MERICS Blog - European Voices on China https://www.merics.org/en/blog/rss?field_topics_target_id=All en China’s expansion in the Indian Ocean calls for European engagement https://www.merics.org/en/blog/chinas-expansion-indian-ocean-calls-european-engagement <span>China’s expansion in the Indian Ocean calls for European engagement</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Fri, 10/11/2019 - 12:42</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-10-11T12:00:00Z">2019-10-11</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>Julian Weber</p> <p><strong><span><span><span><span><span>The Indian Ocean is a critical link in global trade routes, with 80 percent of global seaborne trade passing through it. As China increasingly asserts its interests in the region, Europe cannot afford to turn a blind eye, argues Julian Weber.</span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-10/191011_Containerschiffe_Siwabud%20Veerapaisarn%20via%20123rf_94436512_m.png?itok=cr57qv1_ 325w, /sites/default/files/styles/max_650x650/public/2019-10/191011_Containerschiffe_Siwabud%20Veerapaisarn%20via%20123rf_94436512_m.png?itok=loNirhCU 650w, /sites/default/files/styles/max_1300x1300/public/2019-10/191011_Containerschiffe_Siwabud%20Veerapaisarn%20via%20123rf_94436512_m.png?itok=3iGqDmaC 1300w, /sites/default/files/styles/max_2600x2600/public/2019-10/191011_Containerschiffe_Siwabud%20Veerapaisarn%20via%20123rf_94436512_m.png?itok=oSXoIsv- 2047w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-10/191011_Containerschiffe_Siwabud%20Veerapaisarn%20via%20123rf_94436512_m.png?itok=cr57qv1_" alt="Container terminal stock image" title="Image by Siwabud Veerapaisarn via 123rf" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span>Eighty percent of China’s oil imports come through the Malacca Strait, the Indian Ocean’s busiest “chokepoint”. This reliance on maritime energy imports has led to more assertive securitization by China. Over the past decade, it has expanded its naval capabilities in the Indian Ocean – joining the ranks of the United States, India and France which run several bases in the ocean.</span></span></span></span></span></p> <p><span><span><span><span><a href="http://english.www.gov.cn/archive/whitepaper/201907/24/content_WS5d3941ddc6d08408f502283d.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In its new 2019 defense white paper</span></a><span>, China has stressed the protection of its </span><span lang="ZH-CN" xml:lang="ZH-CN" xml:lang="ZH-CN">“</span><span>maritime rights and interests” (</span><span lang="ZH-CN" xml:lang="ZH-CN" xml:lang="ZH-CN">海洋权益</span><span>) and safeguarding its </span><span lang="ZH-CN" xml:lang="ZH-CN" xml:lang="ZH-CN">“</span><span>overseas interests” (</span><span lang="ZH-CN" xml:lang="ZH-CN" xml:lang="ZH-CN">海外利益</span><span>). These interests undoubtedly entail actions in the Indian Ocean, including the supply of military equipment for its allies and building military bases and commercial ports.</span></span></span></span></span></p> <p><span><span><span><span><span>Indeed, China has already started building high-tech warships for its “all-weather ally” Pakistan. Its only overseas military base has been put into operation in the small African state of Djibouti, which borders the Bab al-Mandab Strait, a “bottleneck” between the Red Sea and the Western Indian Ocean.</span></span></span></span></span></p> <p><span><span><span><span><span>In Sri Lanka and Pakistan, China runs two other strategic ports. The port of Hambantota leased by China from the Sri Lankan government is located just north of the most important shipping route of the Indian Ocean. The Pakistani port of Gwadar built and managed by a Chinese consortium lies close to the India-operated Chabahar port in Iran, and, more importantly, near the Strait of Hormuz, the world’s biggest chokepoint for oil. The concerns about dual use for military purposes have been reinforced by China docking a submarine in Sri Lanka for resupply and sending warships to Gwadar for refueling. </span></span></span></span></span></p> <p><span><span><span><span><strong><span>More than a third of EU external trade value in goods relies on Indian Ocean routes</span></strong></span></span></span></span></p> <p><span><span><span><span><span>The potential consequences of China’s securitization efforts in the Indian Ocean will also affect Europe. Apart from China, Japan, South Korea and India are among </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><a href="https://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122530.pdf">the top ten good-trading partners of the EU</a>.</span> Europe has over 30 percent trade volume with Asian countries. The trade of goods with these countries relies on trade routes passing through the Indian Ocean. <span>And Europe’s freedom of navigation in the region is already impeded as the recent incident in the Strait of Hormuz showed where an Iranian commando seized a Swedish-owned and British-flagged container ship. Although it is not likely that China will create such an incident under current circumstances, its abilities to do so are growing.</span></span></span></span></span></p> <p><span><span><span><span><span>In the neighboring South China Sea power plays involving military operations can already be seen: Here, China has demonstrated that it is not only willing and able to provoke stand-offs with Vietnam and the Philippines by sending coast guard and maritime militias, but that it also does not shy away from intercepting US destroyers in the disputed waters. In doing so, it is breaching international regulations such as the United Nations Convention of the Law of the Seas (UNCLOS).</span></span></span></span></span></p> <p><span><span><span><span><span><span>Considering that China’s navy is growing stronger, and “</span></span></span><span lang="DE" xml:lang="DE" xml:lang="DE"><span><span><a href="http://english.www.gov.cn/archive/whitepaper/201907/24/content_WS5d3941ddc6d08408f502283d.html">speeding up the transition of its tasks from defense on the near seas to protection missions on the far seas</a></span></span></span><span><span><span><span><span>,</span></span></span></span></span><span><span><span>” such incidents could expand to the neighboring Indian Ocean. The Chinese navy is already training for “</span></span></span><span lang="DE" xml:lang="DE" xml:lang="DE"><span><span><a href="http://english.www.gov.cn/archive/whitepaper/201907/24/content_WS5d3941ddc6d08408f502283d.html">strategic deterrence and counterattack</a></span></span></span><span><span><span>” and the risk is increasing that it will use maritime traffic passing through chokepoints to create a precedent for stand-offs or seizures far from its shores. </span></span></span></span></span></span></p> <p><span><span><span><span lang="DE" xml:lang="DE" xml:lang="DE"><span><span>If this happened, goods would not arrive a their destination ports anymore creating insecurity among European businesses about the accessibility to their biggest market Asia. The whole trading system with Asia and Europe could be impeded.</span></span></span></span></span></span></p> <p><span><span><span><span><strong><span>The EU must find ways to deal jointly with China to ensure uninterrupted trade </span></strong></span></span></span></span></p> <p><span><span><span><span><span>The EU has acknowledged the nexus between Asian Security and European prosperity </span><a href="https://eeas.europa.eu/sites/eeas/files/factsheet_eu_asia_security_july_2019.pdf"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">in a recent factsheet</span></a><span> and in March labelled China as a “systematic rival” not only in terms of trade but also security policy. However, it has as of yet failed to address the need for a common China strategy in Asia, let alone in the Indian Ocean. </span></span></span></span></span></p> <p><span><span><span><span><span>France, which has territory and military abilities in the Indian Ocean, is the only EU country addressing this issue. Without naming China directly, </span><a href="https://www.defense.gouv.fr/english/dgris/international-action/regional-issues/france-unveils-its-defence-policy-in-the-indo-pacific"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">in its 2019 security paper on the Indo-Pacific</span></a><span> it stated that it is determined to “[uphold</span><span><span><span>]</span></span></span><span> the multilateral order against major powers” that favor “power-based relations, generating anxiety and unpredictability worldwide”. As the world’s leading trade bloc, the EU must find ways to deal jointly with China to ensure uninterrupted trade and uphold multilateralism in the region – France is not willing or capable to do it alone. </span></span></span></span></span></p> <p><span><span><span><span><span>This does not mean that Europe should not seek to build trust and cooperation with China. The European Union Naval Force (NAVFOR) should continue its joint peacekeeping and counter-piracy missions and evacuation exercises with the Chinese navy.</span></span></span></span></span></p> <p><span><span><span><span><strong><span>The EU needs to show more presence in the Indian Ocean</span></strong></span></span></span></span></p> <p><span><span><span><span><span>But Europe needs equally be prepared for a China that is not interested in multilateralizing securitization efforts beyond anti-piracy missions. The EU needs to step up its joint military capabilities and show more presence in the Indian Ocean vis-à-vis China with European observer or escort missions and naval exercises. The Djibouti military bases of Italy and France would provide good starting points for such engagement.</span></span></span></span></span></p> <p><span><span><span><span><span>Japan, which also operates a base in Djibouti, could be a potential partner in such engagement. And India,</span> <span>as the most relevant and like-minded regional stakeholder, is considering more security cooperation with Europe. </span></span></span></span></span></p> <p><span><span><span><span><span>The EU as a whole needs to realize it has to engage towards China in the Indian Ocean with more visibility and self-confidence to secure its interests – it should act sooner rather than later. If Europe continues to be inactive towards China’s influence in the region and unable to secure its own trade, its container ships could find themselves in stormy waters.</span></span></span></span></span></p> <p><strong><span><span><span><span><span>Julian Weber is pursuing a master’s degree in Chinese Studies and Political Science at the University of Heidelberg. He worked as an intern in the MERICS foreign policy program from July to September 2019.</span></span></span></span></span></strong></p></div> </div> </div> Fri, 11 Oct 2019 10:42:08 +0000 h.seidl 10411 at https://www.merics.org China’s alternative multilateralism https://www.merics.org/en/blog/chinas-alternative-multilateralism <span>China’s alternative multilateralism</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Fri, 10/04/2019 - 09:53</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-10-04T12:00:00Z">2019-10-04</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/hanns-w-maull" hreflang="en">Hanns W. Maull</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>The Franco-German Alliance for Multilateralism, now officially up and running, will not be able to expect much of this American presidency. Can it count on China?</strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-10/191004UN_headquarters_NY_123rf_%20Karel%20Miragaya_66952707_m.jpg?itok=6Jc7w45N 325w, /sites/default/files/styles/max_650x650/public/2019-10/191004UN_headquarters_NY_123rf_%20Karel%20Miragaya_66952707_m.jpg?itok=wiDdpH9l 650w, /sites/default/files/styles/max_1300x1300/public/2019-10/191004UN_headquarters_NY_123rf_%20Karel%20Miragaya_66952707_m.jpg?itok=53B1jOqN 1300w, /sites/default/files/styles/max_2600x2600/public/2019-10/191004UN_headquarters_NY_123rf_%20Karel%20Miragaya_66952707_m.jpg?itok=5s4ybBuh 2508w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-10/191004UN_headquarters_NY_123rf_%20Karel%20Miragaya_66952707_m.jpg?itok=6Jc7w45N" alt="UN Headquarters in New York" title="Image by Karel Miragaya via 123rf" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>For anyone still in doubt about this, Donald Trump made clear where he stands on multilateralism in his address to the UN General Assembly on September 24. In an aside, he attacked the World Trade Organization, a pillar of the present international order, for being biased in favor of China. America under Trump is against multilateralism, and Trump is actively working to undermine it whenever he finds an opportunity – not least in the WTO, whose quasi-judicial dispute settlement mechanism his administration is trying to strangle.  </p> <p>Together with France, Germany has been working on an Alliance for Multilateralism to strengthen international institutions and develop concrete, sustainable proposals for urgent global challenges. At the invitation of Germany, France, Canada, Mexico, Chile, Ghana, Singapore and more than 50 states met two days after Trump’s speech in New York to formally launch the Alliance for Multilateralism. Its key assumption, according to German Foreign Minister Heiko Maas, is simple:  “Only by working together we will all have a future”.  </p> <p>Can that Alliance count on China? President Xi Jinping did not come to New York this year, and Beijing is busy negotiating a trade deal with Washington that – if it is done at all – will satisfy Donald Trump’s transactional preferences but fly in the face of the present multilateral order. Still, Beijing already presented itself as a paragon of multilateralism even before Trump’s election in 2016: when Xi addressed the UN General Assembly in 2015, he offered a whole bouquet of Chinese initiatives to contribute to that order, prefacing those offers with this summary of Beijing’s present thinking about multilateralism:  </p> <p>“In today’s world, all countries are interdependent and share a common future. We should renew our commitment to the purposes and principles of the UN Charter, build a new type of international relations featuring win-win cooperation, and create a community of shared future for mankind”.   </p> <p><strong>All is not what it seems </strong></p> <p>Sounds good to multilateralist ears? Well, not really. After all, the UN Charter already defines how interstate relations should be conducted – so why is there a need to build “a new type of international relations”? In this one phrase you see that Beijing does not offer a multilateralist alternative to the present US administration, but an alternative multilateralism reminiscent of Donald Trump’s “alternative facts”. </p> <p>The difference resembles that between “rule of law”, a founding principle of Western democracies, and “rule by law”, emphasized by the Chinese Communist Party leadership: should governance be accountable to the law and subject to judicial review, or should it use the law as a means to control societies? We know the answer for China: the CCP insists on control, though it tries to make that control palatable through persuasion (i.e. propaganda). That this is not working all that well even in China itself can presently be seen in Hong Kong, though the situation in Xinjiang sadly demonstrated that modern methods of repression can work, at least for now. Beijing’s philosophy on international order similarly prefers China’s sovereign control to universal principles and rules. </p> <p>Yet genuine multilateralism is about following the rules even if and when that hurts one’s own interests – not because of altruism, but based on the conviction that in the long run self-interest (and national interests) are best served by a rules-based “rule of law” order. That Beijing rejects this was made clear in its response to the International Court of Arbitration’s (ICA) ruling in the South China Sea maritime territorial conflict between China and the Philippines: although China had itself played an important role in defining and establishing the UN Law of the Seas (UNCLOS), it refused to abide by the ICA’s authoritative application of that law.  </p> <p><strong>What is at stake </strong></p> <p>It isn’t difficult to see why Donald Trump would not understand the logic of “interdependence and a shared common future”, to quote Xi again – but why does the CCP leadership fail to get it? There are two major reasons. First is the CCP’s obsession with control and its fervent belief that technology will deliver the means to hang on to power. Obsessions inhibit clear thinking. The second reason is what you might call the “power fallacy” in Beijing’s assessment of international relations. This fallacy assumes that the West’s decline in world power relations is China’s gain. In fact, however, power in world affairs is not only shifting from the West to the rest, it is also dissipating within the community of nation states, but even more importantly away from states to other centers of power, namely non-state actors such as large corporations, terrorist organizations, civil society and even powerful individuals. </p> <p>As power thus becomes more and more diffuse, the chances of control recede. There simply is no way how today’s pressing international problems, starting with climate change, can be successfully addressed by way of control, even if attempted by the most powerful states. The only chance to secure our future consists in broad-based, voluntary global co-operation to define and implement jointly agreed goals through following common principles and rules. </p> <p>Those are the - admittedly lofty - ambitions behind the Franco-German Alliance. At present, they are not to the liking of leaders in either Washington or Beijing: while America under Trump is angling for an alternative to multilateralism, Beijing is trying surreptitiously to promote its alternative multilateralism. In the end, leaders in both capitals will have to learn the logic of genuine multilateralism, or be overtaken by history. </p></div> </div> </div> Fri, 04 Oct 2019 07:53:08 +0000 h.seidl 10386 at https://www.merics.org Celebrate the people, not the party https://www.merics.org/en/blog/celebrate-people-not-party <span>Celebrate the people, not the party</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Tue, 10/01/2019 - 14:47</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-10-01T12:00:00Z">2019-10-01</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kristin-shi-kupfer" hreflang="en">Kristin Shi-Kupfer</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>The Communist Party praises itself no end on the 70th anniversary of the founding of the People’s Republic of China. But let’s not forget the truth on October 1 – China’s people are the power behind the country’s phenomenal rise over recent decades, says Kristin Shi-Kupfer.</strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-10/191001_China%20celebrates%2070th%20anniversary_bjl16980075.jpg?itok=wRP8yxAS 325w, /sites/default/files/styles/max_650x650/public/2019-10/191001_China%20celebrates%2070th%20anniversary_bjl16980075.jpg?itok=d-xCJPoZ 650w, /sites/default/files/styles/max_1300x1300/public/2019-10/191001_China%20celebrates%2070th%20anniversary_bjl16980075.jpg?itok=sfqU6xpL 1300w, /sites/default/files/styles/max_2600x2600/public/2019-10/191001_China%20celebrates%2070th%20anniversary_bjl16980075.jpg?itok=JAUbni4v 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-10/191001_China%20celebrates%2070th%20anniversary_bjl16980075.jpg?itok=wRP8yxAS" alt="Image by ImagineChina" title="Image by ImagineChina" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>Happy Birthday, China! How nice it would be to celebrate with a public festival, with kites and cotton candy on Tiananmen Square, colourful billboards and outdoor concerts in Beijing’s pleasant October air. How beautiful. And also how unthinkable in a country in which the government seems to live in fear its own people – the People's Republic of China. </p> <p>The people seem more like extras in these celebrations tailor-made for the state leadership. A few members of the public got to take the stage in the Great Hall of the People as freshly appointed "heroes". Web pages devoted to the celebrations carry a few portraits of citizens, especially "well-known personalities", and a few stories – like one about Huang, the figure skater from the northeast, or Yang, the firefighter from the western province of Sichuan. Some 590,000 posts with the hashtag "I Love China" are the only interactive element on the special anniversary page of the commercial news portal Sina.com. On similar pages of the news agency Xinhua or the newspaper People’s Daily there is no trace of any place for the public to leave comments. This function seems to have been deliberately switched off. </p> <p><strong>Merciless discipline </strong></p> <p>This leaves more space for the narrative the Communist Party wants to control. In the style of Mao Zedong, the message is: "Without the Communist Party there is no new China" – the implication being that without Xi Jinping’s new era there would be no glorious future. "Glorious seventy years, the struggle for the new era" is the official motto of the state- and party-run People's Daily. The narrative is about a Communist Party ready to do battle under Xi. But it is also about the expectation of merciless, ideological discipline at home. Beijing is demanding absolute loyalty and devotion from party members who will obey the leader – and succeed in the struggles of the 21st century.  </p> <p>Past struggles of the last 70 years are mostly referred to as quantifiable achievements. They are underpinned by numbers that sometimes seem almost absurd - government revenues have increased three thousand fold since 1949, GDP is 170 times higher. Success is depicted on interactive maps that show the development of high-speed trains, or the technological path from the telecommunications standard 1G to today’s 5G – all "made in China", of course. Stories of the sort the Communist Party likes to tell of poor villages and poor villagers that in the course of the 1970s grew to become modern cities and wealthy people. </p> <p><strong>Late appropriation </strong></p> <p>Some of these narratives are also popular in the liberal democracies of the West. The reasoning goes something like this: "The Chinese government has lifted millions of people out of poverty”, or, "The pragmatist Deng Xiaoping created an economic boom after 1979". Such explanations are not completely wrong, but they ignore the real reason for China’s success – its people. A crucial part of China’s dynamism almost always came from below, from individuals and groups whose initiative often sidestepped official regulations. It was only later that China's Communist Party declared these kind of practices to be official policy – when they seemed controllable and safe enough, or when its back was up against a wall. </p> <p>Exhibit A - the so-called "reform and opening policy" at the end of the seventies. Once life in the collectives had descended into catastrophic conditions, people turned their backs on this centrally engineered way of living and returned to the old system of farming based around individual households. They also traded goods that were often still scarce on "grey markets". Local party cadres looked away or tacitly supported the initiatives as they improved living conditions considerably. The Communist Party later legalized this system and allowed more experiments with market mechanisms and small businesses. </p> <p>Exhibit B - the economic upswing of the "workbench of the world” in the eighties and nineties. It was made possible by migrant workers making a virtue out of necessity. The industrialization of agriculture put many people out of work. Although their residence registration tied them to their leased land parcels for decades, more and more unemployed farm workers moved to the cities and found work in factories, restaurants or waste disposal. Most had no legal access to urban infrastructure and often lived illegally in cellars or in barracks. They worked without a contract and insurance for pay with which they could feed the entire family back home. China’s booming factories and cities desperately needed this peasant labour force, so the government gradually legalized their status, gave them access to the social security system, and eventually allowed their children to attend public schools. </p> <p>Exhibit C - the emergence of China's dynamic private companies. In addition to rural cooperatives and small entrepreneurs, more and more courageous and sometimes greedy, well connected and hard-working party cadres, "jumped into the sea", as the Chinese say. On the side or, increasingly, full-time, they began to promote their companies. Some people were only interested in fast money, others developed innovative products and services. The Communist Party for a long time had difficulty coming to terms with these busy cadres. Capitalists had never been part of its clientele. But at some point, the "red entrepreneurs" had created a new reality, and their booming companies created more and more jobs, and more growth than the ailing state-owned enterprises. In 2002, the Communist Party declared itself the representative of all "progressive productive forces". Party membership was from then on no longer an obstacle for entrepreneurial activities – or vice versa. </p> <p><strong>Missed opportunity for liberalization  </strong></p> <p>2008 could have been another year of the people leading the way and the government falling in line. Hundreds of intellectuals, entrepreneurs and employees (a good number of them members of the Communist Party members or state institutions) joined forces with Nobel Peace Prize laureate Liu Xiaobo. Together they proposed an admittedly very liberal reform programme, the so-called Charter 08 that touched on a number of issues the political elite was already more or less being openly debating - the abolition of the housing registration system, for example, the protection of private property, privatization of land, or freedom of the press. Other demands went much further – separation of powers, independent judiciary, or even a parliamentary democracy – and would have meant the end of one-party rule, though not necessarily the end of the Communist Party as an organization. Liu Xiaobo, who died in 2017, and fellow reformers also raised the idea of a "Truth and Reconciliation Commission" and the possibility of a post-reform amnesty.  </p> <p>But the Communist Party leaders passed up this historic opportunity for peaceful political reform. Instead they responded repressively, with arrests and surveillance. Today, hopes for similar reform proposals are slim. State President and Party Chairman Xi Jinping has made clear that his concept for the future of the People's Republic leaves no room for "Western" ideas – he has even forbidden them being discussed. Nevertheless, some courageous citizens still refuse to allow the "dynamics from the street" to peter out. The future of their country probably means more – or at least something different – to them than to the Communist Party: It's not just about collective dreams, national strength and international recognition, but also about individual freedom, in having the strength to work through the crimes of the past, in the joint creation of a global order.  </p> <p>It is these people who deserve to be celebrated – but celebrated alongside all the other citizens of China. The country’s vibrant, unbridled society continues to be its greatest hope and offer the greatest possible contrast to its leaders’ totalitarian attempts at forced conformity. Many people imagine Hong Kong will end up like China. But what if Hong Kong’s struggle for freedom actually offered us a glimpse of the mainland’s future? </p> <p><strong>This article was first published in German <a href="https://www.nzz.ch/meinung/70-jahre-volksrepublik-china-lob-des-volkes-und-nicht-der-partei-ld.1510961">by “Neue Zürcher Zeitung".</a> </strong></p></div> </div> </div> Tue, 01 Oct 2019 12:47:17 +0000 h.seidl 10376 at https://www.merics.org Europe has to buckle up to survive the challenge of the “Belt and Road” https://www.merics.org/en/blog/europe-has-buckle-survive-challenge-belt-and-road <span>Europe has to buckle up to survive the challenge of the “Belt and Road”</span> <span><span lang="" about="/en/user/451" typeof="schema:Person" property="schema:name" datatype="">backendadmin</span></span> <span>Mon, 09/30/2019 - 13:28</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-30T12:00:00Z">2019-09-30</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span><span><span><span><span>As Chinese companies become ever more assertive globally, Europe needs to better support up-and-coming industries and advance cross-regional partnerships, argue Alexandra-Andreea Pop and Anne-Sophie Deman.</span></span></span></span></span></span></span></span></strong></p> <p><strong>This article is part 3 of a mini-series to present the outcomes of the<a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"> MERICS European China Talent Program 2019.</a></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190930_Alipay_hospital_bjl12942912.jpg?itok=BGbY-6Ed 325w, /sites/default/files/styles/max_650x650/public/2019-09/190930_Alipay_hospital_bjl12942912.jpg?itok=4lu-gCDS 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190930_Alipay_hospital_bjl12942912.jpg?itok=0wRGdvdQ 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190930_Alipay_hospital_bjl12942912.jpg?itok=fm3o5fDe 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190930_Alipay_hospital_bjl12942912.jpg?itok=BGbY-6Ed" alt="A self-service machine supported by face recognition technology of Alipay, to pay fees at a hospital in Dongyang, Zhejiang province." title="A self-service machine supported by face recognition technology of Alipay, to pay fees at a hospital in Dongyang, Zhejiang province. Image by ImagineChina" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span>Europe’s efforts to foster homegrown companies in emerging industries and protect market share in traditional sectors are being challenged by agile newcomers from an ambitious and resourceful China. As the next head of the European Commission, Ursula von der Leyen, has to ensure Europe’s leaders agree on how to master this challenge. She and her colleagues must secure domestic and global markets for European companies - old, new, and yet to be invented ones – at a time when the European economic model is being challenged.</span></span></span></span></span></p> <p><strong><span><span><span><span><span>Chinese companies have chipped away at Europe’s leadership position in many sectors</span></span></span></span></span></strong></p> <p><span><span><span><span><span>The clock is ticking. Europe missed the digital revolution of the 2000s – China did not. Today, European companies hold only three per cent of global online-platform market share. Chinese giants Tencent, Alibaba, and Ant Financial dominate Asia’s almost tenfold share of 27 per cent. While European </span></span></span><a href="https://ec.europa.eu/epsc/publications/other-publications/eu-industrial-policy-after-siemens-alstom_en"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>companies‘ slow digitalization continues</span></span></span></a><span><span><span> to hinder their development, Chinese companies have bought European trophy assets like KUKA, Syngenta or Volvo, and chipped away at Europe’s position as a global leader in many sectors,  from automation to chemicals. </span></span></span></span></span></p> <p><span><span><span><span><span>This trend became painfully obvious in 2013. China shook things up again by showing it was ready to open its wallet to </span></span></span><a href="https://www.bloomberg.com/quicktake/china-s-silk-road"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>revive the Silk Road</span></span></span></a><span><span><span>.  The project supports Chinese firms to go abroad, while exporting overcapacities at home and bringing partners near and far into a more Sino-centric economic order. Two years later, it called upon its industry to secure China’s seat at the table of global industrial and technological leaders. The “Made in China 2025” plan is meant to upgrade the Chinese economy and ensure China’s high-tech self-sufficiency and global market dominance.</span></span></span></span></span></p> <p><strong><span><span><span><span><span>European leaders must swiftly rethink the EU’s internal and external priorities</span></span></span></span></span></strong></p> <p><span><span><span><span><span>As China appears to be moving ever faster with its push for smart technologies development like </span></span><a href="http://www.oecd.org/going-digital/ai/private-equity-investment-in-artificial-intelligence.pdf"><span><span>artificial intelligence</span></span></a><span><span> or </span></span><a href="https://asia.nikkei.com/Business/China-tech/China-s-tech-spending-surges-as-it-strives-to-be-robotics-superpower"><span><span>robotics</span></span></a><span><span>, European countries are mired in </span></span><a href="https://www.ft.com/content/836e31d4-2890-11e9-a5ab-ff8ef2b976c7"><span><span>debates about how best to nurture competitive homegrown companies</span></span></a><span><span> – a situation some have sought to evade by tapping into China’s Belt and Road Initiative and its promised investment flows that could elevate their economic prospects. To turn things around, European Union leaders must rethink the EU’s internal as well as external priorities - and do so fast. Only then will the EU be able to compete with a determined China and its growing appeal.</span></span></span></span></span></p> <p><span><span><span><span><span>The European Union has not been inactive. Under Jean-Claude Juncker, von der Leyen’s predecessor, </span></span></span><span><span><span>European leaders agreed </span></span></span><a href="https://ec.europa.eu/digital-single-market/en/artificial-intelligence"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>collective initiatives in artificial intelligence</span></span></span></a><span><span><span> and </span></span></span><a href="https://ec.europa.eu/growth/industry/policy/european-battery-alliance_en"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>battery development</span></span></span></a><span><span><span> to better position the EU as a supplier of emerging technologies. But that alone will very likely prove too little and too late to pose any real challenge to China’s efforts in both fields. If they are serious about their aims, EU leaders – guided by von der Leyen and her new European Commission – need to identify the up-and-coming industries that matter and provide them with timely support</span></span></span><span><span><span>. The relaunch of the EU’s industrial policy strategy would be a vital stepping-stone on this path. </span></span></span> </span></span></p> <p><strong><span><span><span><span><span>It is essential to forge a consolidated EU approach</span></span></span></span></span></strong></p> <p><span><span><span><span><span>In general, political will is essential to forge a consolidated EU approach</span></span></span><span><span><span>. This must bundle and channel the innovation-boosting initiatives of member states to respond to</span></span></span> <span><span><span>on-the-ground development needs across Europe -</span></span></span><span><span><span>– </span></span></span><span><span><span>from upgrading technology to full-blown </span></span></span><a href="https://ec.europa.eu/regional_policy/en/newsroom/news/2019/05/05-08-2019-commission-presents-results-of-initiative-supporting-regions-in-industrial-transition"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>industrial transition</span></span></span></a><span><span><span>. Taking the right measures to foster local innovation will help to ensure that European companies reap the benefits of digital transformation and remain competitive in established and emerging sectors in fast-changing global markets. </span></span></span></span></span></p> <p><span><span><span><span><span>In particular, the EU has to expand and speed up private-public partnerships under the resource-pooling framework called </span></span></span><a href="https://blog.semi.org/semi-news/european-state-aid-european-commission-approves-joint-microelectronics-project-to-spur-innovation"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Important Projects of Common European Interest</span></span></span></a><span><span><span> (IPCEIs). It should also establish fine-tuned and more accessible funding tools similar to the </span></span></span><a href="https://europa.eu/rapid/press-release_MEMO-18-4010_en.htm"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>InvestEU</span></span></span></a><span><span><span> program to guarantee sustainable investment for promising ideas. A potential </span></span></span><a href="https://www.politico.eu/article/exclusive-european-commission-leaked-plans/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>European Future Fund</span></span></span></a><span><span><span> could complement this initiative and raise </span></span></span><span><span><span><span>€100 billion more in public and private funding. </span></span></span></span><span><span><span>To allow specialized talent to cluster where it is needed, the EU has to scale up the </span></span></span><a href="https://ec.europa.eu/digital-single-market/en/digital-innovation-hubs"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>pan-European network of Digital Innovation Hubs</span></span></span></a><span><span><span><span>. Currently, this is </span></span></span></span><span><span><span>geared </span></span></span><span><span><span><span>towards small and medium-sized enterprises. </span></span></span></span><span><span><span>It should be expanded to include bigger companies,</span></span></span><span><span><span> while also </span></span></span><span><span><span>encouraging more collaboration between member states and </span></span></span><a href="https://ec.europa.eu/growth/industry/policy/industry-2030_en"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>experts</span></span></span></a><span><span><span>. More information exchange about industrial capabilities and innovation needs will better inform the design of such strategies for industrial development. </span></span></span></span></span></p> <p><strong><span><span><span><span><span>China sent its companies into the world to hone their competitive advantages</span></span></span></span></span></strong></p> <p><span><span><span><span><span>Regions and countries build </span></span></span><span><span><span>competitive companies at home and test their strength against that of competitors abroad. Before finalizing the blueprint for its “Made in China 2025” strategy, </span></span></span><span><span><span>China </span></span></span><span><span><span>first </span></span></span><span><span><span>sent its companies </span></span></span><span><span><span>into the world to hone their competitive advantages and assert themselves. Huawei is an example of this approach – as European companies are discovering, Chinese companies are rapidly asserting themselves along its many routes and beyond.