EU-China News Brief - 11 May 2020
YOUR WEEKLY SHOT OF EU-CHINA NEWS
BY FLAVIAN BERNEAGĂ AND GRZEGORZ STEC
1. EEAS Controversy Again - EU ambassadors’ OpEd is Censored in China Daily
► An opinion piece written by the ambassadors of the EU and the 27 EU member states to China was censored by state-controlled newspaper China Daily.
► The deleted quote was related to the virus having originated in China
► The decision to publish the censored report appears to rest solely with the EU delegation in Beijing
Op-Ed for the 45th Year of EU-China Relations
On May 6, the Ambassadors of the 27 member states to China, alongside Nicolas Chapuis, the Ambassador of the EU to China, published an opinion piece in China Daily in celebration of 45 years of EU-China diplomatic relations. The report:
Highlights the mutual assistance between the EU and China in fighting the pandemic and urges China to “join forces to forge a global economic recovery.”
Calls for the EU and China to undertake a ‘green’ economic recovery that takes into account climate change.
Indicates that, while the EU and China have their differences on human rights, they are both mature partners capable of having frank discussions on this topic.
Stresses the EU and China must maintain cooperation in “climate action, peace and security, sustainable development and upholding the multilateral global order.”
Old Habits Die Hard
The article’s publication was undercut by its censorship by China Daily, a newspaper owned by the Publicity Department of the Chinese Communist Party.
Specifically, the censored portion talked about “the outbreak of the coronavirus in China, and its subsequent spread to the rest of the world over the past three months."
Virginie Battu-Henriksson, the Commission’s spokesperson on foreign affairs, stated the EU delegation in China was informed that the op-ed’s publication (and its subsequent censorship) could only happen with approval from the Chinese MFA.
Battu-Henrikson further indicated that the EU delegation insisted on the full publication of the article, but ultimately agreed to proceed with publishing it in a censored format “with considerable reluctance.”
The EU delegation appears to not have communicated with the Commission or member states on the censored portion, and proceeded with the publication of its own accord.
Despite the diluted version of the op-ed, ChinaDaily refused to publish it in Chinese. To date, China Daily has not posted a version in Chinese.
Reactions from All Sides
EU Delegation
It argued the decision to publish the op-ed, censored or not, was taken so that key messages on multiple policy areas could reach an audience of over 1 billion people.
The Delegation indicated it “strong regrets” the original version was not published and indicated they tried to publish it initially in People’s Daily (another newspaper), a request that was also rejected.
EEAS
The EEAS has also stated that the “decision, taken under great time pressure, was not the right one to take.”
Nonetheless, the EEAS maintained that Chapuis’ expertise on China makes him an asset for the EU and that he will “continue to have our confidence.”
EP Delegation for Relations with China
Reinhard Bütikofer, chair of the European Parliament's Delegation for Relations with the People's Republic of China, criticised the EU Delegation for being too lax and for “accepting Chinese censorship as the right thing to do.”
Bütikofer went as far as requesting the EU ambassador’s resignation.
TAKEAWAYS
► ONE CENSORSHIP TOO FAR?
Before this censorship story, the EEAS had dealt with controversy related to the disinformation report, which we covered in our last news brief. Added to the general uneasiness about China and controversies arising amid COVID-19, each additional incident supports the case of those in Europe who are calling for a “China rethink”. But bear in mind, this does not mean fully confronting China or simply allying with the US (as China may think). (We will return to those dynamics in the second news bite.)
► EU DIPLOMACY... AGAIN
When the EEAS scandal broke, the general line of the EEAS’ response was that it was diplomacy “as usual” and the press had approached the issue with a “hidden agenda”. This time around, the rhetoric is that the censoring of the article is unfortunate and that—according to the EEAS—the decision was “not the right one to take,” but there was no clear statement of it being a mistake on the side of the EU delegation. Both controversies lack a proper acknowledgement of the mishandling of the situation, which is a worrisome trend, given that China’s nationalist rhetoric is unlikely to slow down. For things to change, mistakes must be acknowledged.
