Strategic Europe continues its Capitals Series exploring how EU foreign policy is viewed by major non-European countries. We have asked each of our contributors to give a frank assessment of their country’s relations with the EU and rank five key issues in order of their importance in those relations. This week, the spotlight is on China.
“China will continue to support European integration, hoping to see a more stable, united and prosperous European Union.” This Chinese standpoint, expressed by Foreign Minister Wang Yi on March 8, is by no means unfamiliar, as it has been repeatedly highlighted by generations of Chinese leaders and in all Chinese policy papers related to the EU. Beijing needs the EU not only because the union is China’s biggest export destination but also due to the EU’s role as a global player. Given the current wave of antiglobalization worldwide, cooperation with the EU is even more prominent for China.
To China, the EU’s most crucial role is as Beijing’s biggest trading partner in a growth-based partnership. The China-EU relationship has long been dominated by trade. Since 2004, the union has been China’s number one trading partner, while China has been the EU’s second-largest partner. Trade has been the cornerstone of bilateral relations, enabling exchanges of goods, capital, ideas, and culture.
At the same time, trade is a major source of conflict. The huge trade imbalance between China and the EU has always caused complaints and fears, especially among European manufacturers. Furthermore, European governments and enterprises heighten demands for reciprocity of market access. Meanwhile, China has been disappointed by the EU’s refusal to recognize its market-economy status.
Apart from bilateral trade, the China-EU partnership is also crucial for defending the multilateral trade order, which is full of uncertainty. Chinese economic success is a product of economic globalization. Beijing believes that open trade remains key for global economic growth. While China is adapting to its new economic normal, many EU countries are still struggling to recover fully from the financial and debt crises of recent years. Additionally, the new U.S. president, Donald Trump, has called a halt to trade megaprojects, namely the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP). Some people believe that globalization is dying.
In this context, cooperation between China and the EU becomes especially important. Even though the UK, a key activist of open trade, is leaving the union, China hopes that the remaining EU countries will not turn to trade protectionism. China is also waiting for more enthusiasm from the EU toward Beijing’s Belt and Road Initiative, which is the most ambitious project in China’s foreign policy. China welcomes European leaders’ participation in the Belt and Road summit this May in Beijing. This is an opportunity for cooperation on driving forward globalization and the world economy, especially amid the potential threats of an inward-looking United States and European populism.
Another area in which China needs the EU is the promotion of sustainability. Currently, tackling environmental problems is a top priority for China. The EU is a pioneer in related technologies, experience, and standards, and hence regarded by China as an important partner. Accordingly, the China-EU Partnership on Urbanization was established in 2012 to promote exchanges on a range of urban development topics.
In the international arena, with the risk of the United States withdrawing from the 2016 Paris Agreement, cooperation between Beijing and Brussels on climate change becomes even more crucial. China and the EU are the world’s largest and third-largest carbon emitters respectively and represent the developing and developed worlds in international negotiations. A committed partnership between the pair on fighting climate change can serve as an engine for global action.
China and the EU are also partners on reform. This area is challenging and painful, but China confirms its commitment to further domestic reform. Meanwhile, China sees a similar need for reform in the EU, especially during these years in which the EU faces various challenges and the threat of dissolution. With regard to China’s reforms in market liberalization and governance, experiences from EU countries serve as a reference.
The EU remains an important global actor. This year, the whole world is looking at it, especially in light of the elections in France and Germany, the negotiations on Britain’s exit from the EU, and the ongoing refugee crisis. China’s view of the EU as one partner and one pole in a multipolar world remains unchanged. In particular as the United States risks turning toward isolationism, China needs the EU even more in providing public goods and promoting global governance.
China is committed to continuous globalization. While witnessing drawbacks and even destruction from uncontrolled globalization, Beijing wants to cooperate with the EU to manage this process. In recent years, China has started discussions with the EU and its member states on cooperation in third countries, namely in Africa and Latin America.
Given that terrorism is a common threat to the whole international community, the EU also serves as China’s partner on security and defense. Apart from existing cooperation through multilateral platforms, there have been bilateral cooperation initiatives as well, for example the China-EU 2020 Strategic Agenda for Cooperation. Notably, regular dialogues take place on security and defense policy to help build trust, which is essential for Beijing and Brussels to become closer partners on security. China urges the EU to avoid double standards in the identification of terrorist groups as well as prevent further rises of populism.
Overall, the EU is but one prominent partner for China, yet it is the most important in many areas, and not just trade. In fields like climate change, reform, global governance, and security, the partnership between China and the EU is necessary but not yet strong enough. The couple’s ability to identify common interests and priorities will determine the performance of their tango on today’s international stage, which needs such a partnership more than ever.
Shi Zhiqin is a resident scholar at the Carnegie–Tsinghua Center for Global Policy. Lai Suetyi is a postdoctoral fellow in the Department of International Relations at Tsinghua University.