Canberra cuddles up with Xi. Will Brussels follow?

Опубликовано: Tuesday, 07 November 2023 09:21

Decoding transatlantic relations with Beijing.

By STUART LAU

with PHELIM KINE

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GOOD TUESDAY MORNING. Here’s Stuart Lau covering Europe-China relations for you. Phelim Kine will hold the D.C. fort on Thursday.

FRIENDS AGAIN: This week begins with a dramatic diplomatic thaw between China and Australia, with President Xi Jinping shaking the hand of Prime Minister Anthony Albanese in Beijing after years of rocky ties. Canberra turned to Xi after Albanese saw a “substantial uplift” in trading figures — with the Labor PM triumphantly holding an Australian lobster in a Shanghai expo — while his negotiators walked out of trade talks with the EU owing to a lack of agri-food concessions from Europe.

But first, we have all the updates on the impending EU-China summit, which European Commission’s head Ursula von der Leyen just confirmed is going to happen next month.

EU-CHINA THIS WEEK

XI YOU AGAIN: Von der Leyen is set to be the only G-7 leader to visit Beijing twice in 2023. While she tagged along with French President Emmanuel Macron in April, this time the European Commission president is going to co-chair the EU-China summit in December with Charles Michel, her (outgoing) European Council counterpart. It’s widely expected that Chinese President Xi Jinping will lead the discussion in Beijing. China has yet to announce a date or a venue for the talks.

Hawkish tone: Unveiling the schedule while addressing a conference of EU ambassadors on Monday, von der Leyen unsurprisingly called for a “clear-eyed” approach to Beijing’s hardening global posture. The woman positioning herself to run again as head of the EU’s executive branch has long styled herself as a values-based transatlanticist, lambasting China’s world order or the Kremlin’s imperialistic nature alike.

“We must get China right. We must recognise that there is an explicit element of rivalry in our relationship,” she told the EU diplomats. “The Chinese Communist Party’s clear goal is a systemic change of the international order, with China at its center.”

Increasingly predatory: “By now China is our most important trading partner in terms of goods,” she said. “But at the same time, concerns about unfair and at times predatory practices distorting our own single market are absolutely tangible and rising.”

Autocrats’ enabler: Von der Leyen also criticized Beijing’s role in world affairs. “China states that it is impartial and favors peaceful solutions, while enabling and supporting some of the world’s most destabilizing forces,” she said. (Read: Moscow, Pyongyang, Tehran, Damascus…) Here’s her speech in full.

XI TURNS TO BERLIN: The Chinese leader reached out to German Chancellor Olaf Scholz on Friday in a bid to talk Europe out of a trade war with Beijing.

“[I] hope that Germany will push the European Union to uphold the principles of market and fairness, and to work with China to safeguard fair market competition and fair trade, as well as stable industrial and value chains,” the Chinese president told Scholz, according to Xinhua, the state news agency.

“China-Europe relations are key to the stability of the world order and the Eurasian continent’s prosperity,” Xi said. “China sees Europe as a comprehensive strategic partner, and an important pole in the multipolar [world].” The reference to the multipolar world is Beijing’s common attack on what it sees as a world order preferred by the U.S.

BRETON TRAVELS EAST: One of von der Leyen’s most ambitious commissioners, Thierry Breton, who’s responsible for EU industrial policy, will begin a four-day trip to Beijing and Hong Kong beginning tomorrow.

WHO ELSE WENT TO CHINA THIS PAST WEEK? Irish Foreign Minister Micheál Martin, his counterpart Maltese Ian Borg, Czech PM’s national security advisor Tomáš Pojar. Outside the EU: Serbian Prime Minister Ana Brnabić.

BELGIUM DOESN’T WANT TO FOLLOW AMERICA: Belgium cannot follow the U.S. on China policy, Belgian Prime Minister Alexander De Croo said on Monday, Camille Gijs writes in to report. Responding to a question from a diplomat on whether Belgium should tweak its strategy toward Beijing, De Croo said: “As a European country and as Belgium, we have to conduct our own policy, and not the policy of our American friends — with whom we have very good relations but who sometimes, in their relations with China, have other objectives than us.”

