EU

The relationship between China and Europe is complex. Economic and political interests must be weighed up. Russia and the USA are important factors in these negotiations. All the news on the relationship between China and Europe is available from the Table.Media editorial team. Relations between China and the USA China and the EU have partly common and partly opposing interests. Both politically and economically. The trade volume shows how important the relationship is for both countries. This amounted to EUR 586 billion in 2020. Europe exported goods worth EUR 202.5 billion to China and imported goods worth EUR 383.5 billion. This made China the EU's most important trading partner for the first time in 2020, excluding services. Russia and, above all, the USA have a major influence on the relationship between Europe and China. The government in Washington wants to prevent China from becoming the leading technological and military power. The USA is currently disentangling its own economy from China's and is looking for new partners and trade agreements. Just like the People's Republic. The EU sees itself as a dual-option power that is seeking partnerships with both countries. CAI investment agreement put on hold The CAI – Comprehensive Agreement on Investment – was intended to facilitate investment and trade between China and the EU. However, due to political tensions, particularly over the human rights situation in Xinjiang, the EU Commission suspended negotiations in summer 2021. Negotiations between the People's Republic and the EU have been ongoing since 2013 and the agreement was originally due to be ratified by the EU in 2022. The Chinese government has already signed. The CAI investment agreement should have solved key problems for European companies in China. First and foremost, the imbalance of closed markets in the People's Republic. While Chinese companies in Europe are not subject to any significant restrictions, some markets in China remain closed to European competitors. Particularly in the areas of transportation, telecommunications equipment, chemicals and the financial services sector. The CAI investment agreement should also have abolished the joint venture obligation in the automotive industry. The forced transfer of technology should also have been ended. This is because European companies are only permitted to make direct investments in China if they pass on their research results to a Chinese partner. The European automotive industry in particular is hoping for the CAI investment agreement. Relations between Germany and China Within the EU, Germany is China's largest trading partner. The trade volume between the two countries totaled EUR 212.1 billion in 2020. Germany imported more (EUR 116.3 billion) than it exported. Although Germany is a key negotiating partner for the People's Republic when it comes to relations with the EU, the relationship between the two countries is tense. Above all, human rights violations in China are putting a strain on relations with Germany and Europe. Germany criticizes the lack of freedom of the press, freedom of assembly, freedom of expression and freedom of communication in China. Through trade with China, Germany believes it can have a positive influence on the human rights situation in China. However, the relationship between China and Germany is not only politically but also economically strained. Despite the high volume of trade. The background to this is the German government's concern that it is not an equal partner, while China benefits disproportionately from the partnership. A reciprocal relationship with the People's Republic has been an important goal of German foreign and economic policy for years. The New Silk Road in Europe The New Silk Road is China's global infrastructure project. The People's Republic wants to optimize land and sea routes between Europe and the Asian region. Europe plays a particularly important role in one of the land routes. The route is to run to Germany via Kazakhstan, Russia, Ukraine/Belarus, Poland and Slovakia. Around 150 countries have concluded so-called Memorandums of Understanding (MoU) with China. These are declarations of intent to cooperate. 18 out of 27 European countries have one, Germany does not. Within the EU, Greece is regarded by China as a gateway to Europe. As part of the Belt and Road Initiative, the China Ocean Shipping Company (COSCO) has acquired a total of 51% of the port of Piraeus. It is now the largest container port on the Mediterranean. However, COSCO drastically cut the salaries and social benefits of the port workers and also received massive tax concessions that violate EU state aid regulations. China's geopolitics: EU as partner or adversary? China wants to become the world's largest economic and military power and a leader in technology and innovation by 2049. A goal that the People's Republic is working to achieve without taking into account the interests of other nations or minorities in its own country. This has led to major political upheavals and the formation of blocs. On the one side is the USA, on the other China and, to a lesser extent, Russia. Europe sees itself as a dual-option region that wants to cooperate with both blocs. Due to increasing tensions, but also because the coronavirus pandemic has shown how vulnerable global supply chains can be, China is increasingly focusing on dual circulation. A strategy with which the People's Republic aims to strengthen the domestic economy in order to become less dependent on imports. The USA responded with decoupling. In other words, the unbundling of economic cycles. This has several consequences. Firstly, several standards are emerging at a technical level. One Chinese and one American – for example in cloud computing, artificial intelligence and mobility. The political consequences are that both China and the US are seeking new partnerships and trade agreements. USA and China: EU caught between the fronts Relations between the USA and China are at an all-time low. In recent years, a trade dispute between the two economic powers has escalated. The USA wanted to use sanctions to slow down China's rise as a global power. The U.S. Innovation and Competition Act of 21 (USICA) also served to minimize dependence on China. It provides for subsidies for technologies that America currently obtains from the People's Republic. Semiconductors, for example. Although the hardened fronts between the USA and China could have led to the USA and Europe moving closer together politically and economically, tensions also arose between these economic powers. The background to this was a collapsed submarine deal between France and Australia. Europe was originally supposed to work together with Australia and the UK as part of an Indo-Pacific pact. However, Australia terminated the supply contract and the USA took over the role of the Europeans. EU sanctions against China EU sanctions against China have been in place since March 2021. The foreign ministers of the 27 member states want to take action against human rights violations in Xinjiang. The Communist Party is taking ruthless action against the Muslim Uyghur minority there. Three representatives of the party committee from Xiangjing have since been placed on the EU's sanctions list and are no longer allowed to enter the country. In addition, all their assets located in Europe have been frozen. The Communist Party responded to the EU sanctions against China with counter-sanctions against four institutions and ten individuals. They are not allowed to enter the People's Republic or do business with companies from the country. In response to EU and US sanctions, China also passed the Sanctions Defense Law. It stipulates when and how Chinese authorities can intervene if sanctions against the People's Republic are implemented. It allows the government to punish individuals and organizations that take part in "discriminatory measures against Chinese citizens" or "interference in China's internal affairs". Chinese citizens and organizations also have the right to sue European and American companies and individuals for damages under certain conditions. Russia's place between China and the EU The disputes between Europe, the USA and China have led to a significant improvement in relations between Russia and China in recent years. In 2001, the People's Republic and Russia signed the Sino-Russian Friendship Treaty and demonstratively extended it in summer 2021. It clarifies contentious issues in foreign and security policy and deepens cooperation between the nations. Supply chains: EU dependent on China During the coronavirus pandemic, some supply chains between China on the one hand and the EU and the USA on the other came to a standstill. Since then, the US and the EU have been trying to minimize their dependence on the People's Republic. In the area of medical supplies and protective masks, for example, so-called on-shoring is being considered. In other words, bringing back production facilities from emerging countries. Whether this will be enough remains to be seen. At the same time, an analysis by the China think tank Merics showed that the EU is strategically dependent on China in 103 product categories. These primarily include goods in the fields of electronics, chemicals, minerals, metals and pharmaceutical and medical products. In many of these sectors, however, establishing new supply chains is complex and cost-intensive. China and the EU The relationship between China and the EU is complex. In addition to economic interests, there are political disagreements. The EU is trying to reconcile the interests of the USA and other Western countries on the one hand and those of the People's Republic on the other. Whether this can succeed remains to be seen. The Table.media editorial team provides all the relevant news.