Why Europe is struggling to make a call on China’s rise
As Joe Biden and Scott Morrison look to Europe for support in the contest with China, they face a Continent battling to speak with a single voice.
American statesman Henry Kissinger never actually asked the famous question so often attributed to him: “When I want to speak to Europe, who do I call?” But Chinese President Xi Jinping knows the answer: he calls German Chancellor Angela Merkel.
The pair spoke twice in April, and last week Merkel also had a pretty cosy confab with Premier Li Keqiang. As tensions mount between an assertive China and a US-led coalition of the wary, Beijing clearly sees Berlin as the key to driving a wedge through the democratic West’s solidarity.
Europe – with its population of almost 450 million, its one-sixth share of the world economy, its battery of NATO armies, and its ability to dictate chapters of the global rulebook – is indispensable to the US, Australia and the other powers on the front line of the intensifying rivalry with China.
But who should President Joe Biden, and Prime Minister Scott Morrison, be calling?
Morrison will be keenly feeling the need to phone a friend right now. Beijing’s suspension of an economic dialogue this week added another layer of frost to the tariff increases, the diplomatic deep-freeze and the squeeze on Australian coal. And China watchers expect more to come.
Yet if Morrison calls Merkel, or French President Emmanuel Macron, or European Commission President Ursula von der Leyen, he won’t hear the same message from all three. And if he calls them back a few weeks later, he might hear a different set of messages again.
Europe is a confused and confusing kaleidoscope of hawks and doves, pragmatists and alarmists, and those who are not so much sitting on the fence as see-sawing from one side to the other. If the chips are down, which side is Europe on?
“The European Union is pursuing a very ambiguous foreign policy on China, while the international stage is becoming more and more divided, with lines being drawn in the sand between the US and China,” says Grzegorz Stec, an analyst at Germany’s Mercator Institute for China Studies.
Just after Christmas, the Europeans were trumpeting a new investment treaty with China that looked to the incoming Biden administration like a slap in the face. Yet barely three months later, Brussels and Beijing were trading tit-for-tat sanctions over Xinjiang.
Rumour has it Merkel and Macron might be preparing a trip to Beijing in the coming months – even before either of them visits Washington.
Throughout April, Merkel was emphasising the need for constructive economic dialogue with China. Yet this week, Brussels unveiled a legislative proposal aimed at preventing China’s state-backed companies from buying European assets.
Rumour has it that Merkel and Macron might be preparing a trip to Beijing in the coming months – even before either of them visits Washington. Yet Germany is also dispatching a frigate to the South China Sea this northern summer for the first time in two decades.
And although Taiwan often seems strategically remote from Europe, at the G7 Summit in London this week the foreign ministers of Germany and France signed up to a communique that for the first time explicitly endorsed Taiwan’s membership of bodies such as the World Health Organisation.
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The consensus among analysts is that Europe now accepts, at a fundamental level, that China is as much a threat as an opportunity – that China has become, as Brussels put it in a seminal policy paper two years ago, “an economic competitor” and “a systemic rival”.
“You’ve got a deep transition taking place on the European side,” says Andrew Small, a senior fellow at both the European Council on Foreign Relations and the German Marshall Fund.
“In European policy, though, any time there is a new element, nothing is junked at the same time. So there’s an attempt to have all the elements co-existing. There’s an underlying fuzziness to all this, and it feels like a transition right now.”
At the centre of this transition is Merkel, the axis around which European policy on China is formed.
Like the East German woman in the film Good Bye Lenin!, she is trying to live in a world that no longer exists: where China is straightforwardly a place to do business, and the desire of both east and west to do business means China will inevitably open its markets, reform its economy and play by the rules.
“Merkel is clinging to an old view of China that says you can influence China, that it’s better to speak quietly and behind closed doors on contentious issues, that you can bind China into a rules-based system, and that confrontation is not constructive,” says Noah Barkin, a senior fellow at the German Marshall Fund and director at the Rhodium Group consultancy.
In Macron’s worldview, neither the US nor China are reliable bedfellows. Europe must carve out an economically and strategically independent position, beholden to nobody and acting as a balancing force.
But Merkel is stepping down in September after 16 years in charge. As things stand, the election will likely bring the Greens into government, with a foreign policy that champions human rights and the trans-Atlantic relationship.
Hawkish elements, such as Germany’s foreign ministry, are flexing their muscles against the Chancery’s doves. Foreign Minister Heiko Maas, a Social Democrat MP – Germany is ruled by the two big parties of left and right in “grand coalition” – is more ready to talk tough.