</span></span></span></span></span></p> <p><span><span><span><span><span>In the end, to ensure European companies stay competitive both at home and internationally, a revamped EU industrial policy strategy should emphasize seizing new opportunities in areas where there is still room - for setting standards, say. In the race with China, the EU connectivity strategy published in 2018 needs to be made more comprehensive and better-targeted </span></span></span><a href="https://eeas.europa.eu/headquarters/headquarters-homepage/50699/connecting-europe-asia-eu-strategy_en"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>to connect with Asia</span></span></span></a><span><span><span> and be a key enabler of this goal. It would not only better channel Europe‘s public and private resources pool towards development opportunities that stimulate innovation on both continents. It would also further promote EU investment in partner countries, raise the profile of existing EU projects that lack nothing in scale but everything in publicity, and establish new partnerships where there are currently none. It is a step Europe urgently needs to take.</span></span></span></span></span></p> <p><strong><span><span><span><span><span>About the authors:</span></span></span></span></span></strong></p> <p><strong><span><span>Alexandra-Andreea Pop </span></span></strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><span>is Working Group Coordinator within the Government Affairs Department of the European Union Chamber of Commerce in China, Shanghai Chapter.</span></span></span></span></p> <p><strong><span><span>Anne-Sophie Deman </span></span></strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>is an EU Analyst at Hanbury Strategy, where she also heads the Brussels office. </span></span></span></p> <p><strong>The authors participated in the fifth annual <a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019">MERICS European China Talent Program</a> in May 2019, during which parts of the argumentation presented in this blogpost were developed. The authors bear sole responsibility for the content.</strong></p></div> </div> </div> Mon, 30 Sep 2019 11:28:02 +0000 backendadmin 10356 at https://www.merics.org E-commerce - a new channel for EU-China cooperation https://www.merics.org/en/blog/e-commerce-new-channel-eu-china-cooperation <span>E-commerce - a new channel for EU-China cooperation</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Mon, 09/23/2019 - 16:32</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-24T12:00:00Z">2019-09-24</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span>Ben Miller, Aljoscha Nau, Clémence Lizé</span></span></span></p> <p><strong><span><span><span>Brussels and Beijing should use their trading clout to forge new rules for online shopping and create new momentum for WTO-reform, argue Ben Miller, Aljoscha Nau and Clémence Lizé. </span></span></span></strong></p> <p><strong>This article is part 2 of a mini-series to present the outcomes of the<a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"> MERICS European China Talent Program 2019.</a></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190923_Ecommerce_Stock_image_xtockimages_via123rf.jpg?itok=h195YAyv 325w, /sites/default/files/styles/max_650x650/public/2019-09/190923_Ecommerce_Stock_image_xtockimages_via123rf.jpg?itok=P7r4fbXm 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190923_Ecommerce_Stock_image_xtockimages_via123rf.jpg?itok=b244paY9 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190923_Ecommerce_Stock_image_xtockimages_via123rf.jpg?itok=u_CXEvya 2305w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190923_Ecommerce_Stock_image_xtockimages_via123rf.jpg?itok=h195YAyv" alt="E-commerce" title="The EU and China have seats at the top table for the debate over the governance of digital trade. Image by xtockimages via 123rf" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span><span><span><span>Reform of the World Trade Organization can wait no longer. The WTO needs to modernize rules for the digital era and China’s vast state-led economy is central to this endeavor. As</span></span></span></span><span><span><span> China’s biggest trading partner<span>, reform has to be a priority for the EU as digital trade plays an increasingly bigger role in Sino-European trading relations. EU-China cooperation in regulating this new form of trade is an opportunity to take the lead in shaping the ‘fourth industrial revolution’. Beyond creating a firm legal framework, the EU and China should act as anchors for WTO modernization. Having agreed at April’s EU-China summit to conclude long-running talks about an investment agreement next year, the political will is there.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span><span><span>The WTO is not equipped to deal with state capitalism. <span>A </span></span></span></span><a href="http://bruegel.org/wp-content/uploads/2019/06/WP-2019-06-110619_.pdf"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>report from the think tank Bruegel</span></span></span></a><span><span><span><span> argues China is eroding the implicit “understandings” of international trade and its legal order by defending its own economic model beyond its borders. China’s geopolitical ascent demands a reassessment of these “understandings” to take into account </span></span></span></span><span><span><span>China’s<span> own positions and the nature of its economy. But within the WTO there remains a gulf between liberal market economies and China on issues ranging from the lack of a “level playing field” and market access to state-owned enterprises (SOEs). The EU and China should co-operate on digital trade rules as a vital prelude to tackling these thornier issues. </span></span></span></span></span></span></span></span></p> <p><strong><span><span><span><span><span><span><span>The EU is arguably the only player able to bridge the gap between liberal market economies and China</span></span></span></span></span></span></span></strong></p> <p><span><span><span><span><span><span><span><span>Services are underrepresented in the WTO framework, accounting for only 25 percent of rules while representing 75 percent of the </span></span></span></span><span><span><span>global <span>economy.<sup>1</sup></span> <span>Addressing this deficit is crucial for the future of global trade. The EU is an influential</span> global standard-setter<span> (as seen with the General Data Protection Regulation) and arguably the most open market in the world.  For its part, from 2001-2017, China’s trade in services grew by 16.7 percent, 2.7 times more than the world average, and in 2018 alone, </span></span></span></span><a href="http://www.chinadaily.com.cn/a/201903/21/WS5c932294a3104842260b1cc9.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>mobile payments totaled 41.5 trillion USD</span></span></span></a><span><span><span><span>. The EU and China have seats at the top table for the debate over the governance of digital trade.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span><span><span><span>Any partnership should seek agreement on e-commerce standards and definitions, rules for the ‘fourth industrial revolution’.</span></span></span></span><span><span><span> The United States and others will be key, and the EU is arguably the only player able to bridge the gap between liberal market economies and China.<span> Ensuing agreements should cover issues from privacy to the free flow of information to sovereignty and citizens’ rights. As digitization increases the importance of free-flowing data, there is the danger that restrictive localization requirements and novel definitions of sovereignty will break up global value chains. </span></span></span></span><a href="https://ecipe.org/blog/the-costs-of-data-localisation-country-reports/%20;%20https:/ecipe.org/browse/?subj_subject=1128"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>A study by <span>the European Centre for International Political Economy</span></span></span></span></a><span><span><span><span> has shown the potential cost to business and trade.</span></span></span></span></span></span></span></span></p> <p><strong><span><span><span><span><span><span><span><span>Engagement is crucial for the EU to avoid being sidelined in any Sino-American deal</span></span></span></span></span></span></span></span></strong></p> <p><span><span><span><span><span><span><span><span>Ongoing trade tensions and touted bilateral solutions currently risk undermining the multilateral trading system. As two of the world’s biggest trading blocs, the EU and China have to search for common ground that will allow the technical cooperation necessary to save the global digital economy. As US-China trade tensions rumble on, engagement is crucial for the EU to avoid being sidelined in any Sino-American bilateral deal. China’s avowed willingness to work with the EU is a hedge as this trade dispute continues. But </span></span></span></span><a href="https://www.yicai.com/news/100184840.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Chinese sources report</span></span></span></a><span><span><span><span> increasing willingness in Beijing to cooperate with the EU on e-commerce regulation - a significant shift from two years ago, when China stood apart from the US-EU-Japan coalition on the matter.</span></span></span></span><span><span><span> This is an opportunity the EU should use. </span></span></span></span></span></span></span></p> <p><span><span><span><span><span><span><span><span>The ultimate political imperative for progress is reducing the “digital divide” in access to online products and services. G20 statements in June stressed its importance - and both China and the EU are in a position to make huge contributions. The EU is a world leader on digital regulation for citizens’ rights and leads in ‘business-to-business’ commerce. China is highly influential among the WTO’s developing nations and is a pioneer of integrated services and platforms like Alipay that focus on business-to-consumer commerce (B2C). As the EU and China complement each other, digital trade has proved less contentious than other areas. </span></span></span></span><span><span><span>T<span>here is clearly momentum for finding a common approach. </span></span></span></span></span></span></span></span></p> <p><strong><span><span><span><span><span><span><span><span>Data localization and forced disclosure of source codes are particularly contentious</span></span></span></span></span></span></span></span></strong></p> <p><span><span><span><span><span><span><span><span>But there are sticking points. More restrictions on data localization or forced disclosure of source codes are particularly contentious, as they would reduce Beijing’s access to foreign companies’ data in China. Beijing might tolerate an agreement not to collect data on territorial basis, but all big players would have to agree – so the US as well as the EU. China regards the issue as one of ‘national security’, whereas for the EU and its companies, it is about the free flow of data, and reducing non-tariff barriers and intellectual-property theft.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span><span><span>There is much pessimism about the WTO, but the EU can change that through e-commerce co-operation. China did not help write the WTO rulebook, and working with it on rules for digital industries could help the EU dispel misunderstandings and build the trust for good long-term relations. It could endorse </span></span></span></span><a href="https://www.brookings.edu/wp-content/uploads/2017/04/chinas-emerging-institutional-statecraft.pdf"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>China’s “emerging institutional statecraft,”</span></span></span></a><span><span><span><span> signaling Beijing’s shift from rule-taker (or rule-breaker) to rule-maker. <span>Involving China in writing</span> the new “<em>rules of the game for global governance”</em><sup>2</sup><em>, </em>would help draw Beijing away from casting itself as a victim of trade rules and increase the likelihood it adheres to them. This would help everyone<span> and strengthen the legitimacy of the WTO in China – and globally.  </span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span>1 | Presentation by Dr. Christopher Kiener, Head of Services of the Digital Trade Unit, DG Trade, EU Commission at the British Chamber of Commerce, 21 May 2019.