Should China worry more about the EU than the US?

While Biden could be looking for a quick resolution to the US-China trade conflict, Brussels may be starting to get cold feet about closer ties with Beijing

The last thing the world needs is for trade between the three biggest economies to atrophy any further

Reading Time:3 minutes

Chinese President Xi Jinping greets German Chancellor Angela Merkel, French President Emmanuel Macron, President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen via video link in Beijing on December 30, 2020. At the meeting, Xi and the European leaders announced that the two sides had completed investment agreement negotiations as scheduled. Photo: Xinhua

Published: 5:15am, 25 May 2021Updated: 6:57am, 25 May 2021

Just when the world needs to pull together to beat the pandemic, trade tensions seem to be breaking out again. Surprisingly, it’s not a resumption of friction between the US and China, but a souring of relations between the European Union and China.

With Joe Biden’s election as US president, there seems much better hope that Washington and Beijing can bury their differences and get the ball rolling again for improved trade relations. But, after seven years of careful negotiations, the EU has suddenly called a halt to ratifying the Comprehensive Agreement on Investment, which is aimed at boosting trade flows between Europe and China.

The impasse is being blamed on recent tit-for-tat sanctions by both countries. It’s bad timing for a world which is crying out for better multinational relations, faster bilateral trade flows and an early end to the pandemic-fuelled global economic crisis. It couldn’t have come at a worse time for global recovery.

The big issue now is whether the differences between the EU and China can be patched up to salvage the deal or whether the rift has more serious implications. If it’s the latter, then Beijing might have more to worry about from Europe than the US, with whom trade relations have been badly strained after four years of bitter confrontation with the Trump administration.

Biden is keen to repair the US’ tarnished international reputation, which means he could be looking for a quick resolution to the trade war with China. Meanwhile, it looks like Brussels could be starting to get cold feet about closer ties with Beijing.

It is not just the emerging political strain; Europe could be re-evaluating its growing economic dependence on China, amid concerns about hostile corporate takeovers and potential threats to industrial security.

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