The European Union Isn’t Ready to Stand up to China

Leaders across Europe rejoiced when Joe Biden was elected President of the United States. After four years of isolationism and illiberal leadership under Donald Trump, Biden promised to reaffirm the United States’ commitment to multilateralism and democratic values. He vowed to work with U.S. partners in Europe to address common challenges and revive the transatlantic alliance.

One area where Biden envisioned particularly strong transatlantic cooperation was China policy. Under President Trump, the United States shunned its allies to deal with Beijing directly. Biden promised to change that. Rather than taking on China alone, the United States would partner with allies in Asia and Europe to form a united front aimed at countering Beijing’s human rights abuses, unfair market practices, and increasingly assertive military activities.

But there is a big problem with Biden’s plan: Europe is not interested.

A fortnight ago, speaking at a virtual event hosted by the Atlantic Council (a Washington-based think tank), French President Macron said the European Union (EU) should not join forces with the United States against China. That statement came on top of an earlier European refusal to delay the conclusion of an EU-China investment deal to consult with the incoming Biden Administration. Europe has made its views clear. As U.S.-China competition intensifies, the EU intends to stay on the sidelines. 

EU-China Investment Deal:

Take the EU’s recently concluded investment agreement with China. The deal, known as the Comprehensive Agreement on Investment (CAI), gives European firms access to Chinese markets in exchange for allowing China to make larger investments in European industries. Supporters of the CAI say the agreement finally gives the EU the “level playing field” it has long demanded from China. But from Washington’s perspective, the agreement is concerning.

The deal essentially gives China a free pass on human rights abuses. Take the Xinjiang region, where the government in Beijing has put members of the Uighur minority in reeducation camps and subjected many others to a sophisticated surveillance system. The CAI includes a Chinese pledge to make “continued and sustained efforts” to ratify International Labor Organization conventions on forced labor. But this will do little to alter the situation in Xinjiang. That is a big blow for President Biden, who views human rights as an area where the EU and United States could see eye-to-eye with regards to China.

The CAI also has geopolitical consequences. If Brussels is acting out of sync with Washington, it will be difficult for the United States to enlist EU countries in its fight to prevent Huawei from dominating 5G cellular networks and other national security disputes.

Wishful Thinking?

But maybe it was overly optimistic to expect Brussels to join forces with Washington to take on Beijing. Just look at a map. Unlike India or Japan, the EU is under no direct territorial threat from China. That gives European countries the freedom to focus on what they really care about when it comes to China: money.

European producers want to keep using China as a low-cost manufacturing platform. Few of them are considering shifting their investments in China to other markets, even amidst growing U.S.-China trade tensions. The sheer size of China’s domestic market remains a huge incentive for EU firms to expand their footprint there.

Walking a Tightrope:

Given these realities, Europe has chosen to follow a middle path in the U.S.-China rivalry. Speaking to the World Economic Forum in January, German Chancellor Angela Merkel warned against the “building of blocs” and said the EU should avoid picking sides between Washington and Beijing. While the EU has labelled China a “competitor” and “systemic rival,” it has also labelled it a “partner” when it comes to global action on issues like climate change.

But that is a difficult tightrope to walk. The EU-China investment deal is facing sharp criticism from officials in Washington. Beijing, meanwhile, is putting pressure on Brussels to act more independently of the United States. Mounting tensions between the United States and China are also creating complications for EU companies. A European Chamber of Commerce report predicts many European companies will have to split their supply chains into a U.S.-focused portion and a China-focused one.

For now, though, the EU is not changing its approach. China is too far away to pose an immediate geopolitical threat to Europe. As long as that remains the case and the EU is not forced to pick a side, Brussels is unlikely to rethink its policies.

Conclusion:

So, while the Biden Administration may be pushing for Western democracies to develop a common approach to China, Europe has other intentions. As long as European interests diverge from American geopolitical priorities, Washington will have to get used to Brussels charting its own course.

References:

Annabelle Timsit (2021), “Was the investment deal Europe signed with China worth it?” Quartz. Available at: https://qz.com/1956673/the-eu-china-investment-deal-broken-down/ [Accessed 10 Feb. 2021]

“Decoupling: Severed Ties and Patchwork Globalisation,” European Union Chamber of Commerce in China and Mercator Institute for China Studies. Available at: https://merics.org/sites/default/files/2021-01/Decoupling_EN.pdf [Accessed 10 Feb. 2021]

Image Credit:  ENZO-ZUCCHI, “EU-China Summit in Brussels”, https://creativecommons.org/licenses/by-nc-nd/2.0/legalcode

Katherine Walla (2021), “Emmanuel Macron’s plan to rebuild US-Europe relations,” Atlantic Council. Available at: https://www.atlanticcouncil.org/blogs/new-atlanticist/emmanuel-macrons-plan-to-rebuild-us-europe-relations/ [Accessed 9 Feb. 2021]

Laurenz Gehrke and Stuart Lau (2021), “Merkel sides with Xi on avoiding Cold War blocs,” Politico. Available at: https://www.politico.eu/article/merkel-sides-with-xi-on-avoiding-cold-war-blocs/ [Accessed 9 Feb. 2021]

Stuart Lau (2021), “Amid Biden pressure, China calls for EU autonomy,” Politico. Available at: https://www.politico.eu/article/china-wang-yi-calls-for-eu-autonomy-competition-trade/amp/ [Accessed 8 Feb. 2021]