Just two years ago, on the heels of Donald Trump’s election, the European Union was playing up China’s potential as a partner that could help preserve the global order. But a new strategy paper from the European Commission, released on Tuesday, moves to recalibrate the EU’s approach toward China, calling it an “economic competitor” and a “systemic rival.”
The paper, which comes ahead of a planned series of high-level meetings between European and Chinese leaders, notes Beijing’s failure to open its markets, describes its treatment of European companies as unfair, and claims that its foreign investment practices undermine the rule of law and human rights. It also lays out a number of steps the EU and its member states can take to strengthen cooperation in areas of agreement with China, while working toward a “more balanced and reciprocal economic relationship.” These include pressuring Beijing to end forced technology transfers and making European procurement contracts for Chinese companies dependent on reciprocal access to China’s procurement market.
In addition, the paper recommends a system to block aggressive Chinese trade tactics such as takeovers of European interests by state-subsidized firms—especially in sensitive sectors like technology. Ashley Feng and Sagatom Saha touched on this issue in a briefing for WPR last month, arguing that the EU should adopt France’s screening method for Chinese investment.
As the EU seeks to confront China’s global assertiveness, it will need to coordinate among its member states, many of which have deepened ties with China in recent years. Italy is on the verge of becoming the first Group of Seven country to endorse China’s Belt and Road Initiative despite criticisms from many other Western countries that Chinese infrastructure investments amount to “debt-trap diplomacy.” EU member states are also divided on how to approach investments in their new 5G networks by Chinese telecommunications giant Huawei.
Brussels’ ability to act on its strategy paper may soon come into focus. EU foreign ministers are scheduled to meet with their Chinese counterparts next week, and Chinese Premier Li Keqiang will represent China at its annual summit meeting with the EU, to be held in Brussels on April 9. Chinese President Xi Jinping is also expected to visit a number of European countries in the coming weeks.
Top Reads on China
A talent drain in China’s bureaucracy?: “For centuries, getting a job as a government bureaucrat has been the path to power and relative wealth in China,” write Dandan Li and Peter Martin of Bloomberg News. But Xi has ruthlessly consolidated power since 2012, a process that has taken a toll on rank-and-file officials. Li and Martin interviewed eight current and former Chinese officials in ministries and provincial governments, many of whom described feeling burned-out and tired of having their loyalty questioned. Others complained about rising living costs and a widening pay gap between the public and private sectors.
A 29-year-old civil servant in a provincial capital is rethinking his career as housing prices soar beyond what he can hope to afford on his $522 monthly salary. And another official quit to join a private company after 10 years of service, disillusioned by increasing scrutiny from the party’s disciplinary watchdog, which combs party officials’ reports looking for “malpractice” or “inaction.”China’s “new natalism”: China’s aging population and rapidly shrinking labor force have stoked calls from within the Communist Party to “liberate fertility.” Writing in Foreign Policy, Shanghai-based writer Frankie Huang warns of a new top-down push for more children that will “mirror the coercion of the one-child policy” rather than offering incentives for motherhood.
Perks such as legal protection for mothers at the workplace, extended maternity and paternity leave, and child care subsidies enjoyed by mothers in countries such as Sweden and Japan would offer women too much freedom and obscure the notion that motherhood isn’t a choice, but a duty. Under Xi Jinping’s patriarchal rule, obedient daughters must know their place.Xi’s successes are becoming liabilities: Xi’s achievements during his first term as China’s president are undeniable, yet the mood in Beijing is “far from victorious,” writes Elizabeth C. Economy, director for Asia studies at the Council on Foreign Relations. She argues that a slowing economy, social discontent and rising suspicion of Chinese enterprises overseas are all problems of Xi’s own making, but that he still has time to make necessary adjustments.
With the baton in Xi’s hand, the Chinese government has expanded its reach and influence at home and abroad. Yet the negative consequences of Xi’s approach—local government paralysis, a declining birthrate, and international opposition, among others—have begun to hold China back from the finish line. Xi needs to course correct—or perhaps pass the baton to the next runner.In the News This Week
Domestic politics: China grounded Boeing 737 Max 8 aircrafts after the crash in Ethiopia (AP). … A study found that China exaggerated its GDP data, overestimating nominal and real growth rates by about two full percentage points on average between 2008 and 2016 (SCMP). … Chinese state media defended Beijing’s policies on Tibet as Tibetans marked 60 years since the Dalai Lama fled into exile (Washington Post).
Foreign policy: Florida massage parlor entrepreneur Li Yang sold Chinese business executives access to President Donald Trump and his family at Mar-a-lago. Yang, the original founder of a massage parlor currently at the center of a recent human trafficking investigation, is also an officer of two groups with ties to the Communist Party (Mother Jones). … Vietnam is investigating the sinking of a fishing boat in the South China Sea on suspicion that it was rammed by a Chinese vessel (The Diplomat). … China and New Zealand have agreed to launch a tourism campaign—an effort that was delayed amid increasing bilateral tension—on March 29 (SCMP). … Serikzhan Bilash, a prominent Kazakh activist campaigning for the release of ethnic Kazakhs detained in Xinjiang’s internment camps, was arrested recently in Almaty and placed under house arrest on charges of calling for a “jihad” against China (Reuters).
Huawei: Chinese telecommunications firm Huawei sued the U.S. government last Thursday, arguing that a law that bans federal agencies from buying its equipment unfairly punishes the company (Washington Post). … Chinese Foreign Minister Wang Yi backed the lawsuit last Friday and praised Huawei for “refusing to be victimized like silent lambs” (Washington Post). … The Trump administration warned Berlin that it would limit intelligence sharing if Germany allows Huawei to participate in its 5G infrastructure project (Wall Street Journal).
Trade: A trade agreement in the works between China and the U.S. could put “few restrictions” on Beijing’s control over the value of its currency (New York Times). … U.S. Trade Representative Robert Lighthizer said trade talks with China are in their “final weeks,” but cautioned that major issues remain (Reuters). … Chinese state-owned firms bought at least 500,000 metric tons of U.S. soybeans last Thursday, the first purchases since China committed to buying an additional 10 million metric tons during trade talks last month (Reuters).