China's doing business splits EU ranks

President of China Xi Jinping has spent a total of five days on European soil, visiting Rome, Monaco, Cote d'Azur and Paris. He signed Silk Road Memorandum with Italy and met the most influential EU leaders, wishing Europe to be strong and united at every meeting. Nevertheless, his visit brought to light something else - it exposed the vulnerabilities and frictions within the Union.

It has also transpired that the EU still cannot decide what course of action to adopt with China - should it be treated as a loyal partner or as a dangerous competitor. And how to treat the Chinese billions - as a lucrative investment in growth and new jobs on the continent or as a threat to the European security.

On 12 March, for the first time, the European Commission deemed China a “systemic rival”. The EU and its Member States can achieve their aims concerning China only in full unity, the Commission also stated. However, during Xi's visit, Italy made an independent move and - despite Brussels' warnings - joined China's Belt and Road Initiative (BRI). This programme includes infrastructure projects worth over a trillion dollars. Their implementation would practically bring the multi-billion strong population of China and Asia closer to the 500-million strong population of Europe. Other 12 EU Member States, mainly in Central and Eastern Europe, have already joined the initiative. A Chinese company has acquired the majority stake in the port of Piraeus and promised Greece to turn it into the second largest port of the Mediterranean Sea. Portugal also stroke a lucrative deal under BRI.

Now Italy became the first G7 country to join the initiative. However, it seems strange that while in Japan (which is also G7 member) the commentaries about this move were rather reserved, it has angered Brussels, Paris and Berlin. EU Commissioner Gunther Oettinger immediately proposed that the EU should have the right to block infrastructure projects concluded bilaterally by Member States under BRI. If the ports of Genoa and Trieste got the lion's share from China's trade in Europe, as the memorandum envisions, some other ports of the continent would be pushed to the background. The European solidarity and economic interests do not have any touching points in this case, obviously.

Be as it may, France's President Emmanuel Macron made an attempt to show his high Chinese guest that the European family lives in consensus. Macron invited German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker to the Elysee Palace for talks on the final day of Xi's state visit. He pointed out that while China had lifted hundreds of millions of people out of poverty in recent decades, economic change had brought about tensions and imbalances in European society, leading to “a legitimate need for protection”.

“European businesses must find the same degree of openness in China that Chinese businesses find in Europe: total openness,” European Commission President Jean-Claude Juncker said plainly.

Because it is clear to all that Beijing wants Europe to open its doors wide to China, but not on reciprocal terms. Despite the vows that this will happen, the European companies cannot compete on equal grounds when it comes to public procurements in China.

And then one more hidden obstacle emerged in the relations with Beijing: the Chinese expansion in Europe is now employed by the populists and Eurosceptics who keep warning that it poses a threat to the continent's economic independence. Last week, Italian Vice-PM Matteo Salvini went as far as warning that Italy should not become a “Chinese colony”. As a token of disagreement with the signing of the Silk Road Memorandum, Salvini did not show up at the reception given by Italian President Sergio Mattarella in honour of his high Chinese guest in Rome.

On 9 April, there will be a next EU-China summit meeting. The expectations are that the EU leaders will make it clear to Beijing that true partnership calls for loyalty and reciprocity. And that they also will dispel any doubts of discord within the European family.

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