EU-China summit sullied by storm clouds

APRIL Fool's Day, the first day of that month, is an annual custom centred around practical jokes and hoaxes, but rarely a moment for important diplomacy. However, that will change on Friday (Apr 1) with the EU-China summit, which comes at a crucial point in bilateral relations.

While the diplomatic atmosphere may be warm, bilateral relations have been jolted since the coronavirus crisis began, with a significant spike in tensions that has not been made smoother by China's qualified support for Russia over its invasion of Ukraine.

The list of issues over which Beijing and Brussels have been at odds in the last couple of years has grown, including alleged human rights abuses in Xinjiang, the imposition of Hong Kong's national security law, and a long-negotiated Comprehensive Agreement on Investment (CAI) whose ratification was put on ice last year.

Indeed, Beijing has reportedly tried to pressure Brussels into diluting criticism in an EU report on coronavirus disinformation. That document from the European External Action Service noted that "official and state-backed sources from various governments, including Russia and - to a lesser extent - China, have continued to widely target conspiracy narratives and disinformation".

These challenges, which have chilled the air of bilateral relations, come in a wider context in which Chinese foreign policy's growing focus on Europe has fuelled EU concerns that Beijing is practising "divide and rule" to undermine the continent's collective interests.

Take the example of the Belt and RoadInitiative (BRI), which Brussels has long had reservations about, not least given frustrations over Beijing's perceived slowness to open up its own economy, and a wave of Chinese takeovers of European firms in key industries. And numerous EU states have already signed BRI memorandums of understanding.

Another development that underlines Beijing's growing influence across the continent is the so-called annual "16+1" meeting initiative of China and key countries in Eastern and Central Europe. The initiative is aimed at expanding cooperation in the fields of investment, transport, finance, science, education, and culture with 11 EU member states and 5 Balkan countries.

Despite tensions, both can gain

Key trends are increasingly apparent in China's external interventions in Europe. It is becoming clear, for instance, that Beijing is tailoring its approach around bespoke needs of individual states or blocs of countries such as 16+1. Furthermore, Chinese overtures to Europe are coming with a clear quid pro quo, as underlined by countries signing up to the BRI in exchange for China's investment.

In this context of bilateral angst, both sides are keen to try to stress areas of common interest and cooperation on Friday. This includes the importance of an open, multilateral trading and financial system, plus tackling climate change.

On the economic issue, China still hopes that CAI might get ratified, despite opposition from the Biden administration. And here, there might be a window of opportunity following April's French presidential election and the National Congress of the Chinese Communist Party in the autumn, when compromises could mean that ratification - if both sides still think it is in their interests - could be achieved.

Global warming is another issue on which both sides have long had a fruitful dialogue. Both parties have cooperated on developing a cost-effective low-carbon economy, with the 2 parties accounting for around one-third of global greenhouse emissions.

EU-China discussions on climate change have been cooperative because fundamentally, both share a vision of a prosperous, energy-secure future in a stable climate, and recognise the need for bilateral collaboration to realise this agenda. China's planned investment in the green economy is huge, a fact that the EU is increasingly recognising.

On its part, Europe has clear strengths in areas that China needs here. As China continues on a trajectory to potentially become the world's largest economy, there are, thus, substantial commercial opportunities for European technology and science firms that are leaders on much of this clean technology agenda.

Importantly, this collaboration will not just be one-way traffic. Indeed, China is already the world's largest manufacturer and user of solar panels, and the largest investor in renewable energy; it is increasingly possible that technology transfer will be a two-way process.

To be clear, there is still a way to go before China has a fully-fledged carbon market, and both parties have yet to develop new low-carbon standards in key industrial sectors. However, cooperation could build low-carbon industries in a range of sectors, and also align Europe more closely to the world's second-largest economy.

So despite mounting tensions, both the EU and China still can potentially gain significantly from a deeper partnership on issues from international finance and trade to climate change. Yet, politics may not allow for this, and much may now depend upon how the conflict in Ukraine develops in the coming weeks, and how far Beijing potentially goes in deepening its support for Moscow.

The writer is an associate at LSE IDEAS at the London School of Economics.