Throughout the EU’s history, Europe’s leaders were more concerned with links between themselves than with the global economy, in particular Asia.
The Chinese President Xi Jinping’s Europe tour is attracting media attention than usual, squeezed as it is between the long-awaited release of the Mueller Report in the United States, and the ever more bewildering twists of Britain’s exit from the European Union.
That does not detract from its importance, embracing meetings with Italian Prime Minister Guiseppe Conte, French President Emmanuel Macron, German Chancellor Angela Merkel, and the European Commission’s President Jean-Claude Juncker. It is vital in shaping China’s “long game”, parrying unilateral US pressure in Donald Trump’s trade war, and in defining what Beijing regards as its appropriate place in the global world order.
The media noise about Xi’s Europe trip might be all about Belt and Road (BRI) infrastructure business, but this exaggerates the importance of BRI, and diverts attention from the main purpose: to work with important global trade groupings to reaffirm the primacy of multilateral routes to tackle world problems.
A second purpose is to discreetly deflect the unilateralist divide-and-rule pressure being exerted by Trump and his trade Rottweilers, who are due to land back in Beijing on Thursday to resume talks to resolve the trade war.
Let’s look at these issues in turn: first, the BRI, which is about so much more than a string of infrastructure projects intended to curry favour with a clutch of cash-strapped economies of strategic importance to China. The BRI remains a 100-year vision, not determined by a port here, or a railway there. It is intended to give shape and coherence to what China sees as its place in the world, many decades from now.
Unspoken, but at the heart of the BRI strategy, are not colonial aspirations in Africa or Southeast Asia, or divide-and-rule tactics between the EU and the “16+1” grouping spread across Eastern Europe, but an acute anxiety over the destabilising potential of radical Islamic movements across Central Asia immediately to China’s west.
Across the “stans”, BRI infrastructure-building is about providing foundations for economic growth and livelihood-building across neighbouring regions, where poverty and isolation provide ideal incubators for Islamist utopianism clustered around Islamic State (IS), al-Qaeda or the Taliban.
Second, multilateralism versus unilateralism. Regardless the on-again, off-again mood music coming from US trade negotiators, or their urgent need for a victory to vindicate the acute and growing pain felt by US businesses and consumers over the past nine months, the reality is that Beijing is viscerally uncomfortable with any unilateral US deal that cannot be multilateralised across its trading partners.
While Trump is looking for victories that can deliver unique benefits to his voters, Beijing is looking for ways to manage the opening up of China’s economy to companies from across the world.
In tandem with the US trade talks, Beijing has been seeking common ground with Japan and the 11 Trans-Pacific Partnership economies (now called the CPTPP), ASEAN and the 15 economies negotiating the Regional Comprehensive Economic Partnership (RCEP), and with the 28-member EU. This brings together 50+ economies that will in due course benefit from Beijing’s painfully slow and cautious opening up process.
The agenda for this process has been driven as much by the Beijing-based European Chamber of Commerce as by the noisier American Chamber, and Beijing recognises the need to address the complaints of both. All are complaining about the role of state-owned enterprises, Beijing’s subsidy policies, poor intellectual property protection, and efforts to get foreign enterprises to transfer technology.
Trump’s fractious relations with so many trading partners, and his chronic policy unpredictability, have undermined faith among many allies in the reliability of America as an anchor for the global trading system. But this has yet to translate into trust in Beijing’s promises to commit to multilateral liberalisation and to fight against protection. Trump has gifted Beijing with an opportunity to build trust, and it is yet to be seen whether Beijing can take advantage.
This is where visits like Xi’s trip to Europe are critical. The European Commission’s EU-China Strategic Outlook report defined China as a “strategic rival”, making brutally clear the EU’s anxieties about placing trust in China – ranging from the rising and carefully protected heft of Chinese state-owned enterprises, to the technology leadership of companies like Huawei.
Despite Trump’s unpredictability, Europe’s default position is still to trust the US before trusting Beijing. But as Xi meets with Macron, Merkel and Junker in Paris on Tuesday, he has an opportunity to alter that balance, most of all in winning the commitment to multilateral processes for settling problems.
Macron has talked eloquently about Europe’s “end of naivety” regarding China. While on balance this would be a good thing, I see the change in Europe through a different prism.
For the past five decades in the EU’s history, Europe’s leaders have been self-obsessed, far more concerned with building stronger, closer links between themselves than with adjusting to the fast-changing realities of the global economy, in particular across Asia.
At the heart of this self-obsession has been an erroneous belief that the global economy rests on the locomotive force, and technology leadership, of Europe with the US (and perhaps Japan). The naivety was to dismiss China, and the developing economies of Asia and Africa, as technology-dependent sources of simple goods and cheap commodities.
Through this prism, the end of naivety is welcome and overdue, and it is for leaders like Xi to build confidence during his European discussions that the changing global balance of economic power is a source of opportunity rather than a threat.
Junker calls China “a competitor, partner and rival”. Xi is likely to agree with him. Except that the next and critical step is to be seen as a trusted competitor, partner and rival. There is still a long way to go.