Europe gets bold: "2022 will be remembered as the year when a new ice age began with China"

Created: 08/18/2022, 10:08 am

From: Foreign Policy

In this complicated relationship, does Europe dare to take the economic plunge?

Chinese President Xi Jinping and EU Commission President Ursula von der Leyen.

© Imago (montage)

The Russia-Ukraine war could destroy the last chances of a friendly relationship with China.

Because for the first time, the EU seems ready to turn away economically.

• The Ukraine war has significantly worsened relations between the EU and China.

• In contrast to earlier times, the EU is now ready to go on the offensive and distance itself economically from Beijing, say the authors of the text, Elettra Ardissino and Eyck Freymann.

• This article is available in German for the first time – it was first published in

  Foreign Policy

  magazine on June 23, 2022 .

Munich - Russia's invasion of Ukraine has driven a wedge between the European Union and China for the first time in the history of their relations

Brussels is ready to go on the offensive.

The world's second- and third-biggest economies have been at odds since March 2021, when the European Parliament halted ratification of a comprehensive investment deal over human rights concerns.

But since Russian forces invaded Ukraine on February 24, relations have deteriorated further and there seems little prospect of reconciliation.

Brussels is angered by Beijing's refusal to condemn Russian aggression in Ukraine.

In the early days of the Ukraine war, EU officials hoped China would try to negotiate a peace deal, but a chilly virtual summit between EU leaders and Chinese President Xi Jinping on April 1 dashed those expectations.

More importantly, the conflict in Ukraine has forced Europe to think geopolitically for the first time since 1991.

EU countries' growth expectations for 2022 have been revised downwards given rising energy prices.

It looks like the EU, with its longstanding assumption that economics can be a substitute for actual foreign policy when dealing with authoritarian states,

Russia-Ukraine war: EU wants to distance itself economically from China

In recent months, the European Commission has launched a series of ambitious measures to distance itself economically from China.

Some predate the war: the proposed anti-coercion instrument, which would allow Brussels to impose sanctions on imports from countries that exercise economic coercion on EU member states, was put forward by the European Commission in December 2021.

It is clearly targeting China, which imposed a de facto trade embargo on Lithuania in 2021 after Vilnius allowed Taiwan to open a representative office in the country.

However, most of the European Commission's new policy initiatives targeting China were launched after February 24th.

At the EU-Japan summit in May, Brussels and Tokyo pledged to "deepen our exchanges on China, particularly on security dynamics."

In the same month, Brussels announced it would hold an "enhanced" trade dialogue with Taiwan in June, ostensibly aimed at deepening EU-Taiwan cooperation on semiconductor manufacturing.

In reality, it was a signal that the EU is ready to resume talks on expanding ties with Taiwan, regardless of China's reaction: this proposal was made back in late 2021 but was scrapped again for fear of a backlash from Beijing.

Other initiatives are in preparation that are not specifically aimed at China, but offer tools for a protracted struggle.

The EU institutions are currently negotiating a new mechanism that will allow the Union to assess its trading partners' industrial subsidies and impose countervailing tariffs.

Brussels could certainly use this against China, which has heavily subsidized many of its export-oriented domestic industries.

This year, the European Commission will propose another trade mechanism to prevent forced labor imports from entering the EU.

This, too, could give trade regulators an open tool to increase pressure on Beijing to protect its own economy.

EU and China: Russia's attack on Ukraine postpones consensus among EU member states

In order to become law, the European Commission's proposals must be approved by the member states.

Before the war, this was the crucial point.

But not anymore.

The Central and Eastern European countries have become more combative.

Russia's aggression has shown them how much they depend on the US security umbrella.

Taiwan has intensified its economic involvement in the region.

And Eastern European leaders with close ties to Beijing are increasingly isolated.

Hungarian Prime Minister Viktor Orban can still hold Brussels hostage on foreign policy votes that require unanimity under EU rules, but not on those other initiatives that only require a qualified majority.

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Western EU member states with decades of economic relations with China are still hesitating, but there too the consensus is shifting as a result of the escalated Ukraine conflict.

Germany's implicit policy towards authoritarian states, known as "

, lost all legitimacy on February 24.

On a trip to Asia that did not go to China, Chancellor Olaf Scholz called for Germany's dependence on individual countries to be reduced - a dig at Beijing.

Italian Prime Minister Mario Draghi has invoked the "Golden Power" rules to block Chinese takeovers.

With 3 percent of Italian and almost 8 percent of German exports annually going to China, Rome and Berlin, while not aiming for full economic decoupling, will certainly be less hostile to European Commission initiatives on China than in the past.

European politics is diverse and complicated, and there are many veto points.

That is why the Union can change its foreign policy so quickly.

Brussels' initiatives to reduce the EU's economic and political ties with China are gaining traction in some EU member states than others, and business groups will continue to work behind the scenes to prevent a decoupling.

But the trend is clear - and probably irreversible.

Even before the Ukraine crisis, relations between Brussels and Beijing had cooled.

The year 2022 will be remembered as the year when a new Ice Age began.

By Elettra Ardissino and Eyck Freymann

Elettra Ardissino

is an Analyst at Greenmantle, a macroeconomic and geopolitical consultancy.

Twitter: @elettra_ardi

Eyck Freymann

is the author of

(Harvard University Press 2020) and Director for the Indo-Pacific at Greenmantle, a macroeconomic advisory firm.

This article was first published in English in the magazine "ForeignPolicy.com" on June 23, 2022 - as part of a cooperation, it is now also available in translation to the readers of the IPPEN.MEDIA portals.

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