Reassessing the EU role
By the way, an interesting tradition has already formed in the PRC’s foreign policy, according to which the European direction is not responsible for the head of state, but for the Premier of the State Council (this underlines the importance of the economic, and not the political component of relations). It was Premier Wen Jiabao who, before 2012, represented the Chinese side at bilateral summits of the PRC-EU, and it was he who carried out most of the visits to European countries. This tradition continued after the change of power in Beijing.
The reassessment of the importance of the European direction for the PRC's foreign policy occurred, in my opinion, in 2005 – 2006. It was then that it became obvious that the EU leadership was unable to solve a number of problems in relations with Beijing: first of all, to eliminate the supply embargo weapons in China, introduced back in 1989, in response to the events on Tiananmen Square, and finally recognize China as a market economy country. As a result, Chinese leaders began to react more and more rigidly to the comments of Europeans regarding their domestic policies and to the accusations of trade dumping. In addition, other areas of Chinese diplomacy became important - relations with African countries, with countries of Southeast and Central Asia, new formats of international dialogue appeared - the SCO, the G20, RIC and BRICS, the bilateral dialogue with the USA intensified (even about the notorious "kimerike"). Europe, torn by internal problems, became less and less interesting for China, although it remained the largest (after the USA) trade and economic partner of the PRC in the world. (It should be noted that at about the same time, in the middle of the first decade of this century, the leaders of the Russian Federation switched from Eurocentrism as the basis of Russia's foreign policy to a more balanced position. This fact was openly recognized recently by Russian President Vladimir Putin in his speech on the annexation of the Crimea.)
The economic and financial crisis of 2008 of the year, which affected the EU countries, perhaps more than other countries, contributed to the rapid growth of this trend. As a result, in Beijing there was a cardinal reassessment of the role of the EU and Europeans in the world (despite the fact that the relative share of the EU countries in the total volume of China’s trade and economic cooperation with the rest of the world even increased from 2008). Since 2009, the delegations of the EU and individual European countries have increasingly acted in Beijing as economic aid seekers (without ceasing, however, to lecture the Chinese on human rights and the situation in Xinjiang and Tibet). While China, as a result of the global economic crisis, consolidated its position, it finally turned into the second superpower and began to realize itself in that capacity.
The change in the balance of power is now openly recognized by Chinese experts in the field of international relations. For example, during a meeting with employees of the Institute of Russia, Eastern Europe and Central Asia of the AON of China in October last year, the deputy head of the foreign policy department, Mr. Zheng Yu, stated that the significance of relations with the EU countries for China is falling, as the crisis affected them more than the USA. In addition, according to Mr. Zheng Yu, relations with Washington are more important from an economic point of view (after all, Americans are experiencing temporary difficulties, which cannot be said about Europeans). It is not surprising that the volume of economic ties between China and European countries will be reduced, at least in percentage terms. The same position can be traced in a number of scientific publications.
However, an unexpected visit by observers XI Jinping to four European countries at the end of March 2014 in the four European countries, as well as to the headquarters of UNESCO and the EU shows that Beijing is still trying to pursue a balanced foreign policy and is seeking to increase the level of contacts in the European direction (possibly temporarily).
The choice of countries that Jinping visited during his European tour is predictable: Germany is China’s main partner in Europe (Germany accounts for a third of Chinese-European trade), France is a traditional partner with which China established diplomatic relations half a century ago (Paris was the first western capital, which recognized communist China), Belgium (where the headquarters of the EU is located), as well as the Netherlands, which has a long history relations with China and the second after Germany bilateral trade. It was especially emphasized that this was the first visit of the PRC Chairman to Germany in 8 years, the first ever visit to the headquarters of the EU and Holland, the first visit to Belgium in 27 years.
Commenting on the results of the Xi Jinping tour, Chinese experts emphasized that in recent years, serious changes have taken place in relations between the PRC and the EU. First of all, we are talking about the transition from trade to mutual investments (albeit, since 2012, the annual volume of Chinese investments in the European economy far exceeds the EU investments in the PRC). The strategic dialogue is also intensifying (according to Chinese experts, the consultations of the PRC and the EU on the development of African, Central Asian and Latin American countries indicate that the European Union is “coming out of the shadow of NATO” and is actively trying to participate in creating the international security system). Political analysts also note China’s desire to attract European countries to its New Silk Road projects (judging by the fact that during his visit to Sochi, Xi Jinping lobbied for Russia to join these projects, it can be considered their main “locomotive”). In addition, the Chinese side expects to start, finally, negotiations on the creation of a joint free trade zone with the EU (so far the Chinese have managed to conclude an agreement on the formation of such a zone only with Switzerland, which is not part of the Union).
