The steady stream of European leaders visiting Beijing recently carries a risk. Europe’s eagerness must make it appear more and more in the eyes of China as a applicant — the party in diplomatic relations which cannot wait for the other to propose something, but must come and ask. But what exactly is Europe asking for?
It’s pretty clear where China’s interests lie. Politically, he wants to divide a close West by Vladimir Putin’s assault on Ukraine. On the economic level, he wants to prevent any EU initiative aimed at restricting his access to the market. In a mixture of the two, he wants to increase Europe’s economic dependence on China. It is logical that Beijing feeds the Europeans’ desire to mark their distance from Washington, their resentment at being over-armed by American foreign policy choices and their commercial interests. Hence the very noticeable Chinese charm offensive in Davos in January.
It is more difficult to describe the objectives of Europe. Of course, he wants Xi Jinping to persuade Putin to give up his obsession with wiping Ukraine off the map. But that is only a hope, not a political goal, if European leaders cannot credibly commit to restricting economic reach while Beijing acts against their strategic interests. And their revolving door visits undermine that credibility.
European Commission President Ursula von der Leyen’s speech ahead of her own trip was a step in the right direction. She maintained the EU’s analysis that China is both a systemic rival, an economic competitor and a strategic partner. But she went much further, threatening to block China’s economic opportunities with Europe if Beijing maintains its current course. It will now have an uphill battle to get European capitals to rally behind this more combative approach.
Meanwhile in the United States, Treasury Secretary Janet Yellen has just delivered a speech that substantially aligns Washington with Brussels. She dismissed “decoupling” from China as “disastrous”. Instead, the United States will subordinate economic policy to national security and human rights, but narrowly, while welcoming economic competition and seeking collaboration on global challenges such as climate change. and debt crises. It could just as well have used the Brussels triptych of rival, competitor and partner. Together, the two speeches suggest a welcome effort towards a common transatlantic approach.
The problem is that, unlike the United States, there are too many signs that Europe is unwilling to condition its economic ambitions on the nature of Beijing’s systemic threats. French President Emmanuel Macron’s remarks that Europe is not a “vassal” of the United States are a sign of this. Carving out an independent path is a good thing, but acting differently from the United States just for the sake of it is just going against the grain. It’s natural, for example, to be unhappy that Washington actually decides what chipmaking equipment Dutch company ASML can export to China – but resentment doesn’t replace its own foreign investment and export control policies. . Von der Leyen promised one in his speech, but corporate Europe will hardly allow such constraints without a fight.
Many European business leaders are still salivating at the size of the Chinese market, and most visits by political leaders to Beijing are clearly selling points. Here we come to the heart of why the EU struggles to pursue a credible geo-economic policy. In the European political economy, policy goals still fall short of aligning the mercantile interests of big business in key EU states with the entrenched trade-deepening instincts of the European Commission and many small European economies. Beijing has good reason to sit back and wait.
But something is changing. “Access to China” for EU companies increasingly means expanding production in China itself, not exporting goods and services made in Europe. Before the pandemic, European automakers shipped around half a million cars to China – but they built 10 times as many European-branded cars there. Some will even consider it easier to build electric vehicles there to ship to Europe than to expand production at home.
Gains from these exchanges will primarily benefit EU shareholder companies and not workers, small businesses and countries currently tied to the German auto supply chain. Politicians will eventually realize that the benefits are not widely dispersed. Only then are we likely to see economic considerations firmly conditioned by geostrategic interests in EU-China politics. Until then, Beijing hardly needs to take it seriously. It is time for Europe to learn that what is good for VW is not necessarily good for Europe.
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