How China became EU’s biggest trading partner and why Brussels should maintain that by all means

His Excellency Ambassador of China to the EU, Mr. Zhang Ming (Credit: Chinese Mission to EU)

In a disastrous pandemic year 2020 for the entire world and a global economy with recessions all over, there is good news about EU-China economic relations that the media severely underplayed. EU trade with China in 2020 was €586 billion whereas trade with US was €554. This means that in a remarkably turbulent year for the world China became EU’s biggest trade partner leaving the US behind. Of course, this didn’t happen suddenly but the past 10 years have seen the China-EU trade almost doubling its value.

What does this mean? It basically shows that these two economies are so closely interdependent that nurturing a fruitful, amicable and stable relationship between the two countries is pretty much a one-way street.

The ongoing challenges

Despite the consequential importance of maintaining good China-EU economic relations, it seems that in an orchestrated symphony the EU and the US mean to harm the EU’s relations with its first trading partner. The history of mankind is sadly continuously repeated; every time that someone excels there will be many who will do their best to devour him. But who can earn a single dime anyway if the EU damages its relations with China?

Very recently, at the end of July, the EU’s High Representative Josep Borrell expressed openly a fear that the EU will lose power in Africa and Latin America to China, because the EU has failed to distribute vaccines to the developing world? He tried to provide vague argumentation about it saying that China distributes more vaccines to those countries, thus the EU is missing out. Obviously, this cannot be a serious official declaration by the EU’s top man for diplomacy, but still he made it.

He didn’t stop there though and he later put it bluntly: “The European Union will always be closer to Washington than to Beijing, we will always be closer to a country that has the same political system as ours, a market economy, a multi-party democracy with concurrence in elections, than a single-party country”. He tried to alleviate his bold remark somehow by stating that the EU doesn’t necessarily need to copy-paste the US stance but find its “own” angle. It is at that point that he made a promise to launch a China-EU Relations report when he comes back from his summer holidays in gorgeous Catalonia, where he comes from. Great, so many horrible things happen every day around the world nowadays but the EU officials need to be graced with a month’s beach holidays so to manage to launch a report. What should we be expecting anyway from that much anticipated word document saved as pdf by non-taxed EU officials?

According to Borrell’s “generous” hints, he doesn’t want to play Trump in terms of anti-China tactics, or whatever that means. He then referred to EU’s position on Hong Kong/Xinjiang to climax later with the following blunt statement: “The European Union and the United States have basically developed a preference for containing China, and the E.U. won’t be able to change its position as a competitor with China”. The latter makes it clear that Borrell’s intent is to make this an EU/US report rather than an EU report.

Speaking about the US, the American government launched an accusation earlier in July that the Microsoft Exchange email server software was hacked by sources linked to China. Borrell had also echoed then that the attacks came from China targeting intellectual property. However, the Chinese side rejected those claims as groundless.

Meanwhile, in mid-July the Foreign Affairs Committee of the European Parliament had issued a report about China outlining the relations with EU’s biggest trading partner. While the report endorsed EU-China cooperation for issues like the pandemic and climate change, it kept on scratching the wounds of the China-EU challenges. It discussed the freezing of the Comprehensive Agreement on Investment (CAI) that took place earlier this year and demanded the lifting of the sanctions against MEPs and EU institutions. The report went on to touch thorny issues like Taiwan, Hong Kong, Xinjiang etc. The report didn’t omit to picture China’s 5G giants as potentially harmful to the EU.

Main EU members don’t agree with the anti-China rhetoric

Nevertheless, not everyone buys the anti-China rhetoric and instead tries to read behind the lines of the US-led campaign to hurt China’s economy and Biden’s search for anti-China allies. For instance, Angela Merkel, the German Chancellor representing the EU’s largest economy, has expressed her reservations to go anti-China.

The US President Biden during his July tour in Europe tried to convince her to place Germany firmly against China but Merkel diplomatically spoke about “cooperation and competition”. The French President Macron also had earlier underlined that it is “counterproductive” to adopt anti-China tactics.

Among the EU member states that don’t feel like hurting ties with China there is also Hungary who tends to underplay any aggressive anti-China statements coming from Brussels.

Besides, even the British Finance Minister Rishi Sunak had also underscored that a “balanced relationship” with China is what is truly missing now.

Beijing calls Brussels to come back to the relationship

Chinese State Councilor and Foreign Minister Wang Yi had a meeting with Borrell in Uzbekistan in mid-July. Wang said that he hopes that the EU will appreciate China’s development in a positive way which is important for the development of the entire human kind.

China’s Foreign Minister added that he hopes that the EU will view China’s development from the perspective of the development of mankind with goodwill and positivity, and the two sides will learn from each other and make common progress.

He also expressed China’s intent for fruitful synergies with the EU on interconnection initiatives. Wang committed to sustain a fruitful and win-win dialogue with the EU and resolve differences effectively.

Mr. Wang Yi said that China and the EU can complement each other and work together to promote connectivity among countries and accelerate the development and revitalisation of the Eurasian continent.

The EU High Representative embraced Mr. Wang’s stance stating that he respects China and he wouldn’t want to engage into a new Cold War. He made it clear that the EU doesn’t want to confront the Belt and Road Initiative (BRI). He also welcomed discussions with China on global work for climate change.

Notwithstanding, just a couple of weeks later in July Borrell in a 180 degrees mood swing he changed completely his stance, as said earlier, launching hostile statements against China.

Can Brussels be a pawn of Washington?

All in all, following the freezing of the agreed CAI earlier this year the EU and China are surely running a turbulent summer whereby mainly the European side tends to re-orient the relationship with its first trading partner towards new lows and something modified that has been somehow dictated by the US.

The million dollar question here though is whether the EU can have its own will and spine as well as foreign affairs policy nurturing the European interests towards EU’s first trading partner or Brussels is just a pawn of Washington after all.

The anticipated fall report of Borrell will show how far Brussels is really from the other side of the Atlantic. It will also show if the EU will turn its back to its biggest trading partner. Surely, there are differences but this is why there is diplomacy, no?

Undeniably, the resolution of the differences in a balanced diplomatic way that will not undermine neither the European nor the global economy is a sine qua non in these turbulent economic times that we are going through.

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