Theresa Fallon, founder and director of Centre for Russia Europe Asia Studies, talks about Europe's struggle with China policy, including concerns about China's actions, Europe's lack of leverage, challenges in preventing sale of strategic industries, and Europe's overdependence on China for markets and supplies.
Europe's dependence on Chinese trade raises concerns and highlights the need for strategic thinking and alternative investments.
China's support for Russia in Ukraine challenges European attempts to discourage further assistance and strain their economic ties with China.
Europe's negative perception of China, influenced by COVID and Chinese influence activities, requires a more cohesive and strategic policy approach.
Deep dives
EU-China Meeting: Low Expectations and Tougher European Stance
The recent EU-China meeting, the first major in-person meeting since 2019, had low expectations. No joint statement or deliverables were agreed upon. Despite media attempts to portray it positively, the meeting was compared to the US-China meeting in California and the one in Beijing, where Europeans were tougher on the Chinese. One important issue is the threat of sanctions on electric vehicles coming into Europe. Europe is more dependent on Chinese trade than the US. Another issue is that the Europeans try to distinguish themselves from the US, using terms like 'derisking' instead of 'decoupling'. However, Chinese officials in Brussels see it as the Europeans trying to become less dependent on China. Overall, EU-China relations have been deteriorating, and with the loss of Chancellor Angela Merkel, Europe is still searching for its next leadership on China.
China's Support for Russia in Ukraine Raises European Concerns
China's support for Russia in Ukraine has raised concerns among European countries. China's purchase of Russian oil helps Russia fuel the war in Ukraine. European officials have repeatedly emphasized their opposition to China supporting Russia and have tried to discourage further support. However, the discovery of dual-use goods made in China on the battlefield in Ukraine indicates that China may be crossing this red line. The Europeans have expressed their concerns, but taking action has been challenging, as it could strain their economic ties with China. The Europeans continue to express their stance against further support to Russia, but Chinese officials are realistic that Europe perceives a China-Russia strategic convergence. Reducing dependence on China in key areas is a priority for Europe, and this situation has further highlighted the need for better risk management.
European Perception of China and Challenges in Forming a Cohesive Policy
European perception of China has become increasingly negative, especially after COVID accelerated the negative outlook. Different European countries have varying views on China, with some having favorable opinions while others remain skeptical. However, there is evidence of economic influence and Chinese investment in Europe, which presents challenges in formulating a cohesive policy. European bureaucracy and lack of expertise on China have contributed to this disconnect between public opinion and policy decisions. Europe is gradually shifting towards a more strategic perspective and acknowledging the need for risk management. However, the EU's complex decision-making process, competing interests among member states, and the absence of a united voice on China policy make it difficult to implement effective measures. The influence activities of China in Europe have raised concerns, and there is growing awareness and focus on countering them. Elections in 2024 are expected to bring more attention to the issue and increase scrutiny of China's influence activities.
European Parliament sanctions damage comprehensive agreement on investment
The comprehensive agreement on investment between the EU and China has been put on hold due to sanctions imposed by China on five members of the European Parliament, a German think tank, individual scholars, and the political and security committee, along with their families. The European Parliament is unlikely to vote positively for the agreement as a result. China has attempted to find creative ways to lift the sanctions, such as proposing simultaneous sanctions removal, but the proposal was rejected. As a consequence, the appetite to invest in China has declined, not only in Europe but also in the US and other countries. The business environment in China has become increasingly challenging due to the introduction of several rules and regulations, including the enhanced anti-espionage law. Amidst these challenges, the EU-China summit did achieve one positive outcome, allowing Europeans to take back their data from China.
Europe's dependency on Chinese trade and the need for alternative options
The EU heavily depends on Chinese trade, raising concerns about the vulnerability of its economic relationship with China. The podcast highlights that European countries need to think more strategically and consider alternatives to China in terms of investments and exports. It is noted that China has been investing in countries within Europe's neighborhood, such as Morocco, while European countries have been keen on investing in China. The lack of long-term thinking and strategic foresight is identified as a challenge for Europe. The podcast suggests that Europe could benefit from collaboration with the US, potentially cutting China out of certain trade and investment opportunities. However, complications remain within the transatlantic relationship, with some irritants and differing approaches to various policies. The podcast mentions the increasing momentum in other countries, including the US, to reduce investment in China, suggesting a potential shift away from heavy dependence on Chinese trade.
Europeans are gradually wising up to the threat of the Chinese Communist Party. So why is the EU so completely inept at China policy? Joining us on this podcast for the second time is Theresa Fallon. She’s the founder and director of the Centre for Russia Europe Asia Studies, based in Brussels. She’s also a member of the Council for Security Cooperation in the Asia-Pacific.
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