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Watching China in Europe - May 2020

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

Welcome to Watching China in Europe, a new 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 update, Noah Barkin—a veteran journalist based in Berlin and a senior visiting fellow at GMF—will provide his personal observations and analysis on the most pressing China-related developments and activities throughout Europe. Click here to receive the newsletter version

Has Corona Changed Anything?

How will the coronavirus affect Europe’s relations with China? That is the million euro question in the European webinar world these days. And I think it’s fair to say that a consensus has emerged that views on Beijing are hardening in European capitals, with potentially far-reaching implications for the relationship.

In Britain, anger over Beijing’s weeks-long virus cover-up has fuelled a revolt in the Tories against Boris Johnson’s plan to give Huawei a role in the country’s 5G network and the creation of a new “China Research Group” made up of conservative MPs that want to push Downing Street towards a more hawkish line on Beijing.

In France, Emmanuel Macron’s government has repeatedly called out China (and Russia) for spreading disinformation in the crisis and recently summoned the Chinese ambassador to complain about insulting propaganda disseminated by his embassy. Sweden closed its only remaining Confucius Institute in April and has joined calls for an investigation into the origins of the coronavirus.

In Brussels, European Commission President Ursula von der Leyen has risked the wrath of Beijing by openly praising Taiwan for its role in the crisis.

But delve beneath the surface and the picture becomes fuzzier. In Italy and Spain, the EU countries hit first and hardest by the coronavirus, we have seen mostly praise for China from governments scrambling to secure masks and ventilators. And in Germany, Chancellor Angela Merkel and her ministers have also steered clear of criticising China, even as the country’s top-selling newspaper Bild waged a war of words with the Chinese embassy. Which way Germany leans on China will be decisive for the broader EU’s post-corona stance. And so far, there are no signs of a hardening in Berlin.

Spirit of Cooperation

On the contrary. I listened in on an interesting webcast last week that was organized by Germany’s Asia-Pacific Business Association. Among the guests were two of the government’s most senior Asia experts. And their messages on China were a wake-up call for anyone counting on a tougher line.

The officials made clear that Berlin continues to see China as an “economic motor” and essential location for Germany industrial production and research. They condemned attempts to turn China into a “scapegoat” for the global crisis, saying “all countries have lessons to learn.” And although they signalled that Germany would seek greater autonomy in the area of medical supplies, they stressed that there were no plans to rethink other supply chains or get swept up in the Trump administration’s decoupling drive. In fact, the officials said, Berlin would use its EU presidency in the second half of this year to press for a build-out of supply chains and more, not less, globalisation.

To their credit, the officials did touch on some of Beijing’s more unsavoury actions in the crisis. The silencing of CCP critics, the expulsion of foreign journalists and the arrest of democracy activists in Hong Kong, they said, were “nicht schön” (not nice). But they reassured their audience that incidents like these would not get in the way of Berlin’s “spirit of cooperation” with Beijing.

Is the European line really hardening, or has the crisis merely reinforced existing tendencies among its member states? I fear there is a not-so-insignificant risk that it ends up deepening divisions on China, both within Europe and between the EU and the United States, rather than bringing them together. That would not be a good outcome.

“Champagne is on Ice”

Back to Germany’s EU presidency. This was to be the big year for Europe and China, culminating in Merkel’s September summit with Chinese President Xi Jinping and fellow EU leaders in Leipzig. But the virus has put an end to that, even if Leipzig has not been formally cancelled yet.

In Brussels, Paris, and even in Berlin, officials are breathing a sigh of relief. Or as one European diplomat put it to me: “Champagne is on ice for a Leipzig cancellation.” Behind the scenes, Brussels and Berlin have been pushing for months for China’s vice premier Liu He to engage in negotiations on a comprehensive investment agreement between the EU and China—a deal Merkel had hoped would come together in time for her summit. But that hasn’t happened. At the end of last year, Liu was too busy negotiating the “phase one” trade deal with Washington. Now, Europe is being told, he is too busy with the virus.

Even before corona began spreading around the world, a lack of progress in the negotiations had raised the risk that Leipzig would turn into a propaganda coup for Xi less than two months before the U.S. election. Back in February, concerns about this scenario prompted a group of leading think tankers in Berlin to pen a confidential letter to the Chancellery urging Merkel to rethink. At the time, her entourage saw the letter as an affront. Now, the virus has given them an easy out. In her weekly podcast at the end-of-April, Merkel said Germany’s EU presidency would be thoroughly retooled to focus on the pandemic. She didn’t mention China once.

Tough Questions on 5G

Summits or no summits, China will still loom large for Europe in 2020. A speedy recovery in the world’s second biggest economy could soften the economic blow to the old continent, as it did in the aftermath of the global financial crisis a decade ago. Germany, at least, seems to be counting on this scenario. But once the acute phase of the crisis is over, what next? One has the feeling that a broader post-corona debate on China is looming that neither Merkel nor other European leaders can avoid.

Before the crisis hit Germany, members of the Greens party in the Bundestag put forward what is known as a “Grosse Anfrage” on China—a 21-page list of questions for the government on every aspect of its policy towards Beijing. The aim was to force Merkel to explain her stance in parliament before Leipzig. Even if the summit doesn’t happen, Greens members tell me, they will ensure this debate does.

It is likely to coincide with the return of a contentious discussion over the role of China’s Huawei in the German—and broader European—5G network. Germany held its 5G auctions over a year ago. Other European countries have been closely watching Berlin to see which way it leans. But Merkel, faced with a multi-party rebellion against her plan to keep Huawei in, keep kicking the can in the hope the revolt fizzles. In the meantime, operators like Deutsche Telekom, Telefonica, and Vodafone are creating facts on the ground by building out their networks with Huawei. When the inevitable clash in parliament comes, she and her Economy Minister Peter Altmaier will have some tough questions to answer, including whether these companies should face retroactive sanctions for openly defying the government.

The Disinformation Report

A quick, final word on the scandal du jour in Brussels—the disinformation report from the European External Action Service’s East Stratcom Task Force which was held back and changed following intense lobbying by Chinese government officials.

First of all, it was disappointing that the EU’s top diplomat Josep Borrell, who answered questions from members of the European Parliament last Thursday, did not acknowledge that mistakes had been made in how the EEAS handled the report. “We have not bowed to anyone,” Borrell said. But the facts say otherwise. Publication of the report was delayed. The wording was adjusted. And the reason for that was Chinese pressure. Several people within the EEAS have confirmed all of this to me. Second, Borrell appeared to assign blame to the one person at East Stratcom, a young analyst, who had the gumption to raise internal objections to the changes. If her bosses had listened to her, they wouldn’t be in this mess in the first place.

But I see two silver linings in this episode. First, one or more officials appear to have been so alarmed by the changes that they felt the need to leak the details to the New York Times. That is a good thing and Borrell must now ensure that there is not a witch hunt for the leaker. Second, officials at the EEAS and other EU institutions will hopefully think twice now before bowing to pressure from another state, whether it be China or anyone else. The EU has been at the vanguard of Europe’s multi-year pushback against Beijing. And East Stratcom, set up in 2015 to counter disinformation campaigns from Russia and now increasingly from China too, is a jewel. Its mission—to expose harmful propaganda from other states—will not always fit comfortably with the diplomatic aims of the EU’s diplomatic service. But everyone there, including Borrell and his deputies, should stand back and let it do its job.