[EpochTimesJune92021]Comprehensive strategic partnership, “China-Europe Investment Agreement”, China-Central and Eastern Europe Cooperation Mechanism (“17+1” Mechanism), and “One Belt One Road” are the four pillars of China-EU relations . So far, these four pillars have shown cracks.
The CCP has cracks in the four strategic pillars of Europe
Among the four major strategic pillars of the CCP, the most important is the China-EU “Comprehensive Strategic Partnership.” On October 13, 2003, the CCP published its first policy document on the European Union. On the same day, the European Union approved the fifth China policy document “Mature Partnership”, positioning the EU-China relationship as a “strategic partnership” for the first time.
As the U.S.-China trade war has intensified, the EU’s positioning of the CCP has changed significantly in 2019. On March 12 of that year, the European Union issued the “EU-China: Strategic Outlook”, a strategic document for China, positioning the CCP as both a “partner”, an “economic competitor” and an “institutional opponent.”
This change makes the CCP uneasy.
After the “China-EU Investment Agreement” that was negotiated for seven years was frozen by the European Union, Wang Yi publicly called on China and the EU to “the only proper positioning is a comprehensive strategic partner.” The implication of this remark is that other positions have emerged between China and Europe, which are not what the CCP wants.
During the same period, Lithuania also publicly declared to withdraw from the “17+1” mechanism led by the Chinese Communist Party.
The new Italian Prime Minister Draghi prevented the semiconductor company LPE from selling shares to Chinese state-owned enterprises on March 31. This move is of iconic significance and is regarded as the Chinese Communist Party’s “One Belt, One Road” strategy stranded in Europe. Italy joined the CCP’s “One Belt, One Road” strategy in 2019, and Italy itself is a member of the Group of Seven (G7).
So far, the CCP’s four major strategic pillars in Europe: the comprehensive strategic partnership, the China-Europe Investment Agreement, the China-Central and Eastern Europe Cooperation Mechanism (“17+1” mechanism), and the “Belt and Road” have all been cracked.
The impact of sanctions on Europe expands China-EU relations continue to decline
In March of this year, the CCP sanctioned 10 people and 4 entities, including 5 members of the European Parliament. This sanction directly caused the “China-EU Investment Agreement” to be frozen by the European Parliament, but other unexpected consequences of the CCP are also emerging: the CCP’s human rights issues, which were originally limited to Xinjiang, have gradually generated various other problems.
The China Policy Transnational Parliamentary Alliance (IPAC) announced on June 7 that 11 legislatures across the country had launched an action to boycott the Beijing Winter Olympics and called on leaders of all countries to refuse to attend. Miriam Lexmann, a member of the Slovak European Parliament who was sanctioned by the CCP, is the chairman of IPAC. Previously, IPAC had pushed the parliaments of the United Kingdom, the Netherlands and other countries to recognize that the CCP had implemented “genocide” in Xinjiang.
Recently, the European Union agreed to establish a sanctions mechanism “International Procurement Instruments” (IPI) against third-country investors who block their domestic markets. Member of the European Parliament Reinhard Bütikofer handled the proposal in the European Parliament on behalf of the German Green Party. He was also sanctioned by the CCP in March this year.
Samuel Cogolati, a member of the Belgian parliament sanctioned by the CCP, recently declared that Alibaba is a spy den.
As the EU as a whole becomes hostile to the CCP, even if the CCP is unwilling, China-EU relations will continue to decline.
EU “defensive counterattack” will unite the United States to pressure the CCP
Russian Satellite News Agency reported that German Chancellor Angela Merkel advocated the development of multilateral cooperation with the CCP based on common rules at the Global Solutions Summit on May 28. Merkel believes that although there are institutional differences and competition among different countries, all parties must abide by common rules.
Merkel also said that copyright, fair competition, government subsidies and other issues need to be discussed clearly, otherwise there will be no fair competition in the world.
Merkel’s remarks echoed the “rules-based international order” that US Secretary of State Blincoln has always required the CCP to comply with, and also expressed Europe’s worries about the CCP’s industrial policies and subsidies.
From the perspective of Europe and the United States, the CCP’s industrial subsidies include, for example, Chinese-funded enterprises will obtain land from local governments for free or at low prices, water and electricity prices are low, and plant, equipment, and even products produced may enjoy subsidies. Then, Chinese companies will export their products to the international market to “compete”, which directly leads to the bankruptcy of European and American companies.
For Europe, in 1999, when the leader of the Communist Party of China visited France, the scene when French President Chirac accompanied him to visit the latest high-speed train carriage in Lyon, France is still vivid. Today, after the CCP has acquired many high-tech technologies in Europe, Europe is facing an embarrassing situation of retreat in the local manufacturing market.
On May 31 this year, the Chinese Communist Party announced that the state-owned CRRC’s double-decker EMUs have begun to be exported to Europe and will be used on railway lines in five countries including Austria, Germany, and Hungary.
In December last year, CRRC Tangshan defeated German companies such as Siemens and won the contract for the Portuguese subway train.
Chinese companies are supplying wind turbines in France, selling buses in Norway, and building power grids in Poland. New energy vehicles from Chinese companies are rushing into the European market.
In order to counter the Chinese Communist Party’s encroachment on the European market, the EU had to introduce multiple policies.
The first is the “International Procurement Tool” mechanism IPI. In the future, for countries that block their domestic markets, their bidders will either be excluded from bidding for EU public contracts or accept a premium of up to 40%. This measure is mainly aimed at Chinese companies.
In addition to IPI, on May 5, the European Union announced a draft rule aimed at cracking down on foreign companies that receive government subsidies, mainly targeting Chinese companies.
At the same time, the European Union began to loosen its own industrial policy. After the unsuccessful promotion of the French Alstom company (ALSTOM) and Siemens merged, it realized the merger of Alstom and Canada’s Bombardier Transportation Company. After the merger, Alstom will significantly narrow the volume gap with CCRC and become the world‘s second largest rail transit equipment manufacturer.
These actions reflect the EU’s economic anxiety about the CCP and can be regarded as a temporary “defensive counterattack” strategy.
These measures can effectively prevent or weaken the cannibalization of the European market by Chinese companies, but for markets outside of Europe, European companies still cannot compete with the CCP. In other words, this is only a temporary measure taken to preserve the European market, not a fundamental solution to the problem.
For the EU, from the perspective of its global corporate competitiveness, its fundamental goal can only be to contain and change the CCP’s market-distorting industrial policy, so as to achieve the purpose of enhancing corporate competitiveness. In this regard, the interests of the European Union and the United States completely overlap. With the freezing of the China-Europe Investment Agreement, joining forces with the United States to exert greater pressure on the CCP and forcing the CCP to change its industrial policies has become almost the only option for Europe.
Europe and the United States have also realized that, from the perspective of Xi Jinping and the Chinese Communist Party, drastic changes in their industrial policies and subsidies will mean that what Xi said and did before will be overturned. Unless Xi and the CCP really have an existential crisis, the possibility is extremely small.
It is foreseeable that in order to achieve a balance between bilateral trade and the market, Europe and the United States have joined forces to use various means to force the CCP to open more markets and change some industrial policies, which has in fact become one of the achievable goals. The European and American asking prices for the CCP will also be higher than the asking prices for the first phase of the US-China Trade Agreement and the China-EU Investment Agreement.
Editor in charge: Gao Jing#
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