BEHIND CLOSED DOORS

PERSUASION OVER DINNER: One recent visitor to China, European Commission Vice President Věra Jourová, apparently managed to pull off a diplomatic win. When Jourová sat down with Chinese Vice Premier Zhang Guoqing for dinner mid-September in Beijing, many of the EU’s digital concerns went nowhere. China’s disinformation campaigns, state control over AI development or ties with Russia were not addressed directly.

But there’s one exception: The EU commissioner confronted Zhang with Beijing’s restrictive control over data flows, which prohibited EU companies from transferring any “important” data generated in China, according to the official. Zhang, as it turned out, was ready to make concessions.

We’ll move: “You could feel that something clicked,” an EU official with knowledge of the discussion told POLITICO, recalling the discussion over beef in lotus leaves and dried scallops.

“The vice-premier told her he understood the proposal makes sense, and asked the relevant authorities to take the matter forward.” The same issue was also raised shortly after by her colleague, Trade Commissioner Valdis Dombrovskis — but his counterpart, vice-premier He Lifeng, is not the one calling the shots on data laws in the Chinese system, according to the official.

A few weeks later, China made the relevant revisions to the laws to reverse the burden of proof, allowing most data stored in China to be transferred out of the country unless expressly excluded by the authorities.

Curious courtesy: While the EU wasn’t the only one making the complaint, Beijing made sure to tell the EU that it was basically responding to the EU’s concerns, including via the EU Chamber of Commerce in China (which afterward sent Jourová a thank-you letter, stating that “We are pleased to note that the Chinese side seems to have listened to these concerns [you raised.]”)

“For sure there’s a lot of self-interest for China, where there’s a sharp drop of foreign direct investment which China desperately needs,” the official said. “But if you look at the timing, it’s clear China made the changes shortly after the meetings with Jourová and Dombrovskis.”

TRANSLATING CHINA: XI-ALBANESE

ENEMY-TURNED-FRIEND: Australia is the latest poster child for China’s diplomatic ascendance. Dominating Chinese state media Xinhua’s front page for much of Monday is Xi’s historic meeting with Albanese. And here’s the headline: “China, Australia embark on the right path of improving ties.”

Beautifully phrased: “Your visit is a journey to retrace history and plan for the future,” Xi said in an unusually long English readout for a foreign leader. “Thanks to the joint efforts of both sides, China and Australia have resumed exchanges in various fields and embarked on the right path of improving relations.”

Let’s trade again “China and Australia are both Asia-Pacific countries and important members of the G20, with no historical grievances or fundamental conflicts of interest,” said Xi, calling on Canberra to “give full play to the potential” of the China-Australia free trade agreement.

The presidential order came while Beijing still forbids imports of Australia’s copper and timber, though it has returned to purchasing Aussie oil, beef, wheat and barley. A dispute at the World Trade Organization has been halted following China’s decision to review its tariffs on Australian wine.

ALBANESE IS SIMILARLY UPBEAT: “We have different political systems, but the engagement that I’ve had with China, with President Xi, have been positive. They have been constructive,” he said, according to Sydney Morning Herald. “He has never said anything to me that has not been done, and that’s a positive way that you have to start off dealing with people.”

“I’m convinced that we’re building a relationship that’s constructive, one where we’re able to talk with each other directly,” he said of his interaction with Xi.

CRITICISM FROM CANBERRA: Australia gave up “quite a lot” in achieving the Albanese-Xi meeting, including the termination of WTO cases against China that could have served as international precedents justifying Beijing’s trade weaponization, according to Michael Shoebridge, director of Strategic Analysis Australia. Here’s his take on Sky News.

TRANSLATING WASHINGTON

U.S., CHINESE OFFICIALS DISCUSS NUKE CONTROLS: Biden administration officials are meeting with Chinese counterparts this week to discuss their nuclear weapon stocks. The two sides will exchange views “on a wide range of issues such as the implementation of international arms control treaties and non-proliferation,” on a wide range of issues such as the implementation of international arms control treaties and non-proliferation,” said Chinese Foreign Ministry spokesperson Wang Wenbin on Monday. Those talks follow months of administration efforts to bring Chinese officials to the table to discuss Beijing’s rapidly expanding nuclear weapons arsenal. Neither the White House nor the State Department has confirmed the meeting.