► WHAT WAS THE PLAN?
There seem to be two surprising decisions here: Attempting to run a message not aligned with the official Party-State narrative in Party-State-run media, and trying to reach and affect opinions of “a potential audience of more than 1 billion readers” with an article not published in the Chinese version of the People’s Daily. But there might have been reasons for those decisions that we are not aware of.
Censorship aside, the op-ed painted a pretty rosy picture of EU-China cooperation, passing over controversies in the relationship. Naturally, this is a celebratory piece for the anniversary of diplomatic relations, printed in the press of the receiving (Party-)State. Nevertheless, a question arises: Should such language be used to manage a relationship described in the 2019 EU-China Strategic Outlook as—among other things—a “systemic rivalry”? After all, the delegation turned to this language from the Outlook in its defensive response, after the controversy. Of course, it is important to build a cooperation framework and dynamic for the EU and China—especially amid COVID-19, when we need multilateral responses—but can a censored op-ed help with that?
READ MORE
EU-China ties vital amid global crisis, China Daily (EU ambassador to China and the ambassadors to China of the 27 EU member states), May 6
Censorship of an Op-Ed by the Ambassador of the EU and Ambassadors of the 27 EU Member States to China, Delegation of the EU to China, May 8
Brussels rebukes its Beijing envoy over censorship of EU letter, Politico (Hans von der Burchard and Jacopo Barigazzi), May 8
2. China in the COVID World - Beijing’s Strategic Outlook
► New domestic developments point to Beijing’s strategic outlook for the post-COVID-19 world.
► An internal report warns Chinese officials that China is likely to experience external hostility, mirroring the one following the Tiananmen Square protests, and paints a Cold War-like picture of global affairs.
► Europe seems to be viewed as an actor meant to side with either China or the US and, as such, is a target of Chinese propaganda.
Echoes of Discontent Reach the Homebase
On May 4, news emerged of a report written by the China Institutes of Contemporary International Relations (CICIR), an influential think tank connected to China’s Ministry of State Security.
The report was allegedly later presented by the Minister of State Security to top officials, including Xi Jinping.
The paper argues global hostility towards China has increased to levels unseen since the 1989 Tiananmen crisis. Hostilities are guided by US-China relations being at their worst point in decades.
Reuters compared this to the Novikov Telegram, a 1946 telegram sent to the Kremlin by the Soviet ambassador in Washington, stressing the dangers of deteriorating relations between the two sides.
The principal consequences evoked are growing hostility towards the BRI, financial and military support from Washington for China’s regional enemies, and, in the worst case scenario, armed confrontation.
While it is unclear whether this is Beijing’s main foreign policy stream, it shows the general feeling of the presence of a Cold War mentality, something China has long criticised in official statements.
Europe and its Viewpoint
As the US and China have become more combative in controlling the narrative of the pandemic, Europe has become the battleground of a propaganda war.
According to the EU’s ambassador in China, “these tensions are not conducive to the cooperative spirit we need today”.
Chinese diplomats have spread false claims, mocked liberal democracies, and attempted to pressure European officials to shine a positive light on China.
At the same time, the US has been pushing the EU to back an international investigation, but Brussels is wary of claims from Washington that the virus originated in a lab in Wuhan.
According to Janka Oertel, this behaviour may be the combined result of panic, anger, and calculation:
Panic: The CCP is weary of facing criticism over its handling of the pandemic and uses nationalism as a tool to bury the truth and maintain domestic stability.
Anger: China’s leaders are angry with Washington for insisting the virus came from a Chinese lab, which makes Europe a collateral victim for being a US ally (recall Chen Weihua’s comment on Europe being the “poodle” of the US).
Calculation: China sees Europe’s weakness and acts strategically to become more influential in Europe at a time when EU member states don’t act with unity.
Chinese MFA's Point of View
Statements from the Chinese MFA seems to validate the assessment that China views Europe through a “with us or against us” mindset.
