Transatlantic barrier stalls China’s march

China has been concerned at the enthusiastic reaction of European Union (EU) countries such as Germany and France at the election of US President-elect Joe Biden. Germany’s Foreign Minister Heiko Maas remarked recently that “transatlantic friendship is indispensable if we are to deal with the major challenges of our time including China.”

China had drawn immense leverage from the hard knocks given by President Trump to the transatlantic unity, calling NATO “brain-dead”, imposing tariffs on certain German and French exports to the US, publicly rebuking the EU countries to spend more on their collective defence and taking major decisions such as withdrawal from the Iranian nuclear and Paris climate agreements without consulting them.

Finding that the US was considerably enfeebled, had no appetite for new military conflicts and was in a withdrawal mode, China, under President Xi Jinping, had started setting tougher terms of engagement with the US allies and partners in Europe and Asia. Supported by its Belt and Road and other economic initiatives, the EU was divided with the establishment of a group of 17 plus 1 countries, led by Hungary and others, which supported China’s interests.

With the election of Biden and his call for the establishment of a “united front of the USA, its allies and partners to confront China’s abusive behaviours,” the tables have suddenly turned. China finds a different EU with more tenacious leaders and considerable hardening in their terms of cooperation with China.

EU leaders are now asking China for more market access, elimination of subsidies to China’s state-owned enterprises (SOEs), fair terms of trade and putting restrictions on the SOEs for takeover of assets in the EU markets, demands that the US had been making; they have told her that a comprehensive agreement on investment would hinge on China making stronger offers. China is hoping that the EU countries would not follow the US direction in starting a new ‘cold war’, economic decoupling and exclusion of Huawei from their 5G networks.

The new undercurrents are perceptible across several EU countries. Slovakia joined the other east European countries in signing declarations with the US in October, aimed at rolling back the Chinese influence in 5G telecom infrastructure. The Netherlands has become reluctant to renew an export licence for the sale of critical microchip technology to China. Even an indebted Italy is now trying to balance its economic relationship with China with the need to send a ‘friendly’ message to Washington.

What is galling to China is that the EU countries are now asking her to respect the human rights of its minorities in Xinjiang and Tibet, guarantee freedoms to Hong Kong and release the Canadian nationals, Michael Kovrig and Michael Spavor (arrested by China to seek the release of Huawei top executive Meng Wanzhou) and Chinese dissidents like Gui Minhai. When Xi Jinping told the EU leaders that China would not accept their lectures on human rights and the EU should mind its own human rights record, EU leaders pushed him back saying that China’s human rights violations were ‘systemic’.

Xi, who has cultivated a strongman’s image, has little leeway to compromise on market access, state subsidies or human rights issues. There were earlier plans to invite the Chinese President to a meeting with the members of the European Council (EC) next year; these have been dropped for now. Instead, the EC is inviting the US President to discuss the shared priorities.

In Asia, too, the senior Chinese leaders are at work to deal with new maelstroms stirred by the resumption of transatlantic unity. Foreign Minister Wang Yi recently visited Tokyo to mend fences over the recurrent dispute with Japan over the Senkaku islands. Wang told Japanese PM Yoshihide Suga that Xi wanted to build good working relations with him and the Senkaku dispute should not come in its way.

The two sides agreed to resume business travel and set up a hotline to manage their maritime dispute. Japan’s dispute with China is relatively minor and PM Suga is hedging to improve relations with China and other countries while maintaining close ties with the US.

Chinese President Xi Jinping is contemplating a visit to South Korea after the coronavirus situation stabilises. But South Korean President Moon Jae-in is already under considerable domestic pressure for his China-friendly approach amid escalating anti-China sentiment in the country.

Chinese PM Li Keqiang held a video summit with the leaders of ASEAN countries in the middle of November and urged them to “take a flexible approach to speed up the negotiations for a code of conduct to demonstrate to the international community that they and China have the wisdom to control the situation in the South China Sea” to avoid external (read US) interference.

China’s attitude towards Australia has been more obdurate, telling Canberra to cease any criticism of China, be it for Covid-19, its human rights record and domestic interference. Similarly, China has been truculent in its posture towards India, arguing that the latter has drifted towards the US in its rivalry with that country, an accusation India has denied. China is putting immense pressure on both India and Australia to change course, but these countries have stoutly resisted Beijing’s depredations.

The restoration of transatlantic unity has hurt the considerable leverage that China had started enjoying in pursuing a hawkish foreign policy. A Biden presidency would open new debates along new parameters among the US allies and partners on how best to collectively deal with a rising and aggressive China. The Chinese are hoping that their quick diplomatic moves with the US allies and partners may help in restraining some of them, and side completely with the US.

As the US, its allies and partners in Europe and Asia begin to push back the unfair economic policies and abusive behaviour of China collectively, the terms of engagement set by Beijing earlier, would, undoubtedly, undergo a change. The Chinese leadership is making its best efforts to ensure that they don’t lose too much in the new political alignment.