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China used to be a strong proponent of a stable and unified Europe – as a market and as a pillar in a multipolar world. Yet its recent infrastructure foreign policy initiatives and political outreach to central and eastern European countries have raised the question if Beijing’s priorities have changed. This article is the sixth and final part of a MERICS blog series on China’s new foreign policy setup. 

The emphasis on regional expertise is a major asset of China’s diplomatic corps. Chinese diplomats frequently rotate within a geographic region. China’s top ambassadors, however, are often left in their positions for a long time. The preference for seniority and the lack of qualified potential successors could weaken the overall effectiveness of China’s diplomatic outreach. This article is part 5 of a MERICS blog series on China’s new foreign policy setup.

China’s foreign affairs expenditures may pale in comparison to the United States or Germany, but they grew at an unprecedented speed over the past 15 years. Even in the face of slower GDP growth and rising domestic obligations, China is likely to further scale up its spending to secure its influence in an increasingly multipolar world. This article is part 4 of a MERICS blog series on China’s new foreign policy setup.

China’s new development agency is designed to coordinate aid and prioritize strategic foreign policy goals over short time commercial interests. At the same time, the new agency institutionalizes a mercantilist model of development typified by the Belt and Road Initiative. This article is part 3 of a MERICS blog series on China’s new foreign policy setup. 

Xi Jinping has a global vision for China and has centralized foreign policy around himself and the CCP. In this blog series, MERICS researchers take a closer look at the (new) setup of China’s foreign policy leadership, institutions, budget and personnel – as well as on its policy approach to Europe. This article is part 1 of the series.

The establishment of the Central Foreign Affairs Commission appears to strengthen the role of the CCP in China’s foreign policymaking. The new body will likely have a higher standing than the former Leading Small Group on Foreign Affairs and further sideline the government agencies in charge of foreign policy. This article is part 2 of a MERICS blog series on China’s new foreign policy setup. Read part 1 here.

The “Made in China 2025” strategy is supposed to align the global ambitions of the government and Chinese state-owned and private companies. If innovation is driven by strategic national targets rather than by profit expectations, it represents an export of China’s state-led economic system and a challenge to the affected industries and economies of industrialized countries. 

The reality of Beijing’s investment in Central and Eastern European countries falls short of the rhetoric at the 16+1 summits. Numbers on Chinese investment connected to the Belt and Road Initiative tend to be inflated and misleading. Only a fraction of the reported sums is connected to actual infrastructure projects on the ground. And most of the projects that are underway are financed by Chinese loans, exposing debt-ridden governments to additional risks.

Caroline Meinhardt, Michael Laha, Rebecca Arcesati, Václav Kopecký 

Europe’s cautious approach to developing emerging technologies is hampering its global competitiveness. The European Commission’s AI strategy falls far behind China’s ambitious blueprint in several key aspects, including funding, sector-specific policies, startup incentives, and talent attraction. This article is part 2 of a mini-series to present the outcomes of the MERICS European China Talent Program 2018.

Viking Bohman, Jacob Mardell and Tatjana Romig

The Belt and Road Initiative (BRI) promises to advance global development but also carries daunting risks. If left unchecked, the project could both challenge EU cohesion and undermine European standards. The EU needs the institutional capacity to assess these risks and a coherent narrative to compete with China's. This article is part 1 of a mini-series to present the outcomes of the MERICS European China Talent Program 2018.

Frances Kitt

As political elites In Berlin and Canberra have woken up to the challenge of Chinese Communist Party (CCP) influence, they should work together to address it. The next edition of the biannual meeting of their foreign and defence ministers later this year should put the issue of CCP influence on top of the agenda.

At a time of rising protectionism, China is sending a signal of liberalization by lowering its import tariffs on cars. The unilateral move is only a first step if China wants to prove its commitment to the multilateral trading system. Sacrificing outdated protections can also help China’s transition towards a higher value-added economy.

The US president’s attacks on multilateralism may push Chancellor Merkel into an unlikely alliance with Beijing. Germany and the EU have to test ways to work with China in the absence of transatlantic coordination. The goal must be to organize an international pushback against destructive US trade policies.

Sebastian HeilmannGuntram B. Wolff

Germany’s economic success is under threat. Berlin needs to reduce the country’s dependency on exports by stimulating domestic growth―and push for robust European trade and industrial policies.

China’s growing political, economic and cultural influence in Europe is finally attracting the public attention it deserves. In this OpEd for the New York Times, former Beijing correspondent and current MERICS fellow Didi Kirsten Tatlow offers a personal view of how China expanded its footprint in Berlin since she last lived in the German capital.

(via The Diplomat)

China’s foreign relations institutions have emerged as stronger players from this year’s National People’s Congress (NPC). Taking advantage of the void left by the United States, Beijing is working to realize Xi Jinping’s vision of turning China into a global power by 2049.

News that China plans to reduce the frequency of its summits with Central and Eastern European countries has been interpreted as a charm offensive towards Brussels, where many see the 16+1 as divisive. But it could also be an acknowledgment that many of China’s economic promises to the region have not materialized or even an attempt to further divide Europe. 

Interview with Helena Legarda

China wants to develop a “world class” military force that can “fight and win wars” by 2049. So it comes as little surprise that the defense budget just got another boost. Military spending will rise by 8.1 percent this year. What’s behind this figure and China’s military modernization drive? Helena Legarda discusses the 2018 military budget and China’s strategies.

Geoffrey Hoffman (via ChinaFile)

Censorship and surveillance versus a free and open internet: China's ideas of cyber sovereignty are incompatible with how liberal democracies define cyberspace. Despite these inevitable conflicts, the two models could coexist in relative peace as long as governments focus on the shared goal of cyber defense.

Kim Jong-un’s Olympic olive branch to South Korea may illustrate the decline of US influence in East Asia, but it is wrong to assume that China is the beneficiary of these developments. Beijing has no better answers than Washington to deal with Pyongyang’s recalcitrance, and the Kim regime will not dance to any foreign power’s tune, certainly not China’s.

Jacob Mardell

Beijing tries hard to sell its Belt and Road Initiative (BRI) as a “win-win” for all. But the announcement of a new Chinese-led dispute settlement mechanism will only feed suspicions that the cross-border connectivity program is negotiated entirely on China’s terms.

Chinese media reports dismiss the current debate in Europe over Chinese political influencing. At the same time, their government is telling Western institutions, companies and organizations not to meddle in China’s affairs. China could be more persuasive if it allowed open transnational exchanges and debate - rather than using opaque channels and financial leverage to broaden its influence.

On her recent visit to China, Britain’s Prime Minister Theresa May got a foretaste of the difficult path ahead in carving out a new role for the UK on the world stage. Pressured to forge new trade and investment relationships with major powers like China, the UK might soon find out that it feels much less at home outside the EU than inside.

With little room for tightening, Beijing lacks good options to prevent a return of capital flight. China cannot afford to match the US policy changes as lower tax rates and higher interest rates would further drive up budget deficits and debt.

Rebecca McKimm
Helping ensure the survival of the Iran nuclear deal presents China with the opportunity to raise its profile in international affairs and to set the tone in the nuclear non-proliferation debate.