Challenges and Opportunities: A 2020 vision of China’s relations with Europe

Aki blog

This blog was contributed by Aki Elborzi (SOAS China Institute) in conversation with SOAS alumni Lauren A. Johnston, Andreas Fulda, Alicja Bachulska and Marola Padin Novas.

Much of the international media’s focus relating to China in 2019 was dominated by US President Donald Trump’s ‘trade war’ alongside questions about the trustworthiness of Huawei and whether this Chinese telecoms giant should be excluded from the development of 5G infrastructure over fears of espionage and security vulnerabilities – a debate still unresolved in many European capitals including London and Berlin, much to the dismay of Washington, which strongly opposes Huawei’s involvement in Europe’s 5G, and to the consternation of Beijing, which has warned of retaliation should Huawei be banned from the ‘roll out’ of 5G in various European countries.

Moving into the summer of 2019 the eruption of mass demonstrations and civil disobedience in Hong Kong (still ongoing) made front page news around the World, followed later in the year by new revelations in leaked documents to the New York Times and to the International Consortium of Investigative Journalists of the scale and depth of China’s mass internment of primarily Uyghurs and Kazakhs in the Xinjiang Uyghur Autonomous Region in northwest China.

But what of China’s relations with Europe? 2019 arguably saw some success for Chinese diplomacy in Europe, such as Italy signing an MoU with China on the Belt & Road Initiative (BRI) in March and Greece joining the “16+1” Central and Eastern European Countries (CEEC)-China framework in April, making the platform now “17+1”. Yet setbacks for China came about too, such as the European Commission branding China a “systemic rival” and “economic competitor”, increasingly vocal criticism of China on human rights issues and wider scrutiny of a range of Chinese assets from Huawei to Confucius Institutes.

Yet, as Europe increasingly finds itself often divided from within and diverging from its traditional alliance with Washington over a range of global issues from the fraying 2015 Iran nuclear deal (JCPOA) to climate change, what does the upcoming year hold for China-Europe engagement? Four SOAS alumni shared their views with me on what we might see in Europe-China relations in 2020, in this SOAS blog, looking at China’s relations with the European Union, Germany, Poland and Spain.

 

EU-China relations: A low-hanging silver medal in population ageing collaboration

Lauren A JohnstonThe twenty-twenties begin on an uncertain, if explicitly tense, note for China-EU relations. Unhappy at having been branded a ‘strategic competitor’ by the EU in 2019, China is opting to deepen a more selective bilateral and alternative sub-regional approach. It has, for example, signed a Belt and Road Initiative agreement with Italy and continues to deepen Eurasian-focused ties with Eastern European EU members. For its part, amid parallel heightened China competition risk fears, the EU also continues to prominently pressure Beijing to re-consider its contentious contemporary policy stance on matters pertaining to Hong Kong, Xinjiang and the South China Sea.

Complicating EU-China ties, both the EU and China independently confront a more challenging relationship with the USA. That in turn, may increasingly spill over into their bilateral ties. Europe for example is under pressure to follow the USA’s position in banning adoption of Chinese 5G technologies from its communications network. Meantime, there are fears that China’s response to the American-instigated trade war may have adverse impacts for Europe-China trade. Longer-term hopes, including signing a bilateral investment treaty and the potential for a trilateral approach to development in third countries and especially in Africa, appear to be at risk of fading into a Pollyanna version of future political economy collaboration.

Underlying – and also adding complexity to – those broader frictions is the shared challenge and pressures of population ageing. Europe is home to most of the world’s most-aged populations, and many of the fastest-ageing countries, including Greece, Italy and Finland. China, meantime, is ageing as an upper-middle-income economy which it fears will inhibit its aim to become a high-income country and is also home to the world’s largest stock of retirees. Where the EU and China may struggle, that is, to agree on ‘gold medal’ issues such human rights standards, or on matters economic, regulatory or technological, there may, at least, be a low-hanging silver medal on offer in 2020 in the area of ageing. Indeed, perhaps one area of human rights where the two sides may even reach some agreement is in agreeing the rights and needs of elderly citizens.

A recently signed joint declaration between China, Japan and South Korea may, moreover, offer a starting point. The December 2019 China-Japan-South Korea “Joint Declaration on Active and Healthy Ageing” agrees six points of collaboration: the importance of national ageing strategies; the need to emphasise healthy ageing and also a multi-sector approach to ageing; the importance of quality and affordable long-term care; promote the rights of the elderly; and finally the area of collaboration and lesson-sharing between countries around ageing challenges. These points may be a useful starting point for a broader EU-China approach to collaborating in the area of ageing also. Home to UNWIDER, the UN’s institute for development economics research, Finland, also home to one of the world’s fastest-ageing populations, could, as an example, also host the European end of an EU-China population ageing collaboration effort which could in turn collaborate with UNWIDER to foster the related lessons into economic development research and policy efforts also.

