With Europe in the midst of an economic crisis and the United States announcing a pivot to Asia, relations between China and Europe are at a critical point. Shi Zhiqin details the historical challenges in the relationship and the notable challenges ahead. Shi contends that European and Chinese leaders are conscious of the huge benefits of better cooperation, but have yet to find an effective way to work together.

How does China view its relationship with the EU?

China views its relations with the EU as very important. At the turn of the twenty-first century, the United States was—and still is—the global superpower. Taking advantage of this, then-president George W. Bush pursued a more unilateral foreign policy. This was contrary to Chinese interests, and subsequently Beijing has shaped its policy around a multipolar world.

Europeans see China as a force to balance the United States, as does China. Thus there should be potential for mutually beneficial cooperation between the EU and China, if it were not for several critical disagreements.

Shi Zhiqin
An expert on European issues, Shi Zhiqin runs a program on China-EU Relations at the Carnegie-Tsinghua Center for Global Policy.
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American unilateralism peaked in 2003, when it decided to unilaterally invade Iraq. At that time, the EU clearly preferred a more multilateral effort. And China worked closely with France and the EU to oppose America’s unilateral approach in Iraq.

As a result, China’s relationship with the EU became a stronger partnership. China’s hope was to support the EU to balance American power. The period from 2003 to 2005 was a golden age for China-EU relations, as characterized by the statement from Romano Prodi, then president of the European Commission, declaring that China and EU relations were “not yet a marriage, but an engagement.”
Since 2005, however, there has been a shift in the EU’s strategy toward China. With the euro crisis fueling Europe’s industrial decline, China is increasingly seen as a competitor and a threat to European development and the survival of its welfare states. The commonly accepted idea in Europe is that because China produces cheap goods that are then imported in large quantities to the old continent, China is threatening local production, the very core of European dynamism.

Another factor causing tensions in China-EU relations was the election of more assertive politicians in Europe. Before 2005, most leaders of western European countries pursued policies that benefit China, like Gerhard Schroder of Germany and Jacques Chirac of France. However, with the election of Nicolas Sarkozy and Angela Merkel, France and Germany became more aggressive toward China.

Sarkozy and Merkel both met with the Dalai Lama, a blow to bilateral relations. Since the 2008 chaotic passing of the Olympic torch in Paris, when activists protested Chinese torchbearers, Sino-French relations have been notably tense. This was followed by a rise in anti-French sentiment in China, as seen most notably in a series of sit-ins and riots against the French supermarket chain, Carrefour. China also canceled the 2008 EU-China summit just a few days before it was supposed to take place.

Another reason Sino-EU relations are strained is because of the lack of unity in Europe. Consequently, China is forced to deal with each European country individually. This makes it slower and more complicated to reach fair agreements. China would like to have more streamlined relations at the EU-level, but the slow pace of decisionmaking is disappointing. Most of the time, procedures necessitate consensus among all EU member states, which is difficult—if not impossible—to reach. One small country can reject a deal for the entire EU even if all the others agree. 

China realizes that the EU cannot take action as a whole, so Beijing has focused on bilateral relations with individual countries. China also benefits from the competition between EU countries, which is not optimal for EU interests.

Both China and the EU have realized they need to re-normalize relations. With the common challenges facing both regions, cooperation between both sides is necessary.

What are the key concerns for China regarding this relationship?

China wants the EU to treat it as a truly strategic partner and consider it as an equal in every respect.

Over the last thirty years, China has changed dramatically. Not only has the country opened its economy to the world, there have also been visible developments in freedom of thought and of speech, particularly in recent years. Contemporary Chinese people, especially the netizen community, know a lot about the rest of the world. They have access to international media through the internet and can travel abroad. It is hard to deny that China has become a freer society.

China still has its shortcomings, but the country is moving forward step by step, following Deng Xiaoping’s famous expression about Chinese development: 摸着石头过河 (“crossing the river by groping for stepping stones”). While Chinese improvements are not as fast as Europeans may want them to be, it is essential to recognize all the efforts that are being—and have already been—made.

While European countries have advanced economies and environmental standards that benefit their citizens, China is still a very poor country and wants to learn more from the EU. However, the many European restrictions, including trade restrictions on technology transfers, make it difficult to share information and goods.