According to Chinese commentators, earlier contacts between Beijing and Brussels were at the level of prime ministers, since the head of the European Commission, like the Chinese prime minister, is in charge of trade and economic issues in the first place. However, some experts believe that the working mechanism of China-European relations may change. Although this does not contradict the conclusion made at the beginning of the article that the importance of relations with the EU for China continues to decline.
Chinese boom in Europe
On the other hand, actively using the so-called “soft power”, the Chinese have formed a positive image of the PRC in Europe and laid the foundation for a kind of “Chinese boom”. It seems that the years of culture, student exchanges, numerous seminars, inter-party communications, Confucius institutions, the indirect purchase of experts and specialists in China by inviting them to work and internship in the country (with appropriate financial support) ultimately bore fruit. And now the Chinese commentators are pleased to state that the European countries were swept by the “Chinese wave”, and they are drawing analogies to the 18th century, when Europe was experiencing a boom of enthusiasm for China.
True, the current wave, in their opinion, is more prolonged and saturated. For the reason that at the moment relations between China and Europe are not burdened by heavy historical heritage. In the economic sphere, the parties complement each other, and the PRC remains the second largest trading partner of the EU. Europe, for which the vital economic recovery after the protracted debt crisis, is vital, is counting on further attracting Chinese investment and the influx of tourists from China.
All this contributes to the rise of general interest in the PRC. In mass consciousness, China is no longer shrouded in mystery. It is a symbol of the present. “Made in China” is no longer a stigma that speaks of the low quality of the product; now this inscription can be seen on products created using the latest technologies. Chinese Sanyi corporation has its own production base in Germany, Chinese ships - frequent guests in the ports of Hamburg and Rotterdam, Chinese telecommunications companies Huawei and Zhongxing open their offices throughout Europe.
As a result, according to some experts, Europe’s attitude to the Chinese model has changed dramatically: admiration has replaced doubt. And, perhaps, with individual reservations with this statement, we can agree.
The European direction of the PRC’s foreign policy, which in the first decade of this century (especially in the first half of it) was one of the key ones, seems to be losing its former importance today. Ten years ago, China viewed Europe as a springboard for advancing its geopolitical and economic interests, as one of the main directions of the “peaceful rise” of the PRC, and good relations with the EU as a great way to increase its influence in the world. This explains the close attention of the Chinese leadership to the position of European leaders, and the desire to take into account the demands of the Europeans in foreign and sometimes internal (for all disagreements on the observance of human rights) policies.
However, by the end of zero years, Europe, torn by internal problems, became less and less interesting for China, although it remained the largest (after the USA) trade and economic partner of the PRC in the world. The reason for this is the financial crisis of 2008 of the year, which affected the EU countries, perhaps, to a greater extent than other countries. As a result, a fundamental reassessment of the role of the EU and Europeans in the world occurred in Beijing.
New formats and new partners
This is evidenced at least by the fact that Beijing without thinking about Brussels began to actively establish bilateral economic ties with troubled European countries (countries of Central, Eastern and Southern Europe), drawing them into its orbit. And with the beginning of the second decade of this century, he even moved to the formation of the so-called sub-regional cooperation format, creating an independent forum China - the CEE countries with headquarters (or rather, the representations of the participating countries) in Beijing.
As part of this forum, the Prime Minister of China regularly holds meetings with the leadership of all CEE countries, alternately in Beijing, then in the capital of one of the countries in the region. The last summit of China - the countries of CEE was held in the Romanian capital Bucharest in November 2013. The meeting adopted the so-called “Bucharest” program for cooperation between China and the CEE countries. China and Romania agreed to set up an infrastructure development working group. The government of the PRC promised to invest in the construction of a railway between Hungary and Serbia. They discussed joint projects in the field of nuclear energy, thermal and hydropower. In general, the package of proposals put forward by Li Keqian makes it possible to double the volume of bilateral trade within five years.
People in Beijing insist that business contacts with the countries of Central and Eastern Europe are a great success for Chinese economic diplomacy, designed to "assist bilateral economic integration, satisfy mutual interests, and promote the transformation and modernization of Chinese industry."
According to Chinese experts, as a result of the European debt crisis, many CEE countries faced a financial deficit, infrastructure backwardness, a decrease in exports, and other problems. While China, thanks to the reforms that have been carried out in the last 30 years, was able to accumulate relatively large capital, seize significant advantages in the field of construction of high-speed railways and roads, as well as in the production of atomic, wind, water and solar energy.
