EU – CHINA Relations in 2021

The conference benefited from the contribution of a diverse and prestigious roster of experts and diplomats from Romania and other EU countries, as well as from China. Speakers included: Ambassador Viorel Isticioaia-Budura (former Ambassador to China, Japan, with a leading position in the EEAS), Professor Adrian Severin (former Minister of Foreign Affairs), Werner Fasslabend (former Minister of Defense, Austria), Professor Feng Zhongping (Vice-President of CICIR, Beijing), Professor Catia Miriam Costa (Center for International Studies, Lisbon), Dr. Dan Luca (Vice-President, EURACTIV, Brussels), Tamas Matura (senior expert, Budapest), Francisco Jose Leandro (expert on the Belt and Road Initiative, the University of Macao), Dr. Alexandru Georgescu (senior expert, ICI, Romania).

This virtual event took place against the backdrop of dynamic changes at the international level, such as:

• the effects of the pandemic, prompting discussions of industrial decoupling, “vaccine nationalism” and a Great Reset in economic affairs and governance;
• the installation of the new Biden Administration in the US, looking for its own reset and for a reinitialization of multilateral cooperation, undoing the preferred policies of the Trump Administration;
• the ambitions of the “geopolitical Commission” of the EU, looking to chart its own course in the management of global problems and in European relations with Great Powers and Great Regions.

The presenters emphasized the importance of formulating a strategic approach to EU-China relations that takes into account the interests of both the EU and China, as well as the profound ongoing economic transformations in China. The strategic Belt and Road Initiative, so-called
“project of the century”, the structural transition of China towards more internal consumption, higher value-added economic activity, high innovation content, and the export of capital and technology are now on the political agenda in Beijing. More specific factors of change are the
provisions of the next five-year plan, the policy of double circulation, and the Chinese proactive preparation for a new global division of labor.

It has been remarked during the event that our perceptions often lag the fast-changing reality of China and foreign observers dismiss policy options on the basis of biases rooted in yesterday’s experiences and perceptions.

Despite the difficulties and tensions of the transatlantic relationship over the last few years, the EU will explore new opportunities for cooperation and coordination with the US in the next period.

The topics could include trade cooperation and climate change action, a common technological and security agenda, or at least a common perspective.

The 20th century has proven to be a “short century” and we are now in the chaotic interregnum of a changing global situation that is the result both of actions and perceptions, as well as of objective phenomena such as globalization, catch-up growth, and the relative decline of differences between the Global West and the Global East and between the Global North and the Global South. The Portuguese EU presidency, which started on January 1st, 2021, will continue EU – China relations in these challenging times, based on common interests. China is acting as a new European power, and in the world arena, it is no longer a second-class player. In the discussions, it was emphasized that, in the Central and Eastern European region, “we need more Europe and more China, and not less China”. The message must be “Let’s rebuild together the trust, let’s be again realistic and pragmatic”.

China fits into this view as a beneficiary of the current, multilateral, free trade-oriented global framework, but also as an actor pursuing projects and advancing visions of its own, that are, so far, complementary to the existing order, but are feared as challengers looking to supplant it. Frank exchanges of views, reciprocity, and negotiations are necessary to navigate the new economic and security environment, and whether China is a strategic partner, competitor, or systemic rival or all three at the same time, in varying proportions, depends as much on the policies and actions taken by the global leadership as on China itself.

The conference participants remarked, in a particularly auspicious sign, the commitment of both the EU and China to the multilateral system, even in the face of US retreat. However, there is a point to consider in whether all sides perceive the term multilateralism in the same manner.
Nevertheless, one thing is almost certain in the ongoing pursuit of a productive EU-China relationship – the interest of China in a strong EU, including through expansion in the Western Balkans. The speakers underlined that the EU is China’s biggest trading partner, while the US is
the EU’s biggest trading partner. The current biggest challenge is the lack of cooperation among the US-China – Russia – the EU and the absence of such cooperation generate great risk for the world.

A recurrent statement referred to our inability to solve all problems for ourselves and through ourselves alone. Mistrust is the biggest problem, therefore, there is a need to increase strategic communication.

Multiple experts from China and elsewhere have noted that, despite the tone of representations in the global media, the expansion of EU interests in East Asia, SE Asia, and South Asia is not viewed suspiciously by China, but is regarded as a natural and understandable policy of diversification of relations with emerging partners, such as India and traditional partners such as Japan. Only the appearance and rhetoric of containment of China raises questions on the part of Chinese partners, as does the Indo-Pacific formula.

Moving ahead, as with the Comprehensive Investment Agreement between China and the EU (the legacy of the German Presidency of the EU), what is needed is not just more strategic communication, but also strategic interaction, especially in the context of the relocation of the strategic industry, the rise of an independent EU industrial defense policy and others. Legislative synchronization will be extremely valuable but is currently feasible only within the “Euro-American society” with its underlying cultural commonalities. Still, there are opportunities for EU-China coordination and cooperation in areas such as the Middle East, the building also on experiences and ties in Central and Eastern Europe, provided that decision-makers learn to harness all available resources.

This will enable a host of improved collective coordination measures, such as better UN governance, a possible reinventing of the OSCE, with China as a new member, as well as interactions with other valued stakeholders, including trade and industry associations.

This should not detract from underlying issues which need to be resolved, but neither should they be allowed to derail valuable opportunities for cooperation and coordination – as Deng Xiaoping once said, “when you open the window to let in the fresh air, you also get some mosquitoes”. Having a framework in place to manage these issues and to create and reinforce trust is vital. In the context of a multipolar world, there are formulas emerging to describe the complexity of the current situation, such as “competition-through-cooperation”.

One of these issues should be the ongoing 17+1 Initiative of cooperation between China and its Central and Eastern European partners which has generated significant anxiety and suspicion in Brussels and in Western chanceries. While its results are mixed, given also the heterogeneity of the 17+1, the value of the Initiative is such that solution should be found moving forward to involve the EU in its workings, to increase transparency and an alignment with EU values, policies, and strategic directions.

Lastly, the event also saw the official launch of a report on “Promoting the Belt and Road Initiative and 17 + 1 Cooperation in Central and Eastern Europe, from the Perspective of Central and Eastern European Countries”, coordinated by the Middle East Political and Economic Institute (MEPEI), the EURISC Foundation and the Center for China Studies. This landmark report gives an in-depth analysis of the main Chinese strategic initiative, the BRI, and its subsidiary initiative in the CEE region, the 17+1, the environment in which they operate, the reactions they engender, and the transformations taking place. The report also advances a series of recommendations that address the main topics of criticism of these initiatives, while also anticipating future challenges and opportunities. The report was elaborated by over 30 contributors from 10 countries and represents the first analysis of its kind with such a diverse roster of contributors and coordinated by a Romanian team (Flavius Caba-Maria, Alexandru Georgescu, Liviu Mureșan, Radu-Cristian Mușetescu).