EU-China Relations in Mid-2022: Between Missed Opportunities and Future Uncertainties

EU-China Relations in Mid-2022:  Between Missed Opportunities and Future Uncertainties


For the Emperors of ancient China, their mandate to rule was granted by Heaven. Such a divine mandate was not only restricted to the "Central Kingdom" (as China continues to call itself - 中国), but to the Emperor in relation to the whole world. According to the contemporary narratives popularised in China, for the past five thousand years, the "Central Kingdom" mostly maintained its status as the most powerful, harmonious, wealthy and wisest Empire only to have been recently affected by the modern "Great Powers".

Certainly, the five thousand years of China's continuous history and culture are still a matter of debate among archaeologists. In a similar note, the role assigned to China in the international architecture varies according to interpretations. For most, China is an equal member of the international community which seems to have benefited of a successful economic development story and holds one of the five permanent seats in the UN Security Council; for many International Relations scholars in China, Beijing is the proponent of a "New Model of International Relations" which should help China recover its mandate as "Central Kingdom", according to its manifest destiny.

According to the EU's Strategic Outlook on China, "For the EU, China is simultaneously (in different policy areas) a cooperation partner, a negotiation partner, an economic competitor and a systemic rival". So far, 2022 has been an eventful year in setting a clearer view over the areas in which EU and China are cooperating, negotiating or competing.


The EU-China Comprehensive Agreement on Investment

Despite having been signed on December 30, 2020, the EU-China Comprehensive Agreement on Investment (CAI) has not yet witnessed relevant developments in 2022, pending the ratification by the European Parliament. According to the “Key Elements of CAI”, as published by the European Commission, “In addition to rules against the forced transfer of technologies, CAI will also be the first agreement to deliver on obligations for the behavior of state-owned enterprises, comprehensive transparency rules for subsidies and commitments related to sustainable development. The CAI will ensure that EU investors achieve better access to a fast growing 1.4billion consumer market, and that they compete on a better level playing field in China.” As the CAI text is not yet available to the wider public, some analysts have speculated that, through the Agreement, China urged EU to exercise its "strategic autonomy" from the US which has long since identified China as its "strategic rival".

In fact, the signing of CAI could be interpreted in the light of compartmentalization, an idea already expressed by the European Commission in its assessment of China as “a cooperation partner, a negotiation partner, an economic competitor and a systemic rival.” While EU announced the agreement in December 2020, reportedly after almost a decade of negotiations, in March 2021 Brussels adopted sanctions against China in a climate of worldwide concerns about the treatment of China's Uighur minority. Clearly, as a Union of democratic states, EU has a moral duty to react to human rights violations where such violations are perceived.

In essence, the EU sanctions, only months after announcing CAI, constitute the perfect expression of compartmentalization. The Chinese response, however, was quite broad in scope and included the sanctioning of multiple Members of Parliament, Members of the European Parliament and even academics - which could be summarized as an overreaction which severed the logic of compartmentalization proposed by the European Commission. As the only Western global player that adhered to the logic of compartmentalization in its relation with China, EU could have received a more prudent response on Beijing's behalf.

Certainly, it could also be considered whether the Members of the European Parliament and their respective parliamentary groups will ever ratify CAI as long as the Chinese sanctions are still in force.

Lithuania-China Relations: A Diplomatic Row?

The stalemate regarding CAI has been further aggravated by the recent effervescence between Lithuania and China, which has attracted a very serious attention – and solidarity – of the entire EU.

Certainly, Lithuania, as every other sovereign state, has the right to leave the "17 + 1" format, as it did back in March 2021. Leaving the China-Central and Eastern Europe cooperation initiative was a matter of Vilnius' perception - at that respective moment - of Lithuania's national interest priorities as an expression of its sovereignty and national independence. Lithuania's opening of a Taipei Representative Office (TRO) could similarly be construed by the Lithuanian jurists as a matter of national will; multiple precedents have been established in this direction by other European countries, provided that, at the moment, TROs are registered in 23 European countries and the European Union. Indeed, Lithuania's will to call the representative office as Taiwan Representative Office, instead of Taipei, has caused, due to a possible multiplication of the domino effect, a real concern in Beijing, provided China's sensitivity over the "One China" principle, as recognised by all the countries maintaining direct diplomatic relations with Beijing.

The immediate reaction of China was to recall its ambassador from Lithuania, “downgrade its diplomatic relations with Lithuania to the chargé d'affaires level” (according to a statement issued by the Chinese Foreign Ministry), restricted trade relations with the country and put pressure on international companies to limit their exchanges with the Lithuanian market (as reported by a broader analysis conducted by London School of Economics).

It is very significant, in the context, for the unity of EU, that the Anti-Coercion Instrument (ACI) was presented by the European Commission, as on December 8, 2021. Without direct references to China, the instrument was presented as “a response to the rising problem of economic coercion and aims to protect the Union’s and Member States’ interests and sovereign choices.” The Commission similarly warned that “as a last resort, when the economic coercion persists, the Union may consider taking countermeasures against the country in question in order to counter act such economic coercion.”