Merkel was forced into a compromise last year, for example, that will constrain Huawei’s involvement in Germany’s 5G network.
Meanwhile, although some German companies – particularly the mighty auto sector – are anxiously bending the Chancellor’s ear about the need to keep the Chinese market open and stable, others have accepted that the wind is blowing in a new direction.
Into this German flux steps the other big pole of European power: France.
Macron’s agenda is different. He is the champion of “strategic autonomy” – an idea that gained currency during the tumult of the Trump presidency. In this worldview, neither the US nor China are reliable bedfellows. Europe must carve out an economically and strategically independent position, beholden to nobody and acting as a balancing force.
“Macron has convinced the Germans that this push for a stronger, more independent Europe that is perhaps not as close to the United States as it used to be is probably the way forward,” Barkin says.
Beijing’s overriding strategic aim is not to hug the Europeans close but simply to stop them from getting into bed with the US.
“Germany in the past always resisted this idea but Trump pushed them over the edge.”
Merkel and Macron have twice in recent months held talks with Xi as a double act. The rest of Europe is bemused but has little choice but to accept this Franco-German hegemony over China policy.
The idea of strategic autonomy allows Macron to talk tough on democratic values, playing to the Five Eyes gallery, while also keeping channels open with China. And that suits Beijing: Xi praised the concept in his April 7 call with Merkel.
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“To Beijing, European strategic autonomy means differentiation from the United States. And they will label any strategic autonomy that goes against China as ‘doing the Americans’ bidding’,” Small says.
Beijing’s overriding strategic aim, Stec says, is not to hug the Europeans close but simply to stop them from getting into bed with the US.
When China hit a bunch of European politicians and think tankers with sanctions in March, the idea, he reckons, was “to silence or alienate the individuals and institutions that are either vocally criticising China, or have the potential to drive the European discussion of a re-evaluation of its China policy”.
But the Chinese may have miscalculated. Brussels – the third pole of European China policy – has been hardening against China’s influence more demonstrably than Paris or Berlin.
Von der Leyen has made it clear she favours closer cooperation with Washington. But ultimately if Berlin calls and says ‘we’re going too far’ then the EU institutions have to ratchet things back.
— Noah Barkin, German Marshall Fund
The EU Parliament has walked away from work on the recently agreed investment treaty. The European Commission is preparing rules that would hit China on everything from supply chains to subsidies to infrastructure investment.
And in a recent missive to EU leaders, reported by Politico, Brussels bosses Ursula von der Leyen and Charles Michel didn’t mince words.
“The reality is that the EU and China have fundamental divergences, be it about their economic systems and managing globalisation, democracy and human rights, or on how to deal with third countries,” they said in a letter last month.
“These differences are set to remain for the foreseeable future and must not be brushed under the carpet.”
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But Brussels doesn’t call all the shots. “The EU can set the tone, but ultimately they can’t get too far ahead of the member states,” Barkin says. “Von der Leyen has made it clear she favours closer cooperation with Washington. But ultimately if Berlin calls and says ‘we’re going too far’ then the EU institutions have to ratchet things back.”
The final piece of Europe’s China puzzle is eastern Europe. This used to be easy pickings for Beijing, with its “17+1” grouping that promised lashings of largesse in exchange for support in the corridors of Brussels.
But things have changed. Half a dozen eastern European states didn’t show up to Xi’s most recent 17+1 event in February.
Hungary remains an ally, and may even use its veto power to water down Europe’s tough talk on Hong Kong at an EU foreign ministers’ meeting next week. But for many others, the threat from a belligerent Russia has driven them into the Americans’ arms.
“There is a general tendency to view relations with China increasingly through a security rather than an economic lens. And being tougher on China remains a card that can be played in the relationship with Washington, seen as the key security provider in the region,” Stec says.
Whether it’s in Paris, where Macron faces an election next April, or Berlin, or Tallinn, or Brussels, the overwhelming sense is that Europe’s attitude to China is a moveable feast – at least until the German and French elections are out of the way.
“We’re really looking into next year before we see clearly what the next phase looks like,” Small says.
Although Europe is ultimately likely to buy in, in its own way, to the US agenda on China, Biden will have to be patient.
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“The whole US turn to alliances is not just because it thinks it can get more leverage that way, it’s because the US cannot do this as a solo show – it cannot get the results it wants,” Small says. “There’s a frustration in the Biden administration, but they can see the political currents are heading in a clear direction.”
Both Biden and Morrison will be swinging through Europe in mid-June, giving them a chance to take the temperature at first hand. But until Merkel’s successor has a firm grip, the Continent may continue blowing hot and cold.
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