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MERICS Briefs
MERICS Europe China 360°
21 min read

Franco-German tandem on China + AUKUS + Trade and Technology Council

 

In this issue of the MERICS Europe China 360° we cover the following topics:

  • Changes on horizon for Franco-German tandem on China 

  • Chinese reactions on AUKUS and the EU’s Indo-Pacific strategy

  • Trade and Technology Council makes some headway

  • A sudden strategic dialogue between Borrell and Wang 

  • The EU Chamber of Commerce warns about inward-looking China

  • Smartphone giant Xiaomi investigated in Europe

 


You can read a free excerpt of our latest MERICS Europe China 360° below. 

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Changes on horizon for the Franco-German tandem on China 

The Franco-German tandem has been a driving force of the EU’s China policy, but one of the wheels (France) may take the lead in the coming months, affecting the EU’s stance on China. Germany is likely to be busy with government formation until later this year. Spring elections in France provide a further incentive for French President Emmanuel Macron to take the lead of the EU’s ongoing revision of its China policy. First Afghanistan, then the security alliance AUKUS between the US, UK and Australia have provoked additional discussion on the bloc’s foreign policy, and cast a shadow over Transatlantic alignment. 

Berlin and Paris have shaped the EU’s position on China

France and Germany have a track record of coordinating their China policies and shaping the EU’s position on China. Their consensus played an instrumental role in the development of the EU investment screening mechanism in 2018 and the conclusion of negotiations on the Comprehensive Agreement on Investment (CAI) in 2020. 

Chancellor Angela Merkel and Macron have also been pooling their political capital in interactions with China to support and steer the EU’s China policy. The pair, alongside two subsequent Presidents of the European Commission, jointly met with President Xi during his visit to Paris in 2019 and participated in the official call following the conclusion of CAI negotiations. They also engaged Xi in April, attempting to stabilize EU-China relations after the mutual exchange of sanctions.

The motivations of the two actors differ, as Germany is more concerned with economic relations while France is focused on developing European strategic autonomy. However, both agree on the need to keep the dialogue with Beijing open while mitigating the risks presented by China, and together they have influenced the general line of EU China policy.

The dynamics of this coordination may, however, be about to change.

German elections limit foreign policy clout

The results of the elections in Germany have not provided a conclusive indication of the post-Merkel direction of German China policy. The SPD’s Chancellor candidate Olaf Scholz, whose party narrowly won the most votes, has not clearly indicated his stance on China, leaving options open. But should the SPD form a coalition with the Greens and FDP, their calls for a more assertive stance on China may make it into Berlin’s official line. Although it does not look likely at this stage, the talks could still lead to the CDU/CSU retaining their position in the ruling coalition and a continuation of their engagement policy towards China. In either of the scenarios, however, it is unlikely for German China policy to change drastically given the existing economic interests of the country.

Regardless of what direction the new administration takes, forming a government and articulating its position on China will take weeks, if not months. During this transition period Berlin’s oftentimes more moderating voice is bound to be heard less in EU debates on China policy, especially with Angela Merkel stepping down.    

French elections and Council Presidency provide Paris with momentum

The spring elections in France will coincide with the French Presidency of the Council. The overlap is likely to incentivize Macron to take a more proactive and assertive stand at EU level. That would include on China policy, possibly doubling down on the EU’s strategic autonomy. The creation of AUKUS, partially at France’s expense, will also weigh in on the direction the French Presidency of the Council takes. 

Nonetheless, different preferences within the EU will put a strain to France’s ambitions. Not all EU member states are ready to buy into an ambitious agenda for strategic autonomy. 

Driving on one wheel

Germany’s focus on domestic matters will give France more opportunities to lead EU China policy debate in coming months and seek to advance its bold foreign policy vision of European strategic autonomy. In response, Beijing may well try to leverage the shift and court the French administration by reiterating its support for the strategic autonomy agenda – that is, as long as its edge is aimed at the United States and not at China.

However, with diminished support from its German partner, France may face pushback from smaller European member states, leading to a more heated internal debate about European foreign policy. Central and Eastern European members in particular are not comfortable with the French President’s reservations towards NATO and the United States. 

The informal European Council discussion on China organized by the Slovenian Presidency in early October will be the first test of whether France can take a lead on European China policy. Exploring options to support Lithuania, which has been a target of China’s economic coercion, would be one easy way for the Elysée to alleviate some of the concerns of its CEE partners and boost its standing by sending a message of European unity.

Read more:

China Debates: AUKUS and the EU’s Indo-Pacific strategy – how China reacted

The announcements of AUKUS on September 15, followed a day later by the EU’s Indo-Pacific strategy, spurred much debate among China’s intellectual elite. While the former is perceived as a direct threat to Beijing’s interests in the region, the latter is viewed as relatively benign. Strengthening ties with the EU continues to be the guiding principle advocated by Chinese analysts.

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