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Deteriorating relationship – EU & China.

Deteriorating relationship – EU & China.

UPSC CSE Mains Syllabus: GS-2- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Close relationship:

  • Europe and China have been major partners for a generation.
  • According to the Global Office of the International Comparison Programat the World Bank, China and the European Union (EU) jointly account for nearly 35% of global GDP in PPP terms.
  • Europe championed China’s case for World Trade Organization (WTO) membershipand China supported the ‘European Project’.
  • A single example is sufficient to demonstrate how critical China is for European prosperity.
  • Between 1995 and 2012, Germany, Europe’s economic powerhouse, enhanced its industrial value by 37%, the largest chunk of which came from supply chains not in the United States but in China.

Some contention:

  • In March 2019, the EU Commission published “A Strategic Outlook”, describing China as, simultaneously, a cooperative partner, an economic competitor and a systemic rival promoting alternative models of governance.
  • This was the product of a long process of distillation during which the political and security dimensions began to jostle with the economics that had been the primary determinant of China-EU ties for two decades.
  • In a strategic communicationmapping out 10 proposals for dealing with Beijing, the European Commission also slapped down countries such as Italy for aligning too closely with China’s landmark One Belt, One Road program, which promotes Chinese trade via infrastructure running across Asia into Europe.
  • “In the absence of a European strategy, China has managed to get a foot in the door in a variety of European capitals.” — Marietje Schaake, Dutch MEP

Subsequent rise of red flags:

There was a growing appreciation that the balance of challenges and opportunities presented by China were shifting as its economic power and concomitant political influence grew with unprecedented scale and speed, and in ways that concerned European security.

  • China’s efforts to cultivate separate European sub-constituencieslike the 16+1 Format with the Central and Eastern European States, and meetings with the Nordics and the Southern Europeans.
  • The sailing of the PLA Navyinto the Baltic Sea for joint exercises with Russia in 2017.
  • Cross-sectoral hybrid threatsincluding information operations in European countries.
  • Chinese behaviour in the South China Sea and Indian Ocean.
  • Its targeted acquisition of key high-technology companiessuch as Kuka in Germany or key ports like Piraeus in Greece, began to raise red flags in the Chancelleries of Europe.
  • China’s economic and financial practices backed by strategic motives threatened unity and the European project itself, since it appeared to undo their efforts in terms of connectivity, regulatory frameworks and the building of a single European entity.
  • Further early handling of COVID-19 by China.
  • The clumsy Chinese efforts to use the confusion inside Europe to their propaganda advantage.

This led the EU to make an accusation against China on June 10, 2020: “Foreign actors and certain third countries, in particular Russia and China, have engaged in targeted influence operations and disinformation campaigns around COVID-19 in the EU, its neighbourhood and globally, seeking to undermine democratic debate and exacerbate social polarisation, and improve their own image in the COVID 19 context.”

  • China’s aggressive actions in the South China Sea, on the Line of Actual Control with India, and in Hong Kong, have also gained European attention.
  • With all these, EU is shifting towards “a more realistic, assertive and multifaceted approach” to China.
  • EU has begun to turn towards how to balance economic co-dependencyand co-prosperity with China’s strategic global intentions and efforts to seek military supremacy and its bearing on European security.

In the trinity of determinants identified by the EU in March 2019 — namely

  1. [negotiating] Partner,
  2. [economic] Competitor
  3. Systemic Rival

The last dimension is gradually becoming the dominant political narrative.

  • None of this should lead to the inference that the EU will follow the U.S. in ‘de-coupling’.
  • The European Union Chamber of Commerce in Chinasays that most European businesses are chiefly “in China, for China”.
  • European companies still regard China as the biggest potential market.
  • Yet, the pandemic has also triggered calls for diversifying European businessesaway from an overreliance on any single market.
  • The deteriorating relationship between China and the U.S. is causing many new investors to look for alternative investment spaces.
  • If either the Chinese fail to restore their end of the global supply chainsor if the world demand cannot be revived, more companies will tend to look elsewhere.
  • India and EU:
  • This is an opportune time for India-EU relations.
  • Political conditions are favourable especially after the withdrawal of the United Kingdom.
  • The Europeans recognise India’s role in helping provide peace and prosperityin the Indo-Pacific.
  • They see great potential in working together on technologies and issues of the future.
  • But we are not the only economic alternative for Europe in the aftermath of COVID-19. If the Broad-based Trade and Investment Agreementcan be put back on track or, at the very least, a new investment agreement, and if India is ready to join in high-technology collaboration including 5G and artificial intelligence it will be a leap ahead.
  • This will require efforts from India, but Europe will also need to change its positions on trade in goods and be ready to accommodate India on services.
  • The opportunity for India and the EU to build a partnership that is both economic and strategic is there for the taking in a post-COVID-19 strategic scenario.

Source:” The Hindu“.

POSSIBLE UPSC CSE MAINS QUESTION:

With deteriorating relationship between the European Union and China, there is an opportune moment for India to strengthen the India-EU relationship as well as to emerge as a regional super power. Comment.