Chinese MFA Spokesperson Hua Chunying stated Europe’s choice is not between the US and China, but between “unilateral bullying and multilateral cooperation”.
Hua argued the US is asking its allies to frame China and it pointed to the EU’s pledging conference as an example of good multilateralism.
TAKEAWAYS
► COLD WAR TRAP
The report described by Reuters shows that it is likely that Chinese leadership sees itself being in a Cold War-like situation. This is not particularly new, given that Beijing’s rhetorical arsenal has long included criticising the “Cold War mentality”, but it seems that now the leadership may be led to believe that mending ties with Washington seems hardly possible. This is not good news for the EU. A steep ideological drift would make it harder for Brussels to maintain constructive relations with both the US and China, and also sustain global multilateralism. At the same time, do not take things at face value. This was probably not an uncontrolled leak. After all, the report was drafted at the beginning of April. Beijing may be trying to communicate its uneasiness with the situation in the context of wolf-warrior diplomacy and this may be a call for de-escalation.
► CCP UNDER SIEGE
One thing is clear: the CCP is now feeling defensive on multiple fronts. We discussed the challenge of the economic pressure in one of our past news briefs, alluding to “Fort China”, and we may see it turn to greater usage of ideology domestically. As such, we may see further tightening of the ideological screw (remember the launch of “Patriotic Education Campaign” in 1991) and more diplomatic messaging aimed at pleasing domestic nationalists.
READ MORE
Exclusive: Internal Chinese report warns Beijing faces Tiananmen-like global backlash over virus – sources, Reuters (Peter Hirschberg), May 4
What’s behind China’s new behavior in Europe, Politico (Janka Oertel), May 7
Foreign Ministry Spokesperson Hua Chunying's Regular Press Conference on May 6, 2020, MFA of the PRC (Hua Chunying), May 6
2020 a critical year for China-EU relations after pandemic, Global Times, May 8
Coronavirus: US-China rivalry hampering global efforts to fight Covid-19, EU ambassador to China says, SCMP (Wendy Wu), May 7
3. EU-China Audit of 2019 Goals - Report by Rasmussen Global
► On May 7, Rasmussen Global posted its report assessing the compliance of the EU with the goals it set for itself in March 2019 in the EU-China Strategic Outlook Paper;
► Only one of ten goals was achieved!
► Overall, the EU failed to alter Beijing’s economic and foreign policy agenda.
Limited Success
On 12th of March 2019, as part of the famous EU-China Strategic Outlook, the EU adopted ten action points for the relationship with China, with a delivery date of one year. Rasmussen Global drafted an assessment on the implementation success of these ten points.
The 2019 Strategic Outlook’s importance (and consequently, its implementation) is huge - it marked the first time the EU categorised China as a “systemic rival”.
The overall conclusion is that the EU has not been able to change China’s standing on economic and foreign policy matters.
Cooperation in international matters has either stalled or worsened, as a result of China’s UN vetoes on human rights resolutions.
The biggest missing piece is the Comprehensive Agreement on Investments, while the biggest success is the common policy the EU drafted on 5G rollout, which addresses the Huawei question.
Good, Bad, or Pending?
The report categories the development on the ten action points according to three criteria: Achieved; Partially Achieved; Failed
Achieved
Common EU Approach to the Security of 5G Networks
Partially Achieved
Calling on China to explicitly pledge it will reach peak emissions before the 2030 deadline of the Paris Agreement
Applying the EU’s bilateral agreements and financial instruments to preserve its interests in partner countries and work with China on the ‘EU Strategy on Connecting Europe and Asia’
Producing a more balanced trade relationship through an investment agreement, WTO reform, and geographical indicators
Addressing anti-competitive behaviour by Chinese firms, by focusing on the EU public procurement market
Having member states adopt FDI screening mechanisms similar to those prescribed by the Commission
Failed
Strengthening cooperation with China on human rights, peace and security, and development
Deepening collaboration with China on peace and security according to the JCPOA model
Adopting the International Procurement Instrument (by the European Parliament and Council) by the end of 2019
Filling gaps in EU law to address the negative impact of foreign state ownership and financing in the common market
We encourage you to review the full report - linked in the Read More section.
