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Watching China in Europe - July 2021

7 min read
Welcome to Watching China in Europe, a monthly update from GMF’s Asia Program

Welcome to Watching China in Europe, a monthly update from GMF’s Asia Program. Now more than ever, the transatlantic partners need clarity and cohesion when it comes to China policy. In this monthly newsletter and the WCIE podcast series, Noah Barkin—a veteran journalist, managing editor at Rhodium Group and a senior visiting fellow at GMF—provides his personal observations and analysis on the most pressing China-related developments and activities throughout Europe. We hope you find it useful, but if you would like to opt out at any time please do so via the unsubscribe button below.

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From Bad to Worse

It is too early to sound the death knell for European strategic autonomy. The idea has already been embedded in the EU’s trade strategy (with the addition of the word “open”). And too many Zoom hours have been invested trying to explain what the term does – and doesn’t – mean for it to disappear anytime soon. But there’s no question that over the past month, the staunchest proponents of the idea of an independent Europe, that charts its own geopolitical course distinct from the United States and China, are getting nervous about the future of their enigmatic concept. The reason is that the Biden administration, to the surprise of many, has been pushing all the right buttons in Europe – brokering a truce in the 17-year-old Airbus-Boeing dispute, embracing the idea of a global minimum corporate tax rate, and even parroting the EU’s own language when it talks about China. It is early days, but Biden’s strong start is already changing how officials in European capitals are speaking about the US-Europe-China triangle – and exposing cracks in the foundations of strategic autonomy. “We are being pulled into the American camp and I don’t think we have the strength to resist,” one German official told me. “We will try our best to be a moderating force, but the relationship between the West and China is bad and is probably going to get worse.”

French Frustration

The Biden team has been focusing its charm offensive on Berlin—the European capital that Trump loved to hate. Angela Merkel will become the first European leader to get facetime in the White House with Biden when she makes a celebratory farewell visit to Washington in mid-July. Nord Stream 2 sanctions are off the table—for now. Suddenly, to the delight of Berlin’s political establishment, Washington has “no better friend in the world” than Germany. But not everyone in Europe is happy about the situation. In Paris, where I spent several days last week speaking with French officials, the anxiety over Biden’s European tour and its implications for Europe’s place in the geopolitical landscape is palpable. Emmanuel Macron is fuming over NATO’s focus on China and the praise Biden received in Europe for meeting with Vladimir Putin (two years after the French president was castigated for suggesting a rapprochement with Moscow). Summing up the French frustration, Macron’s Europe minister Clément Beaune told Le Monde last week: “The Americans are giving the impression that they are leaders on climate, on vaccinating the world, on digital taxation, when in fact they were blocking all of this over the past four years. Today, they are the ones who are rallying behind European positions.”

In the Hands of The U.S.

On one level, the Gallic pique is understandable. Trump convinced the Germans to swing behind French dreams of an autonomous Europe. Now, only a few months into Biden’s term, Paris sees Berlin swinging away again. Armin Laschet, the frontrunner to succeed Merkel later this year, pointedly declined to embrace the term strategic autonomy when pressed by Beaune at an event hosted by the Munich Security Conference last week. What does all this mean for China policy? I was struck during my talks in Paris at how much the relationship with China is seen through the prism of France’s other relationships – particularly with Germany and the United States. As one French official put it: “China has mattered so much to Germany that it made sense for us to go along with them in order to get other things.” Asked to describe the mood in Paris on China, the official said: “We don’t want to be in the hands of the United States.” As in Berlin, however, there is a sense that Europe is being pulled inexorably in this direction. Strategic autonomy, born from a desire to shield Europe from a hostile Trumpian United States, is now mainly about countering China, I was told. A paper published by the European Council on Foreign Relations last week that provides a blueprint for the EU’s new anti-coercion instrument (to be unveiled in the autumn) underlines this point. Virtually all of the coercion threats spelled out in the paper emanate from China. “Systemic rivalry seems to be overwhelming everything else in our relationship with China,” a second official in Paris told me.

New Geopolitical Dynamic

The alignment on China coming out of the G7, NATO, and EU-U.S. summits was largely rhetorical. But by creating an array of new structures that—explicitly or not—are focused on the strategic challenges presented by China, the summits created a new geopolitical dynamic that will be difficult to stop. The transatlantic Trade and Technology Council alone created 10 working groups—including on supply chains, export controls, and investment screening—that will consume the attention of the technocrats in Washington and Brussels in the months ahead. China is at the heart of NATO’s new agenda. And the G7 has given rise to an ambitious, though still murky, alternative to China’s Belt and Road Initiative—the Biden administration’s B3W concept.

Build Back Better

It has been interesting to see German Chancellor Angela Merkel seize on B3W after years of paying scant attention to Europe’s own efforts to forge a connectivity strategy. In recent speeches to the Bundestag and the Federation of German Industries, she has stressed the need to move swiftly on the BRI alternative. Why? Because the G7 established a new task force on the issue and Germany is due to take over the rotating presidency of the group next year. For Merkel, it seems, the establishment of a process with clear mileposts is a reason to take this seriously. Whether this injects new momentum into the EU’s own connectivity strategy is unclear. Member states are still wringing with the European Commission over Council conclusions that are due to be approved by EU foreign ministers on July 12th. A German concept note from mid-June, which has the Chancellery’s blessing, argues for a more global approach, a rebranding of the strategy and a connectivity point-person within the college of EU commissioners. EU officials are said to be eyeing a deep sea port in Georgia as a project that would inject some geopolitical credibility into their revamped strategy. Watch this space.

Ostpolitik

It is unnerving—though not surprising—that the geopolitical winds of change are not being felt in the parallel world of the German election campaign. The candidates are talking about foreign policy – Armin Laschet has given a steady stream of interviews in recent months and the MSC debate last week touched on a range of global issues, including China. But apart from Annalena Baerbock of the Greens, no one seems interested in venturing outside the lines of the stilted German foreign policy debate of the past decade – or acknowledging that a new geopolitical environment may require new thinking. At the MSC event, Laschet hailed Willy Brandt’s “Ostpolitik” outreach to the Soviet Union in the 1970s as a model for dealing with China – an idea that was eagerly embraced by his Social Democrat challenger Olaf Scholz, whose own message on China could be boiled down to a simplistic “no decoupling”. But support for dialogue with Beijing and the rejection of full-blown economic disengagement from China do not amount to a strategy. Instead, they are convenient diversions from a real strategic debate – worn out European soundbites from the Trump era. It is clear by now that the real debate will have to wait until after the September election. But then, even members of Laschet’s camp acknowledge, it will be difficult to avoid. “There is no such thing as continuity in our China policy if all other factors are changing, including the position of the United States,” one member of his entourage told me. “The U.S. is prepared to be benevolent on a range of issues but, in exchange, they expect a stronger focus on China. Laschet, too, is aware of this.”