Europe’s China Policy Has Taken a Sharp Turn. Where Will It Go Next?

EU Foreign Affairs High Representative Josep Borrell has referred to the recent EU-China Summit as a “dialogue of the deaf,” and a brief look at the readouts of both sides confirms that impression. The EU started, unsurprisingly, with the Ukraine crisis, expressing its hope that China could play a role in bringing the conflict to an end. Subsequently, it turned to several specific outstanding issues in the relationship. Some of these are contested, like the Chinese sanctions against MEPs and European researchers, elements of the trade relationship, human rights, and Hong Kong, as well as China’s treatment of specific member states. Others are matters where Brussels hopes for greater collaboration with China, including the continued response to the pandemic, the global digital economy, and climate change.

Xi Jinping, conversely, led with more abstract observations on the state of the global order and the role the Chinese government hopes the EU can play. Specifically, Beijing prefers a situation in which the EU pursues greater autonomy from the United States and can act as an independent pole in a multi-polar system. What it would avoid is for Brussels and Washington to create a new bloc that would consider China to be a primary adversary. Xi touched on specific issues only summarily, before turning to Ukraine.

This contrasting approach illustrates two important elements to understand the likely trajectory of the relationship in the near future. First, Beijing and Brussels are not one another’s primary geopolitical concern, but the support they seek from each other is politically impossible. Put bluntly: Brussels wants China to move against Russia, and Beijing wants the EU to distance itself from the U.S., but neither seems to offer compelling incentives to the other for doing so, nor to fully appreciate the importance of those geopolitical relationships.

Second, there is a significant difference of style and rhetoric. EU officials seem to consider the relationship with China as a bundle of processes and mechanisms surrounding very specific policy issues and outcomes to be achieved, which are not necessarily fully linked to each other. Xi, in contrast, adopted a more systemic view, in which individual interests only come into play once the global order’s foundations have realigned towards the multipolarity Beijing desires. As a result, both sides may use similar words, but they certainly do not speak the same language.

Dubbed both the “April Fool’s Day” summit and a “warning summit,” the April 1 EU-China bilateral meeting had not elicited much hope for deliverables. As it concluded, the initial skepticism proved justified, but the summit was historic nonetheless. What came out of it is the image of a resolute and united EU—an impressive accomplishment for a Union routinely called an inconsistent foreign policy actor.

“It sounded almost American!” a Chinese colleague formerly working for a People’s Republic of China think tank pronounced the statement of President of the European Commission Ursula von der Leyen following the Summit. He’s right; there is a new assertive way the EU is talking to China, on top of the traditional approach “d’argumenter, de plaider, d’expliquer,” and it has a strong transatlantic note not just in form but in substance as well.

It might just so happen that the U.S.-leaning Lithuanian policy towards China, initially discreetly frowned upon in Brussels in 2021, could become the new European mainstream.

Surely, that will not lead to a visible sharp alteration of Beijing’s policies, but China has taken note that Russia’s war in Ukraine did China a big disservice by reminding Europe just how important U.S. security guarantees are. As Dingding Chen et.al. put it, “China is, thus, confronted with U.S. containment in the Asia-Pacific and sees Europe giving up its idea of autonomous relations with China.” For China, a supporter of all things European strategic autonomy, this is a worrisome trend.

During the Summit, Xi Jinping again spoke of China’s “own way” in dealing with what China calls “the Ukraine question.” Still, when the President of the European Council Charles Michel says “this double instability is not in China’s interest and not in the EU’s interest,” China cannot help but agree, albeit “in its own way.” Justyna Szczudlik of the Polish Institute of International Affairs rightly notes that hidden in Xi Jinping’s summit statement is a lament “about costs of the sanctions [. . .] for the global economy . . . and Beijing.”

One only feels as though the Summit has not delivered if one had hoped for something extraordinary. Using the platform for a clear, united, and direct EU take on China’s actions and inactions is not a failure. Clarity is a virtue. It is hard to expect a three-dimensional, flexible relationship when the other side is nothing but a two-dimensional object on an oversized video screen.