TAKEAWAYS
► A GOOD PLAN IS HALF OF SUCCESS?
Or rather one-tenth it would seem. The EU’s paper categorising China as a “systemic rival” made quite a fuss but, one year on, it appears the EU is struggling to implement its agenda. The case of the 10 action points should be studied in a time when “China rethink” seems to be on the horison. Only one-tenth of the goals could be achieved in the period when China was less confrontational than it is now. So, there is a need to properly plan and execute adjustment of the dynamic in the relationship and—arguably, even more importantly—within the EU itself.
READ MORE
EU-China – A strategic outlook, European Commission and the High Representative, 12 March 2019
China-EU: Living up to the Ten Actions?, Rasmussen Global, May 7
4. Chinese Case in the EU-Western Balkans Summit
► On May 6, the EU hosted the high point of Croatia’s Council Presidency: the Summit on the Western Balkans.
► The summit did not explicitly pledge enlargement to the six participating Western Balkans countries, but it did dwell heavily on the pandemic and its socio-economic response.
► The underlying theme was that countries seeking accession should not turn to Russia and China whenever it suits them.
Can’t Have Both EU and China Cookies
EU leaders, the leaders of the 27 EU member states and the heads of Serbia, Kosovo, Montenegro, Bosnia, Albania, and North Macedonia met in Zagreb for the EU Western Balkans Summit.
The dominating topics were strategies on overcoming the COVID-19 pandemic and its economic repercussions.
The Balkans’ European perspective was confirmed, but the word ‘enlargement’ did not make it into the final communique (probably as to not give any signals to Turkey).
The summit comes at a time when Chinese medical aid antagonised relations between Brussels and Belgrade. It also comes at a time when social media disinformation from Chinese and Russian bots spread like wildfire in the Western Balkans.
The clear message of the summit was that the Western Balkans should acknowledge that EU “support and cooperation goes far beyond what any other partner has provided to the region,” a clear nod to Chinese and Russian interference in the region.
The final communique urged the Balkans to “progress towards full alignment with EU foreign policy positions, notably on issues where major common interests are at stake, and to act accordingly.”
Even Serbia’s Aleksandar Vučić fell in line. He issued a statement on May 6 in which he said he is grateful for EU help. Vučić: "We are on the European road, and we want to organise our country in line with European standards and rules.”
Financially, the European Commission put down a €3.3 billion support package, including a €1.7 billion assistance package from the EIB and €750 million in macro-financial assistance.
TAKEAWAYS
► A BUMP ON THE ROAD?
Medical aid from Beijing, disinformation campaigns, and Vučić’s rebellious “European solidarity does not exist” had made it seem as if Beijing was gaining the upper ground in the Balkans. Nonetheless, the Balkans (and Eastern Europe as a region) are historically the EU’s most successful cases of normative foreign policy. Even if the Balkans have a long way to go until accession, it seems that their strategic trajectory remains set on the EU, despite tactical moves leveraging relations with China.
► CHINA-OPPORTUNISM
The change of stance by Vučić shows that foreign policy with China can be treated as a tool for putting pressure on the EU or causing uneasiness in Brussels, but it does not necessarily constitute a shift of strategy away from Europe. Perhaps Vučić got the message sent by the exclusion of Serbia from the €3 billion favourable loans mechanism announced by the EU for its Neighbourhood partners on April 22nd, which we discussed in one of our past news briefs.