</span></span></span></span></span></p> <p><span><span><span><em><span><span>2 </span></span></em><span><span>|</span></span><em><span><span> </span></span></em><span><span>Callahan, William A. (2016): China’s ‘‘Asia Dream’’: The Belt Road Initiative and the new regional order, Asian Journal of Comparative Politics, 1 (3), pp. 226–243</span></span></span></span></span></p> <p><strong><span><span><span><span><span>About the authors:</span></span></span></span></span></strong></p> <p><span><span><span><strong>Ben Miller </strong>is Partnerships Adviser and Program Manager in the Department for International Development of the British Embassy in Beijing.</span></span></span></p> <p><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><strong>Aljoscha Nau </strong>is European Affairs Coordinator at the German Economic Institute (IW) in Brussels. </span></span></span></p> <p><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><strong>Clémence Lizé </strong>is an </span></span></span><span><span><span>Executive at the global advisory firm Brunswick Group</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>. </span></span></span></p> <p><strong>The authors participated in the fifth annual <a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019">MERICS European China Talent Program</a> in May 2019, during which parts of the argumentation presented in this blogpost were developed. The authors bear sole responsibility for the content.</strong></p></div> </div> </div> Mon, 23 Sep 2019 14:32:22 +0000 h.seidl 10296 at https://www.merics.org Losing ground in space https://www.merics.org/en/blog/losing-ground-space <span>Losing ground in space</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Wed, 09/18/2019 - 13:23</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-19T12:00:00Z">2019-09-19</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kai-von-carnap" hreflang="en">Kai von Carnap</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Selina Morell</span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>In the space realm, Europe still seeks cooperation with China despite having framed it a systemic rival. This creates serious strategic and economic risks, because Europe is too fragmented to keep up with China’s concerted commercial and military efforts to challenge the US dominance in space.</span></span></span></span></span></strong></p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>This article is part 1 of a mini-series to present the outcomes of the<a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"> MERICS European China Talent Program 2019.</a></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/bjl13075616.jpg?itok=ldN1rJzn 325w, /sites/default/files/styles/max_650x650/public/2019-09/bjl13075616.jpg?itok=hHt7HjP5 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/bjl13075616.jpg?itok=yL0_UYvM 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/bjl13075616.jpg?itok=Qs0HYWVY 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/bjl13075616.jpg?itok=ldN1rJzn" alt="Chang Zheng 2C carrier rocket, Sichuan Province China, 26 July 2019 Source: ImagneChina bjl13075616" title="Chang Zheng 2C carrier rocket, Sichuan Province, China, July 2019 Source: ImagineChina bjl13075616" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Fifty years after Neil Armstrong became the first man to set foot on the lunar surface, China provided humanity with the first picture of the far side of the moon, captured during the Chang'e 4 mission in January 2019. This event is exemplary for the great advances China has made in space:</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> Within a relatively short time, <span>China has emerged as a major space power that is about to overtake Europe</span>.</span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Outer space has become indispensable for our current and future society.</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> Whether getting cash from ATMs, checking the weather forecast or making phone calls, all these everyday activities rely on space infrastructure. Satellite navigation alone contributes to about </span></span></span></span><a href="https://ec.europa.eu/commission/sites/beta-political/files/budget-june2018-space-programme-impact-assessment1_en.pdf"><span><span><span><span><span>ten</span></span></span></span></span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> percent of Europe’s GDP</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>. It also lays the foundations for upcoming emerging technologies: the Internet of Things, 5G and 6G mobile telecommunications standards and quantum technology will all rely heavily on satellite networks. Longterm, our economic prospects may depend on mining resources from asteroids or space-based solar power</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>.</span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Unlike Europe, China aims for military expansion</span></span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>China is turning into a global powerhouse in space matters. Beijing declared the development of its space sector a national priority, with the intention of becoming the world’s leading space power by </span></span></span></span><a href="https://www.uscc.gov/sites/default/files/Namrata%20Goswami%20USCC%2025%20April.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>2045</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>. It is well on track. In 2018, it had more orbital space launches than any other country. In the year to come, Beijing aims to send a probe to Mars</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> and make its <span>navigation system Beidou (China's answer to GPS) fully operational. A Chinese space station called “Heavenly Palace” is under construction and set to ascend in 2022, potentially replacing the International Space Station (ISS), which is planned to be retired 2024</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>.</span></span></span></span></span></span></p> <a href="https://www.merics.org/sites/default/files/inline-images/190909_Blogpost-Graph_Space.jpg"><img alt="Graph Space" data-entity-type="file" data-entity-uuid="04407dc7-21bb-45b5-827d-7697a08af20f" src="/sites/default/files/inline-images/190909_Blogpost-Graph_Space.jpg" class="align-center" /></a> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Many of China’s space efforts are part of a strategic and military race with the US<strong>.</strong> </span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Back in 2015, the Chinese army set up a </span></span></span><a href="https://www.rand.org/content/dam/rand/pubs/research_reports/RR2000/RR2058/RAND_RR2058.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Strategic Support Force</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> to intensify efforts to challenge </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>the US space military. Since 2007, China has had the technology to shoot satellites out of earth’s lower orbits with ground-based weapons and </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>perhaps attack higher stationed satellites with its own satellites</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>.</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> It has made similar advances in developing non-physical space weapons</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>, such as signal interference and cyber-attacks. It even has the technology ready to field a </span></span><a href="https://www.csis.org/analysis/space-threat-assessment-2019"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>nuclear-armed anti-satellite weapon</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>.</span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Unlevel playing field vis-à-vis Chinese companies may extend to space</span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>In a trend known as “New Space" private space enterprises ar</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>e proliferating <span>everywhere. </span>Two thirds of US satellites today serve civil or commercial applications. In the EU, too, civil and commercial satellites dominate. In contrast, of four Chinese satellites, only one is used for civil and commercial use; the other three satellites are deployed for governmental and military applications.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>This is, in part, because Ch</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>ina is a latecomer to New Space, but also because it is attempting to integrate the emerging commercial industry into its defense industrial base. The People's Liberation Army </span></span></span><a href="http://www.chinadaily.com.cn/a/201902/18/WS5c69ef0fa3106c65c34e9bea.html"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>opened its Jiuqua<span>n Satellite Launch Center</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> for private launches and is increasing partnerships with the private sector and leading research universities. By transferring private sector innovation into the defense sector, China clearly hopes to create leapfrog development.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>This interaction of private and military sectors should not only raise concerns for Western companies because of dual use technology, it will also make competition in this emerging market increasingly difficult. The "unlevel playing field" vis-à-vis Chinese companies, with which other industries have already been confronted, could soon extend to space.</span></span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The curse of fragmentation</span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>To date, Euro<span>pe has been a major player in the space domain. </span>Traditionally,<span> EU member countries have had full authority in space matters</span>. In some areas they collaborate within the intergovernmental ESA, a non-EU body<span>, but by and large European countries are </span></span></span></span><a href="https://www.institutmontaigne.org/en/publications/space-will-europe-strike-back"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>hesitant to shift</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> from their national space programs towards a joint strategy. To complicate matte</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>rs further, Britain, one of Europe’s most present space nations, is leaving the <span>EU. Its fragmentation leaves Europe vulnerable to growing dependency and stagnating innovation. </span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Brushing away the </span></span><a href="https://www.reuters.com/article/breakout-beidou/special-report-in-satellite-tech-race-china-hitched-a-ride-from-europe-idUSL4N0JJ0J320131222"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>unfavorable</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span> Beidou cooperation, Europe is maintaining a collaborative stance towards China and still </span></span><a href="https://ec.europa.eu/research/iscp/pdf/policy/cn_roadmap_2018.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>sounds very positive</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span> about future cooperation prospects.</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> Embracing this opportunity, China has established an overseas satellite </span></span></span></span><a href="https://www.scmp.com/news/china/diplomacy/article/2182026/swedish-defence-agency-warns-satellite-station-could-be-serving"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>ground station in Sweden</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>, signed a Memorandum of Understanding (MoU) </span></span></span></span><a href="https://spaceresources.public.lu/en/actualites/2018/Luxembourg-cooperates-with-China-in-the-exploration-and-use-of-outer-space-for-peaceful-purpose.html"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>with Luxembourg</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>,</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> and now hopes to </span></span></span></span><a href="http://www.globaltimes.cn/content/1157850.shtml"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>export its Beidou</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> navigational standard to Europe.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>In an increasingly complex and militarized space sector, cooperation with other countries always entails a risk. Europe must avoid losing agency over sensitive space infrastructure and should be aware of becoming too dependent on foreign space technology, especially from systemic rivals. To prevent such scenarios, Europeans should acknowledge the strategic significance of the space domain, rather than treating it as a </span></span></span><a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2018:0327:FIN"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>user-</span></span></span></span></a><a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2018:0327:FIN"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>driven market</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>. This would pave the way for long-term investment, something the sector has for a long time </span></span></span><a href="https://www.eib.org/attachments/thematic/future_of_european_space_sector_en.