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Europe’s Dangerous China Dependency

The COVID-19 pandemic marks an important inflection point in history. As the virus continues to upend human lives throughout the world, its geopolitical aftershocks are bringing profound changes to the global order. Perhaps the most significant of these consequences is a rapid acceleration in the systemic rivalry between the United States and China, as increasingly hostile rhetoric and actions on both sides brings us closer to the worrying prospect of a new cold war.

In recent years, Europe has attempted to stay on the sidelines of this conflict. While stressing their continued commitment to the transatlantic alliance, European leaders have simultaneously continued to court Chinese investment and brushed off American concerns about Huawei’s role in constructing 5G telecommunications networks across the continent.

A disquieting sequence of events over the last few months has made clear the downsides of Europe’s dependence on China. Alarm bells first sounded in late April after the leak of an internal email within the EU’s External Action Service (EEAS), which revealed that EEAS officials edited a report on COVID-19 disinformation to substantially soften criticism of China in response to complaints from the country’s mission to Brussels. Only a couple of weeks later, the EU’s ambassador in Beijing succumbed to pressure from the Chinese foreign ministry to remove references to the coronavirus’s Chinese origin in a letter for the China Daily, an official Chinese Communist Party (CCP) newspaper.

Most recently, the European Union has failed to adequately address the crisis in Hong Kong, where the Chinese government is imposing new national security laws that threaten the freedoms enjoyed by residents under the territory’s semi-autonomous status. Despite calls from prominent pro-democracy activist Joshua Wong for EU sanctions on Chinese politicians in response, the bloc’s leadership went no further than expressing “grave concern” over the developments.

These incidents strikingly illustrate the EU’s willingness to prioritize narrow economic interests over its foundational values of freedom and democracy. As of 2020, China is the EU’s second-largest trading partner (behind the United States), and many member states will avoid jeopardizing this relationship at any cost. A senior EU diplomat acknowledged as much when commenting on the Hong Kong crisis: “Sanctions are not on the table, our relations with the Chinese are simply too important”.

Australia’s recent experience seems to justify European fears of what could happen if they choose to take a stand against China. After Australian Prime Minster Scott Morrison called for an independent inquiry into the origins of the COVID-19 pandemic, China retaliated by placing tariffs on Australian barley and suspending imports of Australian processed meat. These industries are heavily dependent on exporting to China and the country faces serious economic damage as a result. In order to avoid a similar fate, one might reason, the EU must stay quiet and refrain from criticizing the Chinese government.

Yet Europe’s hands are not tied. While wholesale decoupling is impractical in today’s highly interdependent global economy, it is both possible and advisable for Europeans to reduce reliance on China and choose alternative suppliers in certain critical sectors such as technology and healthcare. There is also a dire need for tougher provisions in a revised EU-China investment agreement due for completion later this year. Taking these bold steps would weaken China’s leverage during future attempts at “wolf warrior diplomacy” and allow the EU to stand up for its core political values.

The outlook for EU-China relations remains decidedly foggy at present. On the one hand, there have been some encouraging signs that the bloc is waking up to the problem: for example, EU competition commissioner Margrethe Vestager suggested in April that member states buy stakes in vulnerable European companies to prevent Chinese takeovers, and certain prominent EU countries may soon follow former member Great Britain’s recent decision to block Huawei from their 5G networks.

On the other hand, it is clear that without a more radical break, the EU will remain beholden to Chinese economic pressure for the foreseeable future. It will be important to watch developments during the German Presidency of the Council of the EU (from July 1 through the end of 2020), as Chancellor Angela Merkel plans to make relations with China a priority. Unfortunately, the flagship EU-China summit scheduled to take place in Leipzig in September has been postponed, making real progress less likely.

One thing is clear: an effective European response to China will not come on a bilateral basis. Only by joining their full forces within the European Union can countries across the continent hope to find a way to achieve both economic prosperity and freedom from Chinese influence. A failure to find this consensus will in all likelihood end with disaster.   

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Nick Lokker

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