China presses Europe for anti-US al­liance on trade

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China is putting pres­sure on the Euro­pean Union to is­sue a strong joint state­ment against Pres­i­dent Don­ald Trump´s trade poli­cies but is fac­ing re­sis­tance.

In meet­ings in Brus­sels, Ber­lin and Bei­jing, se­nior Chi­nese of­fi­cials, in­clud­ing Vice Pre­mier Liu He and the Chi­nese govern­ment´s top diplo­mat, State Coun­cil­lor Wang Yi, have pro­posed an al­liance be­tween the two eco­nomic pow­ers and of­fered to open more of the Chi­nese mar­ket in a ges­ture of good­will.

One pro­posal has been for China and the Euro­pean Union to launch joint ac­tion against the United States at the World Trade Or­gan­i­sa­tion.

But the Euro­pean Union, the world´s largest trad­ing bloc, has re­jected the idea of al­ly­ing with Bei­jing against Wash­ing­ton, five EU of­fi­cials and diplo­mats ahead of a Sino-Euro­pean sum­mit in Bei­jing on July 16-17. In­stead, the sum­mit is ex­pected to pro­duce a mod­est com­mu­nique, which af­firms the com­mit­ment of both sides to the mul­ti­lat­eral trad­ing sys­tem and prom­ises to set up a work­ing group on mod­ernising the WTO.

Vice Pre­mier Liu He has said pri­vately that China is ready to set out for the first time what sec­tors it can open to Euro­pean in­vest­ment at the an­nual sum­mit, ex­pected to be at­tended by Pres­i­dent Xi Jin­ping, China´s Pre­mier Li Ke­qiang and top EU of­fi­cials.

Chi­nese state me­dia has pro­moted the mes­sage that the Euro­pean Union is on China´s side, putting the bloc in a del­i­cate po­si­tion.

The past two sum­mits, in 2016 and 2017, ended with­out a state­ment due to dis­agree­ments over the South China Sea and trade.

“China wants the Euro­pean Union to stand with Bei­jing against Wash­ing­ton, to take sides,” said one Euro­pean diplo­mat.

China´s For­eign Min­istry did not im­me­di­ately re­spond to a re­quest for com­ment on Bei­jing´s sum­mit aims.

De­spite Trump´s tar­iffs on Euro­pean me­tals ex­ports and threats to hit the EU´s au­to­mo­bile in­dus­try, Brus­sels shares Wash­ing­ton´s con­cern about China´s closed mar­kets and what Western gov­ern­ments say is Bei­jing´s ma­nip­u­la­tion of trade to dom­i­nate global mar­kets.

“We agree with al­most all the com­plaints the U.S. has against China, it´s just we don´t agree with how the United States is han­dling it,” an­other diplo­mat said.

Still, China´s stance is strik­ing given Wash­ing­ton´s deep eco­nomic and se­cu­rity ties with Euro­pean na­tions.

It shows the depth of Chi­nese con­cern about a trade war with Wash­ing­ton, as Trump is set to im­pose tar­iffs on bil­lions of dol­lars worth of Chi­nese im­ports on July 6. It also un­der­scores China´s new bold­ness in try­ing to seize lead­er­ship amid di­vi­sions be­tween the United States and its Euro­pean, Cana­dian and Ja­panese al­lies over is­sues in­clud­ing free trade, cli­mate change and for­eign pol­icy.

“Trump has split the West, and China is seek­ing to cap­i­talise on that. It was never com­fort­able with the West be­ing one bloc,” said a Euro­pean of­fi­cial in­volved in EUChina diplo­macy.

“China now feels it can try to split off the Euro­pean Union in so many ar­eas, on trade, on hu­man rights,” the of­fi­cial said.

An­other of­fi­cial de­scribed the dis­pute be­tween Trump and Western al­lies at the Group of Seven sum­mit as a gift to Bei­jing be­cause it showed Euro­pean lead­ers los­ing a long-time ally, at least in trade pol­icy.

Euro­pean en­voys say they al­ready sensed a greater ur­gency from China in 2017 to find like-minded coun­tries will­ing to stand up against Trump´s “Amer­ica First” poli­cies.

A re­port by New York-based Rhodium Group, a re­search con­sul­tancy, in April showed that Chi­nese re­stric­tions on for­eign in­vest­ment are higher in ev­ery sin­gle sec­tor save real es­tate, com­pared to the Euro­pean Union, while many of the big Chi­nese takeovers in the bloc would not have been pos­si­ble for EU com­pa­nies in China. China has promised to open up. But EU of­fi­cials ex­pect any moves to be more sym­bolic than sub­stan­tive.

They say China´s de­ci­sion in May to lower tar­iffs on im­ported cars will make lit­tle dif­fer­ence be­cause im­ports make up such a small part of the mar­ket.

China´s plans to move rapidly to elec­tric ve­hi­cles mean that any new ben­e­fits it of­fers tra­di­tional Euro­pean car­mak­ers will be fleet­ing.

“When­ever the train has left the sta­tion we are al­lowed to en­ter the plat­form,” a Bei­jing-based Euro­pean ex­ec­u­tive said.

How­ever, China´s of­fer at the up­com­ing sum­mit to open up re­flects Bei­jing´s con­cern that it is set to face tighter EU con­trols and reg­u­la­tors are also block­ing Chi­nese takeover at­tempts in the United States. The Euro­pean Union is seek­ing to pass leg­is­la­tion to al­low greater scru­tiny of for­eign in­vest­ments.

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