Asia & China

The EU’s China policy was marked by an increased fragmentation and impoverishment in 2015, alongside a strategic push for engagement with the rest of Asia.

Competition between member states in relation to China intensified in the course of the year, in the context of insufficient EU leadership and a Europe-wide appetite for Chinese capital. Economic interests and the wish for Chinese investment came at the expense of other foreign policy items, and EU member states fought for Chinese attention and funds, showing little restraint in their public statements and bilateral initiatives. The decision by several European states to join the China-led Asian Infrastructure Investment Bank (AIIB) – a development bank set up to finance infrastructure projects in Asia – was a prime example of these trends. It exemplified both the return of intra-European competition for Chinese political favours and the lack of coordination – both between EU institutions and within the high-level EU leadership – in proposing a coherent response to China’s initiative.

The issue of coordination will emerge again as China deploys its “One Belt, One Road” (OBOR) initiative to build infrastructure across Eurasia – the cornerstone of its approach to integration of the region. The EU and its member states therefore need to harmonise their response to China’s initiative by proposing a vehicle to bridge Europe’s need for investment with China’s willingness to invest if they want to avoid another situation in which member states act out of self-interest, lacking unity. The stakes are particularly high given the size of China’s planned investments in Eurasia.

Member states’ prioritisation of economic issues in their relationship with China means that other items of the EU’s foreign policy towards Beijing had limited backing. For example, only a handful of member states demonstrated an active engagement with China in 2015 on human rights, despite a considerable worsening of the situation on the ground. In general, EU member states’ disengagement on non-economic issues resulted in a de facto impoverishment of the EU’s potential for action.

Fortunately, climate change and the environment has become such an important issue for Beijing that it is willing to engage in a dialogue with the EU. But progress was more difficult on other issues of sensitivity to China, where the EU lacks the coordinated support of member states. For example, members have paid limited attention to the deterioration of maritime security in Asia, limiting the scope and impact of EU efforts on this issue in 2015. In particular, the EU and its member states remained silent when a UN tribunal in The Hague accepted the Philippines’ case regarding territorial disputes in the South China Sea. The EU’s response to the ruling in 2016 will be a test of its commitment to an international rules-based order.

However, one positive evolution in EU–China relations should be underlined. China showed an increased willingness to cooperate with the EU on international security, as part of its broader shift to become more active in global governance. This was exemplified by Beijing’s role in facilitating the nuclear deal with Iran, and by its increased involvement in peacekeeping missions across the world. The question of a Chinese role in the Middle East, amid multiplying attacks on Chinese citizens abroad, is increasingly important for Europeans affected by the refugee crisis and by the threat of terrorism.

EU policy towards the rest of Asia was less divided at the member state level than its China policy. Most member states backed the EU’s initiatives in terms of trade and investment, welcoming free trade agreement (FTA) negotiations with Asian partners and increased economic ties. Thanks to these efforts, the EU and Vietnam signed a trade deal in December. 

At the EU level, the new high representative displayed an interest in the continent, visiting five Asian countries in 2015. This was accompanied by a reassertion of the Union’s strong turn towards ASEAN last year, including on maritime security. However, the EU’s position on tensions in the South China Sea – which intensified with China’s island building in 2015 – did not advance significantly. The EU raised the issue in international meetings, but remained committed to neutrality, calling for moderation, compliance with the rules-based international system, and the resolution of disputes through dialogue and peaceful means.

Efforts to build cooperation with China, South Korea, Japan, and ASEAN on traditional and non-traditional security fields continued throughout the year. There is no European coordination of arms sales to Asia, despite export control rules at the EU level, and these sales continued to be the main vector through which Europe affects the region’s security.

Relations with India were perhaps the weakest point of the EU’s foreign policy towards Asia in 2015. Indian Prime Minister Narendra Modi visited Germany, France, and the UK in 2015, but a planned visit to Brussels in May did not take place because of a lack of response from the EU. Whether the European presidency’s schedule was indeed too crowded to accommodate Modi, or whether Mogherini was reluctant due to India’s continued detention of two Italian marines (accused of killing two Indian fishermen in 2012), an important chance was missed to strengthen economic – and potentially political – cooperation. This deadlock solidified following the Commission’s ban on hundreds of the country’s generic drugs in July, which caused trade talks to stall again.

Climate change was the one area where EU member states and institutions spoke with one voice and acted unanimously in 2015, deploying significant resources towards obtaining tangible results and an ambitious agreement at the December COP-21 climate conference in Paris.