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>called for</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>. When it comes to outer space, joi<span>nt efforts are the only option for Europe to ensure its lasting independence.</span></span></span></span></span></span></span></span></p> <p><strong>About the authors:</strong></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><strong>Kai von Carnap</strong> is a junior analyst at MERICS. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><strong>Selina Morell</strong> is a member of the Asia program at the Swiss foreign policy think tank foraus <span>and holds an MA in European Global Studies from the University of Basel. She spend one semester at the Tsinghua University in Beijing and worked as Junior Officer at the Swiss Embassy in China.</span></span></span></span></span></span></p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>The authors participated in the fifth annual <a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"><span>MERICS European China Talent Program</span></a> in May 2019, during which parts of the argumentation presented in this blogpost were developed. </span></span></span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><span><span>The authors bear sole responsibility for the content. </span></span></span></span></span></strong></p></div> </div> </div> Wed, 18 Sep 2019 11:23:31 +0000 komprakti 10276 at https://www.merics.org Italy’s new government lays the foundation for a more balanced China policy https://www.merics.org/en/blog/italys-new-government-lays-foundation-more-balanced-china-policy <span>Italy’s new government lays the foundation for a more balanced China policy</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Tue, 09/17/2019 - 14:44</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-17T12:00:00Z">2019-09-17</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/lucrezia-poggetti" hreflang="en">Lucrezia Poggetti</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Italy raised eyebrows in Europe and across the Atlantic when it joined China’s Belt and Road Initiative (BRI) in March. Under the new coalition, Italian China policy promises to be better aligned with that of Brussels. If complemented with strategic and value-based considerations, an increased attention to China inherited from the previous government might not be a bad thing, says Lucrezia Poggetti.</span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=x_D8vg1j 325w, /sites/default/files/styles/max_650x650/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=aPPKwcoR 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=FFvE5H7q 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=dAczM8y2 2463w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=x_D8vg1j" alt="Italy&#039;s new coalition government charts a new course in it&#039;s China policy. Source: bakai / 123rf." title="Italy&#039;s new coalition government charts a new course in it&#039;s China policy. Source: bakai / 123rf." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Just one day in office after being sworn in on September 4, the new Italian government immediately indicated that it will not continue on the course of all-out cooperation with Beijing initiated by its predecessors. During its </span><a href="http://www.governo.it/it/articolo/consiglio-dei-ministri-n-1/12725"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">very first meeting</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, the new Conte government, a coalition between the anti-establishment 5 Star Movement (M5S) and the center-left Democratic Party (PD), exercised its “Golden Power” – special powers to examine foreign investment in strategic sectors and critical infrastructure – to scrutinize a number of supply deals for 5G networks, including two that involve Chinese ICT companies Huawei and ZTE. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">By so doing, it showed resolve where the previous government had hesitated. The former Interior Minister and Vice Premier, League’s leader Matteo Salvini, had expressed security concerns, but did not act with his coalition partners to actually approve the use of special powers on 5G deals. The new government has now done this and imposed undisclosed “</span><a href="https://www.reuters.com/article/us-huawei-tech-5g-italy/italy-approves-use-of-special-powers-over-5g-supply-deals-idUSKCN1VQ1YG"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">conditions and requirements</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">” on the contracts. The introduction of balanced assessments in the cooperation with Chinese actors can help Italy pursue economic opportunities without exposing itself to excessive risks. It can also serve Italy well in earning back the credibility it had lost in European capitals and DC.     </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Coordination with the EU and the US will be central to Italian China policy </span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The </span><a href="https://www.repubblica.it/politica/2019/09/04/news/programma_governo_conte_2_bis-235177774/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">new government </span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">has put Italy’s European and Transatlantic relations back in focus by stating clearly in its program that the Euro-Atlantic alliance and European integration will be pillars on which the pursuit of national interests in foreign policy will be based. For China policy, this means that cooperation with Beijing will be circumscribed by wider European and Transatlantic interests, preventing eccentric moves like the ones that led to Italy signing a Memorandum of Understanding on the Belt &amp; Road Initiative with China in March. Its swift action on 5G is itself indicative of a more cautious approach to China – something that should reassure Brussels and Washington. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">At the same time, some elements of continuity with the previous China-friendly government remain. 5 Star leader and former Economic and Labor Minister Luigi Di Maio, signer of the controversial MoU, is now Foreign Minister. He </span><a href="https://www.esteri.it/mae/it/sala_stampa/archivionotizie/comunicati/il-ministro-di-maio-ha-nominato-capo-di-gabinetto-l-ambasciatore-sequi.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">picked the current Ambassador</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to China, Ettore Sequi – who was also a strong promoter of the MoU signature – as his Head of Cabinet at the Foreign Ministry. Their new roles signal to China that Italy is still interested in cooperation.   </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Nevertheless, the 5 Stars’ new coalition partner might provide some counterbalances. Democratic Party’s Paolo Gentiloni is back with an important role as Economic Commissioner in Brussels. In 2017, he attended the </span><a href="https://www.reuters.com/article/us-china-silkroad-summit-idUSKBN17K0FL"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Belt and Road Forum in Beijing</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> as Prime Minister of a PD-majority government, while at the same time </span><a href="https://www.mise.gov.it/index.php/it/198-notizie-stampa/2037237-calenda-abbiamo-varato-regole-per-mettere-in-sicurezza-gli-asset-strategici-del-paese"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">promoting, along with Germany and France</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, the creation of the EU framework for foreign investment screening that entered into force this year. His more balanced approach to cooperation with China could inspire the new government to pursue economic opportunities without cozying up to Beijing politically. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">A remarkable step has already been suggested to signal where Italy should stand politically. In an unprecedented move, Italian lawmakers Lia Quartapelle </span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">(Democratic Party, she also heads </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">the Parliament’s Foreign Affairs Committee) and Maurizio Lupi (Us with Italy, a Christian-democratic group), have </span><a href="https://twitter.com/LiaQuartapelle/status/1171779202145759232"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">proposed a parliamentary hearing</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to listen to Hong Kong protesters, saying that Italy should stand with Hong Kong and “hold high the banner of freedom and civil rights”. The proposal came as </span><a href="https://www.reuters.com/article/us-hongkong-protests-germany-china/china-summons-german-envoy-to-foreign-ministry-over-hong-kong-activist-idUSKCN1VW1WI"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing summoned the German ambassador</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to China because of a meeting between Hong Kong activist Joshua Wong and German Foreign Minister Heiko Maas. </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing hopes that Italy will keep pursuing a pro-China stance</span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing has welcomed Di Maio’s and Sequi’s appointments as good news. Chinese Foreign Minister Wang Yi communicated his approval in a congratulatory message delivered to the Italian Foreign Ministry. In hopes that the new government will keep pursuing China-friendly policies, Beijing is being very careful not to upset its new partners. Xinhua, mouthpiece of the ruling Chinese Communist Party (CCP), was quick to </span><a href="https://www.corriere.it/politica/19_settembre_05/di-maio-si-insedia-esteri-dubbi-nuova-cina-scelta-insolita-36a6d054-cfed-11e9-b1b2-ea5000c0ac17.shtml"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">remove a statement</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> depicting Di Maio as an unusual choice for his new role. The deleted comment stated that the 33-year old “never graduated from university, has very limited foreign language skills, and has shown little interest in global affairs in his public life”. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Similarly, the new government’s decision to scrutinize deals involving Huawei and ZTE has not provoked the expected outrage in Beijing. In a balancing act, Chinese foreign ministry spokesperson Geng Shuang limited himself to expressing hope that Italy will grant “</span><a href="http://www.ansa.it/english/news/2019/09/06/china-urges-fair-conditions-for-its-companies-with-5g_4d847d0c-703f-439d-93e4-abee1d0aceb8.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">fair conditions</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">” to Chinese businesses. This is somewhat misleading, given that Golden Power legislation applies to all non-EU companies when critical infrastructures are concerned, without discrimination.  </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Italy should build on the increased number of government and public debates on China</span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">One positive legacy that the current government has inherited from the previous coalition is the increased attention to China. However, Italian China policy has so far been governed only by economic interests, with the Economic and Finance ministries taking over large parts of the portfolio on China. Recent moves on 5G and Hong Kong indicate that more strategic and value-based considerations are slowly making their way into debates about China.</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In addition, the Italian industry has started to position itself more clearly on China. In April 2019, the General Confederation of Italian Industry (Confindustria), issued a </span><a href="https://www.confindustria.it/wcm/connect/18dffb75-6660-48e6-bbcf-ceda0818e26c/Position+Paper_Cina_12042019_Confindustria.pdf?MOD=AJPERES&amp;CACHEID=ROOTWORKSPACE-18dffb75-6660-48e6-bbcf-ceda0818e26c-mEw3nmF"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">position paper</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> advocating for a more strategic and cohesive EU approach to dealing with economic challenges in the relationship with Beijing. </span><a href="https://www.corrieremarittimo.it/ports/musolino-via-della-seta-opportunita-di-sviluppo-per-la-cina-necessaria-una-politica-europea/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Port authorities</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> and </span><a href="https://rep.repubblica.it/pwa/generale/2019/08/25/news/miliardi_e_appalti_ma_la_via_della_seta_parla_solo_cinese-234242687/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">shipowner associations</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> involved in Belt and Road projects are increasingly calling for more reciprocity, as they see the initiative still mostly serving Chinese interests, and for a European approach to BRI.