For years, EU-China trade relations were so robust that policymakers used to say that they represented 1 billion euros worth of goods per day. This has only grown. In 2021, EU exports to China reached 223 billion euros (a 77 percent increase over 10 years earlier), and imports climbed to 472 billion euros (an 84 percent jump since 2011), so now bilateral trade is closer to 2 billion euros per day. In the most recent survey, conducted in 2021 by the EU Chamber of Commerce in Beijing, only 9 percent of European businesses were considering shifting any current or planned investment out of China, the lowest share on record.

This positive economic reality contrasts with the parallel negative political context of the past 10 years. In 2011, amid the euro crisis, China was seen in Europe as a stabilizing force. While Wall Street and the City of London were betting on the break-up of the single currency, Beijing continued to diversify out of the U.S. dollar and into the euro despite Grexit turbulence. European leaders like Jean-Claude Juncker and Nicolas Sarkozy were flying cap in hand to Beijing to convince Hu Jintao and Wen Jiabao to invest in the newly created European rescue funds.

Chinese investments were key in the recovery of Greece and Portugal, with the acquisition of the port of Piraeus and EDP, the electricity firm, as the most significant projects. But the EU quickly became suspicious of China’s increased economic might. The arrival of a more assertive Chinese leader embodied by Xi Jinping, the deployment of the Belt and Road Initiative, the acquisition of the German robotics company Kuka by Midea, the arrival of Donald Trump to the White House and his insistence on the security risks that Huawei represented in the 5G networks, plus the Chinese repression in Xinjiang and Hong Kong, the emergence of COVID, and now China’s reluctance to condemn Putin’s action in Ukraine have significantly deteriorated the political dialogue.

From the possible signing of the Comprehensive Agreement on Investment (CAI), backed largely by the European business community, we have come to this year’s “dialogue of the deaf.” While interdependence was interpreted as positive for decades, now it is a source of distrust. Both the EU and China want to reduce their dependence on the other. But China still depends on the European consumer market for its exports and technology for its growth, and the EU still relies on China’s still relatively cheap imports to tame the current inflationary spiral and its internal dynamism and potential for its large export sector.

The reality is that in the current context of war in Europe, the EU can ill afford to open another battlefront with China. But can this be avoided while the EU increasingly embraces Biden’s political rhetoric that we are facing a contest between democracies and totalitarian regimes? This binary discourse is likely to increase tensions with China. And there is even a bigger inconvenient reality. Only the West, Japan, and South Korea have imposed sanctions on Russia. The “rest of the world” has not, including heavyweights like China, India, Brazil, and South Africa. Some experts point to the West’s double standards with respect to Iraq and many other conflicts over the past 20 years.

This is problematic because the West alone will not defeat Putin. It needs allies, and for that one wonders whether ostracizing China is the best strategy.

The Russian invasion of Ukraine is dramatically influencing Europe’s relations with China. This is particularly true in the EU’s and NATO’s Eastern flank, the so-called Central and Eastern Europe (CEE). Indeed, Beijing’s refusal to distance itself from Moscow amid the Russian invasion of Ukraine may put a final nail in the coffin of China’s attempts to woo the CEE countries.

China started its diplomatic offensive in the region in 2012 when it introduced the “16+1 platform.” Initially, most CEE countries looked at Beijing optimistically with the hopes of receiving Chinese investments and increasing exports to China. After a few years, however, skepticism spread as few promises materialized. In fact, the CEE countries, and especially its 11 EU members, remain the region with the least Chinese economic presence in the world (measured, for instance, by shares of China in their exports or investment stock). The worsening of China’s relations with the West has also contributed to decreasing enthusiasm for China, while COVID-19 has further distanced China and CEE from each other. The recent escalation of the conflict between China and Lithuania was just the tip of an iceberg of structural tensions between China and the CEE region.

Although experts regularly point out differences between China and Russia, the popular perceptions of the two authoritarian regimes across Europe are closely related. A public opinion survey in autumn 2020 in 12 European countries found that perception of China correlated the strongest with perception of Russia. The correlation is even stronger in the CEE region, where the historical memories of being under the control of Communist Russia translate easily into negative images of Communist China.

Today, the CEE countries feel the impact of the Russia-Ukraine war most immediately, including when it comes to hosting large numbers of Ukrainian refugees (Poland alone has taken more than 2.5 million). Many of the CEE countries are also among the most visible supporters of Ukraine, including when it comes to providing military supplies; the Czech Republic has provided tanks and Slovakia an air defense system.

