China is making deep inroads into Europe, and Beijing’s economic influence in the EU might translate into political leverage. Even though data shows that the general European population does not necessarily see China favorably, the governments of EU members have been increasing their cooperation with Beijing, especially when it comes to trade, business, and investments. While the EU is only recently waking up to the threats of China’s infiltration and what that might translate into politically, it still needs to do more. The EU and its member states should partner with Taiwan and the United States to learn more on how to balance China’s influence and infiltration, and ensure that democracy and national security are not sacrificed at the expense of economic deals.
Data from the Pew Research Center show that in 2018 the European perception of China was “an average favorability of 43 percent across 11 countries—a 1 percent decline from 2017.” Of the countries in Europe, the UK, with 49 percent of respondents viewing China positively, is the one that has the highest opinion of China in Europe. This perhaps explains why the two countries increased their economic ties and there is talk about future trade deals after Brexit. Greece is also among the countries in Europe who has less negative views of China, with 43 percent of its respondents giving favorable views. After barely surviving the eurozone debt crisis, Greece developed closer relations with China. In August 2016, China’s COSCO Shipping, which owns the world’s fourth-largest container fleet and is a state-owned shipping company, bought 51 percent of the port of Piraeus, Greece’s largest port, now part of China’s “One Belt, One Road” initiative (OBOR, also known as Belt and Road Initiative). Moreover, in April of this year, Greece also expressed interest in joining the “16+1,” [1] which is a bloc consisting of 16 Eastern European countries (of which 11 are members of the EU) seeking closer ties with China. Diplomats in Brussels, especially those representing the larger EU member states, such as France and Germany, have voiced concerns that the “16+1,” soon “17+1” can be exploited by China to seek further inroads within the EU.
The 2018 data from the Pew Research Center also show that even when countries in the EU polled low in the favorability rates towards China, their engagement with Beijing is nevertheless substantial. This is true in the case of Italy, which only has 29 percent of favorability towards China, yet just joined the OBOR.
The Case of Italy
On March 22 and 23, Chinese President Xi Jinping visited Rome. During the visit, the first in Italy by a Chinese president in 10 years, China and Italy signed a memorandum of understanding (MOU). While many point to the fact that the signing of the MOU between Italy and China is not binding, as the agreement is not a contract, the symbolism is important. Going against warnings from the United States and the EU, Italy became the first of the G7 (Group of 7, the seven top economic powers in the world) to join China’s OBOR, signing 29 different agreements that span from ports, electricity, media, research, health, science, food, and of course trade, for a total of $2.8 billion worth of projects, which the Italian government hopes will help the Italian economy which has entered a recession since last year. Regardless of its economic downturns, Italy is the third largest economy in the eurozone and one of its founding members, as well as a NATO member and a close US ally, making its signing into the OBOR a major concern that “Beijing is seeking to divide the EU.” However, it is also important to note that even though major European countries were enraged at Italy’s signing of the MOU with China, around 12 other EU members already signed similar agreements with Beijing.
The signing of the MOU with China was controversial even within Italy and it created division among Italy’s coalition government. Deputy Prime Minister and Interior Minister Matteo Salvini of the far-right League Party did not join his coalition partner, Deputy Prime Minister and Minister of Economic Development and leader of the anti-establishment Five Star Movement Luigi Di Maio, and Prime Minister Giuseppe Conte at the signing ceremony. Salvini, Italy’s most powerful politician, has remained skeptical of the MOU saying that he favors the deal if it allows Italian investments abroad, but he warned that Italy will not fall into China’s debt diplomacy and it will not become its “colony.” On the issue of telecommunications and data, Salvini’s party “successfully pushed for a water-down version that limits Chinese involvement in telecommunications and other sensitive data.”
Can Europe Stand Up to China?
After Italy, President Xi also visited France, where the Chinese president was welcomed less enthusiastically by French president Emmanuel Macron, as well as German Chancellor Angela Merkel, and the President of the European Commission Jean-Claude Juncker. The joint welcome with the German Chancellor and the President of the European Commission was to show “a united front against what they [France, Germany, and the EU] consider China’s aggressive, and troubling, economic expansion into Europe.”
Just on March 12, the EU took a tougher stance against China’s actions in Europe, and for the first time, the European Commission stated the following about Beijing: “China is simultaneously a cooperation partner with whom the EU has closely aligned objectives, a negotiating partner, with whom the EU needs to find a balance of interests, an economic competitor in pursuit of technological leadership, and a systemic rival promoting alternative models of governance.” Moreover, on April 10 a new EU framework for the screening of foreign direct investment entered into force, which European Commission President Jean-Claude Juncker defined as a “framework [that] will help Europe defend its strategic interests.”
