EU, Germany struggle to formulate China strategy

5G, US relations, and human rights are expected to be major factors in relationship as Xi Jinping will visit Leipzig for summit in September

From July to December, Germany will hold the six-month rotating Presidency of the European Council, so the German government is currently working on a strategic approach to the China relationship, with one eye on the scheduled EU-China summit to be held in Leipzig in September. The event will be hosted by Chancellor Angela Merkel and attended by President Xi Jinping.

In a speech last October, Merkel said that “the EU does not currently have a joint China policy which is not good for the EU".

But political observers suggest that Merkel is part of the problem. Though the EU likes to talk about the relationship between Brussels and China, in reality each individual country pursues its own bilateral relationship with Beijing.

Over the past six months, both Chancellor Merkel and French President Emmanuel Macron have made high-profile trips to China, accompanied by large business delegations.

The new European Commission President Ursula von der Leyen has identified the China relationship as a key theme for the five-year Commission, but will face the same difficulties as her predecessor in presenting a united front.

An analyst at Berlin-based think tank Mercator Institute for China Studies (MERICS) suggests that one result of the recent “phase-one” deal between the US and China will be that Beijing will now focus more intensely on its relationship with the European Union, and over the course of 2020, the EU will be under pressure to come up with a clear direction in its relationship with China.

Visiting Academic Fellow Noah Barkin notes that when Chinese foreign minister Wang Yi visited Brussels in December, he delivered two messages. The first was “we are partners, not rivals”, but the second was more of a thinly veiled threat that Europe and China had to “get mutual perceptions right,” and that failure to do so would risk “unnecessary disruptions” to the relationship.

He took this to be a warning about interference in issues such as the Hong Kong protest movement, human rights abuses in Xinjiang, or security concerns surrounding Huawei.

A number of factors are likely to shape Europe’s relationship with Beijing this year.

The European Commission will unveil its 5G “toolbox” in mid-January, which will give member states a menu of options for mitigating security risks linked to their next-generation mobile networks. After studiously avoiding decisions in 2019, the big European players will need to come down one way or the other in 2020. Their decisions will have a ripple effect for smaller countries.

European leaders have been worried that US President Trump would strike a largely cosmetic deal with Beijing, and then turn his attention to what he views as the unbalanced trade relationship with Europe.

However, the betting on the US election leans towards another four years for President Trump, and with fears of a confrontation with the US over trade, European countries may want to hedge against a second Trump term by softening their tone with China.

Ahead of the September summit with Xi Jinping in Leipzig, Chancellor Merkel would like to finish the comprehensive investment agreement between the EU and China. But even after many years of negotiation, progress is slow and China is wary of commission plans to curb unfair competition from state-owned enterprises. A new investment screening mechanism will be up and running in October, which could cause tension.

And last but not least, many analysts point to EU criticism of human rights in China, a situation which is unlikely to ease under new EU Minister for Foreign Affairs Josep Borrell, who has a reputation for being outspoken.

The situation in both Xinjiang and Hong Kong are constantly cited by European politicians, much to the irritation of China.