China and EU: Xi Administration Hindering What Beijing Calls ‘Common Development’ with Europe

It is clear that economic relations that benefit China only will not last long. The European Union’s growing disappointment and wariness toward China is a result brought about by the Chinese administration of President Xi Jinping itself.

European Council President Charles Michel expressed his dissatisfaction with the current situation at a summit with Xi, saying the bloc wants to build balanced and fair trade relations. The EU’s trade deficit with China reached about ¥63 trillion in 2022.

In response, Xi said that he aims for “common development” with the EU and stressed the importance of the bloc as an economic partner. He also expressed his willingness for China to cooperate with the EU to promote infrastructure development in developing countries.

In the EU, however, doubts persist as to whether China’s Belt and Road Initiative, a massive economic zone, will lead to development for participating countries.

Recently, Italy, the only country among the G7 to participate in the initiative, officially decided to leave the BRI. This is likely because Italy did not experience the results it expected, such as port development.

Such dissatisfaction with the BRI is spreading to Eastern European countries as well. Other countries might also withdraw from the initiative.

From the perspective of economic security, the EU is working to prevent the outflow of advanced technology to China and is also exploring ways to shift away from structural dependence on China for rare earths and other crucial materials.

The EU regards China, which has different political and economic systems, as a “systemic rival.” There is also significant opposition to China’s support for Russia’s aggression in Ukraine. It will be difficult for China to undermine the unity of the EU.

What is of concern is the United Kingdom’s diplomacy with China. U.K. Prime Minister Rishi Sunak appointed former Prime Minister David Cameron as foreign secretary in November.

During his tenure as prime minister, Cameron was touting a “golden era” of intimate U.K.-China relations, which included his decision to introduce nuclear reactor technology developed by China. Beijing must be viewing Cameron’s comeback as an opportunity to improve relations with London.

China hopes to increase foreign investment in order to boost its economy, which has been stagnant due to a domestic real estate slump. If it wants to achieve this, Beijing needs to reduce business risks, which have included its implementation of unpredictable policies such as zero-COVID, as well as forcing foreign companies to transfer their technologies.

There have been a number of cases of Japanese and other foreign nationals being detained on suspicion of violating China’s counterespionage law. The Xi administration needs to realize that its unilateral regulations and failure to disclose the nature of the charges is causing alarm in other nations.

(From The Yomiuri Shimbun, Dec. 12, 2023)