The European Union will weigh a more defensive strategy on China on Thursday, signalling a possible end to the unfettered access Chinese business has enjoyed in Europe but which Beijing has failed to reciprocate.
Caught between a new U.S.-Chinese rivalry for economic and military power, EU leaders will try to find an elusive middle path during a summit dinner in Brussels, the first time they have discussed at the highest level how to deal with Beijing.
But despite the stance Brussels wants to foster, Italy โ where eurosceptics share power โ prepared to receive Chinese President Xi Jinping for a visit during which he was expected to sign major bilateral trade deals with Rome.
French President Emmanuel Macron spoke of a โEuropean awakeningโ that China is seeking to produce sophisticated products that will compete with those made in Europe. The EUโs trade chief Cecilia Malmstrom, a Swedish liberal, meanwhile argued that the international economic order had changed.
โSince the beginning of my mandate Iโve been calling for a real awareness and for the defence of European sovereignty,โ Macron told reporters as he arrived for the summit. โIโd say that finally we have it for an issue as important as China.โ
With Chinaโs Xi starting a tour of France and Italy, EU leaders โ who have often been divided over China โ want to present a united front ahead of an EU-China summit on April 9.
According to a draft April summit statement seen by Reuters, the EU is seeking deadlines for China to make good on trade and investment pledges that have been repeatedly pushed back.
That was the message delivered to State Councillor Wang Yi by EU foreign ministers on Monday. It marked a shift toward what EU diplomats say is a more โassertive and competitive mindsetโ.
โIn the past, it has been extremely difficult for the EU to formulate a clear strategy on China, and past policy documents have not been strategically coherent,โ said Duncan Freeman at the EU-China Research Centre at the College of Europe. โThere is now a clear effort to do that.โ
U.S. President Donald Trumpโs campaign to warn against Huawei telecommunications equipment in next-generation wireless networks has also accelerated EU discussions about its position, although the bloc is keen to avoid protectionist measures.
Malmstrom said Europe often agreed with the United States on what problems were, but not always on the cure โ including U.S. tariffs on EU imports and Washingtonโs trade war with Beijing.
โIt is tempting to try to lock out China, to decouple rather than to discipline. That might work in the short term. But the long term requires a deeper fix, systemic reforms built to last,โ she said, urging transatlantic cooperation on the issue.
The deepest tensions lie around Chinaโs slowness to open up its economy, Chinese takeovers in critical sectors in the EU and an impression that Beijing has not stood up for free trade.
GERMANY IS KEY
With over a billion euros a day in bilateral trade, the EU is Chinaโs top trading partner, while China is second only to the United States as a market for European goods and services.
Chinese trade restrictions are more severe than EU barriers in almost every economic sector, according to research firm Rhodium Group and the Mercator Institute for China Studies.
Unlike the United States, which has a naval fleet based in Japan to wield influence over the region, the EU lacks military power to confront China, so its approach is technical.
Germanyโs views will be important as Berlin has at times pressed for a tougher answer to unfair competition from Chinese rivals but also championed a closer relationship with Beijing.
Chancellor Angela Merkel told reporters in Brussels that there was a need to discuss the EUโs industrial strategy.
But any new EU policies could be complicated to implement, as individual EU capitals continue to court Chinese investment.
Italy plans to join Chinaโs multi-billion-dollar Belt and Road project, while free-traders Ireland, Sweden and the Netherlands are wary of restrictions on commerce.
France is pushing for a coordinated EU approach to the Belt and Road infrastructure initiative, an Elysee official said earlier on Thursday, implicitly criticising Italy for indicating it would join the Chinese project.
โAs far as weโre concerned, we are advocating a different approach and we hope to get the backing of the European Union,โ the official said, adding that France expected the Italian prime minister to explain his countryโs position later at the summit.
One senior EU diplomat pleaded for a debate with โmore subtlety,โ because any ban on Chinese goods could be costly.
โWe need to buy the best and cheapest for taxpayers,โ the diplomat said.