It is difficult to imagine that leaders of the countries, who traveled to embattled Kyiv to meet President Zelenskyy, would want to pose for a family photo with a Chinese leader who declares that there are “no limits” to China-Russia friendship. True, the Serbian president or Hungarian prime minister would probably still be interested. But that would decrease the count of the China-CEE “platform” to a modest 2+1.

The April Fool’s Day virtual EU-China summit should make clearer to China the problems with its venerable playbook for Europe and U.S.-European relations. First, Beijing appears to have assumed that it would benefit from divisions between the U.S. and Europe and within Europe; thus, Europe would not strongly support Washington’s toughening line toward China, including on human rights and international security. The Belt and Road Initiative and other measures would appeal to smaller or poorer Central and Eastern European states, including those that joined the 17+1 arrangement, making European unity less likely on issues important to Beijing. Second, and evident at the summit, Beijing seems to have believed that, for Europe, economic issues would overshadow political ones, and that economic engagement with China would be seen as a clear net plus. Although it has since stalled, initial progress on the EU-China Comprehensive Agreement on Investment had appeared to confirm this sanguine assessment. Beijing dismissed European critiques of its human rights record on Xinjiang, Hong Kong, Tibet, Inner Mongolia, and human rights lawyers, and sanctioned offending Europeans, implying China presumed itself immune from significant consequences. Third, China has sought the recognition, and claimed the deference, due a great power without establishing that it has the will and capacity to bear correlative responsibilities. While this has been a long-standing issue in U.S.-China relations, it had been less salient for Beijing’s interactions with Europe.

Occurring against the backdrop of Russia’s invasion of Ukraine, the European and U.S. response to it, and longer-emerging issues in China-Europe relations, the EU-China summit underscored how questionable these assumptions have become. The summit showcased the cooperation—unimaginable a few years ago—that the EU and the U.S. have achieved in addressing Putin’s war. Ukraine’s preeminence on the EU’s summit agenda demonstrated that Europe—like the U.S.—can prioritize non-economic issues in relations with China, even where matters are not immediately China-related. EU references to Beijing’s responsibility (in part as a Security Council permanent member) not to undermine sanctions against Russia underscored the point. EU references to the large scale and lack of balance in the EU-China economic relationship, and Ukraine-reinforced concerns over Europe’s vulnerability born of economic (specifically, energy) dependence on Russia, should intensify Chinese worries about how Europe views the relative costs and benefits of deepening economic engagement with China. As in the U.S., doubts have arisen over less-than-expected economic gains, prospects that pandemics or politics will disrupt supply chains, as well as Beijing’s blunt use of economic levers to press foreign governments and officials to toe its line on the Dalai Lama, Taiwan, Uyghurs, and more. Chinese summit and post-summit statements, like Beijing’s response to the Ukraine crisis generally, have made China seem much less than a capable and responsible power. Continuing commitments to limitless cooperation with Russia, suggesting blame for the war lay with NATO expansion, insisting Europe adopt an “independent” China policy, and inflated—and hedged—self-presentation as a neutral peace-broker will not help China’s relations with the EU or the U.S.

Current EU and U.S.-European solidarity over Ukraine and toward China should not be overstated and may not endure. But the weaknesses it exposes and exacerbates in Beijing’s approach to Europe and U.S.-European relations have been growing for some time and will likely get worse.

For those remembering past EU-China summits, this one was undoubtedly sober and short of deliverables. This time, EU representatives expressed a unified discourse, insisting the Chinese leaders primarily discuss the most pressing subject from a European standpoint: the war in Ukraine. Other topics, including trade and climate, were relegated to the second part of the meeting. For once, the EU seemed to strike the right chord—and a tougher tone—while talking to China’s leaders. Instead of following Beijing’s agenda, Europeans used the gravity of the moment to defend their line: one cannot have “business as usual” while a neighboring European country suffers such a brutal and unjustified attack.