READ MORE
EU offers more aid, membership to Balkans in riposte to China, Russia, Reuters (Robin Emmott), May 5
EU and Western Balkan leaders reaffirm ties in veiled response to China, Russia, Euractiv (Alexandra Brzozowski and Vlagyiszlav Makszimov), May 7
Three key takeaways from the EU-Western Balkans Summit, Emerging Europe (Nikola Đorđević), May 8
5. China-Europe Railways get a Boost Amid the Pandemic
► China’s exports grew slightly in April, but anaemic supply chains have altered cargo transportation methods;
► Air freight has become too expensive and sea freight remains a rather slow method, thus boosting the position of railways as trade transportation during COVID-19;
► Nonetheless, subsidised China-Europe rail freight has underperformed in the past;
► Its recent growth in importance is owing to the peculiar circumstances of the pandemic and the demand for medical supplies.
One Hot, One Cold
China’s exports grew by 3.5% in April, but imports fell by 14.2%
The exports figure beat expectations of an 11% shrinkage, but the broader picture tells us that lockdowns in Europe and North America are taking their toll on China’s external demand. Greater demand shock may yet come.
The fall in imports tells us that domestic demand is still weak, most likely driven by unemployment (especially among migrant workers) and low consumption patterns.
Trailing Behind
Weaker demand has also made rail freight an attractive method of cargo transportation, compared to sea and air freight.
Trade by sea is expected to run at just 20-30% capacity in the coming months as the main East-West trade routes experience 250-350% higher rates of blank sailings than normal.
For air freight, both transit times and rates have skyrocketed, as much as 300% higher than last year.
The big winner is the China-Europe Rail, a 30+ line network that goes through Central Asia and is heavily subsidised by Beijing and outbound provinces. This makes it a means of transport that is cheaper than air travel and faster than sea travel.
It’s Not All Sugar and Honey
Rail freight cargo transportation from China does not come without problems.
In August 2019, the China-Europe Railway Express was found to be carrying significant amounts of empty cargo containers to Europe.
This had to do with political reasoning, as the rail freights had to be painted as a successful part of the Belt and Road Initiative.
Local governments received subsidies to lower the cost of their freight services so they could compete with sea freight and increase BRI visibility.
Companies running rail routes to Europe found themselves in competition with each other for visibility, with each circumventing subsidy ceiling regulations to attract more businesses.
To look better and boost indicators, these railway service companies increased the number of trips they took, even when they had very little to ship.
Oh, How the Rails Have Turned
COVID-19 is bringing rail cargo transportation back into the spotlight.
As 95% of international flights (that used to carry half the freight transported by air) stopped operating and many cargo ships have seen their capacity decrease drastically, trade from Asia to Europe has become more reliant on the railways.
In April, operators opened a significant number of new routes: from Jinan to Hamburg; from Xi’an to Warsaw; from Hefei to Duisburg; and from Xi’an to Linz, among others.
Freight rates for trains hover around 24 cents per kilogram. By contrast, cargo sent by air to Frankfurt now hovers around 1 dollar (down from $3 in March).
According to the China State Railway Group, freight trains from China to Europe reached a record high in April. Part of the reason behind that seems to be the huge amount of medical supplies transported to Europe.
TAKEAWAYS
► SHORT-TERM BOOST, NOT LONG-TERM SOLUTION
Amid the pandemic, the railway does offer an attractive alternative, but this is likely going to be a temporary change. While this may create new supply chains based on usage of China-Europe rail cargo, this may recede once the situation returns closer to how it was before the pandemic. So the question of the sustainability of the Europe-China railway remains valid. It will be interesting to observe the (so far somewhat sluggish) progress of joint EU-China research into sustainable railway-based transport corridors between Europe and China, as part of EU-China Connectivity Platform.
READ MORE
Coronavirus: China’s exports in surprise jump in April, but imports tumble, SCMP (Finbarr Bermingham), May 7
China-Europe rail freight set to boom amid virus outbreak, SeaNews, May 3
Covid-19: hardest-hit European ports, Riviera (Rebecca Moore), May 5
Empty trains on the modern Silk Road: when Belt and Road interests don’t align, Panda Paw Dragon Claw, August 23 2019
Shippers turn to Belt and Road trains to beat coronavirus shutdowns, Asia Nikkei (Jens Kastner), May 10