By January 2021, it is unfortunately unlikely that China and the EU will have resolved many, if any of their most fundamental differences, a prediction that a President Trump re-election may make more probable again. Into that pessimistic forecast, it would be unfortunate if the two sides cannot at least rapidly accelerate their cooperation in the area of population ageing. A silver, not a gold medal issue, this may nonetheless serve to alleviate a powerful underlying challenge that itself otherwise may progressively and incrementally deepen the complexity of other more intractable differences. It hence presumably makes sense to grab this particular low-hanging silver medal China-EU fruit as soon as possible.

Dr Lauren A. Johnston (MSc Development Economics, 2002-03) is a Research Associate at the SOAS China Institute

 

Germany-China relations: Between a rock and a hard place

Andreas Fulda-Germany ChinaOutsiders trying to make sense of German foreign policy are often puzzled: is Berlin’s Ministry of Foreign Affairs in charge? Or has the Foreign Office been effectively side-lined by the powerful German Chancellery under Angela Merkel’s leadership? And if so, who is advising Chancellor Merkel? The question of who makes foreign policy is directly related to its overall direction: is it informed by private commercial interests or do enlightened German national interests play a role as well, e.g. in the field of democracy and human rights promotion?

Attempts to answer these questions will fail without acknowledging how foreign policy making is embedded in Germany’s highly corporatist political economy. While politicians and business leaders are close in any given country, the enmeshment between political and economic elites is particularly striking in Germany’s case. The German branch of Greenpeace has shown that the door between the world of politics and the German car industry is constantly revolving.

This means that car manufacturers such as BMW or Mercedes-Benz, who are heavily reliant on the mainland Chinese market for car sales, have an outsized influence on government policy. Such lobbying power is also evident in the case of the current Huawei controversy. German telecommunications giant Telekom was in advanced discussions with mainland China’s IT firm Huawei before it was called back by Chancellor Merkel. She did so not because of a sudden realisation that involving a Chinese company—which heavily relies on Chinese Communist Party patronage—would be problematic from a national security perspective. She only ordered a review after coming under pressure from a cross-party coalition of rebellious lawmakers.

The Huawei controversy is also a textbook example of what happens when Germany’s highly corporatist political economy meets the realities of geopolitics. The Trump administration has made it clear that involving Huawei in the building of Germany’s 5G infrastructure would pose a security risk and burden the already strained transatlantic partnership with the US. And a Chinese diplomat threatened the German government with retaliation should Huawei be excluded. When it comes to China, the German government thus finds itself between a rock and a hard place.

The mishaps of Merkel’s China policy come to show that foreign policy should not be the result of back-door lobbying by large commercial groups. Instead there is a need to make the policy making process much more transparent and accountable. A good starting point would be for the German parliament to finally make a lobby register compulsory. Such a register would also help address another problem, which is the increasing problem of influence operations by potentially hostile foreign governments. The British academic Martin Thorley has pointed out that foreign government actors can take advantage of the same channels which commercial lobby groups use. German China policy is unlikely to improve without structural reforms relating to the way it is formulated.

Dr Andreas Fulda (MA Chinese Studies, 2000-01) is a senior fellow at the University of Nottingham Asia Research Institute and the author of The Struggle for Democracy in Mainland China, Taiwan and Hong Kong: Sharp Power and Its Discontents

 

Sino-Polish relations: From hyper-optimism to scepticism

Alicja2019 has proven to be quite an important year in terms of shaping the general dynamics of cooperation between Poland and China. Warsaw, which throughout the last decade was quite eager to strengthen bilateral and multilateral ties with Beijing, has started to redefine its approach towards China. Disillusionment with the lack of tangible results of cooperation, coupled with ongoing deterioration of relations between the PRC and the US and its impact on third countries have led Warsaw to reassess its previous hyper-optimism towards China-led international frameworks for cooperation, such as the Belt and Road Initiative or the 16/17+1 platform. Throughout 2019, this shift towards growing scepticism on the Polish side has been accompanied by a series of events that made the headlines, also internationally. The most prominent one was the January 2019 arrest of a Warsaw-based Chinese national and simultaneously one of regional Huawei directors, who was detained in Poland (and still remains under arrest) over spying allegations. Given Warsaw’s closeness with Washington, the event was widely (and also rather simplistically) interpreted as just a symbolic gain proving that Poland would side with the US in terms of the unfolding strategic competition with the PRC. Although this argument seems largely correct, it should not lead to a conclusion that Poland is about to decouple from cooperation with China altogether.

