When the leaders of Europe and China announced in December, 2020, they had reached agreement on a landmark investment deal, after more than seven years of negotiations, it seemed like a major win for Chinese President Xi Jinping.
Not only would the new arrangement boost trade even further with China’s second-largest economic partner, it was a major thumb in the eye for Washington, both to outgoing President Donald Trump, who had launched a trade war against Beijing, and to successor Joe Biden and his plans for an alliance of democracies against China.
Fourteen months later, all this is in disarray. The Ukraine crisis and Beijing’s apparent support for Moscow has emboldened China hawks across Europe and driven a wedge between Beijing and Brussels, lawmakers and analysts told The Globe and Mail. As China and the European Union prepare for another summit in April, the trade deal, still not ratified by the European Parliament and already facing opposition over Beijing’s actions in Xinjiang and Hong Kong, appears dead on arrival.
Jude Blanchette, a Washington-based analyst at the Center for Strategic and International Studies, said Mr. Xi’s decision to ally himself with Russian President Vladimir Putin on the eve of Moscow’s Feb. 24 invasion of Ukraine is “arguably one of the biggest foreign policy blunders of his two terms in office.”
Meeting in Beijing ahead of the 2022 Winter Olympics, Mr. Xi and Mr. Putin released a joint statement in which they said the partnership between China and Russia has “no limits,” and voiced support for their respective stances on NATO expansion and sovereignty over Taiwan.
“If you didn’t think it was a Cold War before, that joint statement helped,” Mr. Blanchette said, adding it was a gift to critics in Europe and the U.S. who were already attempting to “drive a harder agenda against China.”
Subsequent reporting that Mr. Xi was briefed on Russia’s plans, as well as China’s refusal to condemn the invasion, has led many people in the West to view Beijing as standing by Moscow, no matter how often Chinese officials speak of their support for peace and dialogue.
At a news conference Monday, Chinese Foreign Minister Wang Yi attacked unnamed forces he said were “unhappy to see the steady growth of China-Europe relations.”
“They fabricate a narrative of the ‘China threat,’ and clamour for seeing China as a systemic rival, even imposing sanctions and provoking confrontation with China,” he said, adding the “China-Europe relationship is not targeted at any third party, nor is it subjugated to or controlled by any third party.”
Many observers were surprised at the concerted and forceful response from Europe to the Ukraine crisis, not least perhaps in Russia and China, which have long weathered criticism from Brussels and various European capitals without it harming trade ties.
“There has been a realization at the European level following Russia’s invasion of Ukraine of the need to stand up to autocrats,” said Malcolm Byrne, an Irish senator and critic of Beijing.
Given the potential costs of this new stand against Russia however, Danil Bochkov, a China analyst at the Russian International Affairs Council, a Moscow-based think tank, was skeptical about whether the E.U. was willing to “spoil its already strained relations with China” at the same time.
“The E.U. has just effectively cut off all its ties with Russia – be they diplomatic, academic or, more importantly, economic,” he said. “So now, Brussels will act cautiously with all other global players in order to compensate for all the losses it is going to bear.”
Even before Moscow’s invasion, there were signs Beijing’s increasingly aggressive foreign policy was backfiring in Europe. Last year, China sanctioned multiple European politicians and think tanks in retaliation for measures against four Chinese officials over human rights abuses in Xinjiang. But while Beijing may have seen the move as a tit-for-tat piece of sabre rattling, it resulted in Members of the European Parliament voting overwhelmingly to freeze ratification of the trade deal agreed just five months earlier.
“We are face to face with reality, that there is an authoritarian regime that is in a power struggle with us,” French MEP Emmanuel Maurel told lawmakers at the time. “If we want to show once and for all that the European Union is not just a supermarket but rather has principles … we have to come up with some tangible action, and that means we need to reject the investment agreement.”
In January, Brussels launched a case against Beijing at the World Trade Organization over restrictions imposed by China against EU member Lithuania that “threaten the integrity of our Single Market.” Beijing blocked trade with Vilnius after it moved closer to the self-ruled island of Taiwan.
Speaking last week ahead of the opening of the National People’s Congress, China’s rubber-stamp parliament, spokesman Zhang Yesui denied accusations of “economic coercion,” adding Beijing hoped “the EU can take an objective and fair stance and won’t escalate the China-Lithuania dispute to the China-EU level.”
Beijing’s treatment of Vilnius nonetheless shocked many observers in Europe, and could backfire further, given the parallels many now see between Ukraine and Taiwan, which Beijing regards as part of its territory and has vowed to take by force if necessary.
“There has been a notable shift in Europe towards Taiwan in the last few years,” said Sjoerd Sjoerdsma, a Dutch lawmaker who was one of those sanctioned last year by China. “The wake-up call that we are now experiencing with Ukraine could indeed make us less naïve about the intention of other autocratic powers that want to expand their sphere of influence.”
Volker Stanzel, a former German ambassador to China, said “Europeans have begun to realize how vulnerable they are if a dedicated and motivated adversary is ready to shake the whole structure.”
“Given Europe’s economic dependence on China,” he said, the Ukraine crisis “will certainly have an impact on the way the EU’s China strategy will be drafted, and on how NATO discusses China.”
There is a way Beijing could yet come out ahead from the Ukraine crisis: by helping to end the war. Observers in China and Europe have said the country is well positioned to act as an interlocutor, given Beijing’s strong relations with both Kiev and Moscow.
“Probably right now the EU, and even NATO and the U.S., need Beijing the most,” said Wang Huiyao, president of Center for China and Globalization, an influential Beijing-based think tank. “Where on earth can you find a third party who is on good terms with both Russia and Ukraine? Only China is on good terms with both countries.”
Speaking to Spanish newspaper El Mundo last week, the EU’s foreign policy chief, Josep Borrell, said “it has to be China.” But he acknowledged that while Beijing has spoken in favour of diplomatic talks, Chinese officials are not actively pursuing the role of mediator.
Indeed, so far, Israel has done more to try and find middle ground than Beijing, which may be wary that such a move might be seen as hostile by Moscow, as it would raise pressure on Russia to actually reach an agreement with Ukraine, a desire not currently evident in talks between the two sides.
Nor is it clear that many officials in Europe would see Beijing as an uninterested party, given its tacit support for Russia’s invasion and own aggressive foreign policy. Speaking in Parliament last week, British lawmaker Iain Duncan-Smith said “a similar argument was advanced in 1940, whereby Mussolini was going to be the interlocutor with Hitler.”
Mr. Blanchette said “China’s not in a credible position” to act as mediator, “and there’s a lot of people in European and Western capitals who are going to do their damnedest to make sure China isn’t able to wipe the stink off from their enabling of Moscow.”
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