In the past, by and large, Europeans had compromised with China in the name of “win-win” and similar Chinese approaches. This led China to score a number of successes as Beijing often managed to divide Europeans. For example, the EU failed to produce a unanimous statement of support for freedom of navigation in the aftermath of the 2016 final ruling of the United Nations Convention on the Law of the Sea (UNCLOS) Arbitration Court in The Hague on the Philippines’ case against China over the South China Sea. It was eventually revised downward. This had followed the refusal of three EU member countries—Greece, Hungary, and Croatia—to sign onto this joint declaration. Similarly, in 2017, Greece blocked an EU statement at the UN Human Rights Council (UNHRC) condemning China’s human rights violations—the first time the EU failed to speak with one voice at the UNHRC. More recently, in 2021, Hungary opposed the EU’s attempt to produce a strong statement in favor of the rule of law in Hong Kong.

Still, the past two years have seen a major shift in Europe’s China policy. Brussels no longer separates economic issues from human rights and values. This is the reason why EU High Representative for External Affairs Josep Borrell called the meeting a “dialogue of the deaf.” While Beijing hoped to achieve some concrete results on trade and investment cooperation, the Europeans also wanted their Chinese counterparts to hear their voice and to commit to not interfere with the economic sanctions against Russia.

European Council President Charles Michel stated that China could not “turn a blind eye” to Russia’s actions. Against that backdrop, the EU is waving the only card that matters to China: trade. In the follow-up press conference, European Commission President Ursula von der Leyen said that daily trade between the EU and China amounts to two billion euros, while Sino-Russian trade comes to 330 million. For all the talk of a new cold war, China—already facing a slowing economy—cannot afford to sacrifice its commercial relationship with the EU. The Belt and Road Initiative, Xi Jinping’s flagship project, is already suffering from the war in Ukraine and economic sanctions, while Chinese companies have so far tried to avoid circumventing the EU’s sanctions against Russia.

It will take a while for China to digest this meeting and the fact that the West appears united. But a growing negative European sentiment vis-a-vis China (including in business circles, in the media, and among certain politicians) might start to hurt Chinese interests in Europe. This could lead to a possible turnaround that sees Beijing move a tiny bit closer to the European position on Ukraine—especially when, hopefully, there will be light at the end of the Ukrainian tunnel.

Although relations between the European Union and China have steadily developed since diplomatic ties were first established in 1975, the relationship is now venturing into uncharted waters. The EU’s current China policy was defined by the March 2019 communication “EU-China – A Strategic Outlook.” In this document, and for the very first time, the EU defined China as a systemic rival and an economic competitor. Again, in April 2021, in a letter addressed to the European Council, the European Commission’s President Ursula von der Leyen declared that the EU and China have fundamental divergences regarding how to manage international affairs, and that such differences are set to remain for the foreseeable future.

For years, the EU was inconsistent in its China policy, mainly because of the tendency of EU Member States to be divided over China. Yet, this year’s Summit was not business as usual, as Russia’s invasion of Ukraine forced the EU to rethink its relationship with authoritarian regimes. The 2022 Summit came as political ties between China and the Western world have become more delicate than ever, with Beijing’s apparent support of Putin’s Russia undermining the global confidence China managed to earn in recent years. China’s hesitance to express complete contempt for Vladimir Putin’s actions has unified the perception of China in the eyes of European countries. This is precisely what could bind individual EU Member States together, to agree on common interests and priorities vis-à-vis China within EU institutions.

After all, normative divergences and understandings of world order between China and the EU have always been part of the agenda. Yet, the relevance of norms and values was often sidelined in conventional analyses of EU-China relations, following the idea that they are affected largely by trade and economic interdependence, and that the EU essentially prioritizes its material interests with China. The limits of this perspective have been called into question by Russia’s invasion of Ukraine. The war at its doorstep is forcing the EU to rethink its foreign policy agenda, including longstanding concerns about the normative divergences with China. The latest EU-China strategy, adopted in September 2021, underlines the role of the EU as a more effective geopolitical actor. While the document stresses the importance of encouraging dialogue and cooperation with China in global governance, it also calls upon the country to abide by international standards and to respect international norms and universal rights “regardless of the differences between both systems.”

