Tuesday

22nd May 2018

Focus

Trump chaos breeds better EU-China relations

  • Trade commissioner Cecilia Malmstroem is key to forming the EU's China policy - along with Jyrki Katainen, commissioner for jobs, growth, investment and competitiveness (Photo: European Commission)

As the US is increasingly becoming an unpredictable global player under the Donald Trump presidency - by ignoring international agreements and upsetting the rule-based world order - the EU and China more and more find themselves to be allies in wanting to uphold multilateralism in dealing with global issues.

But there is a level of unease between the EU and China: while the two global players increasingly need each other, the lack of trust persists.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • 'China and the EU have a joint responsibility,' China's ambassador to the EU, Zhang Ming, argued (Photo: Mission of China to the EU)

That underlying dynamic was evident at a conference on Monday (7 May) at the European Economic and Social Committee on how the EU and China could work together to achieve the UN's sustainable development goals, a set of targets set out in 2015 to prevent poverty and climate change, and address health, education, sanitation, energy, and social justice in the developing world.

Since Trump ushered in his 'America First' policy, China has started portraying itself as a defender of multilateralism and global rules-based trade.

The EU has encouraged China to takea central role in fighting protectionism , but has insisted it needs to reform to be fair to European investors and traders.

China is the EU's biggest source of imports and its second-biggest export market, while China and Europe trade on average over €1bn a day.

China's ambassador Zhang Ming told the conference that "sustainable development would be out of the question without solid economic recovery and a rules-based trade and investment environment".

"The current environment for development is not resilient enough, and cannot afford reckless acts of unilateralism and protectionism," he said.

"We must firmly uphold the multilateral trading system that is free, open and non-discriminatory, and fight protectionism in any form or under any pretext. China and the EU have a joint responsibility in this regard," China's ambassador argued.

He added that Beijing is ready to "step up dialogue" on environmental protection, clean energy and the 'circular economy', whereby more materials are recycled and reused in products.

European Commission vice-president Jyrki Katainen agreed that the EU and China must be "exemplary" in refusing unilateralism.

"If China and the EU, two of the largest economic and political powers in the world, cannot show leadership in this respect, others for sure won't be able to compensate this," he said.

Katainen however insisted on the need to "uphold democratic values at home, the rule of law".

He also said the EU and China "must promote an open, rules-based and fair trade order".

"This means that we must support the WTO [World Trade Organisation], but also upgrade its rules – for instance by negotiating new rules on subsidies – to fight overcapacity and promote a level playing field," Katainen said.

Chinese overcapacity?

Chinese overcapacity in steel and its cheap exports have been blamed for the new US tariffs introduced by Trump, despite the US administration's unwillingness to address the issue alongside its European allies - rather than introducing unilateral punishing tariffs.

A Swiss-based trade watchdog, Global Trade Alert, however warned in a report last Thursday that the concept of global excess capacity, commonly cited against China, is exaggerated as a justification for US protectionism.

But overcapacity is not the only issue that is a concern to the EU.

European investors have been concerned about Chinese barriers.

In 2016, Chinese investment flows into the EU rose to a record high of almost €40bn, while EU investment into China fell to a 10-year low of less than €8bn.

The issue should be addressed within the EU-China investment agreement - that has been under negotiation since 2013 without a breakthrough.

"We must also ensure more reciprocal openness towards one another," Katainen said.

"China still has many barriers to foreign investment and has repeatedly announced that it will lift them. It is important that such reforms are carried out and that this is enshrined in an ambitious bilateral investment agreement," the commission vice-president added.

Bernard Dewit, chairman of the Belgian-Chinese Chamber of Commerce, stressed at the conference that for investors, the investment agreement would be a crucial framework, even if not all the details are yet hammered out.

"The EU-China investment treaty will give a clear framework for all European companies, it will push for more trade relationship between China and EU," he said.

However, other experts warned the EU against pushing China into a corner with trade defence instruments and veiled protectionist measures.

Renato Antonini, a lawyer dealing with large trade defence investigations, and who recently successfully represented Chinese companies at the European Court of Justice, said at times tools originally designed to promote 'sustainability' can be used as a form of protectionism.

He warned there could be a tendency to use the EU's new trade defence instruments, or the 2017 report on China's market distortion practices by the European Commission in anti-dumping cases as a form of protectionism. Instead controversial issues should be dealt with at international forums, he argued.

"Will we use these tools to implement protectionism, or [use] these tools sincerely ... to push forward certain elements of sustainability?," he asked, rhetorically.

Stakeholder

China-EU relations in the new era

A new type of international relations is needed to advance China-EU relations to a new level, says the Chinese ambassador to the EU.

Hungary-Serbia railway launched at China summit

The flagship project of China's increased presence in central and eastern Europe was launched on Tuesday, following an EU probe as a summit in Budapest raises questions on Beijing's influence.

MEPs tell Chinese ambassador of concerns on trade

In an exchange with the new Chinese ambassador to the EU - his first appearance at an EU institution - the EU Parliament international trade committee called for action to meet commitments to open up China's market and reduce overcapacity.

Analysis

Macron's Chinese 'game of influence'

On his recent visit to China, the French president tried to take advantage of Beijing's 'divide and rule' EU approach and become the country's main interlocutor with Europe - while also calling for more EU coordination.

Stakeholder

Openness for greater prosperity, innovation for a better future

Reform and opening-up is a great process that has seen China and the world achieve development and progress together, with more than 700 million Chinese people lifted out of poverty, China's president Jinping told the Boao Forum for Asia.

Supported by

News in Brief

  1. Trump warns Nato allies' low budgets will be 'dealt with'
  2. Only Estonia, Greece and UK hit Nato spending target
  3. EU to start process to counter US Iran sanctions
  4. Macedonia PM sees 'possible solutions' in Greek name row
  5. EU takes six countries to court over air pollution
  6. New Catalan leader sworn in without reference to Spain
  7. Merkel and Putin revive dialogue in troubled times
  8. European companies putting Iran business on hold

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. Athens mayor wants direct access to EU migration fund
  2. Nordics could be first carbon-negative region in world
  3. Zuckerberg and Trump top the EU's agenda This WEEK
  4. Integration of Syrian refugees in Europe needs scrutiny
  5. Bulgarian PM: No asylum reform without stronger border
  6. Eight countries to miss EU data protection deadline
  7. Italian populists to defy EU debt rules
  8. Commission 'playing tricks' with EU budget figures

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight