The European Council on Foreign Relations

The Chinese view from Brussels

Date: 16th December 2010  |  Author: Jonas Parello-Plesner,

Categories: China, Europe and the world,
Tags: china, eu, g20, wikileaks, climate change

Imagine that Chinese diplomatic cables also began appearing on WikiLeaks...what might a memo from their man in Brussels say..?

To the Foreign Minister, Beijing,

Here is our annual status report from Brussels on our strategic partnership with the Europeans.

Everything is going according to plan. The EU is our largest trading partner, and still one big, open market for our goods. This is essential for our national development, and is our overriding priority.

Currency: the EU has been following the US somewhat in criticising our currency valuation. Luckily, Europe’s internal divisions play in our favour. Germany is in the same boat as us with their export-oriented model. The UK has been massively devaluing its own currency since the financial crisis – although still nobody wants to buy their products abroad, even when Cameron does try to sell Clarks shoes to us in China. France has been bought by our little concession of agreeing to speak more broadly on economic governance during their G20 presidency. Therefore, problem solved: no more currency war with Europe.

Economy: The EU has almost become an endangered multilateral species this year. The euro-crisis seems to roll on like continuous waves on a seashore; Greece, Ireland, Portugal and Spain. Germany does not want to pay for the others anymore. They feel that their war debt to Europe is paid.

Actually, Germany is a mini-China in Europe. They produce and the rest of Europe consumes. They had sluggish wage growth for the last 10 years while the others bought German cars with money borrowed against over-valued property. Basically, their deal with the rest of the EU is same deal as ours with the US. Yet if Germany does not want to do it, we should step in and continue our altruistic efforts to save the euro. We have to keep Europe alive in order to arrive at a truly multi-polar world.

Our strategy of buying of European government bonds should continue. It is a great way of diversifying from the Greenback, of which we have too many, and which the Americans are making worthless by continuing to print money. And European bonds are a good buy with all the current market distrust. The combined debt level of Europe is actually much lower than the US or Japan. It is a good long-term investment to buy European debt, and the side-effect of giving us extra leverage in the countries we do so is also great. The Europeans haven’t come around to making a pan-European bond, which could mitigate risk, spread yield and eliminate market doubts about individual member countries. Again, they stay divided and fall alone.

On climate change, the co-operation from Europe is great. We just got €500m from the European Investment Bank to reduce our carbon emissions. This fits nicely with our own ambitions within the 12-year plan. The EU hopes the money will make us commit more in the multilateral arena. I continue to give them diplomatic answers about a global deal so that they don’t smell a rat before we pass 2012, when the Kyoto-protocol will have to stay on forever by default. Then we can stay in the developing country category until we become the world’s largest economy.

Let me now turn to the Lisbon treaty. They promised the world ONE Europe and ONE president, yet now they have a new holy trinity of three people, two presidents and one high representative. In fact, we are lucky that we only get three. In the G20, we still have to cope with representatives from all the so-called big countries as well as the two European presidents and the rotating presidency of small countries. Like bird flu, the rotating presidency doesn’t seem to want to die off completely. That is why we should make sure that the EU never comes to Asian summits like the East Asia Summit – one invitation would mean we would have to seat an extra six people.

Ashton, the high representative, is supposed to lead Europe’s new External Action Service. It is still not in place, and its budget is restrained. And the internal turf wars are starting between her and the two others, although one of them seems to be mostly occupied with writing Japanese poems. That will play to our advantage even better than the divide-and-rule games among the 27 nations.

There is one thing, however, that we have to be prepared for. They are starting to try to establish something called reciprocity. The haiku-guy even put it into a poem: “reciprocity is not a dirty word”. Some people from a think tank called ECFR claim it is one of their central ideas. Maybe. The idea is to assemble coherent EU-priorities, make trade-offs and negotiate more firmly. That is also why the Europeans offended our Premier by asking at the EU-China summit what we are willing to trade in exchange for Market Economy Status or changes to the Arms Embargo.

Still, there is a long way before the EU can say that it wants 1,2 and 3 from China like we do consistently with the MES, arms embargo and One China policy. The member states are still too split. They all want individual advantages and are willing to sell their European unity for that. The free traders will block what they consider to be too forceful moves towards closing out markets on public procurement and other trade battle fields. The Southern weak belly will bend to our will when it comes to human rights. We still have the “One-EU” policy that we would like to see.

All in all, another good year for EU-China relations from our perspective.