Member states support tougher stance toward China despite warnings

Chinese foreign affairs minister, Foreign Affairs minister Wang Yi, and EU's High Representative, Federica Mogherini, speak to reporters, on Monday (18 March).

EU’s foreign affairs ministers expressed their “full support”on Monday (18 March) to the EU’s new stance toward China, described as “systemic rival”, as the bloc seeks to rebalance its economic and trade relationship with Beijing.

EU High Representative for Foreign Affairs and Security Federica Mogherini told reporters after a day-long discussion on China that she counted on the EU-28’s full backing.

“I did not hear any reservations or criticism towards our approach”, she added.

In a paper published last week, the European Commission labelled China as a cooperation and negotiating partner in some fields. But also as “an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance”.

Commission pursues 'bilateral and multilateral cooperation' with China as MEPs express deep concern

The European Commission has set out a series of concrete actions to “deepen its engagement with China to promote common interests,” the bloc’s top officials said on Tuesday (12 March). However, MEPs voiced concerns over “embedded backdoors” in Chinese tech that may put personal data in the EU at risk.

The Council’s meeting was attended for the first time by a senior Chinese official, Foreign Affairs Minister Wang Yi, signalling a critical period in EU-China relations.

Wang said that the EU and China are experiencing “some competition” but “the important thing is that cooperation is the main theme of EU-China relations.”

But senior EU officials and diplomats are increasingly worried about the risk of Chinese companies in Europe cooperating with their intelligence services, in particular Huawei, a leading firm in telecommunications infrastructure.

Commission says Europe should be 'worried' about Huawei

Europe should be “worried” about Huawei and other Chinese companies, given the mandatory cooperation they have to maintain with Chinese intelligence services, European Commission Vice-President for Digital Single Market Andrus Ansip said on Friday (7 December).

Wang told the Europeans not to follow the US’s steps in excluding the Chinese firm from their markets, as some member states are considering.

“What we oppose are groundless accusations for political purposes and attempts to bring down a foreign company,” he said early on Monday.

“We think such practices are abnormal, immoral and have no support,” he added.

The Europeans have also voiced their complaints in regards to the restrictions their companies face to access the Chinese market and the forced transfer of technology they experience in the Asian country.

Mogherini said that, during the “extremely positive and friendly” discussion, both sides identified areas “to ensure that European Union-China relations are set on a fair, respectful, balanced and mutually-beneficial course”.

But despite the cordial tone, Europe is toughening its stance toward Beijing.

Commission to strengthen anti-subsidies measures by end of year

The European Commission will propose by the end of 2019 new measures to address the negative impact of foreign subsidies and state-owned companies, according to documents made available on Wednesday (13 March), as the EU aims for a more assertive tone towards China.

The 28-member-bloc already bolstered its trade defence instruments to tackle China’s subsidies. In addition, EU leaders will task the Commission later this week with proposing additional measures to address unfair practices, according to the latest draft of the summit conclusions seen by EURACTIV.com.

In addition, EU leaders will call on their ministers and the Parliament to complete the talks to set up a new International Procurement Instrument. This mechanism would increase the EU’s leverage for negotiating market access with third countries.

Wang recalled the recent law approved by Chinese legislators last week to open up its economy to foreign investors.

However, EU officials and diplomats remain skeptic about the Chinese efforts, after years of unfulfilled promises and poor implementation.

“I stop believing in the ‘Three Kings’ long time ago”, said a diplomat.

Commission tells China to deliver on promise to open up its market

EU Commissioner for Health and Food Safety Vytenis Andriukaitis told EURACTIV.com that China should deliver on its promise to open up its market, as European companies complain about the difficulties they face in the country.

Market access and restrictions will be one of the main issues for the bilateral summit to be held on 9 April.

The Europeans want to agree on a set of deadlines to ensure the Chinese deliver on their promises to facilitate access to their consumers and contracts.

China and the EU will “agree by summer 2019 on a set of priority market access barriers and requirements facing their operators”, reads the conclusions drafted by the EU side, and seen by Reuters.

The document also sets 2020 as the goal for the bilateral investment treaty that has been under negotiation for almost a decade.

The EU’s trade deficit with China slightly increased in January to 21.4 billion, from 20.8 billion a year earlier, Eurostat confirmed on Monday.

Europe strengthens monitoring of foreign investment

The European Parliament approved on Thursday (14 February) the proposal to screen foreign investment at EU level, clearing the path for closer monitoring of third country companies willing to invest in EU’s critical sectors.

Areas to cooperate

Wang admitted that both partners have “diverging views” on economy and trade. But despite competition was “unavoidable”, he highlighted that both sides have to gain more from a fair, unbiased and non-discriminatory cooperation.

Both sides highlighted their cooperation on maintaining afloat the Iran nuclear deal, the fight against climate change, the implementation of the Sustainable Development Goals, and the support to a multilateral rule-based order.

Mogherini also added that they are working on reforming the World Trade Organisation, and foreign affairs issues including Korea, Afghanistan and Venezuela.

But the EU’s top diplomat added that “it would be quite naive, if not ridiculous, to hide that we have differences in the ways in which we address our governance and our political systems.”

Wang’s landmark participation in the EU meeting comes days before Chinese president Xi Jinping embarks on a European tour that “speaks volumes to the importance of Europe” for Beijing, the Chinese diplomat said.

President Xi will visit later this week Italy, France and Monaco.

EXCLUSIVE: Leaked memo reveals China’s detailed plans in Italy

China plans to cooperate with Italy in the development of “roads, railways, bridges, civil aviation, ports, energy, and telecommunications” as part of Beijing’s Belt and Road Initiative, a confidential ‘memorandum of understanding’ obtained exclusively by EURACTIV reveals.

But the plans to include Italy in its new ‘Silk Road’ and the 16+1 format involving China and European countries is seen as an effort to divide the Europeans.

Mogherini responded that “if unity of the EU is always a plus, vis-à-vis China is a self-evident, self-interest of the EU member states, because none of them has the size, the impact, the power to negotiate with China on an equal footing” on trade, investment or security issues.

Wang replied that China “firmly supports the EU integration”, and highlighted the complementary between the massive infrastructure programme (known as “One Belt, One Road”) and the EU’s ‘Connecting Europe’ initiative to finance key infrastructures.

[Edited by Sam Morgan]

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