Russia’s war against Ukraine has triggered a profound reassessment in European capitals of their individual and collective relationship with China.
Faced with the need to quickly reduce a reliance on Russian energy accumulated over decades, government officials from Rome to Prague are reassessing the extent of their economic and political ties with China.
Senior lawmakers in Berlin who now admit that such closeness to Russia was a historic handicap are beginning to see the danger of repeating the mistake with another authoritarian regime, sounding the alarm over Germany’s status as a Beijing’s largest European trading partner.
Central and Eastern European nations are questioning the wisdom of the so-called 16+1 forum with China. Italy has just strengthened its right of veto against foreign takeovers, a measure directed against China.
At European Union level, attitudes have deteriorated over Beijing’s refusal to condemn the Russian invasion and its attempts to undermine the transatlantic unity fostered by the war. A virtual EU-China summit on April 1 took place against the backdrop of what one person familiar with the talks described as an increasingly rocky relationship.
Against the backdrop of the war in Europe, the EU started the talks with the key priority of calling on China to use its influence with Russia to stop the bloodshed, the person said, adding that there was grave concern that China’s continued inaction would have a lasting negative impact on relations with the EU.
After the summit, a Foreign Ministry reading in Beijing said President Xi Jinping had called on Europe to have an “autonomous” view of China, and that the solution to the conflict was to heed “reasonable concerns”. safety of all parties”. concerning.”
“A dialogue of the deaf,” is how EU foreign policy chief Josep Borrell described the exchange with China.
After Xi met Vladimir Putin in early February and declared an “unlimited partnership”, Beijing tried to remain neutral in the dispute, expressing its understanding of the Russian president’s position while defending Ukraine’s sovereignty.
Beijing is unlikely to welcome the instability and economic turmoil that Putin’s war has brought. Yet even if its ability to influence it is limited, the EU says China has unique channels it can use to try.
The view of a European diplomat in Beijing is that the war is driving China and Europe further apart, deepening their systemic rivalry. The pandemic and Europe’s realization that it was dependent on China for basic medical supplies was the wake-up call; Russia’s war on Ukraine strengthens the argument that Europe needs to reduce its dependence on Beijing, the diplomat added.
“This is really the West’s wake-up call,” said Lithuanian Foreign Minister Gabrielius Landsbergis, whose Baltic nation has suffered a slump in exports to China after falling out with Beijing over Taiwan, China. island democracy that China considers its territory. The EU filed a complaint with the World Trade Organization in March over China’s treatment of Lithuania.
“The main lesson we should take from Russia’s war in Ukraine is that trade alone does not change the way authoritarian countries act,” Landsbergis said in an interview in Vilnius. “When we talk about China, we clearly see that new dependencies are developing.”
China overtook the United States as the EU’s top trading partner in 2020, with total trade worth around $868 billion last year.
The war in Ukraine has rumbled through already fragile supply chains on trade routes between China and Europe, while adding to soaring energy and raw material costs. But geopolitical considerations also influence companies operating in China.
A majority of German companies there said in late March – before the Covid Zero lockdowns in Shanghai and elsewhere – that the war-caused crisis in Europe was impacting their strategy in China, a survey of 391 found. members of chambers of commerce.
A third of respondents said they expected to suspend planned activities or investments, while 46% saw a decline in the attractiveness of the Chinese market. About 10% said existing business could be moved out of China and 27% said they expected an acceleration in diversification in Asia.
Jens Hildebrandt, executive director of the German Chamber of Commerce in North China, said the trend is moving away from globalization and moving more towards what he calls “localization,” where companies build supply chains. localized supply chain to serve specific markets. The U.S.-China trade dispute has spurred that development, “and the war in Ukraine is giving that another boost,” he said by phone.
For Joerg Wuttke, who heads the EU Chamber of Commerce in China, “the type of public image China has with regard to Ukraine really makes a difference”. Caught with its Covid Zero policy and associated trade disruptions, “what really matters now is the perception that China is becoming unreliable,” he said, calling it a “new dimension.”
EU-China relations have deteriorated sharply over the past year, marked by the imposition of reciprocal sanctions on the human rights situation in Xinjiang. China has hit out at members of the European Parliament, putting the adoption of an ambitious EU-China investment deal on ice. His treatment of Lithuania added to the tensions.
In March, two weeks after the Russian invasion, China warned the United States against trying to emulate NATO in the Pacific and dismissed comparisons between security disputes over Ukraine and Taiwan.
“China-EU relations are already facing increasing difficulties on various issues, and bringing more sticking points based on nothing is in the interest of neither party,” the Communist Party’s Global Times newspaper said. Chinese in an editorial this week calling on the EU not to “fall into the Lithuania trap”.
Ahead of the April summit, Brussels and member states had hoped Beijing would end the ‘downward spiral’ of EU-China relations by using its influence over Russia to help end the war, Janka Oertel said. , director of the Asia program at the European Council on Foreign Relations.
“That hope has been shattered,” she said in an online comment.
China always views its relations with the EU from a “strategic and long-term perspective” and stands ready to work with Brussels, Foreign Ministry spokesman Zhao Lijian said Friday at a press briefing. regular. “We hope the European side will achieve an independent perception of China and adopt an independent China policy.”
At the same time, Zhao said China’s ties with Russia were a “new model” for the world.
In the EU, the sense of dismay at China is arguably most acute among the Central and Eastern European countries that have the most hawkish views on Russia. Paradoxically, they are also among the EU nations with which China enjoys the best relations through its 16+1 forum which has allowed small states to have an audience with Beijing’s leaders.
Disaffection with the forum has long been evident and Lithuania resigned last year. A Chinese diplomat was dispatched to the region last week, stoking speculation that others may now be considering a way out. She was met with a warning from the Czech government that China’s endorsement of Russia would damage its relations with the wider EU.
However, few advocate decoupling.
The Dutch have become aware of the Chinese threat in recent years, but that does not mean they will stop trading or talking with Beijing, people familiar with the government’s thinking have said.
Some European companies are increasingly focusing on China. One of Volkswagen AG’s priorities for 2022 is to “boost our business in #China”, CEO Herbert Diess said in a Linkedin post.
Europe needs China to stabilize its economy as it suffers fallout from war, says Henry Wang Huiyao, founder of the Center for China & Globalization, a policy research group in Beijing created as a bridge explaining the position from China to the world.
“The message is that while the EU is militarily more tied to NATO now, economically it will have to be more tied to China over time,” he said.
The political mood in Europe’s largest economy appears to be moving in the opposite direction. German Finance Minister Christian Lindner, speaking at the Ludwig Erhard summit last week, said Berlin needed a whole new business model to reduce its economic dependence on China.
Lars Klingbeil, who co-leads Chancellor Olaf Scholz’s Social Democratic Party, said at the same conference the need to learn the lessons of Germany’s Russian policy and “end dependence on China”.
In Italy, Prime Minister Mario Draghi hardened his stance on China after the Russian invasion. Italy this month strengthened its veto power against foreign takeovers by creating a special division to oversee any potential merger, allowing it to block a deal if it involves a strategic sector.
“The war has already sparked intense debates about critical infrastructure and resilience in Europe,” said Agatha Kratz, associate director of the Rhodium Group, and Max Zenglein, chief economist at the Mercator Institute for China Studies, in a joint report. this week.
The era of “massive Chinese investment” in Europe may be over, they said.
Bloomberg’s Milda Seputyte, Lenka Ponikelska, Chiara Albanese, Cagan Koc and Tom Hancock contributed to this report.