EU-China sum­mit comes at cru­cial time

China Daily European Weekly - - COVER STORY - The au­thor is a vis­it­ing pro­fes­sor at the Guanghua School ofMan­age­ment, Pek­ing Uni­ver­sity. The views do not nec­es­sar­ily re­flect those of China Daily.

Europe hop­ing to har­ness some of Belt and Road’s bustling en­ergy for its own pur­poses and gain bet­ter ac­cess to Chi­nese mar­ket

Western links, likeNewZealand, to sig­nal their ac­cep­tance of the global power shift by join­ing the Belt and Road Ini­tia­tive, it is more dif­fi­cult for the es­tab­lished pow­ers, par­tic­u­larly the United States, to do so. China’s emer­gence con­fronts the US with a dilemma: does it sup­port the process, thereby gain­ing con­sid­er­able eco­nomic ben­e­fit, but per­haps yield­ing a part of its dom­i­nant global po­si­tion; or does it op­pose the process (as it did with the for­ma­tion of the AIIB), and risk los­ing the sup­port of some or most of its al­lies.

The third eco­nomic su­per­power, the Euro­pean Union, is in a sim­i­lar po­si­tion to the US, but with the im­por­tant dif­fer­ence that some of its mem­bers, for ex­am­ple, Poland andHun­gary, are lo­cated close to cen­tral Asia, while oth­ers, like Greece, al­ready have sig­nif­i­cant Chi­nese in­vest­ment (that, in fact, is turn­ing out to be very suc­cess­ful).

As China starts to reach out to claim the global lead­er­ship to which its eco­nomic achieve­ments have en­ti­tled it, the sum­mit be­tween the Euro­pean Union and China in Brussels on June 1 and 2 comes at a sig­nif­i­cant time.

The re­quire­ment for Chi­nese in­vest­ment in Europe to be open and trans­par­ent is one fac­tor be­hind the long de­lay in fi­nal­iz­ing the bi­lat­eral in­vest­ment agree­ment be­tween the EU and China, which has been in ne­go­ti­a­tion since shortly af­ter the 2008 credit cri­sis, and which would re­place the ex­ist­ing mul­ti­ple trade agree­ments be­tween in­di­vid­ual mem­ber Euro­pean states and China. Other key is­sues here for China in­clude demon­strated cuts in Chi­nese in­dus­trial over­ca­pac­ity, par­tic­u­larly in steel; and ac­cess for Euro­pean coun­tries to the Chi­nese mar­ket equal to that en­joyed by Chi­nese com­pa­nies to Europe’s mar­ket. These are dif­fi­cult is­sues, but China’s con­tin­ued growth and Europe’s own need to in­crease eco­nomic en­gage­ment with China make them in­creas­ingly im­por­tant to re­solve soon. They might be im­por­tant is­sues at the Brussels sum­mit.

At the Euro­pean end of the Belt and Road Ini­tia­tive, China has re­cently ac­quired 67 per­cent of Pi­raeus, Greece’s largest port, hav­ing first taken con­trol of two of the port’s three con­tainer ter­mi­nals in 2009. China is si­mul­ta­ne­ously en­gaged in devel­op­ing the over­land road and rail links from south­ern Greece into East­ern Europe. The ex­tent and speed of Chi­nese in­volve­ment with South­ern and East­ern Europe has raised eye­brows in the EU, which rec­og­nizes China’s need to ex­pand and di­ver­sify, but is not used to deal­ing with an Asian power on its doorstep.

Bri­tain’s de­ci­sion to leave the Euro­pean Union, which will take ef­fect onMarch 29, 2019, will not only de­prive the EU of its sec­ond-largest econ­omy, but will also de­prive China of its main plat­form within Europe, since many Chi­nese multi­na­tion­als have al­ready es­tab­lished their Euro­pean head­quar­ters in London. Doubt­less most of them are wait­ing to see how the ne­go­ti­a­tions be­tween Bri­tain and the EU de­velop, but if these turn out as badly as many ex­pect, Chi­nese com­pa­nies based in London will have to look out­side Bri­tain for their foot in Europe.

Trade, mi­gra­tion, cli­mate change, for­eign pol­icy and se­cu­rity is­sues will be the key is­sues at the EU-China Sum­mit in Brussels. But loom­ing over all these will be the ques­tion of how Europe comes to terms with a China that has sud­denly emerged as an eco­nomic force and geopo­lit­i­cal voice that can­not be ig­nored, and whose po­si­tion five years from now can only be much stronger than it is to­day. By ex­er­cis­ing its right to set con­di­tions on China’s ac­cess to the Euro­pean mar­ket, Europe hopes to be able to har­ness some of China’s bustling en­ergy for its own pur­poses.

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