Europe eyes to replace US as China’s prime foreign partner

Last Tuesday in Washington United States Secretary of State Rex Tillerson (on the right) met with Chinese State Councilor Yang Jiechi, the top diplomat of his country. (Date: 28/2/2017. State Dept Image).

Last Tuesday, Rex Tillerson, the US Secretary of State, received in Washington the top Chinese diplomat Yang Jiechi , in an effort to establish a “regular high-level engagement” with China, after President Donald Trump has practically destroyed the until recently multiple channels of problem solving and interaction between the two super powers. Obviously, Tillerson felt he had to urgently invite State Councilor Yang to the US to sort out the mess between the two countries.

Reportedly, the American administration, but probably not their boss, are alarmed by the new free trade and otherwise cooperation openings the European Union is currently offering to China. No question that Europe is eager to replace, at least partially, the US as prime economic, financial and investment partner of the still super fast growing and most populous country of the world.

Brussels calls Beijing

It is very characteristic in this respect that Reuters, the prestigious news agency, published a telling story about the swift action of the European Commission, in her efforts to secure Beijing’s fullest possible cooperation in their bilateral relations. The Reuters report says that, “The European Union is preparing an early summit with China in April or May in Brussels, to promote free trade and international cooperation in the face of a more protectionist and inward-looking Washington, three EU officials said”.

On many occasions, the German Chancellor Angela Merkel and other important German decision makers have openly said or left to be understood that their country is eager of filling the gap the Americans are leaving in China in particular and South East Asia in general. Outspoken German Vice Chancellor, Sigmar Gabriel, until recently leader of the Socialist Party, said that Germany has to put together an economic plan to charm the Asians “should the new U.S. administration start a trade war with China”. Gabriel said that on 20 January, only hours after Donald Trump took the oath as the 45ht American President.
Germany is ready

However, Germany is a pivotal member state of the European Union and no country of the club is allowed to conduct her own foreign trade policy. So, it will be Brussels and the European Commission to undertake the task of opening new highways in the trade and financial relations between Europe and China.

Incidentally, last Monday, Cecilia Malstrӧm the Swedish EU Commissioner for Trade speaking at an EU-China relations forum in Brussels, said: “If others around the world want to use trade as a weapon, I want to use it as a tonic, a vital ingredient for prosperity and progress.” Of course, she didn’t explicitly referr to Donald Trunp’s threats about imposing extra tariffs on Chinese imports, but it was clear that she was backing China in the battle against Trump’s protectionism. She went even further and remembered that last January in Davos, the Chinese President Xi Jinping said that, his country is now the leader of the globalized world. She also offered her full backing to Xi’s conclusion, that the big global problems can only be solved with multilateral cooperation, not with threats of a trade war.

What is the EU ready to trade?

However, this tide of cooperation proposals emanating from Brussels and directed towards Beijing is not without problems. For years now, the European Commission has been punishing the Chinese exports of steel and steel products with extra duties, on the base of alleged dumping pricing or state subsidies to exporters. In reality, the European Union is not ready to open its internal market to China, and Malstrӧm clarified that “many barriers and irritants” are present in the economic relations between the two sides. Finally in her speech mentioned above, she added that trade between the EU and China is all but balanced.

Undoubtedly, Europe is eager to take advantage from the emerging clash between China and US. This doesn’t mean though that Brussels is ready to pay an unduly price for any Chinese concession. The opposite is rather true. The EU counts to profit from the conflict of other two. In any case, Europe will remain firm in protecting its internal market. Possibly then, some of those questions will be clarified in the forthcoming spring EU-China summit. The main target, though, of this summit is that, both sides want to appear defiant vis-à-vis Donald Trump’s threats about unleashing a trade war. China and Europe have both made clear at the highest level, that they will duly and immediately retaliate.

According to Washington’s progressively greater clarification, whether, during the coming weeks, Trump’s trade war threats are to shape official policies or, on the contrary, policy is to take a different turn, the EU-China summit will produce diametrically different results. Despite all that, the EU and the US are still together in blocking China’s efforts in the World Trade Organization to be recognized as ‘a market economy’, an issue of paramount importance in world trade. No surprises, then, if the  US-China-EU triangle continues to be shaped under the same world geometry, as was the case during the past many years.