Has China lost Europe?

Mark O'Neill September 07, 2020 08:32

Two years ago, the European Union was a major destination for Chinese capital, students and tourists. In 2018, Chinese companies invested US$4.3 billion in France and Germany.

How much has changed in two years. Last week, German Foreign Minister Heiko Maas told Wang Yi, his Chinese counterpart, that Beijing should withdraw the National Security Law (NSL) and allow LegCo elections “quickly and unhindered”. Of five governments in Europe which Wang visited during his tour, four raised the NSL.

Last year Chinese investment in Europe was US13.4 billion, down 40 per cent from 2018 and its lowest level since 2013. It has fallen even further this year. Last year the EU had a trade deficit of 164 billion euros with China, with exports of 198 billion and imports of 362 billion. It has had a trade deficit every year since 2019.

China and the EU are in their seventh year of negotiating an investment treaty. “We expect the same access to the Chinese market as the Chinese have in Europe,” said EU Commission President Ursula von der Leyden.

“China subsidies its state-owned enterprises and has the largest series of trade and investment barriers recorded,” said Josep Borrell, EU High Representative for Foreign Affairs and Security Policies and Vice-President of the European Commission, in a paper published in August.

“European companies suffer discrimination as regards access to its market, in particular for public tenders. Keeping things as they stand (lack of reciprocity and unequal conditions) is not an option. Our relationship is too asymmetric for the current level of Chinese development. This needs to be redressed,” he said. “China is a strategic partner with which the EU cooperates, as well as being a competitor and systemic rival.”

After seven years and more than 30 rounds of negotiations, the patience of the EU is wearing thin. Joerg Wuttke, President of the European Union Chamber of Commerce in China, said in June that he doubted an agreement would be finished in 2020. “Meeting halfway with Chinese negotiators is impossible as Europe is already far more open than China,” he said.

This year relations have worsened. Beijing imposed the NSL, despite the strong opposition of the EU. The pandemic could have brought the two sides closer – but it has had the opposite effect.

The consensus in Europe is that China was not transparent enough when the virus was discovered in Wuhan last December and has not accepted responsibility for the global pandemic.

Even worse, on orders from Beijing, China’s “Wolf Warrior” diplomats in Europe have gone on a propaganda offensive, praising their own country’s measures to control the virus and contrasting them with the failures of governments in Europe.

Worst was a post from the embassy in Paris in April saying that careworkers in French nursing homes had abandoned their posts, leaving the elderly residents to die. It was false -- and an astonishing claim by an embassy whose job should be to cultivate good bilateral relations. Enraged, Foreign Minister Jean-Ives Le Drian summoned ambassador Lu Shaye for an explanation.

Borrell called the highly critical messages posted on Chinese embassy websites and social media “a battle of narratives”.

These Wolf Warriors have undone four decades of patient work by their predecessors to present China as a constructive economic partner and Chinese as friendly, productive people with much to offer Europe and to overcome the negative images of the Mao era.

Borrell said that China was becoming more assertive, expansionist and authoritarian. “Any signs of dissidence can be easily suppressed by means of powerful mass surveillance tools and the sway which the Party holds over the State. In recent years, we have witnessed with concern a rise in human rights abuses in China, increased repression of human rights defenders, journalists and intellectuals, and the treatment of Uyghurs in Xinjiang,” he said. So the image of China among Europeans is deteriorating.

A poll published in the summer by Korber-Stiftung found that 36 per cent of Germans regarded China less favourably than before the outbreak of the virus.

The EU is afraid that foreign firms, especially from China, will buy its firms on the cheap after the virus. So an EU screening system will become operational in October, including plans to block takeovers by companies active on the European market but subsidised by non-EU governments.

During the Trump era, the EU has been careful to maintain correct and cordial relations with China. But these are now fraying.

France, Germany and Slovakia criticised Wang Yi for his attack on Milos Vystrcil, President of the Czech Senate, for visiting Taiwan last week. “We as Europeans act in close cooperation – we offer our international partners respect and we expect the same from them,” said Foreign Minister Maas.

Minister Wang Yi and his senior colleagues in the Foreign Ministry are sophisticated, well-travelled people who understand well these issues. They know how unpopular China is becoming in Europe. But can they relay this bad news to their political superiors?

In the Beijing power structure, the Foreign Ministry has always been a weak player. Under President Xi, its influence has fallen further behind that of the security ministries -- Defence, Public Security and State Security.

The new playbook written by Zhongnanhai is that China is a rising power, ambitious and self-confident, that does not need to rely on outside countries. It has abandoned the dictum of Deng Xiaoping that “China should hide its strength and bide its time”. So the Wolf Warriors have become aggressive and boastful.

They would do better to listen to Deng’s wise advice.

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Mark O'Neill

A Hong Kong-based writer, teacher and speaker.