The European Council, held in Brussels on Thursday, 21 and Friday, 22 March, offered the Twenty-Eight the opportunity to hold a discussion in order to define a coherent European line towards China. Ten days after the European Commission published a new European strategy on China, which aims to be "realistic, assertive and multifaceted" (see EUROPE 12212/20), European leaders called on Beijing to provide concrete evidence of its commitment to more reciprocal relations.
Member States in dispersed order
First of all, mainly for Germany and France, it was a question of guaranteeing the accession of all European countries to a more ambitious vision towards China, a message that the EU will relay to Beijing at the EU-China Summit on 9 April.
"On the one hand, we are partners, on the other hand, competitors - and not only economically", Merkel said.
"It is very clearly a question of defining a common strategy to overcome divisions and assert European sovereignty together", summarised French President Emmanuel Macron, adding that "this awakening was necessary".
Indeed, the risks of European dispersion faced with China's economic power are real.
A new '16+1' Summit, the Cooperation between China and the countries of Central and Eastern Europe, which includes eleven Member States, will take place on 12 April. On the other hand, Italy should soon become the 14th country to announce the signing of a Memorandum of Understanding with China, as part of its New Silk Road, also called the Belt and Road.
At the European Council, these States therefore insisted on providing their EU partners with guarantees of their independence from Beijing, stressing that China could not undermine European unity.
No carrot - what about the stick?
It was then a question of rebalancing Sino-European relations.
The 'diplomacy of the bow', practiced by the Commission in Beijing, has been short-lived. In its discussions with China, the EU has little room for negotiation, as its markets are already largely open to third-country companies - a fact that can largely explain the stalemate in the negotiations on a Comprehensive Agreement on Investment (CAI) between the EU and Beijing since 2013.
Europeans are thus becoming aware of the need to strengthen their diplomacy towards the ‘Middle Kingdom’ that regularly defies European norms and principles.
This in-depth discussion between the Twenty-Eight Heads of State or Government was therefore requested by several European countries. The idea of a European Union that is less naïve and more realistic in the face of China has made its way in recent months.
To impose more reciprocity, but also to encourage the emergence of European champions as part of a new European industrial strategy for 2020 (see EUROPE 12218/4), the EU must therefore equip itself with new tools.
The investment screening tool, approved a few weeks ago (see EUROPE 12207/22), is the first sign of this European "software change", in the words of a European diplomat. "We can no longer be too complacent", confirmed a source from a Member State with a more liberal tradition.
Towards an ’IPI 3.0’?
This is therefore an opportunity to highlight the Commission's proposal for an international public procurement instrument (IPI), in order to ensure better reciprocity in access to public procurement abroad. Published in 2012, amended and put forward in 2016, the document had been shelved following the inability of Member States to define a common line.
Discussions will therefore resume in the Council of the EU. However, the more liberal countries will not give their green light to the Commission's existing proposal on the IPI. "We want to be much less restrictive", warned the latter source, adding that as it stands, the proposal was "almost Trump-like”.
"There are clearly differences of opinion that still exist, very large differences in situations”, Mr Macron acknowledged.
The EU also calls on China to commit itself to conclude the CAI negotiations by 2020. The next few weeks should also see the conclusion of agreements over geographical indications and aviation safety.
A multilateral commitment
Finally, Beijing must become more involved on the multilateral stage, first and foremost at the WTO.
"We hope to persuade China to include industrial subsidies as a crucial element of the WTO reform”, said European Council President Donald Tusk.
More generally, a European source recalled that, while China was a partner in the preservation of multilateralism, its definition of this concept differed from that of the EU.
“We discussed the issue of multilateralism, the new multilateral institutions in China. It's not a problem, but we shouldn't be naive: there may be a possibility that China is trying to influence through these organisations”, warned Dutch Prime Minister Mark Rutte.
His Belgian counterpart, Charles Michel, raised the issue of China's influence in Africa. “We want to deploy a more ambitious EU-Africa alliance and we have seen for several years now the role that China is playing or trying to play on the African continent with an interest in natural resources”, he explained.
Bilateral cooperation
The European Council also discussed cybersecurity and 5G networks. Mr Juncker recalled that the Commission would present by the end of March - probably on the 26 - a recommendation for a concerted European approach.
"Several countries, and this is the case in Belgium, are facing lax investments in the field of, for example, digital technology and telecommunications. There is a need for clarity on the choices we are going to make, a need for coordination at European level in relation to this issue. The deployment of 5G is an important challenge to stimulate the digital economy and we must be able to stimulate this digital economy by also protecting our interests in the medium and long term", summarised Belgian Prime Minister Charles Michel.
According to a European source, during the debate, several heads of state and government also referred to human rights, a subject of discord between the EU and China, “which has no interest in copying” the European system.
“The EU and European states are, most of the time, used to negotiating with States that have similar systems to ours or that say that our system is their objective (...) but very rarely (they negotiate with) States that have very different systems and that show a very clear attitude that this will not change. It is a challenge. And we talked about it”, said Austrian Chancellor Sebastian Kurz.
To see the conclusions of the European Summit: http://bit.ly/2UQbgjJ (Original version in French by Camille-Cerise Gessant with Hermine Donceel with editorial staff)