The EU-China Summit

Held virtually on April 1, the summit has been the first formal meeting between the leaders of the two sides since 30 December 2020. EU leaders Ursula von der Leyen and Charles Michel, Presidents of the European Commission and the European Council, respectively, have met - virtually - Xi Jinping, President of China, and Li Keqiang, Prime Minister of China. The online bilateral summit lasted about an hour and was described by the European Commission as "open and frank", yet "not business as usual. It took place in a very sober atmosphere." In the same note, EU's Foreign Affairs High Representative, Josep Borrell, has described the 2022 EU-China Summit as a “dialogue of the deaf”.

A brief look at the statements of both sides indicates each party's priorities in its bilateral relations. The EU readout starts with the Ukraine crisis, hinting at China's responsibility, especially as a permanent member of the UN Security Council. Subsequently, the attention turned to several specific bilateral aspects: climate, fight against Covid-19, China's "unjustified trade measures against Lithuania", the Chinese santions against the members of the European Parliament, human rights and a level playing field in the bilateral trade and investment relations.

The Chinese side, conversely, presented rather abstract remarks regarding the global order and showcased a rather prescriptive stance on the role EU can play. Specifically, Beijing expressed its preference for greater autonomy of the EU from the United States, which might, in their opinion, position the Union as an independent pole in a multi-polar system. Certainly, Beijing prefers to avoid a strong union between Brussels and Washington, in which China appears as a competitor.

It could be inferred that the veiled messages from von der Leyen and Michel was that European companies could pull out of business with China shall Beijing side too closely with Moscow.

"We count on China’s support to achieve a lasting ceasefire, to stop the unjustifiable war and address the dramatic humanitarian crisis it has generated", said Michel. In the press conference, von der Leyen opined that the two sides simply had "opposing points of view" regarding the Ukrainian crisis: for Europeans (as for Americans) it is an international crisis - so "is not only a defining moment for our continent, but it is also a defining moment for our relationship with the rest of the world." For President Xi, Russia's unprovoked military aggression against Ukraine represents an European crisis, i.e. regional, which should not "tie the whole world to the crisis [and means] people of all countries will pay a heavy price."

As the Russian military aggression in Ukraine also implies a general disturbance to global economic flows and Chinese imports of wheat and sunflower oil, fertilizers and other raw materials from Ukraine, one may conclude – also bearing in mind both China’s Ministry of Foreign Affairs’ statements and the UN principles – that Beijing could generally hold negative views on the war in Ukraine. It is noticeable that these days the Chinese and Russian leaders agreed their respective countries are bound by a “friendship without limits”, leaving room for already existing speculations on a prospective new alliance affecting the unipolar system in world affairs.

As, perhaps, the two participating parties at the summit could not find the same words to describe the results of the summit, no joint statement was released by the two parties. While some may consider such an output as the measure of a lesser success, the importance attached by the EU to the war in Ukraine and the consequences China’s stance on the Ukrainian issue have been conveyed in the most open manner to Beijing.


China’s Two Special Envoys in Central and Eastern Europe

While the Central and Eastern Europe - China cooperation seems to have lost momentum, provided the lack of attention this matter receives in both the European and Chinese media, China registered certain diplomatic démarches in an apparent attempt to further strengthen the ties with the members of “16+1” format.

China's first Special Envoy for Central and Eastern European (CEE) Affairs, Huo Yuzhen, started her diplomatic mission in April 2022 with a tour in the Czech Republic, Slovakia, Hungary, Croatia, Slovenia, Estonia, Latvia and Poland. While the media in China has been scarce on the details of Huo's mission, as well as China's Ministry of Foreign Affairs, one could only speculate on the achievements of the Chinese diplomat in her European tour.

A second Special Envoy, Wu Hongbo, embarked on a three-week tour of Europe only a month later. The tour included stops in Belgium, Romania, France, the Czech Republic, Hungary, Germany, Cyprus, and Italy. While some analysts comment both Special Envoys received a cold reception in Europe, Wu Hongbo's trip in Europe received even less coverage in both Chinese state-owned media and in Europe.

In the new global context, marked by Russia's aggression against Ukraine and, as a result, the following strong economic sanctions, China may be willing to avoid placing itself in the same boat with Russia, especially given the historic trauma inflicted by the former Soviet Union to the CEE countries. It is not completely impossible that, in the eyes of Beijing, a serious deterioration of Central and Eastern Europe's relations with Russia will generate a proportional deterioration of CEE's relations with China. Certainly, in the light of the recent diverging views which marked the Europe-China relations, it may also be possible that the same concern may regard the whole European Union, not only CEE.

What to look for in the coming months of 2022?

It is clear that a mid-year examination of the EU-China relations reveals multiple eventful moments. Characterized by several missed opportunities and multiple uncertainties for the coming months, the relations between the two powers reveal marked differences.

Continuing in the same note may lead for the two parties to further consolidate their views, associate with other actors that share the same vision and further distance themselves. A scenario in which EU and EU-members would further consolidate their already existing friendships and alliances, based on the values of democracy, multilateralism and respect for international law, is not impossible.

At the same time, the possibility that the Chinese nationalist impulses may reason with the Russian narrative, at the expense of the tremendous economic advantages of the EU-China economic, trade and investment relations is not to be excluded.

Indeed, if the growing swirl of confrontation, rearmament, insecurity, nationalism and the formation of competing blocs will continue unchecked, it may threaten to unleash a global conflict undermining the values of all sides to a much broader extent than currently.



The opinions expressed in this article are the author's own and do not necessarily reflect the official policy, position or view of IRSEA.