<![CDATA[Europe wakes: why Beijing is on a mission to quell Brussels' fears about China]>
When Chinese President Xi Jinping lands in Europe on Thursday, China will have already sent one big signal that it is trying to improve ties with the 28-member European Union.
In a reversal of last year's arrangement, Beijing has scheduled the EU-China Summit before another top-level meeting between China and 16 countries in eastern and central Europe, a gathering known as the 16+1.
Observers and diplomatic sources say the gesture indicates that Beijing is aware of EU unease about China's growing influence on the continent and tactics that some claim are meant to divide the bloc. That unease is driving a sharper, more unified EU approach to China, and last week resulted in Brussels' labelling Beijing for the first time as a "systemic rival".
Xi will use his trip " which includes stops in Italy, France and Monaco " to try to ease fears that Beijing has become a threat to the EU, a mission that has taken on greater importance with China mired in a trade war with the United States.
Growing fears
The EU's discontent surfaced after last year's 16+1 meeting in Sofia, Bulgaria. The meeting took place before the EU-China Summit in the Chinese capital, suggesting to Brussels that Beijing was paying more attention to these nations instead of the EU.
Cui Hongjian, a senior fellow with the China Institute of International Studies, said that while the order of last year's summit was not intended to convey political importance, China decided to let the EU select a time for the EU-China Summit this year. The EU was slow to respond, but both eventually agreed on a date, he said.
"China has never made 'who meets first' a sign of privilege or bias. From China's perspective, meeting first has its advantages, and meeting second has its advantages as well," he said.
Major members of the bloc expressed concern that China was trying to sway the central and eastern European nations to its side with its promises of infrastructure and investment, endeavouring to make them feel less inclined to back the EU on issues such as China's trade practices and human rights.
Lucrezia Poggetti, a research associate at the Berlin-based Mercator Institute for China Studies (Merics), said holding the EU-China Summit before the 16+1 was a plus for Brussels. "This will allow the EU to be able to set the tone for discussions, and get its message across Europe cohesively, before China goes to Croatia for the 16+1."
Poggetti said China's recent tactics in Europe "must be seen against the backdrop of the US-China trade deal being negotiated. China is aware of the toughening stance in Europe, and at least on the surface they would like to make things look very friendly and cooperative".
"China is in need of partners," she said.
She added that China would be hard pressed to allay European concerns on a range of issues, including the alleged risks posed by Chinese telecom companies.
Those concerns about China were spelt out last week in the 16-page paper "EU-China " A strategic outlook".
It outlined 10 points of action for the EU in its relations with Beijing, including expanding cooperation on issues such as Iran and North Korea, ramping up pressure to end market-distorting state subsidies for domestic industries and curtailing possible threats to 5G telecommunications security.
The document also sets an ambitious deadline of 2020 for the completion of a long-awaited EU-China joint investment agreement. The EU is also planning a new industrial policy to help European firms compete with China, pushed strongly by Germany and France.
Frans-Paul van der Putten, senior research fellow at the Clingendael Institute in The Hague, said the paper was aimed at helping EU member states deal with a more "powerful China".
"While the [European] Commission is getting tougher on China, at least for now it does not seem to be aiming for a confrontation with China," he said.
Three-way ties
That bodes well for China, which is already embroiled in a lengthy trade conflict with the US. Beijing fears that Western economies could align against it in their demands for greater market access and an end to industrial subsidies, among other things.
Shortly before the US imposed tariffs on Chinese imports on July 6, Chinese Foreign Minister Wang Yi called on Europe to work with China to protect the global trade regime and not "stab China in the back" " suggesting that Beijing was worried that Brussels might side with Washington.
Washington has also urged European nations to ban Chinese telecom giant Huawei Technologies from their next-generation telecommunications networks and expressed dismay over Italy's interest in joining the "Belt and Road Initiative", Xi Jinping's massive infrastructure programme that aims to link China to Europe and Africa.
But there are also tensions between the EU and the US. The triangular relationship between the EU, China and the United States has caused all parties to hedge their bets, fearing that a deal between two may come at the expense of the third.
"While Beijing is worried about the united pressure from the US and EU, Europe is fearful of a sudden harmony between the US and China in the economic arena. This may become Europe's worst nightmare," said Klaus Larres, professor of international affairs at the University of North Carolina at Chapel Hill.
In recent weeks, senior Chinese diplomats have launched a charm offensive, calling on Europe to stay "independent".
They have also maintained that China is not trying to divide the bloc through infrastructure investment in central and eastern Europe.
On Monday, Wang told the EU high representative for foreign affairs, Federica Mogherini, that the emergence of China-EU cooperation and competition was "something everyone is focused on right now".
In response to Europe's tougher policy on China, Wang then outlined his own 10 points on China-EU relations, all of which stressed areas of cooperation with Europe, from upholding multilateralism in trade and world affairs, to fighting terrorism and poverty alleviation.
Wang also set the stage for Xi's trip to the continent, saying Xi's choice of Europe for his first official visit of the year "demonstrates China's high regard for Europe".
But Mogherini said: "It would be quite naive, if not ridiculous, to hide that we have differences in the ways in which we address our governance and our political systems."
A stronger line
There is also disquiet within the 16+1. Promises by Beijing to bring large amounts of investment to the region had left much to be desired by members, said Jakub Jakobowski of the Centre for Eastern Studies in Warsaw.
"For years, China has only paid lip service to its promises. We hope that China will come up with some concrete results," he said.
China's investment in eastern Europe plunged 40 per cent from a year earlier in 2018, accounting for only 1.5 per cent of all Chinese investment in the EU, according to a Merics study. The figure represented half the peak total of 2016.
Overall Chinese investment in Europe has fallen dramatically in recent years, due to stricter investment screening in Europe as well as tightening liquidity in China.
Central and eastern European countries also have begun to take more of a "Europe-first" approach to China, and have found common ground with Brussels on areas ranging from China's approach to infrastructure and investment to demands for greater access to China's markets.
"In a way, there is a convergence between what Brussels demands and what [the 16+1] demands, and as a result we see more and more emphasis to the common EU approach within 16+1," Jakobowski said.
As the EU-China summit approaches, Beijing hopes the sides can come up with a joint statement that shows mutual friendship rather than repeat their debacle of two years ago when the parties could not agree on a communique.
This year, Beijing will want the statement to underscore the values of multilateralism and opposition to protectionism, but the EU will demand concrete progress from China at least on trade friction.
Joerg Wuttke, a former president of the EU Chamber of Commerce in China, said the EU wanted to maintain its relations with China, but increasingly felt the need to take stronger action to voice its concern.
"The EU has no interest in cooling its China relationship, but if it does not act now to protect its economy from unfair state-owned enterprise competition in the EU market, then the citizens of Europe might ask for more protection," Wuttke said.
"[There is] growing realism in Europe and the end of naivety when it comes to China."
Additional reporting by Wendy Wu
This article originally appeared on the South China Morning Post (SCMP).
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