As French President Macron stated that finally Europe is waking up to the challenges that China’s infiltration means for the EU, it is also important that the EU creates a more united front in dealing with China. One that allows the EU to remain open for business without compromising its values and democracy. While some action have been taken by the European Commission to ensure that democracy and European values are not compromised when dealing with China, what has been done so far is not enough.
Even though the recent Italian deals with China rattled Europe about China’s inroads into the EU, Italy is not the only EU member that has been engaging more with China. As Italy’s undersecretary for economic development Michele Geraci pointed out, many other EU members “do billions of dollars more business every year with China.” While Chinese investment in Italy totaled USD $25 billion, Britain’s is around USD $89 billion. Moreover, Italian exports into China is “13 billion euros [around USD $14 billions] compared with 20 billion euros [around USD $22 billions] for France and 87 billion euros [around USD $97 billions] for Germany.” As of 2019, “Chinese state-owned or state-controlled firms now control 10 percent of European port volume, raising long-term concerns about maritime security and control of key waterways.” This has raised concerns that China’s increasing control of ports and railways across Europe could hinder European and US military operations in the continent, and disrupt military mobility of NATO forces. Some smaller countries in Europe (especially in the Balkans and Eastern Europe) can become vulnerable to Chinese debt-trap diplomacy, and some already saw how increased economic ties with China, have translated into political influence in Europe, as is the case of Greece blocking a EU human rights statement on China in 2017.
What are the Implications for the Relationship Between the EU and Taiwan?
Even as China continues to try to divide Europe internally and to put political pressure on Europe, the EU and its member states have continued relations with Taiwan on a number of issues. On October 11, 2018, the EU and Taiwan held their first-ever labor affairs consultation meeting in Brussels, which Taiwan Deputy Labor Minister Lin San-quei defined as a “milestone in bilateral cooperation [between the EU and Taiwan.]” Moreover, the EU has expressed interest in a deal with Taiwan over green energy, and last year Taiwan and the EU engaged in $62 billion in trade. Both the EU and Taiwan are aware that China will continue to create obstacles between Taipei, the EU, and its member states; nevertheless, this has not stopped Europe from voicing its support in favor of Taiwan. In January of this year, the EU commissioner in charge of humanitarian aid and crisis management, Christos Stylianides stated at a plenary session of the European Parliament that the EU is “interested in developing closer relations with Taiwan,” and also highlighted how Brussels and Taipei share the same belief in a system of governance based on freedom, democracy, and human rights. Again in March, during a seminar titled “Why Taiwan Matters,” members of the European Parliament expressed the importance of the increased partnership between Europe and Taiwan, as well as Europe’s support of Taiwan’s democracy and values. Europe is also concerned with China’s increasing aggression against Taiwan, and on February 21, a total of 155 European parliamentarians called for China to stop engaging in additional military maneuvers in the Taiwan Strait. The preservation of peace and stability in the Taiwan Strait and the Indo-Pacific is of great importance not only for the US but also for the EU. In fact, in April France also sent a warship to pass through the Taiwan Strait in an act to assert freedom of navigation in international waters, as the US has been doing more often recently.
The question is, will the EU and its member states continue to speak up for Taiwan also in the future, or will China’s economic influence in the EU translate into political leverage which will hinder Europe’s relations with Taipei? As many experts and scholars suggested, including experts that testified before the US House of Representatives in a hearing on “China’s Expanding Influence in Europe and Eurasia” on May 9, there is a general lack of information in Europe about Chinese investments, especially related to ports and airports, and how the investments are connected to the Chinese Communist Party. European governments need to invest in developing objective and independent expertise and better understanding of China and how it operates, and the EU can learn so much on this from Taiwan. Taiwan is a democratic model and a responsible citizen in the world that contributes to democracy, human rights, global health, and many of the same values shared by the EU and the US. As such, the EU should partner with the US and Taiwan to ensure that the rule-based order that the transatlantic democracies created after World War Two is not threatened by a rising China, and other authoritarian regimes. More cooperation with European countries, who share the values of democracy and freedom with Taiwan, cannot be anything than beneficial for both the EU and Taiwan to pursue.
The main point: China’s economic influence in the EU might translate into political leverage. The EU should partner with Taiwan and the US to learn more on how to balance China’s trade and infiltration, and ensure that democracy and national security are not sacrificed in favor of economic deals. Moreover, the US and the EU need to provide alternatives to China’s investments in European countries and they can do so by partnering with Taiwan.
[1] The “16+1” is composed of the following countries: 11 EU members (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia) and five European countries that are not members of the EU (Albania, Bosnia and Herzegovina, Macedonia, Montenegro, Serbia).