The last couple of years have brought a sense of instability in the traditional course of the relations between China and the EU. 2021 witnessed an even rockier start to the year for EU-China relations, triggering Brussels to more explicitly reassess the EU’s policy towards China. Many issues have kick-started a re-evaluation of European policy on China, including growing tensions with the U.S., the global pandemic, challenges in Xinjiang, Hong Kong’s new national security law, the need for a level playing field across multiple sectors, among others. In the spring, Brussels launched a series of new initiatives involving China under the umbrella of the EU Strategy for Cooperation in the Indo-Pacific. Amongst other things, the Council’s conclusions called on the launch of a strategy for connectivity, promising a dynamic year ahead. Indeed, at the start of the summer, the European Parliament took measures to redirect the EU-China relationship, freezing the Comprehensive Agreement on Investments (CAI), a major deal between the EU and China. This came after the imposition by Beijing of sanctions on European politicians and researchers, action that followed another wave of sanctions from the US, Canada, Australia and EU on Xinjiang.
The remainder of 2021 should provide plenty more issues to tangle with that will affect the relationship between China and the EU, including the international community’s changing discourse regarding Taiwan. Recent conversations in the EU around Taiwan’s status with the bloc will surely press some sensitive buttons in Beijing. There have been contentious proposals to change the name of the European Economic and Trade Office in Taiwan to The European Union Office in Taipei. Other countries, such as The Netherlands, have moved in similar directions already. Lithuania welcomed the opening of a Taiwan representative office in its capital, and there too has been dialogue in the U.S. about renaming Taiwan's office, though this has not come into fruition. As a whole, the EU has considered the possibility of a bilateral investment treaty (BIT) with Taiwan, and during the strategic dialogue with Wang Yi, the EU’s highlighted its interest in advancing the relationship with Taiwan. Europe is demonstrating a change of tone with China, and Taiwan may be part of that change.
In her State of the European Union (SOTEU), European Commission President Ursula von der Leyen only mentioned China by name twice, but the implicit references were many more. The first explicit mention came in reference to environmental efforts, where appreciation for China’s commitments was expressed, but the EU leader stressed that real action must be seen to back up its statements. The second explicit, stronger reference came regarding the Global Gateway– the new EU connectivity strategy. The EU presenting an alternative to the BRI reveals its aims to regain control of the nature and purpose of its infrastructure projects at home, and abroad to reduce dependencies from China.
In other cases, references to China have been more concealed, like those found in the EU President’s remarks on the growing competitive climate between great powers, the push for European semiconductor production (known as the Chip Act), and the ban on imports of products resulting from forced labour. Even more went unmentioned during the SOTEU. Brussels is working on dossiers concerning anti-coercion regulations, and a mechanism for regulating foreign companies with state subsidiaries. None of these explicitly mention China and none, if passed, will be applied solely to Chinese actors. However, as was the case for the EU framework for screening foreign direct investments, China remains one of the main triggers and targets for these policies.
President von der Leyen also highlighted the EU’s Indo-Pacific strategy, but the official presentation of the strategy was in the hands of the High Representative and Vice President Josep Borrell. The countries who could and to a certain extent wanted to have more direct involvement in the region had already launched their own strategies (France, Germany and The Netherlands), thus it was expected the EU’s strategy would be a framework where these could be embedded. Nonetheless, it is important for Brussels to signal that the EU as a whole has a strategy for what is poised to be the beating heart of the global scene in the foreseeable future. Unfortunately, the launch came on the same day in which one of the EU’s most active Indo-Pacific actors, France, saw a multibillion-dollar deal to provide submarines to Australia fall apart as the result of another deal being struck between Australia, the UK and the U.S. (AUKUS). Despite France’s loud protests following the creation of AUKUS, it remains desirable for EU actors to collaborate with partners such as the U.S., the UK, and Australia to enhance their position in the region and beyond.
All in all, normalisation of the relationship with China remains a core EU interest even though Brussels is on course to adopt a more assertive approach to China in certain areas. After all, it is in Brussels best interests to maintain an open and collaborative relationship with China. Balancing these priorities are challenging to begin with, but efforts have been drastically hampered by the pandemic, restricting direct exchanges between peoples of both countries. However, and as always, the biggest obstacle to the EU is the EU itself; not divisions amongst member states, but the apparent inability to realise its own true value and geopolitical weight. With all its limitations and issues, the EU remains an important global market which many countries - including China - rely on. Still, the EU appears to buy into the narrative that it plays from a position of weakness when facing China but buying into such a narrative will only exacerbate the Union’s problems. It is imperative for the EU to manage this perceived imbalance and follow through on its new initiatives and adopt all measures that have been proposed. This would ultimately give the EU more agency in dealing with China at all levels.