A European love-hate relationship

China wants the ‘friendship’ of the European Union, but Brussels is limited to extending a hand, complaining about how European companies are treated in China, and doubting how Chinese companies, especially in the technological area, are operating in Europe

If relations with the United States are unlikely to be good, and with Russia it is difficult to improve upon them, what is the role of the European Union in the greater scheme of Chinese bilateral relationships? With the two sides seemingly on the same page with regard to tariffs, will Brussels and Beijing form an alliance against Washington? 

Europe is China’s largest trading partner and China is Europe’s second largest. The trade in goods between the two is worth over MOP13.8 billion [€1.5 billion] every single day. But last year the EU recorded a deficit of €176 billion in trade with the Middle Kingdom. 

“We share the same concerns as the US. But there are better and less risky ways to deal with problems,” Mats Harborn, chairman of the EU Chamber of Commerce in China, said last month. The concerns are about issues like market access and intellectual property rights. A recent survey conducted by this body concluded that China is “one of the most restrictive economies in the world.” 

That is, China wants an ally called the European Union in the anti-Trump fight but Europe does not want to extend both hands to an entity which systematically creates issues for European companies seeking to expand in China or to freely conduct business there. 

“Regulatory issues,” Harborn told Deutsche Welle, “range from ambiguous rules to discretionary enforcement of policy to specific problems like access to licences and financing or equal access to public procurement bids.” 

One of the most prominent cases is ‘Made in China 2025,’ Beijing’s ambitious initiative to mitigate and even eliminate the technological gap that Chinese companies feel when competing freely in the world (in areas such as biotech, robotics, aerospace and clean-energy cars). 

Add to this European Parliament reports which systematically criticise the [unrequited] quest for human rights in China, and we can see that the relationship can never be perfect – or at least as good as it is with Russia. It is to approve these reports, something political analysts attribute to the millions pledged by China in the 16+1 format, an initiative by the PRC ‘aimed at intensifying and expanding co-operation with 11 EU Member States and five Balkan countries (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia) in the fields of investment, transportation, finance, science, education, and culture).’ 

“We share the same concerns as the US. But there are better and less risky ways to deal with problems” – Mats Harborn, chairman of the EU Chamber of Commerce in China

In this global context, with the exchange of sanctions already in force, the recent summit between EU and China, held last July in Beijing, took on a special interest. 

Despite the Chinese interest in actually deepening the strategic partnership, Brussels emphasises that “China needs to take responsibility for global problems of overcapacity in the steel and aluminium sectors, and conform to stricter rules on state aid.” 

Both confirmed support of a ‘rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system’ with the WTO at its core and committed to complying with existing WTO rules, but the idea of a joint complaint has not disappeared.  

“We expect all our partners to respect international rules and commitments that they have made, notably within the framework of the World Trade Organisation,” said EU Commission president Jean-Claude Juncker – words that can be addressed as much to Washington as burning ears in Beijing. 

Russia, BFF 

In 1950, Mao Zedong and Josef Stalin signed a friendship treaty to create a Soviet-Chinese alliance promising to “remain friends forever.” But the friendship slid into rivalry and even in hostility in the 1960s. With the collapse of the Soviet Union in 1991, Moscow and Beijing recycled the old treaty and forged what they called a “strategic partnership” (a model used by China with dozens of other countries). 

This year, Xi Jinping handed Vladimir Putin the ‘Medal of Friendship’ when the two met in Beijing, declaring the Russian leader his “best, most intimate friend . . . a good and old friend of the Chinese people . . . [and] . . . the leader of a great country who is influential around the world.” 

The Chinese President also said Sino-Russian relations had been a “priority” for both sides “no matter what fluctuations there are in the international situation.”