YELLEN, HE LIFENG TALK ECONOMIC TIES: Treasury Secretary Janet Yellen will meet with Chinese Vice Premier and economy czar He Lifeng on Thursday and Friday in San Francisco. The two officials aim to “further stabilize the bilateral economic relationship and make progress on key economic issues,” said a Treasury statement published on Monday. Yellen has been at the forefront of President Joe Biden’s efforts to drain the rancor from the bilateral relationship and her trip to Beijing in July forged Economic and Financial Working Groups aimed to deepen that process.

GET YOUR XI DINNER TICKETS HERE! U.S. business leaders will have a chance to hear visiting Chinese paramount leader Xi’s views on U.S.-China relations at a special dinner on Nov. 15 during the APEC meeting in San Francisco next week. “We cordially invite you to a dinner welcoming a senior Chinese leader and his ministerial delegation to the United States,” the U.S.-China Business Council and the National Committee on U.S.-China Relations said in a joint invitation issued on Sunday.

The admission fee requires a Fortune 500 company expense account: Tickets are $2,000 per head. Neither organization responded to a request for comment and the Chinese embassy in Washington declined to comment regarding the identity of the “senior leader,” but it coincides with Xi’s presence at APEC (which will include a one-on-one meeting with Biden). Expect Xi to talk up China’s advantages for U.S. businesses at a time when Beijing is wrestling with worrying economic indicators including a retreat in foreign direct investment from July-September.

BIDEN KNOCKS CHINA’S ‘DEBT TRAP DIPLOMACY’: Biden used his speech to the Americas Partnership for Economic Prosperity Leaders’ Summit to take an implicit jab at Chinese government’s international lending practices. “We want to make sure that our closest neighbors know they have a real choice between debt-trap diplomacy and high-quality, transparent approaches to infrastructure and to development,” Biden said in a transcript of his speech published Friday. The “debt-trap diplomacy” reference echoed a flurry of recent reports of crippling loan repayment burdens among countries that participate in Beijing’s Belt and Road Initiative international infrastructure development program.

China’s Foreign Ministry has denied those allegations. “Some people take the opportunity to accuse China offering opaque loans and hype up the so-called ‘debt trap’ caused by China —China firmly opposes the allegation,” Chinese Embassy spokesperson Liu Pengyu said in a statement on Saturday.

‘CHINA HOUSE’ CHIEF MAKES BEIJING DEBUT: The State Department’s new “China House” chief, Deputy Assistant Secretary for China and Taiwan Mark Lambert, debuted in Beijing in his new role last week. Lambert pushed for a resumption of bilateral military-to-military channels suspended since 2022 and blasted the People’s Liberation Army’s “dangerous and unlawful actions in the South China Sea, including the PRC’s obstruction of an October 22 Philippine resupply mission at Second Thomas Shoal and its unsafe intercept of a U.S. aircraft on October 24,” said a State Department readout of his meeting with met with China’s Director-General for Boundary and Ocean Affairs, Hong Liang. Beijing had a more upbeat readout of the meeting. “Another example of the constructive exchanges happening between our two governments,” Chinese ambassador to the U.S., Xie Feng, said in a social media post on Friday.

BURNS TELLS BEIJING: NO COAL, PLEASE: U.S. Ambassador to China Nicholas Burns urged Beijing to rethink the climate consequences of its plans build a new generation of coal-fired power plants. China should “cease building new unabated coal-fired power plants not already under construction,” Burns said in a transcript of a recent speech published on Friday. Such facilities — which lack any emission mitigation mechanisms — could “negate any progress on climate change” China is making in the area of expanding the use of renewable power, Burns said. Burns comments came as Biden’s climate envoy John Kerry prepared for four days of meetings that began on Saturday with his Chinese counterpart, Xie Zhenhua, in Sunnylands, California ahead of the United Nations climate conference in Dubai later this month. The Kerry-Xi talks aim at “promoting actions and cooperation on climate change,” Wang at the Chinese Foreign Ministry said on Friday.

MANY THANKS: To editor Christian Oliver, reporter Camille Gijs and producer Seb Starcevic.