Europe at odds over China trade as resentment grows over US pressure and inflation measures -- China Boss update 12.02.22
Update
What happened.
“European Council President Charles Michel on Thursday (1 December) asked Chinese President Xi Jinping to influence Russia to end the Ukraine war during a highly criticised visit that took place amid an uprising against the country’s zero-COVID policy,” Euractiv’s Alexandra Brzozowski reported yesterday. “Michel’s one-day visit to Beijing comes only weeks after EU leaders held an extensive strategic discussion on China as to how to handle relations with the country in the future,’” she said.
Brzozowski, Euractiv:
The soul-searching exercise comes amid concerns over Beijing’s refusal to condemn Russia’s war on Ukraine, its human rights record, threats to Taiwan, trade pressure on some EU countries, and support for Russia.
A predominant issue over the past weeks, however, has come with the realisation that the bloc is highly dependent on China for technology and raw materials.
In an earlier report, Brzozowski said that the EU Council chief was “expected to walk a fine line between Germany, with its important economic interests in China, and EU members like Lithuania, which has attracted Beijing’s anger by building closer ties with Taiwan. Michel’s trip was made on the heels of German Chancellor Olaf Scholz’s heavily-criticized visit earlier this month, which “many EU capitals saw . . . as a contradiction of efforts to not repeat the same dependency mistake as with Russia,” and during historic mass protests against Xi Jinping’s zero-Covid policy.
Brzozowski, Euractiv:
Michel said he “shared the European experience” of dealing with COVID while stressing that “European companies are available to provide vaccines if those vaccines are authorised” by Chinese authorities.
. . . However, there were few deliverables announced after the meeting, apart from what Michel’s spokesperson called “the readiness to resume” the EU-China human rights dialogue and having raised “the situation of minorities” in China, and in particular in Xinjiang.
Xi insisted that such a dialogue could only take place on an equal footing.
Why it matters.
Europe’s China problem
"Europe is becoming increasingly reliant on China for trade" as some try to figure how to manage a "souring relationship" with Beijing, amid Russia’s war in Ukraine and "rising geopolitical tensions," CNN Business's Anna Cooban wrote last week.
Cooban, CNN Business:
China was the third largest destination for EU goods exports, accounting for 10% of the total, according to Eurostat data. China is Europe’s biggest source of imports, accounting for 22% in 2021.
“The European market’s importance as a destination for Chinese exports is around double that of the Chinese market for Europeans,” Jörg Wuttke, president of the EU Chamber of Commerce in China (ECCC) wrote in a September report.
Overall, the relationship is simply “too big to fail,” according to Borges de Castro. Europe is not seeking to decouple from the lucrative Chinese market, he added.
Right. You couldn’t be faulted for thinking Europe’s China problem is a conundrum beset by twisted statistics and unfounded assertions. But try herding 27 sovereign countries together during a pandemic, while contending with their peculiar national champions who have massive investments in China, and this is what you get.
Odder still, while some European firms are convinced there’s still a China choice to be made - the hard truth is that it’s up to Beijing, not Europe, to decide their PRC fates, and Chairman Xi sees less and less need for anything foreign these days.
“The way we see it is, some companies are going to get pushed out of the market,” [Adam Dunnett, secretary general at the EU Chamber of Commerce in China] said.
“They’ll fight as long as they can. Others have something to offer, and they’re willing to offer it because the market is there and it’s good and they’ll try to hold onto it as long as they can. And others, quite frankly, are in areas that are not deemed as being sensitive and will continue to do well in their own right with relatively little disturbance.”
Washington’s growing impatience
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