Empire at the Gate: how Europe should tame China’s appetite

Europe has  caught China’s attention lately.

Chinese investments in Europe has soared to nearly $US 40bn in 2016 (almost double the amount in 2015) and its share of Foreign Direct Investments (FDI) in Europe rose from around twenty to twenty-five percent in 2017.

While this is good economic news for Europe and China, China is accused of using its substantial financial muscle to buy its way into European politics. For example:

• In the Czech Republic, president Milos Zeman vowed to be China’s “unsinkable aircraft-carrier” in Europe following considerable business investments.
• Greece, a generous recipient of similar investments, blocked the EU from criticizing China’s human-rights record at a UN forum.
• Hungary and Greece prevented the EU from siding with a court ruling against China’s territorial claims in the South China Sea.

Eyes wide open

One way China has neutered the EU is by taking advantage of its need for unanimity in its decision-making process. By approaching one or two member states, China can easily block statements or actions it may frown upon, particularly regarding human rights.

As a result, others are now closely scrutinizing China’s growing influence abroad, fearing that trade deals may affect a country’s foreign policy.

China’s investment plans in Europe are mostly nothing but sensible, lucrative deals. However, where China seeks to infiltrate Europe’s political ranks via populist or xenophobic parties, China would actually profit more from stable trade relationships and ought to refrain from undermining EU sovereignty.

Similarly, while some consider China to be a useful counterweight to an unpredictable US administration, Europe still has far more to benefit from its common ties with America.

Therefore, while it may seem like a good idea to subject Chinese firms in Europe to the same restrictions that European firms face in China, it would actually hamper Europe from capitalizing on its strength as a permeable society and economy that can easily integrate beneficial foreign concepts and influences.

Fair play

If Europeans are to reciprocate fairly with China as equals, several measures ought to be considered, such as:

• Introducing new instruments clarifying which parties are acquiring stakes in firms and determining the fairness of acquisition methods.
• Increasing European funding for impartial research on China.
• Providing full transparency on the part of European lobbyists, political parties, think-tanks and universities.
• Using qualified-majority voting (QMV) instead of unanimous voting, thus preventing China from blocking the EU by influencing members on sensitive subjects.
• Displaying greater solidarity to southern and eastern European countries (those most vulnerable to China’s influence) by providing alternative sources of funding for projects they deem important.

America also has its role to play in Europe’s future by:

• Treating Europeans less as free-riders on American power and building greater commercial ties, as Europe could be a great ally in enforcing international norms on China.
• Assisting EU governments in implementing common transparency standards to better tackle influence peddling and graft busting, thereby precluding China from imposing itself on smaller states.

A meeting of minds

As China’s economic power grows, the world will increasingly need a more independent, open and free Europe.

Moreover, an enfeebled and fragmented Europe will also likely intensify problems beyond its borders. It is therefore in the continent and the world’s best interest that the continent’s economic equilibrium with China be more carefully monitored.

Sources:

• The Economist: “China has designs on Europe. Here is how Europe should respond”
• The New York Times: “China Seeks Influence in Europe, One Business Deal at a Time”
• The Washington Post: “Europe divided, China gratified as Greece blocks E.U. statement over human rights”

Photo credit:

• Pexels.com: “Antique World Globe”
• Pixabay.com: “European Flag”, “Yuan bills”