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EU Takes Tougher Line on China

13 March 2019

EU Takes Tougher Line on China

The Commission and EEAS issued a communication on 12 March on EU-China relations proposing that the EU takes a tougher approach towards its strategic partner and top trading partner. The paper proposed ten actions (see annex) urging China, described as a ‘systematic rival,’ to deal with the lack of reciprocity in economic relations and to act as a responsible stakeholder in tackling global challenges. The paper also raised sensitive issues such as human rights and the situation in the South China Sea.

The paper will be discussed at the March European Council which will also prepare guidelines for the EU-China summit set for 9 April in Brussels. Before then China’s foreign minister, Wang Yi, will attend the Foreign Affairs Council on 18 March. 

The paper is set against the background of the growing trade conflict between the US and China and pressure from Washington on the EU to toughen its stance on China. Both the US and EU are seeking to prise open the Chinese market. The EU is negotiating a bilateral investment agreement that should cover many market access issues and hopes to conclude the talks by next year.

The paper stated that China could no longer be regarded as a developing country. It had a responsibility for upholding the international rules-based system. Its commitment to multilateralism was ‘selective.’ For the first time the EU described China as a rival promoting alternative models of governance and seeking global technological leadership. This language reflects French and German concerns that the EU must encourage European champions to take on China and the US in world markets.

The paper also urged China to respond to proposals for WTO reform including on subsidies and forced technology transfers. The paper also said that Europe needs to do more to safeguard against potential serious security implications for critical digital infrastructure. ‘A common EU approach to the security of 5G networks is needed.’ (Another EU paper on the security aspects of 5G will be published soon)

The communication also emphasised the importance of a united front against China chastising Italy for contemplating a MOU with China on the Belt and Road Initiative; and reminding the EU members of the 16+1 grouping China to stick to EU rules and standards in dealing with China.

The paper also said that the EU should use reciprocity as a guideline on the participation of foreign bidders and goods in the EU procurement market. It calls for an early conclusion to the proposed agreement on Geographical Indications (GIs) and on China to treat the EU as single entity for agriculture and food exports and end discriminatory procedures.

Find the EC/EEAS Communication here.