Sunday

19th May 2019

Opinion

EU's internal dynamics must be part of 'China' debate

  • The Greek port of Piraeus: Sorely missing is a frank assessment of differences between European countries in the perceived balance of opportunities and challenges presented by China. Greece and Italy get criticised, Luxembourg and Germany do not (Photo: European Parliament)

Only recently have European governments and businesses started a serious debate about how to deal with China's growing role and influence in the world, including in Europe.

One important ingredient is still missing, however: the EU-internal dimension.

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Failure to address this shortcoming now may prove costly later, as the migration and euro crises have shown.

Europe has to come to grips with the fact that the balance of opportunities and challenges presented by China differs profoundly between EU member states.

Advanced economies benefit from established trade ties with and investment in China, and have growing worries about Chinese take-overs of their (high-tech) companies.

Less developed economies want infrastructure development at home, which Chinese money and Chinese companies can facilitate.

More trade with China can help develop their economies, while reducing their (trade and political) dependence on large European countries.

Recent discussion papers by the European Commission, the Federation of German Industries (BDI) and the Commission's European Political Strategy Centre think tank (EPSC) bravely challenge long-held taboos in Europe in order to better deal with China.

They call for new industrial policies and a more critical – although not US-like confrontational – stance towards China.

The message is clear: disciplining China's state capitalism will not happen with demands on its governments or cooperation with Chinese players.

The EU and member states must also do their homework.

Never before was the commission so bold in its proposals for the EU to make the necessary adjustments at home.

The EU-China: A Strategic Outlook presents concrete ideas for why and how to develop offensive and defensive capabilities for dealing with incoming investments; (strengthening) innovation; competition law (and the desirability of so-called 'European champions'); government procurement (and state aid); and (protection of) critical infrastructure.

The path is clear and the debate with the member states is on.

But what remains unsaid is that while this policy shift may be to all EU countries' long-term interests, they largely tailor to advanced economies' immediate concerns.

Sorely missing is a frank assessment of differences between European countries in the perceived balance of opportunities and challenges presented by China.

This is needed if officials and business representatives in the EU and (mostly Western) European capitals wish to succeed in their efforts.

The BDI China-paper acknowledges the challenge by stating that new EU policies 'require also a willingness to put existing positions up for discussion within the European framework'.

But this is speaking of and to individual German companies. And it remains to be seen whether European governments that now prepare a China-strategy of their own – including the Netherlands and Sweden – will also acknowledge that such sacrifices need to be made.

Unsaid goes the fact that EU-policies at times drive member states in the arms of China.

Consider the case of Greece.

Pushed by EU member states into privatising its harbours, and lacking European interest to invest in them, the Greek government accepted Chinese investments in the Port of Piraeus.

Now, these same EU member states lament perceived Chinese political influence in Greece and, by extension, in Brussels.

Greek politicians consider themselves to be punished twice: first by EU policies and next by criticism of the consequences? Set against this context, Greece joining China's (now) 17+1 partnership with Central and Eastern European countries recently is telling.

Today, Europe risks pushing Italy in the same corner, following vast criticism after the Italian government in late March signed up to China's Belt and Road Initiative.

How many of the critics noticed that Luxembourg a few days later (and Germany's Siemens two years earlier) did the same?

Even if these facts are known, their consequences for intra-EU policymaking remain unaddressed in today's debate about updating EU policies for dealing with China.

This is misguided and problematic, as it fails to recognise the legitimate pursuit of some (smaller) European economies of their national interests as well as the role of bigger member states with stronger economies therein.

The consequence may well be a further deepening of already existing political divides that will only undermine the coherent EU action so badly needed today.

Win-win or divide-and-rule?

Clearly, for EU-cooperation and coherence to be undermined, China does not need to pro-actively divide and rule in Europe. Chinese companies and banks oftentimes do little more than act on real desires of governments or individual politicians.

Most certainly, the Chinese Communist Party will make use of resulting (political) influence when it suits its purposes.

Preventing and countering this from happening is the shared responsibility of the EU and all its member states.

The intra-EU dimension of China's growing role and influence in Europe should therefore be part of the debate today.

Author bio

Maaike Okano-Heijmans is a senior research fellow at the Clingendael Institute in The Hague.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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