Throughout 2022 security challenges posed by China have become an issue of increasing concern for Europe. From economic, through cyber and hybrid to more traditional – in the context of potential military action against Taiwan, these challenges exist in multiple domains.
In a lineup of new strategic documents there is a visible shift in the framing of China. This is apparent in the release of the EU’s Strategic Compass in March, NATO’s Strategic Concept in June, the input paper by the European External Action Service in October and following the European Council’s economic security concerns about China. Strategic change of this trajectory is unlikely in the wake of the 20th Party Congress’ outcome, which in the words of EU High Representative Josep Borrell “largely confirmed what we already knew.”
And yet, while the broad strokes of this security-conscious re-evaluation of the EU’s China policy seem to be emerging into a consensus, the debate still rages on about into what actions should this translate. Especially after two years of halted exchanges, there is a growing appetite to re-open direct channels of communication with Beijing.
Selected political events relevant to EU-China relations in 2022
- January 27 – EU launches a WTO dispute with China over Beijing's economic coercion of Lithuania
- February 4 – China and Russia declare a "no-limits partnership" with Russia’s invasion of Ukraine soon to follow
- February 4-20 – EU leaders – with exception of Polish President Andrzej Duda – decline invitations to the Beijing Olympics
- March 21 – Adoption of EU Strategic Compass with reference to challenges posed by China
- April 1 – EU-China Summit focuses on disagreements
- June 29-30 – NATO Summit in Madrid adopts Strategic Concept describing China as a "systemic challenge"
- July 19 – EU-China High-level Economic and Trade dialogue
- August 11 – Estonia and Latvia leave the 16+1 format
- November 4 – German Chancellor Olaf Scholz visits Beijing
- November 15-16 – Several European leaders meet Xi Jinping on sidelines of G20 summit in Bali
- December 1 – European Council President Charles Michel visits Beijing
Russia factor as a double-edged sword
Russia’s invasion of Ukraine and Beijing’s tacit support of Moscow accelerated this security reevaluation, putting the challenges of dependencies and foreign interference high on the agenda of policymakers. The Beijing-Moscow partnership paired with the People’s Liberation Army’s (PLA) military exercises around Taiwan compounded Europe’s security- and bloc-politics thinking towards China. Particularly, in Central and Eastern Europe these events accelerated the corrosion of China-CEE cooperation, resulting in the departure of Estonia and Latvia from the 16+1 format.
Still, somewhat counterintuitively, the invasion also had a stabilizing impact on EU-China relations – at least in the short term. The economic pressure and energy crisis created by sanctions towards Russia reduced the EU’s threshold for repercussions, that would otherwise have allowed for a critical reevaluation of its economic relations with China. These circumstances further limit the appetite of European businesses to diversify away from the Chinese market, with its comparative appeal to the European one. Second, China’s commitment to Russia keeps many across the EU under the impression that Beijing can impact Moscow’s behavior – including limiting the usage of nuclear threats – although both Beijing’s will and its capability to play this role remain questionable.
Costly diplomatic engagements
Against this background, the EU and China resumed direct exchanges with high-level meetings on the sidelines of the G20 and successive visits to Beijing visits from German Chancellor Olaf Scholz and European Council President Charles Michel. Visits by French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni are set to follow next year, yet high-profile visits from Chinese leaders to Europe have so far not been scheduled.
Direct exchanges with China’s party and state leader Xi Jinping are valuable at a time when he has surrounded himself only with loyalists, exacerbating his risk of operating within a sycophantic echo chamber. But prior to their visits, European leaders need to be mindful to coordinate their position – both across the EU and with like-minded partners – and not to shy away from issues of contention with Beijing, seeking concrete, verifiable commitments from China. President Michel’s visit is an example from which lessons need to be drawn.
The transatlantic route, a direct connection with turbulence
The swift coordination on sanctions against Russia marked a pinnacle for EU-US collaboration, thanks in no small part to the Trade and Technology Council (TTC). On December 5, the EU and US held their third Ministerial Summit of the TTC, just days after the two held a dialogue on China (December 2) and a dialogue on the Indo-Pacific (December 3). Back at the end of November in Bucharest, NATO Ministers discussed China in terms of its members’ resilience, technological edge, and need to work with partners to face challenges in the Indo-Pacific.
However, it hasn’t all been smooth sailing. The new export controls imposed by the US on October 7, and especially, the US Inflation Reduction Act have presented new frictions between the two, but they are being addressed; the latter has spurred the creation of an ad-hoc working group.
Furthermore, at the TTC’s summit the EU and US agreed to launch the Transatlantic Initiative for Sustainable Trade. After the TTC, the US suggested that the EU impose new tariffs on China’s aluminum and steel exports. The justification of the tariffs is to combat carbon emissions, but the main concern relates to China’s unfair competition with American and European producers. However, an agreement between the EU and US may not be so easy to reach. First, the EU has already expressed concerns regarding the legality of the move under WTO rules, a matter of high importance to the Commission and DG Trade, who regard upholding WTO regulations as a necessary precondition for such actions. Second, the EU may find it difficult to exclusively target China with these measures. On the one hand, China’s over-production in the sector may facilitate the EU to justify the move, on the other hand, the issue taps into a broader push by the US for EU policies to target China, like in the EU’s export controls.
2023 outlook – the Swedish Presidency
Next year, Sweden will hold the Presidency of the Council of the European Union for the first half of 2023, followed by Spain for the second half of the year. Responsibility for implementing regulations with implications for China may land at the feet of the Swedish presidency, such as the anti-forced labor regulation, the anti-coercion instrument, or the review of the investment screening regulation.
Now, China may not be Sweden’s number one foreign policy or EU Council Presidency priority, but it is likely to rank high on the list. Whereas, dealing with Russia and the war in Ukraine, as well as its own accession to NATO are more pressing issues for Stockholm. However, past issues between Sweden and China (i.e., China’s arrest of Swedish citizen Gui Minhai, and the subsequent cancellation of trade missions to Sweden by China in response to a Swedish NGO awarding Gui a prize in 2019) as well as current developments such as the ban on Huawei have made Sweden an important and experienced stakeholder in the European debate on China. The Swedish Presidency will have the difficult role of working on a united approach to China when old habits of bilateral engagement and member states’ divergent interests are likely to emerge once more. The publication of Germany’s China policy will be a key moment, one which is likely to spur questions about each EU member state’s approach to China.