Europe Says No to Decoupling from China

While the idea of “de-risking” would literally mean reducing dependence on China – which some might see as a good sign – “de-risking” mainly means better management of trade and economic ties with China. After all, the EU sees China as an economic competitor. Therefore, devising new strategies to manage this competition makes perfect sense not only for the EU but also for China. As a leading US media outlet said in one of its reports, the EU has basically decided not to “piss China off.”

The real question is: Why is the EU, despite China’s overall pro-Russia position on Ukraine, devising a strategy that does not involve the kind of “decoupling” that the EU has effected vis-à-vis Russia in terms of energy supplies? There are several crucial reasons for the ongoing strategic rethinking in the EU vis-à-vis China.

First of all, the EU leaders tend to believe that China itself is eager to maintain stable economic ties with the EU. As opposed to Beijing’s estranged ties with the US, China intends to maintain a healthy, although competitive, environment with the EU. Doing this is very much possible since the EU is not as deeply entangled with China in geopolitical flashpoints, such as Taiwan and the South China Sea, as the US is. For the EU, therefore, continuing trade ties with China present an opportunity that should be exploited to the best possible extent, even if this continuation does not fit very well with the nature of the US-China ties.

Secondly, the EU is a 27-member bloc, which can be – in fact, it is – internally very diverse, with many EU countries following or favouring alternative policy positions. This internal divergence makes it extremely difficult for any given actor within the EU to impose its position on the bloc. This internal divergence also means that finding consensus on minimum common ground is equally difficult.

We have seen that German and French leaders have visited China in the recent past, but we have also repeatedly seen President of the European Commission Ursula von der Leyen taking a tougher position on China, showing how the three key EU leaders are not necessarily unanimous, making it extremely difficult for a) the US to make the bloc follow a single set of policies of “decoupling”, and b) the EU to devise its best China policy that stresses “de-coupling” over “de-risking”.

Even though some countries advocate a tougher position, the declaration of the latest EU summit in Brussels said that “Despite their different political and economic systems, the European Union and China have a shared interest in pursuing constructive and stable relations, anchored in respect for the rules-based international order, balanced engagement and reciprocity,” adding that Europe “does not intend to decouple or to turn inwards” or adopt policies “to harm China, nor to thwart China’s economic progress and development.”

Thirdly, the EU does not see the kind of interest that “decoupling” would yield for the bloc, as a potential “decoupling” would supposedly serve the US and harm the EU. Unlike the US, the EU, as it stands, is not trying to preserve its own hegemony by engaging China in a conflict.

Therefore, the EU’s stance – and the language it has been expressed in – is markedly different from the language the US officials normally used to report on their interaction with China. For instance, after Blinken met Chinese officials in June, he said he “warned” China about its foreign policies. Earlier in February, Blinken had sent yet another warning to China about its support for Russia.

But the EU, as is evident from the latest declaration, has a position that stresses cooperation over warnings and conflict. Although the EU disagrees with various policies of China, including its Ukraine stance, there is no desire within the bloc, on the whole, to pick a conflict with Beijing and deliver yet another economic blow to the continent, which is still not fully recovered from the effects of “decoupling” from Russia. “Decoupling” from China, therefore, will “kill”, to quote Hungary’s foreign minister, “Europe’s economy.” Various assessments prove this scenario.

For instance, the Seeheimer Circle, an official think tank inside the party of the German Chancellor, released a paper last April on Germany’s relationship with China calling for a “multi-dimensional” – that is, open – policy towards the Asian giant. An “abrupt end to trade relations with China” would be “an economic disaster,” the paper argued, rejecting an “anti-China strategy.”

Therefore, while a potential “decoupling” from China might help the US regain its position of economic and financial dominance at the global level, the EU sees no glory. The EU leadership is cognizant of this fact, which is why key EU leaders are not in line with the US. Instead, various EU pronouncements show an ongoing struggle within the bloc with regard to developing a strictly European strategic vision vis-à-vis China.

Source

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.

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