EU Council President Charles Michel’s upcoming visit to China shows that energy-starved Europe wants to secure economic ties with Beijing.
Fearing an economic downturn due to the Ukraine conflict – and deepening tensions between Russia and the West – Europe’s top leaders are reaching out to China, signalling a crack in the US-led Western resolve against the rising Asian giant.
Following German Chancellor Olaf Scholz’s visit to China earlier this month, EU Council President Charles Michel will also go to Beijing to meet the country’s paramount leader Xi Jinping on December 1, according to European diplomatic sources.
Many European countries – from Germany to Holland – hesitantly joined the US-led Western alliance against Russia over the Ukraine conflict.
But as the Russian offensive continues, some capitals like Berlin and Amsterdam are feeling an increasing economic pressure to reach China to ease their tight finances.
Experts believe Michel’s visit demonstrates a potential split in the Western camp to go against China in a unified fashion. Michel’s visit is coming after US President Joe Biden’s three-hour meeting with Xi in Indonesia’s Bali during the G20 summit.
“The US definitely wants to isolate Beijing, expecting Europe to join Washington’s anti-China alliance. But as we are clearly witnessing in the Ukraine conflict, Europe has paid the heaviest price for Washington’s Russia policy,” says Bulent Guven, a Turkish-German political scientist.
According to Guven, the energy-rich US is not facing any shortage of gas or oil unlike its European partners which are struggling to meet their requirements, leading to public discontent.
The Netherlands has already lifted some sanctions on Russia to ease pressure over its economy and has indicated that it will reach out to China as well.
“The Netherlands will not copy the American measures one-to-one,” said Dutch Foreign Trade Minister Liesje Schreinemacher in an interview this month, referring to Washington’s export controls on China.
French leader Emmanuel Macron has also signalled that he will visit China in the beginning of the new year in a bid to recalibrate Paris-Beijing ties, showing another crack in the Western camp against Beijing.
“I am convinced China can play, on our side, a more important mediating role in the coming months, to prevent in particular a stronger return of ground offensives in early February,” said Macron, referring to the Ukraine conflict. Macron’s statement is another indication of increasing differences over the West’s China policy.
Among others, Germany appears to be the biggest loser in the Western camp. With gas supply cut off from Russia – Germany’s biggest supplier before the Ukraine war – Berlin is facing an unprecedented energy crisis which has largely impacted Europe’s largest economy, pushing the country to the edge of a financial shock.
As a result, Germany, stung by sky-high energy prices, is desperately seeking to secure not only gas supply to tide over the harsh winter months but also open up alternative trade routes with bigger economies like China to uptick its finances.
Under huge economic pressure, which has led to anti-government protests, Scholz needed to pay a visit to China and meet Xi, who marched to an unprecedented third term as the Chinese Communist Party’s paramount leader. But the visit was scoffed at by many in the US and some other Western states.
“Germany thinks that a US-centric China policy, which is similar to Washington’s Russia policy, could cost Europe dearly, particularly in economic terms,” Guven tells TRT World, referring to Scholz’s need to visit China with a large delegation. Scholz’s team included top business leaders from BASF, Volkswagen and Bayer which have invested in the Asian giant.
“If China is changing then our approach to China must change,” the Chancellor was quoted as saying prior to his visit to Beijing, signalling Germany’s opposition to the US approach toward the world’s second biggest economy.
In September, in a sign of Germany’s problematic gas supplies, Scholz unveiled a large package to help German households “get through this winter”. With his recent China visit, the chancellor wants to keep German trade ties with China intact to save Berlin from an economic downturn, according to Guven.
Despite his efforts, things can get ugly in Germany, experts say, as the country’s top industrial players recently warned Berlin that anti-China measures would deeply hurt the European country.
As an ominous sign of Germany’s growing problems, Scholz’s China visit, which lasted just 11 hours, faced much criticism both inside and outside Germany.
He is the first Western leader to visit Beijing since the rage of the global pandemic. Reinhard Butikofer, a member of Germany’s Green party, which is a coalition partner of Scholz, called it “the most controversially debated visit in the country for the last 50 years”.
Also some opposition political parties in Berlin publicly rebuked the chancellor, labelling his reach to Xi as an appeasement to the new Chinese Communist Party leadership. On the other hand, Macron, one of the leading voices in the EU, offered Scholz to go to China together to show Beijing that Europe as a continent acts together.
But Scholz declined Macron’s proposition, showing another crack in the Western alliance in relation to conducting its China policy. Despite much opposition from even his coalition partners and the US, Scholz also allowed China to obtain a critical stake in a Hamburg port terminal, showing his insistence on tightening Beijing-Berlin ties.
“The chancellor is a native of Hamburg. Despite opposition from six ministers of his cabinet, including interior and finance ministers, he approved the Chinese bid to buy a stake of 24.9 percent of the terminal,” says Guven, underlining Berlin’s internal infighting on the country’s China policy.
But some saw Scholz’s move to approve the Chinese bid as a generous offer to Beijing prior to his visit to China. “It appears that Scholz, shortly before heading to Beijing, is offering the Chinese government a gift,” said Noah Barkin, an expert on EU-China relations at Rhodium Group, an American think-tank.
German dependence on China
Scholz needed to deliver such a “gift” to China because he wanted to secure the German automotive industry’s investments in the Asian giant, according to experts.
“Some German companies have a big dependence on China. The German automotive industry has strong investments in China,” says Guven, referring to companies like Volkswagen, Mercedes Benz and BMW. These ties played a critical role in Scholz’s visit because he wants to protect their market share in China, he adds.
Germany’s political connections with countries like China have been formulated under a policy coined as Change through trade, a term developed by former Chancellor Angela Merkel.
“The German economy is so intertwined with China that breaking that dependency by clashing in the short-term could seriously harm the German economy and German companies. That’s why he’s so cautious,” says Guven.
As a result, unlike Russia-West connections, which have quickly deteriorated in the wake of the Ukraine conflict, Germany wants to rearrange its China ties in an incremental process “spread over time”, says Guven. Under US pressure, Europe as a whole aims to rearrange its trade ties with China, adds the analyst.
“On top of cutting off … imports of energy and resources [from Russia], cutting off the market [from China] would be economic suicide,” said Cui Hongjian, an expert at the China Institute of International Studies, a Chinese think-tank.
Raffaello Pantucci, a senior associate fellow at Royal United Services Institute (RUSI), a British think-tank, also believes that Scholz’s China visit marks a return to “the approach that Europe had to China previously.” A lot of other people and countries are also returning to their previous positions in regard to China, he tells TRT World.
While European states continue to call out issues like Taiwan and Xinjiang Uighur Autonomous Region, they also aim to bring their economic relations with China back to pre-pandemic levels, moving forward, according to Pantucci.