Europe must tread carefully as US-China links deteriorate

European powers have a deep interest in avoiding being caught up and marginalised in the slipstream of a new cold war between the United States and China.

At stake is the shape of world politics and economics as the shock of the Covid-19 pandemic is dealt with just when climate breakdown intensifies. Compared to recovery from the Sars epidemic in 2003 when China was the sixth-largest economy producing 4 per cent of global output and with 20 million tourists, it is now the second-largest, producing four times that output and with 150 million tourists.

That captures the huge change in its impact and relative position in less than a generation. In between came China’s crucial manufacturing base for the world economy and its response to the global financial crisis.

Critics say China puts trade and investment over concern for human rights and the rule of law

In 2008-2010 it invested 12.5 per cent of gross domestic product in construction, welfare and transport activity to maintain domestic employment and preserve the regime’s legitimacy. This was followed by the colossal external Belt and Road Initiative (BRI) to link China, Europe and southeast Asia, drawing on its surplus capacity and calculated to extend its global influence. These are key ingredients of its emergence as the world’s second power.

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The European Union seeks to co-ordinate its members’ relations with China. Individual interests in Germany, Italy or France among the large states are pursued independently and given priority over EU policies; where they are brought together, the EU’s external action service has difficulty asserting itself. In a spectacular own goal, its Beijing ambassador recently allowed Chinese censors remove a reference to Covid’s Chinese origins in a letter from its 27 ambassadors in a leading Beijing newspaper.

That has stimulated a sharp debate on the EU’s priorities with China. Critics say it puts trade and investment over concern for human rights and the rule of law and is complacent about the treatment of millions of Uighers, Tibetans and now about the crackdown on protest in Hong Kong. China’s penetration of European markets, strategic BRI investments in central and southern Europe, takeover and domination of high-technology firms and sectors, all add spice and urgency to the relationship. They pit EU countries against each other – notably Italy against other core members.

A major geopolitical shift will make Europe's relations with China and Asia its major external focus in coming years

Germany’s incoming EU presidency is making relations with China a priority, but the planned September summit with President Xi Jinping has now been postponed because of Covid-19. The ambassadors’ letter outlines “obvious shared interests in the peaceful resolution of global conflicts, climate change mitigation, sustainable development, food and energy security, nuclear non-proliferation and social justice”. Enhancing connectivity is another priority, as is “upholding multilateralism, with the United Nations and World Trade Organisation at its core”. Differences on human rights are acknowledged but with a supposed capacity for frank disagreement.

That sits awkwardly with the currently more assertive strain in China’s “lone wolf diplomacy” in Europe and elsewhere. Critics of China say magnanimity is one hallmark of a great power rather than the current chauvinism which seems to mirror Donald Trump’s resentful resistance to US decline.

Behind such jostling over events and criticisms lies a major geopolitical shift which will make Europe’s relations with China and Asia its major external focus in coming years. Were it to be sucked into a reactive response to a US-China cold war, that potential would be lost.

Nathalie Tocci, adviser to former EU external affairs boss Federica Mogherini, puts it well in a useful symposium in the current Asia-Europe journal: “Amidst a sharpening of the US-China strategic competition, Europeans must redouble their quest for autonomy, enabling them to triangulate between the two rather than being forced to choose between or to succumb to one of them. Such autonomy is necessary to shield Europeans against the nefarious effects of asymmetric interdependence aimed at making the continent simply another terrain of the crystallising global confrontation.”

That requires a greater strengthening of EU foreign policy capacity to match its economic ambitions. The two come together in dealing with China. But the common interests involved in maintaining multilateralism are shared with other Asians, notably the Association of Southeast Asian Nations. Its 10 members bring 600 million people together in a regional inter-governmental organisation with which the EU is also pledged to strengthen its links.

Future summitry should aim to balance bilateral with multilateral relations on all these issues. From such encounters can be developed a more effective ethical engagement based on mutually recognised interests and values.