Iuliu Winkler, member of the European Parliament – EPP, Romania: “Just a little bit better than business as usual”

“What we see is that action is needed. And what I see, from the trade point of view at least, is that we have again flamboyant words and optimistic declarations – even written ones – but we expect now actions to come after these declarations. So, we have these commitments and we are very curious now to see them fulfilled.”

The 20th summit between the European Union and China was greeted for its breakthrough achievements after two years of deadlock. But Beijing has yet to show that it will now finally walk the talk.

The 20th EU-China summit that took place in Beijing on Monday (July 16) was said to be a new milestone in the partnership between the two major global actors.

Looking beyond their differences, the leaders of the EU and China succeeded for the first time in two years to conclude a series of statements, including an ocean partnership and a cooperation on climate change and clean energy.

On the trade and investment front, both parties exchanged market access offers towards reaching an investment agreement. They also agreed to reach a Geographical Indications deal before the end of October. An action plan on customs cooperation on intellectual property rights was also signed.

With a little help from Trump

For Fraser Cameron, director of the Brussels-based think-tank EU-Asia Centre, the summit’s achievements owe a lot to the U.S. administration’s stance on international relations and trade. Washington’s trade attack has encouraged Beijing to work on good relations with Brussels, Fraser said.

Fraser Cameron, Director of the EU-Asia Centre: “The EU and China are simply being pushed together by the US”

“I think that in the present uncertain geopolitical circumstances you are finding that the EU and China are simply being pushed closer together on a range of issues, from defending the Iran nuclear deal to international trade – which nobody could have foreseen just a few years ago. And that’s due to the behaviour of one man: Donald Trump.”

Lagging multilateral role

But if China is good at the rhetoric, it could do more to support the multilateral system, Fraser added.

For the member of the European Parliament (MEP) from Germany, Jo Leinen, who chairs the assembly’s China delegation, “China and the EU need to function as an anchor of stability in a new world order.”

But the Social Democrat admits that Beijing’s multilateral commitments are uneven.

Jo Leinen, member of the European parliament – S&D, Germany: “China has engaged on climate and energy”

“We need China for multilateral systems like the Paris agreement on climate protection or the Iran nuclear deal, so let’s say in the whole area of climate and energy, as well as peace and stability China is, for the time being, really quite useful. On the other hand, we cannot be naive, China has another political system, on human rights we are completely different.”

Words not followed by actions

More specifically, China still fails to play by the rules on trade. Indeed, most of Beijing’s political declarations have not been followed by actions – starting with President Xi Jinping Davos 2017 speech.

For centre-right MEP Iuliu Winkler, a standing rapporteur for China in the EU parliament’s trade committee, the summit’s outcome did not bring any real breakthrough.

Iuliu Winkler, member of the European Parliament – EPP, Romania: “Just a little bit better than business as usual”

“What we see is that action is needed. And what I see, from the trade point of view at least, is that we have again flamboyant words and optimistic declarations – even written ones – but we expect now actions to come after these declarations. So, we have these commitments and we are very curious now to see them fulfilled.”

The trade parliamentarian greeted both parties’ engagement in reforming the World Trade Organisation (WTO), a key multilateral body that is currently undergoing a major crisis.

But according to Winkler, such very general declaration of goodwill can lead to more EU disappointment. The Romanian MEP expects Beijing’s WTO reform commitments to be conditional to serving China’s own interests.

He added that on trade, the EU expected more reciprocity and more clarity, including simplification of business regulation and cutting down red tape.

However, in the past two years EU investors in China are finding that on the ground the situation has actually deteriorated, Winkler noted.

Iuliu Winkler, member of the European Parliament – EPP, Romania: “Making business in China has become more complicated”

“The situation has changed in the last two years, but unfortunately not for the good. My impression comes from the official evaluations of the EU-China Chamber of Commerce [representing EU companies in China], also from a number of other sources. If we analyse that yearly whitepaper, then we see that in the last two years the number of obstacles is increasing, not decreasing. We see that making business is China is more complicated.”

“They are good at following their own objectives, so the EU should perhaps be better at following our own objectives,” Winkler concluded.

In the medium to long term though, both the trade war with the US and a slightly slowing domestic demand could affect the Asian country’s growth rate.

According to Fraser Cameron, it could in turn encourage China to keep up with its multilateral commitment.

Fraser Cameron, Director of the EU-Asia Centre: “The party’s legitimacy rests on the economic growth record”

“Essentially the party’s legitimacy rests on the economic growth record that it has given the Chinese population. So, when the growth starts to fall, you have political consequences. And therefore, I think this makes the Chinese slightly more forthcoming, but nobody should expect China to open up and becoming overnight a sort of liberal market economy as we know in Europe. That’s not going to happen, but they are now being pushed towards the right decisions.”

Europe is China’s largest trading partner and China is the EU’s second largest. The trade in goods between both is worth over 1.5 billion euros every day.

Author: Hermine Donceel, Euranet Plus News Agency, https://euranetplus-inside.eu/eu-and-china-coming-closer-thanks-to-donald-trump/