There is no doubt that China and the EU have a growing economic relationship. In 2021, China was the third largest partner for EU exports of goods and the largest partner for EU imports of goods. Therefore, to Chinese policymakers, it is vital to avoid a U.S.-EU anti-China coalition. However, the question remains as to the extent to which Beijing’s de facto undeclared distance from Moscow negatively affects the EU’s perceptions of China. After all, the country might pursue Ukraine peace “in its own way.” Nevertheless, assuming that neither China nor the EU are ready to sacrifice their thriving economic relationship, it is still possible that any kind of equivocal Chinese support for Putin’s demands—from rejecting sanctions to boosting gas imports to Russia—could also leave EU-China relations with little room for maneuver to return to the honeymoon splendor of the past.

From today’s vantage point, amidst renewed European and transatlantic solidarity over the war in Ukraine—and in the immediate aftermath of what (by all accounts) seems to have been a chilly EU-China summit—one might strain to recall the warm European and Chinese rhetoric which initially surrounded the announcement of their Comprehensive Agreement on Investment (“CAI”) in December 2020, or the profound dismay with which the announcement of the CAI was received in official Washington and by the (then) incoming Biden administration. At a time when bipartisan consensus to more forcefully confront China’s rise had not only emerged but even hardened in Washington—and just as the incoming administration was sharpening its plans to reinvigorate transatlantic alliances and partnerships for that very purpose—the initial announcement of the CAI provided a bracing reminder of the more nuanced, multi-dimensional European approach to China that accrued from geopolitical designs of “strategic autonomy.”

Of course, the early messaging around the CAI, along with the sense that it might drive (or further refine) a wedge in transatlantic relations, did not well survive the theater of European sanctions (over China’s policies in Xinjiang) and Chinese counter-sanctions (targeting parliamentarians, scholars, and research institutes) which swiftly followed in March 2021. By the end of the year, and with the CAI itself formally shelved by the European parliament’s overwhelming vote, the reversal in the overall EU-China relationship would be further accentuated by an escalating showdown over China’s economic coercion against Lithuania for that country’s diplomatic recognition of Taiwan.

Reporting just before and after the EU-China summit earlier this month indicates that Chinese leaders have not yet fully come to terms with (or adjusted to) how much has changed in this relationship since the high-water mark of December 2020—a downward trend which has been turbocharged by European perceptions of Chinese alignment with Russia in its invasion of Ukraine. That said, a few notes of caution remain highly warranted for American policymakers who may discern here an important strategic advance in their goal of achieving greater transatlantic commonality vis-à-vis China.

Of most immediate concern is the prospect of near-term deterioration of European solidarity with the re-election of Viktor Orbán in Hungary, and the even more destabilizing possibility of Marine Le Pen winning her runoff election in France. Advances by right-wing politicians focused on economic nationalism in these European countries, and perhaps elsewhere, could well afford multiple opportunities (both at national and EU levels) for China’s narrowly tailored vision of trade- and investment-focused relations to proceed apace.

Even absent some new decline in European solidarity, however, it behooves American policymakers not to lose sight of all the ways in which European “allies and partners” have and likely will continue to view China differently than does the new bipartisan consensus in Washington. It is not just that European elites retain natural concern over the return of the more contentious transatlantic dynamics fostered by the Trump administration—or, at least, the continuance of the occasional marginalization of European interests that has been a more enduring feature of transatlantic relations across administrations, and was again recently suggested by the new “AUKUS” security pact between the U.S., Australia, and the U.K. More broadly, it is also that European leaders and policymakers simply do not, to this day, view China in quite the same thoroughly “securitized” way as that which now dominates official U.S. thinking about our geopolitical rival.

In short, the overall triangle of Europe-China-U.S. relations is best understood as a highly dynamic one, notwithstanding whatever equilibrium may be perceived at any given snapshot in time. For each set of policymakers in this triangle, but perhaps especially for U.S. and Chinese policymakers intent on advancing strategic goals against each other, sensitivity to evolving dynamics, and nimbleness in responding to them, would appear of paramount importance.

