May 13, 2022

Pushing back on Beijing in the EU-U.S. Trade and Technology Council

When the United States and Europe stood up the Trade and Technology Council (TTC), European Commission officials stressed, “the TTC is not a dialogue on China.” The United States and Europe have long diverged in their approaches to Beijing. However, the Ukraine crisis might be changing that. The gradual shift taking place in Europe might create space for a new agenda in the Trade and Technology Council to address risks emanating from China.

Europe’s stated policy is to approach Beijing as a partner, competitor, and systemic rival. In the past few years, Europe’s approach to Beijing has shifted more toward systemic rivalry. The crisis in Ukraine – and China’s response – could more dramatically shift EU policy on China. Up until this point, a few developments in the EU-China relationship have precipitated Europe’s incremental shift. For one, in March 2021, the European Union imposed measures on four Chinese party and regional representatives in response to Beijing’s human rights abuses. Beijing retaliated by imposing measures on European Union officials, Members of the European Parliament, and European analysts. A year later, Lithuania opened a Taiwan representative office in November 2021. China responded to this move by blocking Lithuania’s imports to China a few months later. Most recently, the April 1 EU-China Summit was coined the “dialogue of the deaf” by Josep Borrell, the EU’s foreign policy chief. Given China’s response to the ongoing crisis in Ukraine, Beijing received a frosty reception. For the first time since the dialogue was launched, the EU and China produced separate readouts from the summit, rather than a joint statement. All of these events have contributed to Europe’s shift toward systemic rivalry with China.

The gradual shift taking place in Europe might create space for a new agenda in the Trade and Technology Council to address risks emanating from China.

Incremental shifts in China policy are occurring not only in European governments, but also in the business community. European industry has long held a cozy position on China, given its sheer market size and the opportunities for investment. However, the Ukraine crisis is illuminating the dangers of doing business with an authoritarian government. While the European business community is often the holdout on adopting a more confrontational China policy, a recent survey from the German Chamber suggests otherwise. In late March, a majority of German companies replied that the Ukraine crisis was affecting their China strategy. Furthermore, 33% of respondents indicated they plan to put business or investments on pause.

Read the full article from Encompass Europe.

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