Is Europe Unanimous on China?
Germany recently released its strategy on China, outlining the challenges China poses and setting forth an agenda regarding how it intends to cooperate with it. The document notes the assertive character of Chinese foreign policy, China’s efforts to reshape the existing rules-based international order “according to its own preferences”, and how China impacts European and global security as a result. Germany calls China a “partner, competitor, and systemic rival”. It points out human rights violations in Xinjiang and Tibet, and the erosion of civil liberties in Hong Kong.
The strategy document clearly shows that the official German position on China has shifted and become bolder than a few years ago. The emphasis on China's impact on European security is an effort towards recognising factors that were previously dwarfed by Germany’s extensive, deep economic relationship with the Asian giant. But at the same time, Germany seems to be walking a tightrope: while China is a systemic rival, it does not mean that the two “cannot cooperate”. It emphasises the importance of “de-risking” but leaves it open to business firms and companies how they may de-risk from China, by not laying binding targets for them.
Along with Germany, the European Union’s position also appears to be toughening. In a speech in late March, ahead of her visit to Beijing, Ursula von der Leyen, President of the European Commission, emphasised the “deliberate hardening of China's overall strategic posture” and its “ratcheting up of increasingly assertive actions.” Expressing the desire to rebalance the relationship with China “on the basis of transparency, predictability and reciprocity,” she outlined a policy of de-risking European economies from China.
That said, for both Germany and the European Union (EU), de-risking does not imply de-coupling. The argument for de-risking is that European economies must be shielded from critical vulnerabilities that impact national and economic security, but at the same time, such shielding must not be equated with substantial economic disengagement. That disengagement, Leyen notes in the speech, is not in Europe’s interest. The emphasis on this distinction underscores Europe’s need to balance economic interests with a partner that poses significant security risks.
The distinction also brings to the fore a lack of cohesion among EU member states over their perception of China. European discourse on China today possesses significant diversity. The diversity stems from how countries within the EU evaluate their economic relationship vis-à-vis China and their threat perception from that relationship.
De-risking might mean different things for officials in Berlin, Paris, Budapest, Amsterdam, Vilnius, and finally, Brussels. Recent visits by the top leaders of Spain, France and Germany to Beijing in late March and April underscored that member states are not necessarily entirely aligned on what de-risking should entail. As its ambassador to the EU Fu Cong acknowledged, Beijing is well aware of these differences. This diversity is likely to complicate the adoption of tougher EU-wide measures.
For instance, the French and German approaches on technology issues are incompatible with the tougher approach adopted by the Netherlands to align with the US to block the export of semiconductor equipment to China. The Dutch decision is also much tougher than anything that the EU has decided, although it is clear that the EU has sought to gradually coordinate its thinking more closely with the US, particularly with regard to emerging technologies.
That coordination, however, does not imply a complete alignment between the US and the EU. Europe, in fact, is trying to find a new equilibrium in its relationships with both the US and China. As much as there are anxieties around China’s rise, there is also concern around the churn in American politics and Washington’s increasing reliance on industrial policy, which imposes costs for Europe’s economic security.
Another key facet of this concern is whether Europe and the US even see eye-to-eye over China. Both agree that China poses systemic challenges to the international order and their place in the world. But European assessments of the nature of the security threat that China’s rise presents are not entirely compatible with the US’ assessments.
Take President Biden’s latest curbs on US investments in China in key technological sectors like semiconductors and artificial intelligence systems. Despite US encouragement for similar EU legislation, Brussels has adopted a cautionary tone over the bans. In May, Margrethe Vestager, European Commissioner for Competition, expressed whether outbound screening mechanisms for investments in China were necessary. She suggested that the EU should devise its own framework to assess geopolitical risks; otherwise, it would allow China or the US to set the terms of the discussion. The European Union had to assess risks from a European perspective, “...otherwise the dividing lines [would] be drawn either in Beijing or in Washington”.
But without sufficient European consensus on China, such a framework will be hard to conjure. While Germany’s and the EU’s perspectives on China are getting bolder, it is unclear whether this will translate to bolder policy measures. Such translation requires extensive intra-EU bargaining and negotiation amidst various diverse groups who see China differently. And ultimately, these policy measures may not necessarily be aligned with how Washington sees Beijing.
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