Is it the internationalist, multilateralist country trumpeted by Beijing’s top diplomats abroad? Or is it the one centered around a more Marxist vision, as presented by President Xi Jinping at home? Suspicions are growing among EU leaders that it’s the latter.
After talks with Xi on Monday, European Commission President Ursula von der Leyen vented frustration with Beijing’s reluctance to open up its economy. The EU, she complained, still needed convincing that it was “worth having an investment agreement.”
In her State of the Union address on Wednesday, she went even further in stressing the ideological gulf with Beijing, and criticized China over its human rights abuses in Hong Kong and against the Muslim Uighur minority in Xinjiang.
“There is no doubt that we promote very different systems of governance and society,” she said. “We believe in the universal value of democracy and the rights of the individual.”
Europe’s fundamental problem in reeling in a prize trade deal is Xi’s heightened talk at home of a return to Marxist values and a state-led economy — a message that is starkly at odds with the portrait that China wants to present abroad.
On the international stage, top Chinese officials parade their enthusiasm for an investment agreement with the EU by the end of this year, trumpeting market openness and multilateralism as a “win-win.” That’s the message that China’s top diplomat Yang Jiechi and Foreign Minister Wang Yi typically carry with them on visits to Europe.
But back home, Xi extolls the virtues of a “Marxist political economy” while officials issue bellicose warnings against outside interference in what they regard as their country’s political affairs, whether in Hong Kong, Xinjiang, or even Taiwan. Government-controlled news outlets publish editorials about the importance of state-owned companies and an economy under the command and control of the Communist Party.
Given that double-talk, it’s little wonder that the EU is in no hurry to sign anything.
Making nice with the EU
Speaking to the state-run Xinhua news agency following visits to Spain and Greece this month, Yang said the EU was “one of the most important foreign relationships for China.” Wang pushed for an investment deal by the end of the year and urged the EU to deepen cooperation in economy and trade, sustainability and digital technologies.
This narrative of openness is one adopted by Xi, too — at least where he has an audience receptive to this message. “The world economy thrives in openness and withers in seclusion,” he reminded delegates at a recent trade fair.
Yet policymakers in Europe are deeply worried by the harsher, isolationist — and some would say contradictory — rhetoric coming from Beijing in recent months.
In an editorial on August 15 for the party periodical Qiushi, Xi said that China’s state-led, Marxist political economy must remain the bedrock on which the country builds its future, with the country’s state-owned enterprises enjoying a privileged status. That position is unlikely to please EU trade officials, whose idea of a level playing field means reducing Beijing’s support for SOEs.
Europe’s policymakers are also worried by a host of other factors that mark out China as a questionable partner. Beijing’s bellicose “wolf-warrior” diplomats are looming large in the international arena, and China is perceived as attempting to pit richer and poorer states in Europe against each other. The Chinese government’s caginess over the origins of COVID-19 has also proved unsettling.
“What we see since Xi Jinping became president is a China that’s become much more assertive abroad and is committing human rights violations domestically,” said Evelyne Gebhardt, vice chair of the European Parliament’s delegation to China.
In Monday’s video conference, European leaders came away with few concrete concessions. Von der Leyen said there was still a “lot to do” on market access and sustainable development standards. After China’s widely condemned National Security Law in Hong Kong and accusations of consistent flouting of subsidy rules, there are also question marks over whether Beijing would stick to its commitments in an investment treaty.
Some are more sanguine about the prospects, however. Bernd Lange, head of the Parliament’s International Trade Committee feels that the devil is in the details when it comes to a successful deal with China. “We have to be careful in the concrete formulation of an agreement,” he said.”If there is one, they will execute it.”
Reinhard Bütikofer, the Green MEP who heads the Parliament’s China delegation, did not share this optimism: “I don’t trust Chinese pledges to support open trade and anti-protectionism,” he said.
Pot and kettle
The charge of mixed messages cuts two ways.
In a speech to European business leaders last week, China’s Ambassador to the EU Zhang Ming described non-tariff barriers such as European competition policy and investment screening as “mountains” standing in the way of Chinese companies.
A survey published last week by the Chinese Chambers of Commerce in the EU found that 60 percent of Chinese companies surveyed cited “a slight decline,” and 10 percent “a significant decline” in ease of doing business in Europe since 2019.
China’s also complained about EU agricultural subsidies, which make up almost 40 percent of the bloc’s expenditure.
Yet the fact remains that China does seem to communicate two opposing messages. According to Andreea Brînză, vice president of the Romanian Institute for the Study of the Asia-Pacific, Chinese leaders tend to speak in terms that are both Marxist and nationalistic for the home crowd. “But with international audiences, as they want to attract foreign investment … they talk about free trade, win-win and multilateralism.”
Alicia García-Herrero, chief economist for Asia Pacific at Natixis, a bank, adds a pragmatic angle, pointing out that, “those countries dependent on investment need that softer rhetoric to be able to justify lobbying in favor of China in Europe.”
Feeling its way
Even remarks addressed to a foreign audience can sometimes be tough.
In recent months, a number of Chinese diplomats have issued hawkish statements that have riled their hosts, for example tweeting that the U.S. should “enact an African-American Human Rights Policy Act” [sic] instead of sanctioning China for its treatment of Uighur Muslims.
According to Hosuk Lee-Makiyama of the European Centre for International Political Economy, some of this more abrasive tone is simply down to diplomatic inexperience. “China never really had a foreign policy,” he said. “It never engaged in nation branding and soft power… It’s really at the beginning of the learning curve.”
Neither is China a political monolith. “In China, there are leaders who are more open or more closed to free trade, foreign investment and economic liberalization,” Brînză said. “But in the end, the statist and Marxist narrative has more supporters and therefore, more influence.”
The tendency in Europe to see China’s aims as contradictory may also be a particularly Western problem. Not only is the Chinese Communist Party host to a range of political and economic ideas; the leadership may not see any serious conflict between them. According to Phil Entwistle, a China expert at executive recruiter Perrett Laver, Chinese policymakers like to pick and choose from different economic systems.
“We’re captive to a mentality in the West which looks at capitalism and communism as stark alternatives,” he said. “But actually, in China’s socialist system it’s not an ideological crime to make use of other, foreign systems, as long as it’s controlled and not diminishing the Chinese Communist Party’s ability to direct and steer the economy.”
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