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MERICS Briefs
MERICS Europe China 360°
18 min read

Party Congress implications for the EU + Germany's China policy

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

  • CCP’s 20th Party Congress – What does it mean for the EU?
  • German China policy’s strategic repositioning: outcome unknown
     

CCP’s 20th Party Congress – What does it mean for the EU?

By Francesca Ghiretti and Grzegorz Stec 

The 20th Party Congress signaled a continuation of Xi Jinping’s leadership and an emboldened commitment to party policies. The rationale appears to be a further tightening of party control to bolster domestic stability and to prepare for oncoming economic and geopolitical struggles. Consequently, many of the challenging trends in EU-China relations are here to stay if not intensify.  
 

POLITICS: Party unified around Xi with security as top goal 

While “Xi Jinping Thought” did not make it into the party constitution and the title of Chairman was not bestowed upon him, he comes out of the Congress significantly strengthened. The new Politburo Standing Committee (PBSC) is made up of Xi loyalists whose ideological commitment is more important than technocratic credentials. The more reform minded moderates did not make it to the PBSC, nor to the Politburo.  

Security tops the agenda. National security has new dedicated sections and security (安全) received 93 mentions in the work report (compared to 54 mentions in 2017), overtaking economy’s (经济) 60 mentions, for the first time. To ensure security, the CCP’s control is set to tighten under the “Central Committee’s centralized, unified leadership” and with “ideological commitment” being the primary competency for selection of officials. 

Takeaways for the EU:

  • As the party exercises greater control over party-state officials, weakening the position of moderates and increasing the requirements of ideological commitment, common ground between the EU and China will be harder to find.
  • EU-China relations have largely been based on an assumption that ultimately both sides are rational economic actors who prioritize economic benefit. Beijing’s growing prioritization of security and ideology over economics disrupts the fundaments of this relationship.
  • As adherence to Xi thought grows officials’ agency decreases. Therefore, it is important for the EU to access higher ranks in the chain of command where greater levels of maneuverability exist. EU-China summits and bilateral exchanges with Xi become even more important.
     

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FOREIGN POLICY: Struggling for a new world order  

Beijing’s outlook on the geopolitical status quo has grown darker. The work report emphasized that within China’s current international environment “strategic opportunity and risks and challenges co-exist”, a shift from 2017 report that focused solely on the former. Heightened anxiety is linked to fear of US-led containment, which affects the prospects for fruitful major power relations. While in the previous work report “cooperation” (合作) was still one of the ambitions, it now been reduced to the weaker wording of “peaceful coexistence” and “positive interaction” (良性互动).

Within that environment, Beijing’s objective is to change the international order through its initiatives (GSI, GDI), minilateral groupings (BRICS, SCO) and increased engagement with the Global South. The idea here is to adjust the international order so that it accommodates China’s rise and ensures the safety of its political system. 

On Taiwan, there were relatively few new points since the August publication of a dedicated White Paper. However, in his work report Xi reserved the right to use military force and “opposing and deterring Taiwan separatism” was added to the Party’s Constitution. 

Takeaways for the EU: 

  • Room for meaningful, long-term cooperation is narrowing given the deficit of strategic trust, but Beijing may be trying to court the EU – likely with low-cost and reversible gestures – amid fear of US-led containment. 
  • Beijing is unlikely to move away from supporting Moscow, given that on a strategic level Moscow is a key ally in reshaping the international order. China may, however, decide to recalibrate the extent of its support if becomes too costly. 
  • Systemic rivalry is likely to become more pronounced as will the competition to support developing countries within multilateral frameworks. 


Geoeconomics  

The centrality of geoeconomics to CCP thinking is evident given the Belt and Road Initiative’s enduring policy relevance, the focus on supply-chain security, and on cultivating a dual-circulation economy. In each case, special attention is given to the Global South and to technological advancement, where the party views competition with the US and Europe as a zero-sum struggle: “resolutely win the battle of key core technologies” (坚决打赢关键核心技术攻坚战).

For those who doubted the future of the BRI, the Congress provided necessary proof that it is still very much in the CCP’s plans. In the report, the BRI is even mentioned in relation to four tangible deliverables: (i) speed up construction of a new land-sea corridor in the West, (ii) and of the Hainan free port; (iii) implement strategies to upgrade free trade pilot zones and expand the global network of high-standard free trade zones; (iv) promote RMB internationalization. Neither the GDI nor the GSI, in contrast, are presented with deliverables.

The relationship with the Global South gains importance not only considering global diplomatic competition but also for China’s own domestic development and the success of the dual-circulation economy.  

Takeaways from the EU 

  • The EU must define Global Gateway strategically. The Global South is going to be the focus of much of China’s diplomatic and geoeconomic action. Finding new markets and areas for production and securing supplies should be some of those priorities. The EU should reach out to third countries with which to do business, not just to send aid.  
  • Notwithstanding the competitive basis of the different initiatives, the Global Gateway and the BRI can collaborate in limited sectors in third countries (i.e. debt relief). 

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