Europe Needs to Shed its Naivety about the Values Conflict with China

It seemed like a diplomatic masterstroke when President Xi Jinping convinced Chancellor Angela Merkel, President Emmanuel Macron, and the rest of the EU leaders to sign on to the Comprehensive Agreement on Investment (CAI) in December, short-circuiting any coordination with the soon-to-enter-office Biden administration. However, on Thursday the European Parliament adopted a resolution that confined the CAI to the deep freezer. This was a rational reaction after China’s spree of rash sanctions on members of the European Parliament and other EU actors earlier this year.

Even against that grim background, some European diplomats still cannot believe that China’s leadership really is willing to sacrifice such an economic opening by its sanctions in response to EU sanctions on human rights abuses in Xinjiang. A German diplomat told me how much they conveyed to their Chinese counterparts that China overreacted and that its actions amounted to a self-inflicted wound. The hope seems to be that the Chinese leadership will act purely based on economic opportunities. But that remains wishful thinking.

My reading is that Beijing enacted its sanctions in the full awareness that such a move could sink the CAI. Xi invested personal capital in the investment agreement but he has several priorities that rank higher. Above all, he wants to stay in power. Next year he renews his mandate with the top brass of the Communist Party. Although Xi seems to be untouchable, having even codified his thinking into the constitution, he will still be on the lookout for internal enemies or dissent. Absolute power breeds paranoia. That means acting tough at home and abroad will be the default option for Xi.

Xi will also continue to ride the wave of Chinese nationalism. That was evident in the democratic community’s outcry over the horrible human rights conditions in the province of Xinjiang afflicting the Uighur minority. As a response, China’s leadership orchestrated a battle with Western clothes brands that had stopped sourcing cotton from Xinjiang due to the conditions there. China’s consumers were galvanized on the country’s stymied social media, where nationalism is their only legitimate valve to vent anger. This means Western businesses increasingly experience China as a politically riskier place. Again, this does not make economic sense for China, but it does for Xi. It also means his minions in China’s authorities will push on relentlessly with their “wolf warrior” diplomacy. No sweet economic deal with the EU can change this calculus.

Additionally, Xi fears that the Biden administration could succeed where the Trump administration failed by rallying the United States’ democratic allies in a united front against China. Trump gave U.S. China policy hard edges, but he never managed to consistently bring others to support it. Biden could achieve that. Currently, a United Kingdom-led G7 outreach to democratic allies is hitting back at China’s digital authoritarianism and even led to the novelty of a mention of Taiwan in a G7 foreign ministers’ statement, sparking a strong rebuke from Beijing.

To prevent such an alliance from forming, China is lashing out at the United States’ allies to raise the costs. “Kill the chicken to scare the monkey” is a fitting Chinese saying for this strategy. That explains Beijing’s strong stance and its heavy sanctions on Australia. By hitting hard enough, it hopes to split the EU. As the Ministry of Foreign Affairs’ spokesperson Hua Chunying said, “not all US allies…follow the U.S. blindly. Some EU countries are under coercion to do so.” She went on to praise Hungary for breaking ranks with the rest of the EU on Xinjiang sanctions.

All of the above means that the current sanctions skirmish is merely the opening shot in a heightened cold war with Europe on values, rather than an overreaction that China will soon correct as rose-tinted diplomatic eyes still see it in Berlin and in some quarters of Brussels.

There is no turning back to what some once labelled a golden era of engagement with China. The logic of China’s leadership dictates more values battles ahead. The need to shed any naivety about China should dawn upon all EU members. The riposte to Beijing lies in building a position of consistent and unified strength. The EU needs to work with other allies to raise the costs for China of its authoritarian coercion. Beijing leaves it no other choice.