As a result, there was space for bilateral cooperation. CEE countries can solve the development problems they face, and China can export their goods and technologies. The Chinese openly admit that “economic diplomacy” allows promoting the interests of China in Europe. The peculiarity of this diplomacy is that China closely links its activities in the European direction with the situation in key sectors of the economy, for example, in the construction of high-speed railways. At the same time, enterprises and the government manage to act very harmoniously.
We note that cooperation between China and CEE is perceived by both parties precisely as “bilateral” and not multilateral. In other words, China considers the countries of Central and Eastern Europe not as members of the EU, but as a separate structure, their special partner in the European direction. And, I must say, the representatives of these countries with such a position, albeit with reservations, but agree.
The change in the balance of power was most pronounced in 2013 during the conflict over the export of Chinese solar cells to EU countries.
It all started with the fact that in the spring, European Trade Commissioner Karel de Gucht announced that the EU intends to impose additional duties on imports of solar panels from China. Moreover, the increase in duties was planned to be quite substantial - in case the agreement could not be reached, the EU should introduce temporary (for two months) duties for solar energy products with 6 June in the amount of 11,8%. And from August 6 to increase them by four times - almost to 50%.
The decision of the European Trade Commission was not supported by a large number of EU countries, among which was the main Chinese partner in Europe - Germany (despite the fact that it was German manufacturers of solar cells that were rumored to initiate an anti-dumping investigation against China). It should be noted that the situation when leading countries at the government level do not support the decision of nominally higher European bodies becomes common practice in the EU.
In response, State Council Premier Li Keqiang, during his first trip to Europe as Prime Minister from EU member states, limited himself to Germany, while Wen Jiabao usually visited three or four countries plus Brussels. In addition to Germany, Li Keqiang also visited Switzerland, which is not a member of the European Union and recently signed an agreement with China on the creation of a free trade zone.
Despite the mediation efforts of Germany, the European Commission nevertheless introduced temporary duties from June 6, to which the Chinese side responded with extremely harsh comments. And after that, she threatened to take retaliatory measures to limit the import of luxury European-made cars to China. Note that the PRC is (along with the Russian Federation and the United Arab Emirates) the main buyer of such machines.
However, Beijing soon refused this measure (I think it happened under pressure from partners from the Federal Republic of Germany, because it was German firms that mainly produce luxury cars). On the other hand, he began a response antidumping and antidote investigation in respect of wines imported from Europe. And this move proved to be more effective, since the restrictions on the import of wines were supposed to affect just those countries (France and Italy) that supported the decision of the European Commission.
As a result of negotiations, which lasted almost the whole summer, the parties made mutual concessions. The EU canceled the duties, China agreed to set the price at 56 eurocentes per watt (the Europeans demanded to double it from 40 to 80 eurocents) and import solar modules with a total capacity of no more than 7 GW per year.
It seems that starting the next anti-dumping investigation (the right to which the EU structures retain, since they still do not recognize China as a market economy country), the European leadership did not understand the situation too much and seriously overestimated its strength. During the conflict, it turned out that imports from China already occupy about 70% of the solar cell market in Europe and make up about 90% of their total imports (the European market, due to environmental preferences, is today one of the main markets for solar cells). In addition, Beijing found its counterparts, which turned out to be very effective.
It is also worth noting the ability of the Chinese side to react flexibly and learn on the go (a quick transition from pressure on Germany, which already opposed anti-Chinese sanctions, to pressure on France, which was, as it turned out, their initiator). In general, it can be stated that as a result of the conflict, Beijing made insignificant concessions, retaining the European market for solar batteries in full.
The EU’s attempts to force Chinese airlines to pay additional duties for excessive emissions to the atmosphere ended in the same way (the Chinese authorities simply recommended their companies not to pay these duties).
The crisis in Ukraine
As for the crisis in Ukraine, which split Europe into two camps, the PRC leadership managed to “get up above the fight” here, taking the neutral position of an arbitrator calling on the parties involved in the conflict to keep “within the rules”. This was facilitated, in our opinion, by the fact that China is ready to sacrifice part of its economic dividends (and he managed to conclude large contracts with the former Kiev authorities, including those relating to Crimea) for the sake of long-term strategic interests. In addition, the economic power of Beijing allows him to be confident that any power, after normalizing the political situation in the country, will continue to cooperate with the PRC and take care of Chinese interests in Ukraine.
In this connection, it should be noted that during Xi Jinping’s visit to Europe, which took place just at the time of the extreme aggravation of the crisis, the Chinese side managed to almost completely avoid discussing events in Ukraine, limiting itself to calls for “resolving the conflict by peaceful means.” At the same time, both Russia and the EU representatives had the impression that the leadership of the PRC supports precisely their position.