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Event Report: 14th EU-China Think Tank Roundtable, Berlin

13 June 2019

14thEU-China Think Tank Roundtable – report

The 14thannual EU-China Think Tank Roundtable was held in Berlin from 2-4 June 2019. The event was jointly organized by the EU-Asia Centre, the Konrad Adenauer Stiftung, the EPC, and the CIIS. Attended by around twenty experts from established think tanks in both China and the EU, discussions revolved around the state of the EU, the state of China, the rapidly evolving partnership between the EU and China, and pathways for cooperation on trade, global governance, and international security.

The state of the European Union 

Analyzing the results of the EU-wide elections of May this year, participants agreed that any pan-European trend in the electorate is challenging to identify. Europeans voted for a more fragmented European Parliament, reflecting the increasingly diverse political landscape in Europe. The two major groupings lost ground but remained the largest parties while the Liberals and Greens posted significant gains. Populist parties had mixed results. With the strong showing of the Greens, the European Parliament is expected to more thoroughly review proposed trade agreements on their respective environmental and social sustainability. The Greens will also advocate greater emphasis on the conditionality of future trade arrangements to respect human rights and the rule of law.

The state of China

Representatives from Chinese think tanks reiterated that China’s process of reform and opening up is irreversible and will only accelerate. The establishment of fully German-owned BASF and BMW plants in China testifies to this trend. Likewise, total import tariffs imposed by China now amount to less than commitments entered into upon accession to the WTO. The representatives likewise argued that the CCP’s success in guiding China towards unprecedented levels of economic and social wellbeing continued to legitimize the Party’s rule. Western media had unduly inflated the abolition of the presidential term limit – the move was informed by widespread popular support for Mr. Xi. 

On the Belt and Road Initiative, China had conceded a number of problems in the implementation of certain infrastructural projects – which illustrated the true global, multilateral nature of the initiative: China was keen to revise its policies on the basis of foreign suggestions. China had, indeed, not properly undertaken feasibility studies for certain projects. However, the problems that arose surrounding the construction of a high-speed railway in Malaysia, were of a contractual nature only. In the near future, China should work to strengthen its domestic consumption and realize national harmony against the backdrop of the ongoing trade conflict with the U.S.

The EU-China partnership: economics and trade

Europe’s policy vis-à-vis China has recently undergone a significant shift with the EU branding China a ‘systemic rival’ in March this year. It prompted Member States to undertake action to ensure reciprocity in their trading relations with China. Chinese think tank representatives argued that China has in fact fully responded to these longstanding reciprocity concerns by opening up its domestic market for European investors – in particular the automobile, medical and banking industries. Nonetheless, European concerns endure – in particular relating to joint venture requirements, involuntary transfer of technologies, transparency in public procurement, and the provision of subsidies to state-owned enterprises.  

Participants identified connectivity as a potential area for cooperation. The summit statement of the leaders’ meeting earlier this year in Brussels included a joint commitment to conclude a bilateral investment agreement by 2020, providing a glimmer of hope for the improvement of trade and investment relations.  

The EU-China partnership: foreign/regional security policy 

Concrete progress had been achieved in the field of security policy on the Iran, DPRK and Afghanistan dossiers. On Afghanistan, the EU and China had consistently been pushing for an inclusive peace process; on Iran, both sides duly realize the significance for international security of the JPCOA; and both sides were instrumental in the adoption of UN Security Council resolution 2254 on Syria. To further cooperation on security, some representatives proposed the joint financing of future IAEA missions in Iran, and the establishment of more direct military-to-military links. Recent Sino-Russian naval drills in the Baltic and European activity in the Taiwan Strait had, however, not contributed to the bettering of security ties. 

The EU-China partnership: global governance/multilateralism

Participants agreed that the EU and China have a number of shared interests in upholding systems of multilateral governance and the values that underpin these. In today’s high-risk geopolitical environment where nations have become increasingly interdependent, when nationalist and mercantilist ideologies are on the rise, China and the EU must identify pathways for cooperation in securing the effectiveness and sustainability of the rules-based multilateral system.  

It proved rather challenging for participants to identify such pathways. Reform of the WTO, a multilateral institutions whose functioning both the EU and China greatly benefit from, had been difficult due to fundamental disagreement on the provision of subsidies and the role of the state in fueling economic growth. Likewise, even though both China and the EU had been ardent proponents of the Paris Agreement on countering climate change, China continued to finance the construction of coal plants in countries signing up to the Belt and Road Initiative. As such, China risked locking these nations in carbon emission traps which China itself had been in for over 30 years. The EU, though home to a plethora or coal plants itself, continued to criticize China for the low progress booked in moving to renewable energy sources. This frustration, coupled with mutual distrust and occasional finger pointing, is not conducive to Sino-European cooperation on climate change – a topic of an intrinsically global nature.