China’s rise has helped European integration

Source:Global Times Published: 2019/4/6 12:04:23

Editor's Note:

After Italy signed up to the China-proposed Belt and Road Initiative (BRI), China-EU relations are once again under the global spotlight. Meanwhile, China's rise is believed to be worrying Europe. Which way will EU-China relations go? What do Europe and European enterprises expect from China? How will China's rise affect European integration? Before the upcoming EU-China summit scheduled for April 9, Daniel Gros (Gros), director at the Brussels-based Centre for European Policy Studies, shared his views on these issues with Global Times (GT) reporter Xu Hailin.

GT: Does the EU have a unified stance toward China?

Gros: There has been little European unity toward China so far. Some progress had been made because the member states now see that 5G is a key technology and Chinese state-owned enterprises might dominate key sectors. However, it is unlikely that the EU will ever find a cohesive policy toward China because member states prefer to keep foreign policy to themselves.

GT: What will be the prospects of BRI in Europe?

Gros: BRI has become an important topic in the EU mainly because of strategic Chinese investment in infrastructure (ports, for example) and because in the 16+1 group there are a number of EU member countries. There is a feeling in Brussels that the representatives from some member states with strong Chinese investment take a more China friendly line than others. However, apart from this, there is little interest in the BRI outside small policy circles because most European policymakers are busy with their domestic problems.

GT: There is divergence in attitudes toward China among EU member states. While some hope a split EU can deepen ties with China, they are vigilant about the increasing influence of Beijing around the world. How will the upcoming summit reassure the EU?

Gros: The first key issue is whether French President Emmanuel Macron, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker can find a common line. This should be feasible as all three share a preference for an open multilateral trading system. But all three are also wary of investment of Chinese state-owned enterprises in key sectors. They do not want to shut Chinese investors out of the EU market, but would like to have more transparency and reciprocity. 

GT: The EU has demanded that China further open its market and lower the limits for entry of foreign capital. In fact, China is opening its door more widely, but the country has its own pace. So, how can the two sides coordinate the divergence on this issue?

Gros: There is little EU leaders can do since China will decide the pace of its opening-up on its own. But the Europeans perceive China now as a very competitive economy. The latest new law on intellectual property is a step in the right direction, but remains to be seen how it will be implemented at the regional and provincial level.

GT: Will more EU member states follow Italy signing MOUs with China within the framework of BRI, and why?

Gros: Other EU member states are likely to wait and see what concrete advantages Italy gains from this step. At present, Italy trades relatively little with China and receives also little investment from China. Other countries will want to see whether signing the MOU will lead to more investment or more trade. Only if this happens, other countries are likely to follow the Italian example.   

GT: What do you expect from China's law on foreign investment, which was approved during the two sessions held in early March?

Gros: This new Chinese law on foreign investment could be a major step forward. However, the foreign response has been muted. The key reason for this cautious foreign response is that implementation will be key. The many complaints from European and US enterprises in China are usually not about laws, but about opaque or inconsistent application by different bureaucracies and in different provinces. The change foreign enterprises in China expect is thus a different attitude in the administrations they have to deal with. If the government succeeds in ensuring that the spirit of the new law has to be adapted by the administration at all levels, this new law on foreign investment could be a major positive event.

GT: As EU leaders prefer to keep foreign policy to themselves, what do you think the EU-China summit will do to the current complex situation on the continent?

The EU-China summit might be important for both sides: for Europe to understand better what China wants; for China to understand better why Europe worries about state intervention in the economy and what Europe might do next. However, it is unlikely that Europe will ever have a coherent "China strategy." Member states like to keep foreign policy for themselves (this is mainly for domestic purposes, most European leaders know that they have no influence abroad, especially not in China). However, the EU has a unified trade policy. There is not yet a unified foreign investment policy, but this is likely to change over time as the European Treaty has given the EU the power to conclude foreign investment treaties.

GT: What role can China play in European integration?

Gros: China can do very little to resolve all the problems we have in Europe. It is already positive that China has not taken the attitude of Donald Trump that the EU is a rival and should disintegrate. The rise of China has already helped European integration because it has helped European citizens to understand that their countries are much too small to prosper individually. Moreover, the important role of the state in such a big economy as China forces Europe to re-examine the role of the state at home as well and it has increased the value of a unified European trade policy, which can negotiate from a position of almost equal strength with China, for example by insisting on reciprocity in foreign investment, government procurement and so on.


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