China, the unbeloved trade partner

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Direct freight trains from China to London cross through Poland, one of the nine countries on its 12,000 km long journey from Zhejiang Province, after London has become the 15th European city belonging to the New Silk Road. [EPA/WOJCIECH PACEWICZ]

Will Europe challenge China? Brussels does not want to quit the field uncontested when it comes to the fact that the People’s Republic infiltrates the European economy for self-serving reasons and wants to set the tone also in political terms, writes Wolf Achim Wiegand.

Wolf Achim Wiegand is a journalist and consultant in Hamburg. He is active in the FDP, including in the Federal Committee for International Affairs as well as Country Coordinator and member of the ALDE Party.

Beijing’s trading methods are meeting with increased resistance in the EU. How can you tame a trading partner who does not want to comply with mutually agreed rules and does everything to gain all the benefits? It is precisely this question that is currently on the agenda of senior Commission officials.

It concerns the future relations of the union with China – a hyperactive player in world trade, which has set itself the goal of gaining supremacy on the international trade routes.

However, a determined trade policy alone for free world trade advocates is no reason to put major obstacles in the way of a competitor. But the regime in Beijing has lost its former sympathies through aggressive and unfair action. This is why the German government is now pressing the EU to impose stricter laws against Chinese investors.

Reason for the European mistrust: the People’s Republic is currently buzzing together a world empire – and could not care less about the WTO rules. The list of allegations against China is long: it ranges from state-subsidized dumping and lack of equal opportunities for foreign companies in China to constraint for investors to form joint ventures.

In addition, critics see tapping of technological know-how through targeted buying of strategically interesting EU companies: Volvo in Sweden is already Chinese, the Greek port of Piraeus, and even a winery on the Moselle in Germany is under Chinese rule.

EU, China bet on tourism to boost trade, ease tensions

At a time of increased tensions between Brussels and Beijing, the two partners met in Venice on Friday (19 January) to launch the EU-China Tourism Year, hoping to patch up or better revitalise relations.

A recent study by the Global Public Policy Institute (GPPI) and the Mercator Institute for China Studies (MERICS) in Berlin corroborates the complaints about the sellout to an unfair player: “Europe must urgently oppose the authoritarian Chinese action.” The EU and its member state governments failed to adequately analyse the consequences of the Chinese assault and develop a consistent counter-strategy.

It is evident that in October 2017, Chinese President Xi Jinping set the goal of a “rebirth of the great Chinese nation” at the 19th CP Congress in Beijing. His project “Made in China 2025” aims at global market leadership in key technologies such as data processing, robotics artificial intelligence and autonomous driving cars.

Celebrated at home, Xi has become a spectre to the outside world.

The explosive nature of China, however, is not only characterised by economic dominance – Beijing also reaches for political leadership. This proves through the creation of artificial islands in the South China Sea to assert extensive sovereign rights as well as the granting of cheap credits to calm governments along the “New Silk Road”, a gigantic trade route from Asia to Europe and Africa.

Countries that can no longer pay for the Chinese-supported construction of new harbours, railways and roads bleed with generation-long usage rights or exploitation of their resources. “Creditor imperialism”, as Brahma Chellaney from the Robert Bosch Academy in Berlin calls the strategy.

Macron's Beijing visit comes at complex time in EU-China relations

On 8 January, French President Macron visited China for the first time, seeking closer relations between China and Europe. Some believe it is meant to reposition France as Beijing’s pivot in Europe after Brexit. But the visit comes at a complex time of growing concerns vis-à-vis China’s influence on the continent, warns Harry Nedelcu.

However, according to the study, Beijing’s lobbying policy in Brussels is particularly severe: “China is not just knocking on Europe’s door. It has already been behind it for a long time.” The Chinese Communist Party (CCP), the real ruler, purposely influences EU political and economic leaders and promotes its authoritarian society model, both internally and externally. “China as a trading partner?” has become a political issue.

EU decision-makers have a dilemma. On the one hand, they are attracted by the largest economy in the world with 1.4 billion inhabitants. On the other hand, China does not treat its customers as partners, but as compliant executors of its own interests. EU desires – such as better market access in China, the elimination of subsidies or the renouncement of dumping prices – are falling on deaf ears with Xi and his followers.

Recently, China has been trying to split Europe. At the end of last year, Chinese Prime Minister Li Keqiangin met with leaders from 16 Eastern, Central and Southeastern European countries (including five non-EU members).

The venue of the “16+1 Conference”: Budapest, capital of EU member Hungary, whose Prime Minister Viktor Orbán is the archetype of EU deviationism. Beijing promised more than $3 billion along the Danube River for infrastructure projects in the Balkans and in the Eastern parts of the EU.

Something similar is planned for Mediterranean neighbours inside and outside the EU.

One Belt, One Road initiative: Beyond trade and investment

The One Belt, One Road initiative (OBOR) has been described as ”the most significant and far-reaching plan that China has ever put forward”.

The European Council on Foreign Relations (ECFR) commented: “There is no doubt that the 16+1 format is a kind of EU competition to EU-fed funds and projects.”

Former NATO Secretary General Anders Fogh Rasmussen emphasised that “China is investing in Europe’s divide – the EU should not sleepwalk and react only when it is already too late because much of the infrastructure in Central and Eastern Europe has become dependent on China.”

The warnings have reached Brussels. The Commission, together with the EU External Action Service, is working on a Euro-Asian networking strategy to be completed this summer. EU leaders will then have to decide in the Council on what goals, interests and principles they want to pursue towards China.

Another unrestrained spread by China with unequal market conditions is not in Europe’s interest. Beijing is stretching out its feelers: a recent White Paper of the People’s Republic states bluntly that China now wants to become active in the Arctic.

The goal is a “polar silk road” to perceive “own interests”: mining, fishing, tourism. For the CCP, which sets the tone in the Middle Kingdom, it no longer means “proletarians of all countries, unite!”, but “businessmen of all countries, unite!”