What is more, European countries tend to consider their own values as universal, and try to impose them on China. The widely shared belief in Europe is that its political systems and values are intrinsically superior, which is condescending to China. Each country and culture has its own values that are the product of its respective history and fitted to its own society. This also fuels mistrust between China and the EU on human rights disputes.

Furthermore, China is very sensitive to EU intervention in its internal politics. Not only does China value the integrity of its sovereignty but it also promotes a foreign policy based on the idea that each country should be treated equally in the international system. When it comes to issues like the secessionists movements in Xinjiang or Tibet, China considers it a major offense to its sovereignty that European countries intervene, for instance, by meeting with the Dalai Lama.

For China, the Dalai Lama is a religious leader but he is also playing politics, as seen by the fact that he directs monks to become dissidents within China, which we saw in the March 2008 riots in Lhasa, Tibet. These actions threaten China’s internal stability and the harmony of Chinese society, which are core interests for China.

The Eastern Turkestan secessionists in Xinjiang, which directly question China’s territorial integrity, are another one of China’s core interests. When similar individuals or groups threaten European countries or the United States, they label them terrorists. But in China, every dissident is presented as a defender of freedom and a leader of an oppressed part of society.

China considers such double standards to be very harmful for its bilateral relations with European countries as they demonstrate that China is not considered an equal. Europeans should look at Chinese history: Xinjiang and Tibet have long been part of China. At times these regions were part of China. Other times they were fighting China and sometimes invaded China. This shows that the changing relations between the different regions of China are part of history, and should not be misinterpreted.

Finally, there are a number of symbolic factors that hinder relations between the EU and China. The first one is the 1989 embargo on weapons sales to China, and the second one is the refusal to grant “market economy” status to China at the World Trade Organization.

From the Chinese perspective, the fact that these issues have not been solved shows that EU countries do not regard China as a real comprehensive and strategic partner. Why would Vietnam be relieved from similar restrictions and not China? These issues, which have been festering for years, are consistently raised in negotiations related to human rights or trade relations.

As a result, China has taken steps to show its displeasure, both in economic and political discussions. China has concluded that the EU refuses to lift the embargo because the United States is against it. Thus, the EU still cannot be considered as a completely independent partner. Removing the embargo on weapons would be a strong political symbol, showing European willingness to deepen relations with China. It is a political symbol only since it is unlikely, even with the embargo lifted, that Europe would sell their most advanced weapons to China.  

How does China perceive the eurozone crisis and how can the EU address its problems?

When the euro crisis became more serious, the Chinese government offered to help indebted countries such as Greece and Spain. In this way, China’s response has been very different from the United States, who blamed European countries for their thoughtless spending habits.

While Zhou Xiaochuan, director of China’s Central Bank, was showing China’s goodwill by offering help, Timothy Geithner, U.S. secretary of the treasury, was predicting the coming death of the euro. China believes the EU and the euro can survive, and China wants to show its support for European countries. That is why Chinese leaders have visited Europe frequently since the start of the crisis—they pay a lot of attention to the EU and its role in the world.

The widely shared perception of the euro crisis is that it is the result of the structure of European institutions: a monetary union without fiscal policy. Another factor is that for decades Europeans wanted to build more economic integration without really giving strength to the EU’s political bodies. I think this was the result of the lack of political will from Europe’s leaders who refused to face the need to make a choice.

Another shared perception in China is that the growing size of the EU has complicated its integration. Trying to incorporate countries with very different economic and social structures has made it harder for the EU to work together since their needs are so different. These new countries, mostly from eastern and central Europe, have lower standards of living, and their welfare states were less developed than those of the richer members. Additionally, due to limited country-to-country transfers, these countries have raised their standards by acquiring more debt in an attempt to catch up with their richer counterparts.

The financial crisis has revealed these structural problems, and the solution now is for the EU to build a more tightly-knit political union. It is the only way out.

Another dilemma for the EU in this time of crisis is the tradeoff between the need for reform and other political priorities. As we have seen in the elections that took place this year, the French and Greeks voted for leaders who promised to safeguard their living standards and welfare states. By doing this, the people chose against reform.

It remains to be seen to what extent this will impact European debt levels and the eurozone. Indeed, even appointed technocrats like Mario Monti in Italy have scaled back their promised reforms because of the limited legitimacy that leaders enjoy. Thus technocracy has shown its limits. It is now essential for European leaders to find an alternative that combines democracy and the necessity of reform.