</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">With increased government and public discussion on China, Italy has an opportunity to devise a more strategic approach to relations with Beijing. Working closely with the European Commission President-elect Ursula von der Leyen, who plans to “</span><a href="https://www.scmp.com/news/china/politics/article/3026809/incoming-eu-chief-ursula-von-der-leyen-vows-define-relations?utm_term=Autofeed&amp;utm_medium=Social&amp;utm_content=article&amp;utm_source=Twitter#Echobox=1568219174"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">define our relations</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> with a more self-assertive China”, would be a very good start.</span></span></span></p></div> </div> </div> Tue, 17 Sep 2019 12:44:08 +0000 komprakti 10271 at https://www.merics.org What shall we do with China? https://www.merics.org/en/blog/what-shall-we-do-china <span>What shall we do with China?</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Fri, 09/13/2019 - 10:31</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-13T12:00:00Z">2019-09-13</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>MERICS Guest Author Miguel Otero-Iglesias</p> <p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The geopolitical rivalry between the United States and China will be the most defining, and permanent, question in international relations for decades to come. And Europe needs to decide how to position itself.</span></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=T5uWZuQd 325w, /sites/default/files/styles/max_650x650/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=mfXkxZZP 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=Zv4JCb-w 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=ki03e_TD 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=T5uWZuQd" alt="Europe needs to find a position in the rivalry between China and the US. Source: ImagineChina." title="Europe needs to find a position in the rivalry between China and the US. Source: ImagineChina." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Although some believe the situation will improve once Donald Trump and Xi Jinping reach an agreement, or once we have a new American president in the White House next year, the reality is that the most likely scenario is that the geopolitical rivalry (and tension) between the United States and China will be the most defining, and permanent, question in international relations for decades to come. Hence, there is no point in burying the head in the sand and hoping for the storm to pass. We must think strategically and in the long term. </span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 1: Join forces with the United States</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The European Union, including Spain as a key member of the richest club in the world, has four options. The first one is to stop messing around and join forces with our American cousins. True, the Americans have a very different mentality to us. They have the death penalty, love firearms, hate social democracy and wash their chicken in chlorine, but there are so many factors that bring us together. We both believe in liberal democracy, with its rights and liberties for the individual, and we should not be naïve: thanks to the NATO alliance, the United States remains our military guarantor.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 2: Align with China</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The second option is to look to the future and leave the past behind and understand that China will be the great superpower of the 21<sup>st</sup> century. It is just a question of scale, dynamism and inertia. The same way British leaders begrudgingly conceded in the 19<sup>th</sup> century that the US was unstoppable and the smart thing to do was to jump on the wave and not resist it to maintain the prosperity of  the society, the same needs to do now the EU with the rise of China. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The Chinese economy is already today bigger than the US economy in 2005 (in the midst of the real estate and financial bubble), and according to the projections of Goldman Sachs, it will be almost double the size of the American economy by mid-century. Europe, with aging and less dynamic societies, simply cannot afford to miss out on such a big market.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 3: Become divided</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The third option is to divide us and become ever more peripheral and insignificant. Many people think that we are already here. Countries like the UK have decided that they will side with the US, and other countries in the East (Hungary) and the South (Greece and Portugal) are already under the Chinese orbit. Of course, reality is a bit more complex. Within every European society there are groups that remain strongly transatlantic and others that have started to look to the Far East to increase their business. Italy is a good example. While Di Maio, from the Five Star Movement, was keen on signing the Memorandum of Understanding in order to join China’s Belt and Road Initiative, Salvini, from La Lega, was adamant to stick to the military umbrella provided by the US. But the point remains. Divisions are widespread, and this makes us weaker.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 4: European Strategic Autonomy</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The fourth option is to develop the so-called European strategic autonomy. In concrete terms, this would mean that the EU would build its own technological (including a European Google) and military (yes, a European army) capacities in order to be fully independent in all areas. Many believe this is impossible (the differences and divisions are just too big) so the default strategy should be option 1. The question is whether option 1 does not push us irremediably toward option 3. It is not just that the weaker countries of the East and the South of the EU club look increasingly to Beijing, a lot of the stronger, exporter countries of the north, including Germany, will continue to want to export to China. Even Switzerland, proudly independent and neutral, has a free trade agreement with Beijing. The Chinese market is just too attractive. </span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Where to go from here?</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>From a Spanish perspective, given its strong Europeanism, the strategy should be as follows: we need to try to avoid option 3 like the pest, and to do that we need to work with France and Germany (while including the smaller countries) in building option 4. At the same time, we cannot close the door of option 1. The United States remains our most important ally. Nevertheless, we need to be smart and keep option 2 alive. Obviously, this needs to be done through critical engagement. If China wants to enter the European market, its needs to open its market to European goods and services. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>What about the Chinese socio-political system? Is that not a threat? As long as the European system delivers (and unfortunately this is now in doubt), the Chinese system will never be attractive. However, to achieve this we need to improve <em>our</em> model, and this brings us unavoidably back to embrace option number 4.</span></span></span></span></span></span></p> <p><span><span><span><em><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Miguel Otero-Iglesias is senior analyst in International Political Economy at Elcano Royal Institute and Professor of Practice at IE School of Global and Public Affairs. The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</span></span></span></em></span></span></span></p> <p><span><span><span><em><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The article has originally been published in Spanish by <a href="https://blogs.elconfidencial.com/mercados/tribuna-mercados/2019-08-17/guerra-comercial-china-eeuu-union-europea-eurozona_2180899/">El Confidencial on August 17, 2019</a>.</span></span></span></em></span></span></span></p></div> </div> </div> Fri, 13 Sep 2019 08:31:35 +0000 jheller 10251 at https://www.merics.org A vulnerable Germany finds it hard to say no to China https://www.merics.org/en/blog/vulnerable-germany-finds-it-hard-say-no-china <span>A vulnerable Germany finds it hard to say no to China</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Mon, 09/09/2019 - 13:25</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-09T12:00:00Z">2019-09-09</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/noah-barkin" hreflang="en">Noah Barkin</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span><strong>On her trip to China, Chancellor Angela Merkel did little to distance Berlin from Beijing, despite its actions in Hong Kong and Xinjiang. It’s a stance that may alarm her European partners as well as the Americans.</strong></span></span></span></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=om4zU07r 325w, /sites/default/files/styles/max_650x650/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=u_W0WY5g 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=YbbyfgK9 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=gG8a2YCY 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=om4zU07r" alt="German chancellor Angela Merkel gives a speech at the Wuhan University of Science and Technology in Wuhan, Hubei province, on September 7, 2019. Source: ImagineChina." title="German chancellor Angela Merkel gives a speech at the Wuhan University of Science and Technology in Wuhan, Hubei province, on September 7, 2019. Source: ImagineChina." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>Near the end of her speech at the Munich Security Conference in February, Chancellor Angela Merkel struck a resigned, almost plaintive note about Germany’s place in a world dominated by a more hostile United States and China.</span></span></span></p> <p><span><span><span>Germans could work day and night to be the best, she told her audience, but they would still come up short against the Americans, with their massive economy and all-powerful dollar, and the rising Chinese, with a population more than 16 times the size of Germany’s.</span></span></span></p> <p><span><span><span>“The odds look pretty bad for us,” Merkel concluded in a remarkable admission of frailty.</span></span></span></p> <p><span><span><span>That moment in Munich is instructive when trying to understand Merkel’s trip to China last week, her twelfth in 14 years as chancellor and perhaps the most challenging of all her visits, amid violent protests in Hong Kong, an escalating trade war between Washington and Beijing, and nascent European attempts to push back against the master plans of Chinese President Xi Jinping.</span></span></span></p> <p><span><span><span><strong>Constant criticism from Trump</strong></span></span></span></p> <p><span><span><span>Germany is feeling especially vulnerable these days. Its economy, held up for the past decade as the growth locomotive of Europe, is heading into recession, buffeted by the decline in international trade and investment, Brexit, and a struggle by its industrial champions to adapt to a digital future.</span></span></span></p> <p><span><span><span>The United States, guarantor of Germany’s security since World War II, has turned into its biggest critic. Hardly a day goes by when US President Donald Trump or one of his allies doesn’t lob a verbal grenade at Germany, for its lack of defense spending, its outsized trade surplus, or its addiction to Russian gas.</span></span></span></p> <p><span><span><span>Against this gloomy backdrop, China looms with open arms. It believes in climate change. It pays lip service to the idea of a free, multilateral trading system. Despite recent signs of weakness, it remains a vast, growing market for German firms. And it doesn’t engage in Germany-bashing. On the contrary: at a time when the Trump administration is gearing up for a new Cold War, Beijing is doing all in its power to lure Europe’s largest economy into its camp.</span></span></span></p> <p><span><span><span>But there is a price for doing business with China, and Merkel paid it during her two-day visit to Beijing and Wuhan. Not once did she utter the word “Xinjiang,” the western Chinese province where more than a million members of the Muslim minority have been detained in reeducation camps. And not once did she criticize Beijing for its handling of the protests in Hong Kong, limiting herself to calls for dialogue and de-escalation.