Chinese Foreign Minister Wang Yi (right) meets EU foreign affairs chief Josep Borrell on the sidelines of the UN General Assembly in New York on September 21. Photo: Xinhua
Opinion
Andrew Hammond
Andrew Hammond
EU policy focus suggests relations with China could join Russia in deep freeze
Ensuring energy security and agreeing on measures against Russia are high on the agenda in Brussels, but equally significant is the EU’s stance on China
China-EU relations have been deteriorating for years and could soon get worse amid talk of Europe ‘increasing realism’ and ‘leaving naivety behind’
Discussions over a big potential gas price measure against Russia is top of the domestic political agenda in Brussels. However, the European Council summit this week might also be remembered for significantly hardening the European Union’s foreign policy position towards China.
Relations between Brussels and Beijing have frayed since 2020, and this week’s summit could move closer to formalising that shift. This development bodes ill for bilateral relations, including the long-negotiated Comprehensive Agreement on Investment whose ratification is frozen in Brussels.
The EU could stick to a three-part assessment of China as partner, competitor and systemic rival, despite this being potentially outdated. However, the European External Action Service, the EU’s diplomatic body, has advised member states in a new document that the “competitor” piece should increasingly be the focus of bilateral relations as Beijing becomes “an even stronger global competitor for the EU, the United States and other like-minded partners”.
This is key, it says, because “China is not going to change” and is “moving to a logic of all-out competition, economically but also politically”. The intervention comes with the claim that “current and foreseeable challenges”, such as human rights abuses in Xinjiang, Beijing’s position on Moscow’s invasion of Ukraine and the imposition of Hong Kong’s national security law, are only likely to “widen the divergence between China’s and our own political choices and positions”.
It also advises the bloc to enhance ties with other Asia-Pacific powers including Japan, India and Australia, diversify supply chains and “intensify efforts to reduce vulnerabilities” in areas including fighting disinformation, cyber, maritime and space security, and innovation and technology. These would build on existing measures, including the new strategy “A Globally Connected Europe”, which is seen as a competitor to China’s Belt and Road Initiative pushing for investments in visible projects to link the EU to the wider world.
The initial response from Europe’s foreign policy elite has been favourable, with Dutch Foreign Minister Wopke Hoekstra saying, “There is increasing realism in the dialogue with China. We are leaving naivety behind.” Meanwhile, EU High Representative for Foreign Affairs and Security Policy Josep Borrell said, “A new discussion on China, with a new analysis, is very timely.”
While the significance of this week’s development depends upon the degree to which EU states adopt the advice, it represents a clear shift in policy tone. Remember that the EU has previously referred to Beijing as Europe’s “strategic partner in addressing global and international challenges”.
In this context of challenge, there are still some areas of common interest and cooperation. These include the importance of an open, multilateral trading system and tackling climate change.
On the economic front, China still hopes the investment agreement with the EU gets ratified. However, the prospects of ratification getting kicked further into the political long grass are growing.
Climate change is another issue where both sides have long had a fruitful dialogue. They have cooperated on developing a cost-effective low carbon economy with their 2015 agreement, for instance, agreeing to intensify cooperation in domestic mitigation policies, carbon markets, low-carbon cities, greenhouse gas emissions from the aviation and maritime industries and hydrofluorocarbons.
Beyond China, the EU also has Russia in its sights given that the energy crisis has worsened since Moscow’s invasion of Ukraine. The European Commission will seek to agree on new emergency regulations to address high gas prices and ensure energy security, going beyond already-agreed measures on gas and electricity demand reduction, gas storage and redistribution of surplus energy sector profits.
Rather than bringing in formal gas price caps, which member states have disagreed on, this new regulation contains around a half-dozen alternative elements. This includes combining EU demand and joint gas purchasing to secure optimal prices and reduce the possibility of member states outbidding each other on the market while seeking to deliver security of supply across the bloc.
A security guard in front of the landfall facility of the Baltic Sea gas pipeline Nord Stream 2 in Lubmin, Germany, on September 19. Photo: Reuters
Moreover, work is under way to develop a price correction mechanism to introduce a so-called dynamic price limit for transactions on the main European gas exchange, plus a temporary price collar to prevent extreme price spikes in derivatives markets. Beyond these short-term measures, a new liquefied natural gas pricing benchmark will be developed by March 31, 2023.
Taken together, these developments underline how much Russia and China are under the EU policy microscope. With relations with Moscow remaining in the deep freeze, there is a growing possibility of EU-China ties moving in a similar direction.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics
