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Foreign Policy

Good Reason for Europe to Change Approach to China

May 03, 2023
  • Wu Baiyi

    Former Director of the Institute of European Studies, Chinese Academy of Social Sciences

Since late March, Spanish Prime Minister Pedro Sanchez, French President Emmanuel Macron, President of the European Commission Ursula von der Leyen and German Foreign Minister Annalena Baerbock have visited China one after another. The intensive interaction and frequent dialogue between China and Europe has not only contributed to the impact of China’s diplomacy so far this year but also send a message of cooperation and stability to the international community. 

Fundamentally speaking, a changed European attitude toward China can be attributed to a triple challenge: 

First, given its multiple economic difficulties, it is necessary for Europe to seize the important opportunity presented by China’s post-pandemic reopening. Following the outbreak of the Ukraine conflict, energy flows from Russia to Europe have been discontinued. Meanwhile, in the face of growing inflation and sluggish investment and consumption, Europe finds it wise to maintain the stability of its industrial chains and supply chains with China, which helps to ease economic pressure and cope with a regional and global recession. 

As early as November, when China began to adjust its epidemic control policy, German Chancellor Olaf Scholz led a huge business delegation of chemical, manufacturing, pharmaceutical and financial giants to China and signed a series of investment and trade deals. This signaled Germany’s intent to deepen cooperation with China, its commitment to free trade and opposition to decoupling. Five months later, Macron undertook a well-crafted trip to China, bringing business orders worth $130 billion to French and European companies. European Commission President Ursula von der Leyen, who traveled with him, publicly stated that the relationship with China is “too important” and that decoupling is clearly not viable, desirable or even practical for Europe, because “China is a vital trading partner — our trade represents some 2.3 billion euros a day.” 

Obviously, Europeans cannot afford to underestimate China’s industrial strength, market size and consumption potential — on all of which it finds difficult to move beyond reliance. After all, in the context of an economic crisis, development is the biggest political issue and diplomacy is the extension of domestic politics. 

Second, the uncertain prospects for peace in Eastern Europe highlight the important role of China as a stabilizer. Since the outbreak of war between Russia and Ukraine, China has been calling for a cessation, accompanied by dialogue, and has also taken the lead in embracing the principle of not adding fuel to the fire by refraining from providing military equipment and technology to Russia. 

On the other hand, the European Union and some major European countries continue to provide military aid to Ukraine, which adds to their already heavy economic burdens. As many as 10 rounds of sanctions against Russia have not achieved the desired results and Europe, as its bargaining power declines, has found that there’s little it can do to curb the risk of escalation. 

By employing diplomatic pressure, Europe is urging China to change its policy toward Russia. However, Brussels, Paris and Berlin have gradually realized that China — one of the five permanent members of the UN Security Council — not only acts as an influential player in international cooperation on issues such as Ukrainian food exports, nuclear safety and humanitarian assistance but also will play a critical and constructive role in the establishment of the European security landscape in the years to come. Given China’s key position in both China/U.S./Russia relations and China/U.S./Europe relations, Europe should not, for its own benefit, push Beijing further toward Moscow. Thanks to cooperation with Beijing, the multi-polar structure envisioned by Europe remains within reach. Without cooperation with Beijing, the world will undoubtedly move toward division and confrontation, and Europe will return to the age of competing camps. Its goal of “strategic autonomy” will be impossible to achieve. 

Third, dramatic shifts in the international situation demand a rebalancing of the relationship between Europe and the United States. To start with, by following the U.S. policy toward Russia and China, Europe has not reduced but only increased the risk to its own interests. Last year, the U.S. Federal Reserve’s interest rate hikes and the introduction of the Inflation Reduction Act had a significant siphoning effect on European capital, leading to a record low of the euro exchange rate. At the same time, American increases in domestic subsidies has further weakened the competitiveness of European companies. 

In March this year, the collapse of Silicon Valley Bank — a result of domestic interest rate hikes — has once again dealt a heavy blow to the European financial system. In the wake of the bankruptcy of Credit Suisse and other incidents, panic is quietly spreading globally, and a wave against the U.S. dollar is on the rise. 

Meanwhile, U.S. control over the world has declined significantly, and a “new global South" has taken shape, which places more restrictions on U.S. hegemony. As the world’s largest developing country, China is undoubtedly a pivotal force in promoting regional and global governance, resolving contradictions, promoting a new type of South-South cooperation and advocating a new type of North-South relationship. The recent reconciliation between Saudi Arabia and Iran with the help of China, for example, has led to a rapid improvement in relations between countries in the Middle East and the Gulf region, which must have left a deep impression on Europe. 

The EU regards itself as an “institutional force.” Only by strengthening, not weakening, its contact and dialogue with China can its global influence remain unabated. Additionally, expanding third-party cooperation with China in developing countries and regions serves Europe’s long-term interests. 

Finally, maintaining close ties with China can help European countries prevent the specter of being swept along by uncertainty due to the strategic rivalry between China and the United States and of being reduced to the status of “America’s followers,” as Macron put it. More important, it contributes to Europe's strategic autonomy and increases its status in transatlantic relations. Although Macron's remarks on China drew public criticism in Europe and the United States, EU leaders such as Von der Leyen, Charles Michel and Josep Borrell clearly expressed their support. This indicates that senior European leaders have begun to fine-tune their perception of China. Europe sees China as a partner, competitor and rival simultaneously, as EU member states struggle to exit the quagmire of troubles caused by differences in their viewpoints and policies on China. 

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