Crucial to the survival of the European Union is regulating financial speculation. It has been recognized that more financial regulation in the eurozone is needed. The people are demanding it. However, little has been done so far, and the people still feel that they are paying the bills instead of the banks.

This is the result of the extreme form of capitalism that has grown out of the dominance of neo-liberalism, which has been on the rise for the past twenty to thirty years, and now we see the crisis of the European social model. Neo-liberalism is mainly the result of English and American influence on economic thought after the Second World War. Financial institutions moved to an aggressive stance where they care only about capital and profits rather than social impact.

How do you see the future of China-EU relations?

The U.S. pivot to Asia has been interpreted by many as a move to contain China and prevent it from taking the place of the United States as the leader in the Asia-Pacific region. Because it is afraid to lose its place to China, the United States is strengthening its presence at military bases in South Korea, Japan, and the Philippines. It is also reinforcing its partnerships with Southeast Asian countries, such as Vietnam.

At this critical point, China hopes that the EU will side with Beijing to prevent China from becoming isolated in Asia and to balance American influence in the region.

As a result of Washington’s pivot, China is trying to build a coalition of friends in Europe, not only in Western Europe, but also in the former Soviet bloc. This means that China is becoming a more important partner for central and eastern European countries who previously had little to do with each other since the end of the Cold War. Necessity has forced China to come back to these regions. Furthermore, the structure of the EU, where one country alone can block a decision, gives these countries increased leverage that China can seek to capitalize on through its friendship with them.

Another important aspect for the future of Sino-European relations is what position European countries take on China’s regional security issues. In Southeast Asia, China hopes the EU will support its actions, especially in light of China’s help on the eurozone crisis.

China expects European support relating to an issue with the Philippines, where a group of islands is claimed both by the Philippines and China. The Chinese position is that these islands are historically part of China since the Philippines only started claiming them in 1997. Before that, these islands were recognized as part of China’s territory. Furthermore, the islands were discovered and administered by the Chinese government since the Yuan and Ming dynasty.

While China would like European support, it expects that at the very least the EU remain neutral, especially given China’s historical evidence and the legal argumentation based on the United Nations Convention on the Law Of the Sea.

How can Sino-European relations be improved?

The best way to improve Sino-European relations is to better understand each other’s values and interests. Such understanding can be built by cooperation on regional security issues, which would allow both sides to better understand each other’s approaches to security issues and the values and reasons that guide such approaches.

There are shortcomings to this approach: while China hopes to engage through talks and diplomacy that do not impede on the sovereignty of other states, the EU and European countries support an approach that relies heavily on sanctions and pressure. The discrepancy between European and Chinese approaches is clear in the case of Iran’s nuclear ambitions.

But cooperation can sometimes bring good outcomes, as seen in a swift and efficient response to piracy off the coast of Somalia. While the EU believes in maintaining power and China believes in sovereignty, these two sets of values and methods can be progressively reconciled through continued cooperation.

Additionally, Europeans need to better value the support China is giving. In fact, China feels that its efforts are being overlooked by European leaders. In times of crisis, Chinese leaders have shown their confidence in European countries, not only by making supportive statements and visiting Europe, but also by buying European bonds en masse. Contrary to the United States, China does not laugh at European countries or point the finger at them when they are in trouble.

But this approach by China seems to receive little appreciation, with leaders from Europe continuing to criticize China and describing it as a threat to Europe. Europeans should not take China’s support for granted—as China diversifies its trade relations, its need for Europe might decrease. 

A lot can also be done to improve Sino-European relations by developing better cultural dialogue. There is already a China-EU dialogue but it needs to be more inclusive so that it’s not just elites talking, but also people-to-people relations.

The media play a strong role in this because coverage determines what images are built in the public’s mind. It is essential to promote unbiased news coverage, which has been lacking in Western media. Western media has been carrying a lot of negative coverage about China and a limited number of positive reports. An example of this negative coverage is in 2008 when the BBC and German newspapers famously made up a riot in Tibet, taking pictures of Nepalese monks. Such problems should be avoided for better relations.

Indeed, the future of Sino-European relations depends on each side’s efforts to understand its partner’s interest and values. European and Chinese leaders are conscious of the huge benefits they could gain from better cooperation.

This article was published as part of the Window into China series