In 2020, we might expect more balancing acts on the side of the government in Warsaw. As the US remains Poland’s key international ally, its core interests will definitely be considered while making any strategic decisions. Nevertheless, diversification of international partners also remains in Poland’s interest. While the current stance on China-related issues that have been so far deemed of strategic importance (such as limiting Huawei’s involvement in 5G construction) will be upheld, cooperation in more low-key areas (like education and culture) will most probably continue. Although “people-to-people” (or rather, in case of China, “government-to-people”) cooperation has been regarded as less controversial, it has also generated growing, albeit limited, concerns. Issues such as the role of Confucius Institutes, sponsored content in local media or potential elite capture might come into play at a larger scale, especially given the growing polarisation of the international debate on the implications of the PRC’s global expansion and its effect on democracies that are already in crisis. What we might anticipate is some form of public discussion on Beijing’s ability to enhance its soft power and shape international debates for its own good, most prominently by means available to all actors (including those representing non-democratic regimes and their interests) in democratic countries, like independent press and uncensored social media.

It seems likely that perception of the PRC as a threat, also in normative terms, will accelerate. Nevertheless, we need to put things in perspective: luckily or not, China has been and will most probably remain at the margin of public debate in Poland in the nearest future. As a both culturally and geographically distant partner, it neither poses a direct threat to Poland, nor represents a viable alternative to Western allies with whom Warsaw still seems to share some long-term goals and political values.

Alicja Bachulska (BA Chinese and Development Studies, 2010-14) works as a China analyst at the Asia Research Centre of the War Studies University in Warsaw, Poland. She is also a project coordinator for Poland at ChinfluenCE, an international initiative mapping Chinese political and economic influence in Visegrad Four (Czech Republic, Slovakia, Hungary and Poland)

  

China and Spain: Are they in their happy twenties?

Marola-China blogIn the last decade, China’s economic power and political influence have grown with unprecedented scale and speed, not only regionally, but around the entire globe. This is an issue out of question. However, how has that growth been regarded from countries like Spain?

When checking their relationship two aspects can be considered: numbers and perception. Firstly, the numbers are clear. By 2020 the growth prospects for Chinese investment in Spain are promising, as operations seem to indicate in the case of the announcement at the end of December in relation to a Chinese company’s takeover in a Spanish Railway infrastructure company (Aldesa) valued at 250 million euros, which shows that Spanish companies remain attractive to the Chinese investor.

The factors that had prevented Spain to further use its potential to be present in China are now over and Spain is stepping up relations there with more intensity than the EU average. This improvement is due to the efforts made by the Spanish Public Administration and private enterprises. Both have more experience, knowledge and interest in the Middle Kingdom.

Spain is a founding member of the Asian Infrastructure Investment Bank (AIIB) and has participated in Belt & Road Initiative (BRI) summits. Even though the Spanish government encourages greater Chinese investment, it also supports greater strategic scrutiny by the European Union. Thus, in relation to Xi Jinping’s initiative of the ‘One Belt, One Road’ plan Madrid has aligned its views more closely to the positions of France and Germany and, differentiated itself from other southern European countries such as Italy, Portugal and Greece. This led to a certain climate of mistrust.

Furthermore, two general elections in 2019 did not help to keep things on track. Spanish Prime Minister Pedro Sanchez supported the EU Commission’s position in March 2019 which declared China to be “an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance.” A perception of threat is underlined, overall, when talking about the battle over 5G technology.

In the consular sphere, bilateral talks continue. Last year the State Secretary announced Spain’s interest in opening a new Consulate General in Chengdu (Sichuan), in the context of the development of closer ties between Spain and China.

On the other hand, Spanish firms, but not Spanish citizens, are very positive toward investments from China, although less enthusiastic about investments in China as they have experienced difficulties operating there. According to a 2017 poll by Elcano Royal Institute, Spanish citizens perceive that a great deal of Chinese investment has come to Spain, which is untrue.

Appearance of similitude and perception are keywords to understand the posters shown for both Catalan and Hong Kong protesters. Despite the empathy they might feel, actions, purpose and the political situations differ completely.

Last June Spain secured its place in the 2019 FIFA Women’s World Cup round of 16 despite being held to a disappointing 0-0 draw by China. Let´s see how numbers and perception play their role in 2020.

Marola Padin Novas (MA Chinese Studies, 2008-09) is an Analyst for the Observatory of Chinese Policy

  • Image: Prime Minister of Spain Pedro Sánchez with Chairman of the People’s Republic of China, Xi Jinping. Photo credit: La Moncloa (Source: Flickr)

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