</span></span></span></p> <p><span><span><span><strong>Open for business</strong></span></span></span></p> <p><span><span><span>At her news conference with Chinese Premier Li Keqiang, Merkel sounded almost apologetic about her government’s moves to shield German companies from the opportunistic embrace of state-backed Chinese rivals, reassuring her hosts that the German market remained open for acquisitive Chinese firms. And she praised Beijing for granting German companies like Allianz, BASF, and BMW opportunities in China that have been denied to other Western firms—moves that skeptics dismiss as symbolic gifts designed to soften up the Germans.</span></span></span></p> <p><span><span><span>Merkel’s trip came after a year in which Europe, in the words of French President Emmanuel Macron, overcame its “naivety” vis-à-vis China, erecting its own barriers to Chinese investments in its critical infrastructure and declaring the rising Asian superpower to be a “strategic rival.”</span></span></span></p> <p><span><span><span>In January, the Federation of German Industries, an influential business lobby, issued a toughly worded paper that questioned whether China would ever fully open up its market to foreign investment and urged European countries to work closely together, and with like-minded partners including the United States, to coordinate their response.</span></span></span></p> <p><span><span><span><strong>European shift</strong></span></span></span></p> <p><span><span><span>Spooked by China’s economic ambitions, a new European Commission is expected to explore changes to the bloc’s industrial, competition and procurement policies when it takes over later this year.</span></span></span></p> <p><span><span><span>Yet there was little evidence of this European shift during Merkel’s visit. And her partners, in Paris, Brussels, and other capitals, may be alarmed by its “back to business” tone. </span></span></span></p> <p><span><span><span>Merkel travelled with a large delegation of German CEOs, the most prominent of whom was Siemens boss Joe Kaeser, who once referred to China’s controversial Belt and Road Initiative as “the new WTO.” Also along for the ride was Volkswagen’s chairman, Herbert Diess, who only a few months ago caused outrage when he denied knowing anything about the mass detentions in Xinjiang, where VW has a plant, despite months of front-page stories about the plight of the Uighurs.</span></span></span></p> <p><span><span><span>The Trump administration, which has been piling pressure on Germany and other European countries to follow its lead and decouple from China, will also be alarmed. A transatlantic split <span><span><a href="https://berlinpolicyjournal.com/the-huawei-conundrum/"><span>over the inclusion of Chinese telecommunications supplier Huawei in next-generation 5G networks</span></a></span></span> is looming. And that may provide just a taste of the tensions to come. </span></span></span></p> <p><span><span><span>At a time when Washington is eyeing new export controls against China, Germany is doubling down on research collaboration with the Chinese and pressing Beijing to clinch an elusive investment agreement with Europe in time for an EU-China summit that Merkel will host in the eastern city of Leipzig in September 2020. If the deal comes together, two months before the US presidential election, it would mark the death knell of Trump’s clumsy attempt to pry the Europeans away from China.</span></span></span></p> <p><span><span><span><strong>Antithesis to German Values</strong></span></span></span></p> <p><span><span><span>The Americans must see this. On the same day that Merkel was meeting with Li in Beijing, US Defense Secretary Mark Esper was in London warning Europe to be wary of China.</span></span></span></p> <p><span><span><span>“The more dependent a country becomes on Chinese investment and trade, the more susceptible they are to coercion and retribution when they act outside of Beijing’s wishes,” Esper told the Royal United Services Institute, a think tank.</span></span></span></p> <p><span><span><span>Merkel is not naive. As Hong Kong pro-democracy activist Joshua Wong pointed out in an open letter to the German leader before her trip, she grew up under authoritarian rule in communist East Germany. She sees what is happening in China, from the rollout of a Social Credit System grounded in big-data surveillance, to Beijing’s attempts to chip away at democratic freedoms in Hong Kong and its crackdown in Xinjiang.</span></span></span></p> <p><span><span><span>All this is antithetical to German values. And yet, unable to count on the support of the United States, Merkel seems to feel she has no choice but to cozy up to Beijing.</span></span></span></p> <p><em><strong>This article was first published at the <a href="https://berlinpolicyjournal.com/a-vulnerable-germany-finds-it-hard-to-say-no-to-china/">Berlin Policy Journal website</a> on September 9, 2019.</strong></em></p> <p><em><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Noah Barkin</span></span> </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">is a Berlin-based journalist </span></span></span>who has written about European political and economic themes for Reuters and other publications for more than two decades. He is a</strong><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><strong> Visiting Academic Fellow at MERICS.</strong> </span></span></span></em></p> <p><em><strong>The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</strong></em></p></div> </div> </div> Mon, 09 Sep 2019 11:25:32 +0000 jheller 10236 at https://www.merics.org Merkel’s China challenge – signaling distance and conditional engagement https://www.merics.org/en/blog/merkels-china-challenge-signaling-distance-and-conditional-engagement <span>Merkel’s China challenge – signaling distance and conditional engagement</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Wed, 09/04/2019 - 16:25</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-05T12:00:00Z">2019-09-05</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/mikko-huotari" hreflang="en">Mikko Huotari</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>The German Chancellor’s visit must signal Beijing that Europe is serious and united in its newly critical approach to China and show Washington that there are less destructive ways to deal with differences, says Mikko Huotari.</strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=dE7t7cKW 325w, /sites/default/files/styles/max_650x650/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=u57OWkxy 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=-h1Nz3m- 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=50ysv4SX 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=dE7t7cKW" alt="Chancellor Merkel and Chinese Premier Li Keqiang in Beijing in May 2018. Source: Bundesarchiv, Photo 00405590 / Guido Bergmann." title="Chancellor Merkel and Chinese Premier Li Keqiang in Beijing in May 2018. Source: Bundesarchiv, Photo 00405590 / Guido Bergmann." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">With the US and China locked in a destructive spiral of muscle-flexing over trade and technology, German Chancellor Angela Merkel’s visit to China, which starts today, will be a litmus test for whether the European Union stands any hope of tackling the West’s differences with China in a more goals-oriented way. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Any sign during Ms Merkel’s two-day trip that Beijing can be better persuaded than bullied into dealing with its lack of economic reciprocity and discrimination of foreign companies would be good for the EU and the world economy. One win would be movement in the tough talks about an EU-China investment agreement, which Merkel would like to have signed next year when Germany hosts a summit between all 27 EU member states and China. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><strong>Europe’s weakness demands a smarter play</strong></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Since announcing she would not run again for Chancellor, Ms Merkel has variously been suspected of having lost her touch or even of being a lame-duck head of government. But the complexities and dangers the EU faces in triangulating the positions of the US and China demand the kind of canny operator Ms Merkel has often proved herself to be – one that can engage one side without prompting the other to dis-engage, and vice versa. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The EU and the US might be at odds over how to deal with China’s economic and other policies, but not over the need to get Beijing to change them. This spring, the EU Commission used its new strategic outlook for EU-China relations to describe Beijing as a strategic competitor and systemic rival for the first time. In this spirit, the French government is pushing the EU to set conditions for Chinese companies bidding for public contracts, a demand Berlin might yet support, if only to create leverage in ongoing EU-China negotiations.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">But the EU is no geopolitical superpower like the US. No European leader would risk the kind of confrontation Washington is seeking with Beijing – and Germany would not want to fully back Washington for the reasonable fear of being isolated in the event of an about-face by the Trump administration. Merkel knows Europe’s weakness demands a smarter play. </span></span></span></span></span></p> <p><strong>Open and clear communication with China is needed</strong> </p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Playing it smart can’t mean business-as-usual for Merkel – even with a massive German business delegation accompanying her to China. The Hong Kong protests and Beijing’s strong-arming of multinational companies bring into focus the myriad ways in which Beijing exerts pressure on its citizens and businesses. The increasing systemic tensions between China and liberal democracies demand that Merkel reinforce Europe’s coordinated stance that Beijing’s approach to Hong Kong’s fundamental freedoms and autonomy is a test case for the EU’s willingness to treat China as a partner.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Berlin has been central to shaping the EU’s new, less naïve China policy – and Ms Merkel needs to show that even economic expediency will not see Germany backsliding. For now, Merkel’s government is pursuing a wobbly policy on the role of Huawei in the 5G telecoms rollout and shying away from the clear political decision that would be necessary to align European forces. Berlin kicking the can down the road on 5G threatens Europe’s late awakening to the importance of technological sovereignty and consensus-building on infrastructure security. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The ongoing European debate about how to better deal with China’s state-led economy and unfair competition needs to be underpinned by concrete and speedy steps by the EU at home – together with loud and clear demands for equal treatment of state and private (foreign) firms or “competitive neutrality” in China. Merkel needs to counter vague rhetorical commitments by China’s leaders to multilateralism with specific requests to reform the World Trade Organization to tackle distortions caused by China’s industrial subsidies.</span></span></span></span></span></p> <p><strong>Engagement is possible - if it aligns with European interests</strong></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Constructively delineating the differences between the EU and China should serve Merkel as a foundation to pursue clear-eyed engagement in a few, well-defined areas if they are aligned with long-term pan-European interests. With the backing of of EU member states, these might include research and innovation cooperation in smart manufacturing, standard-setting for the industrial internet and autonomous driving, and what could be called a strategic sustainability agenda focusing on climate and environmental technologies. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">It’s time for Germany to match its rhetoric about the need to “Europeanize” approaches to China with concrete actions. The EU’s ambition of forging a forceful, coordinated and competitive China policy can only be fulfilled if Berlin demonstrates its willingness to act as its guarantor while continuing to test China-policy alignment with more reliable partners in the US. Moderate disengagement from China also needs to be among the cards for European governments to play. A realist, nuanced and incremental European approach to China would then have the chance of proving itself a credible alternative to Donald Trump’s gunboat economic diplomacy.</span></span></span></span></span></p> <p><strong><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">This article was first published by the <a href="https://euobserver.com/opinion/145822">EUobserver on September 5, 2019</a>.</span></span></span></span></span></strong></p></div> </div> </div> Wed, 04 Sep 2019 14:25:45 +0000 jheller 10221 at https://www.merics.org