Business China Cooperation Economy Europe Politic United States

Europe and China. Is a Relationship Crisis Inevitable?

What will relations between Beijing and Brussels look like in the near future?

Following the German Chancellor Olaf Scholz, the President of the European Council, Charles Michel, went to Beijing. There, at a meeting with Xi Jinping, he tried to solve the same puzzle: what should relations between the EU and China be like in the medium term?

Brussels has to start from several important considerations. First, there is a high probability that Europe’s interest and dependence on the Chinese market will increase as early as next year. This is due, on the one hand, to the expected recovery in the pace of development of the Chinese economy; and, on the other hand, with complex processes within the European economy. These processes may well take the form of a recession caused by a break in cooperation with Russia, including in the supply of energy resources from there. In addition, the ongoing Russian-Ukrainian war poses significant risks for Europe. Of all the world’s major economic centers, the EU has the most bleak future ahead of it in the coming years. Cooperation with China could become a vital necessity.

But, secondly, this need faces difficulties: political and international. Differences between Europe and China over democratic principles and the protection of human rights persist and impose significant restrictions on bilateral cooperation. It is political disagreements that have become the main reason for the sharp deterioration in Sino-European relations over the past two years. The international situation is determined by destabilization at the global level, the aggravation of US-Chinese contradictions and the complex nature of relations between the EU and the US. Taken together, this poses a challenge for Europe: how to increase the potential for trade with China, which may be the main salvation for the European economy, without sacrificing political principles? So far, the answer is not very clear: Xi Jinping repeated the ritual phrase that it is necessary to avoid escalation in the Russian-Ukrainian war, and Charles Michel tweeted that open engagement with China in all aspects of bilateral relations is the only way. Behind these statements, there is no certainty whether even a sustainable partnership between China and Europe can be expected in the coming years.

How difficult such a path might look on the ground became clear last week when the EU filed two WTO cases against China. One of them concerns intellectual property rights, in particular, restrictions imposed by Beijing on the protection of high-tech patents by European companies. Since the year before last, Chinese courts have systematically resorted to the practice of prohibitions, which make it difficult for Europeans to protect such rights. The EU sees this as an attempt by China to gain cheap access to technology at the expense of its own interests.

The second lawsuit concerns restrictions imposed by China on imports from Lithuania and/or goods containing Lithuanian components. This was done in December last year in response to the opening of an official representation of Taiwan in Vilnius – which, in turn, happened in the midst of another crisis caused by violations of human rights in China. Now trade between the EU and Lithuania has fallen by 80%, and this creates enough problems for the EU to apply to the WTO.

Both of these cases go beyond trade and concern areas where competition develops into mistrust and confrontation. The paradox remains: Europe needs China, but relations with it are deteriorating, and neither Brussels nor Berlin can do anything about it yet. Olaf Scholz tried to describe the essence of the problem in his article for the current issue of the influential magazine ForeignAffairs. In his view, China’s rise should not lead to its isolation, but instead make China an ally in support of free trade. But this is unlikely to be enough. Beijing has long made redefining the world order its strategic goal. Probably, in China they would agree with Scholz’s demand for fair interdependence; but the concepts of “fairness” in Beijing and Berlin seem to be different. Ideological and political conflicts will intensify, and Europe will have to continue to think about how to turn trade with China into an asset.

Source : ГОЛОВНА