EU-China Monthly Report: May 2020
INTRODUCTION
Welcome to the Monthly EU-China Report!
In May, multiple developments highlighted the contradictions engraved in the multifaceted approach of the EU towards China, as outlined in the Strategic Outlook from March 2019, in which China is defined as a cooperation partner, negotiating partner, economic competitor, and systemic rival.
The EU’s response to Beijing’s move to impose a national security law in Hong Kong exposed the challenge of protecting both values and interests when dealing with a systemic rival. But the view of China as an economic competitor also is gaining momentum, as further economic securitisation on the EU’s side is visible on the horizon. The postponement of the Leipzig Summit may also be a blow to the “cooperation partner” dynamic.
This further highlights the need for a wider reflection on the EU’s policy towards China and development of a “robust strategy on China,” in the words of High Representative Josep Borrell. Such a strategy would require a more unified approach from the EU, faithful to its own interests and values despite the pressure to take sides in escalating tensions between Beijing and Washington. We would hope that the upcoming German Presidency will provide a platform for developing this more united approach towards China among the member states, despite Leipzig being put on hold.
The level of the challenge ahead for the EU—to promote its interests and values in the reality of Sino-American rivalry—was well exemplified by the controversies surrounding the World Health Assembly and the plans to launch an international investigation into the origins of the virus. The EU cooperated with the WHO in launching the Coronavirus Global Response (including international pledging event) and compromised on the international investigation, likely to avoid fragmentation within the organisation. While President Trump withdrew from the WHO, President Xi pledged $2 billion to fighting COVID-19 but is likely to spend it via China’s own health diplomacy channels rather than the current multilateral framework. These are not easy times for the EU’s model of multilateral globalisation.
But May was also a month in which the EU and China both set economic agendas and response plans towards the corona-crisis. The message coming from Beijing and the Two Sessions is the mantra “stability over growth”, as the GDP growth target was dropped for the first time in almost three decades. Brussels offered some positive news, as the Franco-German proposal on the recovery fund paved the way for the European Commission’s proposal for the “Next Generation EU” fund (combining grants and loans) as well as for the next EU budget, for 2021-2027. Fortunately, the initial reactions from the member states have been positive and we are set for negotiations in a constructive tone under the German Presidency.
We hope that you will enjoy this report and encourage you to share it with your network.
Enjoy and stay safe!
Grzegorz Stec
Founder of EU-China Hub