EU, China Draw Closer in Post-Pandemic Setting

The 10th annual Strategic Dialogue between the European Union and China on June 9 can be regarded as marking the resumption of structured big-power diplomacy in the post-Covid-19 setting. It was both a symbolic and substantive event, preparing the ground for the forthcoming EU-Summit. 

At the virtual event on June 9, the EU and Chinese sides were represented by the High Representative/Vice-President Josep Borrell and the State Councillor and Foreign Affairs Minister of China Wang Yi respectively.  

Europe and China, two major poles in the emerging world order have pulled through the devastating pandemic and are re-engaging. They find a world order that is in great transition. 

The very fact that the EU-China Summit — and not the G7 Summit that President Trump was keen to host in Washington on June 26-27, as originally planned — will now mark the commencement of the post-Covid-19 era in international politics politics speaks volumes about the world order in transition. 

The EU no longer includes Britain; the pandemic has not only ravaged the European economies but has left deep wounds that will take time to heal; Europe stares at a long unpaved road to recovery; the EU itself is badly rattled with the cohesion of the group even more shaky than before. 

Surely, the pandemic has weakened China too, but it is better placed than the US, Russia or the EU in being already on the road to recovery. Importantly, it finds itself in a unique position to fuel the recovery of the economies of other big powers. 

On the other hand, its own fortunes are heavily dependent on the speed and extent of repair to the global supply chains that takes place in a near term — for which the EU is a crucial partner. The big plus for China is its massive financial reserves, which it can bring to bear not only on its reconstruction and rehabilitation but also to inject new vitality to its global engagements.   

Both the EU and China are intensely conscious that the economic repercussions of the pandemic must not be understood as an ordinary problem that macroeconomics can solve or alleviate. 

They understand that the world is witnessing a fundamental shift in the very nature of the global economy. For both, succinctly put, the immediate crisis is one of both supply and demand. Supply has been disrupted because companies have closed down or reduced their workloads, and demand has drastically shrunk.

But what gives impetus and urgency to their strategic dialogue is that neither the EU nor China can afford to be ‘natural’ or ‘self-sufficient’ economies. Both are avid globalisers and big-time participants in international trade, which entails, inevitably, a division of labour between them — and stakeholders in multilateralism. 

For both the EU and China, their relations with the US have become problematic. In the case of China, the coronavirus crisis has sent the relationship with the US spiralling, which has touched the most dangerous point in the half century since their historic rapprochement in early 1970s. 

In the case of the EU too, the pandemic brought to the surface the simmering irritants and mistrust in the transatlantic partnership. When Europe grappled with the epochal crisis, the American ally was not only nowhere to be seen but had unilaterally erected walls to sequester itself. It was China that held Italy’s hand. 

Meanwhile, Europe watched with disbelief, pity and disdain the Trump administration’s incompetency in combating Covid-19. The US’s image suffered a lethal blow in the recent months. 

Seventy-three percent of Germans say their impression of the US has worsened due to the COVID-19 pandemic, according to an opinion poll conducted jointly by the Koerber Institute in Germany and the Pew Institute in the US. Only thirty-seven percent of Germans now prioritise their country’s relationship with the US, a 13 percentage point decline through the previous six-month period since last November.

In reality, in both cases (with the EU and China alike), the deterioration in the bilateral relations with the US accelerated during the pandemic crisis but its roots are in longer term trends. 

As early as 2017, German Chancellor Angela Merkel said that Germany and the EU can no longer rely on the US. Many European countries have also had disputes with Washington in terms of 5G technology and the defence spending of NATO countries. A rising trend of unilateralism and protectionism in the US under Trump has driven Brussels and Washington apart.

The EU no longer reposes the old confidence in the US’ leadership role and Euro-atlanticism is in retreat, replaced by a pervasive distaste and disillusionment with Washington’s  disinterest in upholding the values of a liberal international order.

On the other hand, China now has the power and the confidence to challenge the US across many fronts even as their power gap is dramatically shrinking. 

China welcomes the EU’s consequent ‘Ostpolitik’. Beijing is pinning hopes on Germany and France to keep stable and sound ties with China. President Xi Jinping is paying attention personally. Last week, Xi made his fourth telephone call this year to German Chancellor Angela Merkel on Wednesday, followed by his fifth of the year to French President Emmanuel Macron on Friday. 

Chinese Premier Li Keqiang and German Chancellor Angela Merkel since had a video meeting this week to flesh out a road map for Sino-German relations, which have become pivotal in the overall China-EU cooperation. 

The EU perspective on China is quintessentially pragmatic characterised by the willingness for constructive engagement. To be sure, there are lingering issues in the relationship — delay in concluding a Comprehensive Agreement on Investment; market access, level playing field in trade and business promotion, and reciprocity; human rights issues.  

However, Borrell in his press conference following the 3-hour talks with Wang on Tuesday made the following remarks underscoring the importance of China in the world order: 

• “China is without doubt one of the key global players. This is a fact, and China will increase its global role. We have to engage with China to achieve our global objectives, based on our interests and values.” 
• “Our relationship has to continue developing. It is important to have exchanges of views. We base our relationship on mutual trust and on the will for cooperation. This has to be built by having meetings, discussing, presenting their points of view, noting the disagreements, trying to look for agreements. For sure, we have not found an agreement on everything, the work continues.”
• “It is clear that we do not have the same political system. It is clear that China defends its political system as we do with ours. It is clear that China has a global ambition. But, at the same time, I do not think that China is playing a role that can threaten world peace. They committed once and again to the fact that they want to be present in the world and play a global role, but they do not have military ambitions and they do not want to use force and participate in military conflicts.” 
• “What do we mean mean by ‘rivalry’? Well, let’s go over this word. Sometimes, there are differences on interests and on values. That is a fact of life. It is also a fact of life that we have to cooperate, because you cannot imagine how we can solve the climate challenge without strong cooperation with China. You cannot build a multilateral world without China participating in it effectively, not in a ‘Chinese way’ [perhaps] but in a way that can be accepted by everybody.”

In a rebuff to Washington, Borrell concluded: “We [EU-China] are not on a confrontational line; we just want to have realistic relationships in order to defend our values and our interests.”