Von der Leyen seeks confrontation + Boao Forum

Von der Leyen shows clear lines toward Beijing

By
Amelie Richter

Shortly before her first trip to Beijing as head of the EU Commission, Ursula von der Leyen gave an idea of what she has to say in the Chinese capital in a surprisingly clear speech on EU-China relations. At the event organized by the think tanks European Policy Center and the Beijing-sanctioned Merics Institute in Brussels on Thursday, she advocated a joint EU-wide China policy. She called for “de-risking” in strategic areas rather than full decoupling. The EU triad of “partner, competitor, rival” usually repeated by officials to describe the relationship with the People’s Republic went unmentioned.

Together with France’s President Emmanuel Macron, von der Leyen will travel to China next week. The speech struck a challenging tone in advance. Von der Leyen has already spoken critically about individual aspects of EU-China policy in the past. However, this was the first time she gave a pure keynote speech on relations with Beijing. An overview of the most important points:

Geopolitics

• Brussels must completely reorganize its China policy: “our relationship is unbalanced and increasingly affected by distortions created by China’s state capitalist system,” said von der Leyen. They must be brought back into balance. However, it was “neither viable nor in Europe’s interest” to distance itself from Beijing in the process. “This is why we need to focus on de-risk,” she stressed.

• Beijing’s position in the Ukraine war and its relationship with Russia plays a central role in future EU-China relations: “How China continues to interact with Putin’s war will be a determining factor.” The pictures of the meeting between China’s leader Xi Jinping and Russia’s President Vladimir Putin would say more “than a thousand words”. Xi is maintaining his “no-limits friendship” with Putin and sees this as an opportunity to gain influence over Russia, which until now has dominated the power balance in their relations, said von der Leyen.

• The EU Commission chief was inclined to reject China’s 12-point plan for peace in Ukraine: “Any peace plan which would in effect consolidate Russian annexations is simply not a viable plan.” China must work for a just peace, she urged.

• The EU Commission chief generally sees Beijing taking a tougher stance in enforcing its wishes on other countries. The human rights track record in particular, she said, points to a general hardening. “These escalatory actions point to a China that is becoming more repressive at home and more assertive abroad,” von der Leyen said.

• China is a “fascinating and complex mix of history, progress and challenges. And it will define this century.” The story of how the EU deals with this is not yet fully written and does not have to be defensive, von der Leyen stressed.

Trade

• For the most part, trade of goods and services continues to be “mutually beneficial” and free of risks.

• But: The EU Commission President raised the prospect of new limits on investment by European companies in China. She said the EU must prevent capital and expertise of European companies from helping to “enhance the military and intelligence capabilities of those who are also systemic rivals”. But these safeguards should only apply to “a small number of sensitive technologies”. According to EU circles, work is already underway on a targeted foreign investment tool, known in the US as outbound investment screening.

• In addition, the Comprehensive Agreement on Investment (CAI) concluded with China in late 2020 is to be revised, according to von der Leyen. The EU Commission chief suggested publicly for the first time that the agreement might not be pursued because “the world and China have changed significantly in the last three years”. CAI is currently shelved anyway. Most recently, EU circles reported that Chinese officials in Brussels have offered to lift sanctions against MEPs in exchange for confirmation of CAI.

The speech of the head of the EU Commission was unexpectedly direct and in line with her recent tendency to take a more assertive stance on China policy. This was already evident at von der Leyen’s meeting with US President Joe Biden in Washington. Beijing is likely to be upset by the speech. China will accuse Brussels – not for the first time – of being a pawn of the USA.