Beijing has tried to muddle through on Ukraine. In talks with Kyiv, it has expressed that “China’s basic attitude on the Ukraine issue is to promote peace talks.” On Russia, China continues to reiterate the close relationship between the two countries and highlight that NATO’s eastward expansion neglected Russian security interests and thus was “the root cause of Russia’s anger and military operation in Ukraine.” The Party newspaper Global Times writes that U.S. efforts pressuring China to intervene on Russia intend only to sow discord between China and Russia, and thus only serve American interests. As for the EU, China continues to talk about “pragmatic cooperation” while calling on Europe to be “diplomatically independent” (meaning “from the U.S.”) on Ukraine.

This time, the muddling through isn’t working. Nowhere has this been more visible than in the EU-China summit, which the European Union’s High Representative for Foreign Affairs Josep Borrell described as a “dialogue of the deaf.” The EU wanted to talk about Ukraine while Xi Jinping preferred to discuss more “positive things.” Xi’s comments were published in Chinese state media while the summit was still going on. Xi urged that the EU adopt an “independent” China policy (from the U.S.’s) and work with Beijing to promote global growth. He also noted that the summit sent a positive message to the world—a view that Borrel apparently did not share.

Xi’s statements appear to be lost in time, caught in the conflict logic of the Cold War and blind to the paradigm shift that is taking place in the EU.

Xi’s first blind spot is the power of collective action from shared awareness. On the evening of February 24, the day the Russian army invaded Ukraine, the European Council—a body notorious for failing to act due to national agendas—unanimously agreed to a series of historic sanctions against Russia. The decision followed the chilling warning by Ukrainian President Volodymyr Zelenskyy in a video call with EU leaders: “This might be the last time you see me alive.”

Xi’s second blind spot is the strength of civil society: Ukrainian civil society, which stood up to defend the country; civil society in Europe organizing anti-war demonstrations and help for refugees; and, not least, civil society in Russia, protesting the war all over the country despite the danger. In China, netizens have condemned the Bucha massacre and drawn comparisons to the Nanjing Massacre of 1937. Though many posts on Bucha were quickly censored, the Chinese envoy to the UN called the images of the Bucha killings “deeply disturbing,” asking for an investigation; but he didn’t condemn Russia.

Xi’s advisors were apparently unable to accurately assess and anticipate both the civil society response (in Ukraine and Europe) and the swift unity of the Western countries. Moreover, Xi has not traveled since the COVID-19 outbreak. This isolation from people who think differently has ultimately sheltered Xi from reality. With more images from Bucha emerging, the costs of muddling through will become too high for China—internationally and domestically. Like Prague in 1968, when the Soviet Union invaded Czechoslovakia, Bucha may be the turning point that opens the window of opportunity for diplomacy.

The EU-China summit on April 1 did not halt the ongoing deterioration of relations between the two actors. At the summit, the EU leaders talked primarily about the war in Ukraine, while their Chinese counterparts tried to avoid that topic. Afterwards, EU High Representative Josep Borrell expressed disappointment that Beijing refuses to name Russia as the aggressor, and that it did not even commit to what he regarded as what is minimally necessary. That includes asking Russia for a ceasefire and for a humanitarian corridor, and insisting that it will not use weapons of mass destruction.

But while the EU-China summit ended with no deliverables or joint statement, it did provide insight into where relations between the two actors might go. The crisis in Ukraine is revealing China’s new role as a security actor in Europe. Along with Russia and the United States, China is now a major player when it comes to European stability. It derives its influence not from its military power, but from its huge economy and close ties with Russia. The main instrument used by the EU to pressure Russia into ending the war is the imposition of economic sanctions on Russia. China has the ability to either amplify the effect of these sanctions, which are potentially very costly for the EU itself, or weaken their impact. This explains the strong emphasis the EU leaders placed on the Ukraine war as a topic for discussion at the summit. The fact that the Chinese leadership did not commit to either support or abstain from circumventing the European sanctions does not diminish China’s relevance.

In recent years, Europeans have become increasingly aware that China is a factor that influences the trans-Atlantic relationship. As China became a top concern for U.S. foreign policy, it subsequently moved higher on the agendas of European politicians and policymakers. The war in Ukraine is now making it apparent that China is also an important factor in the EU-Russia relationship. If, in the years ahead, Russia continues to be seen as a major security threat to the EU, the European approach to China may increasingly center not on concerns about values or economic competition, but on China’s relevance for regional security in Europe.