European naivety over?

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European naivety over?

Thursday, 28 March 2019 | Claude Arpi

European naivety over?

Even as Beijing managed to find a new ‘client’ in Italy, other European nations such as France and Germany are not convinced about its bonafide interest

On January 28, 1964, The New York Times reported: “General de Gaulle’s Government broke today with the United States (US) policy of isolating communist China and announced the establishment of diplomatic relations with Peking.” The US newspaper added: “France’s recognition of the communist regime was the first by any major power since the Korean War began nearly 14 years ago.” The US deeply regretted the French move at a time the Chinese communists were “promoting aggression and subversion.” So as French President Emmanuel Macron and his wife Brigitte Macron received the Chinese presidential couple  for an intimate dinner at Beaulieu-sur-Mer, a resort on the Riviera, the stakes have changed. China now has the upper hand.

In 1964, former French President Charles de Gaulle had affirmed: “La Chine est un grand pays” (China is a big country) but today it has become power No 2 on the planet after the US and Xi Jinping plans to dethrone America with his own dream. Fifty-five years later, the same New York Times reported the arrival of the Chinese President: “The Promenade des Anglais [in Nice] — the palm-lined beachside avenue that is the city’s premier attraction — was closed to traffic all weekend.” This never happened before.

In March last year, Xi made news when he was given a life-long term as President of China. The international Press then mainly noted the Emperor-for-life aspect, forgetting that Xi wanted to transform China into the No 1 world power. A year later, partly due to Twitter attacks from US President Donald Trump, Xi is not so self-assured and an economic crisis, looming large over China, has weakened the Middle Kingdom. Officially, its growth was only 6.5 per cent in 2018, the slowest pace since the depths of the global financial crisis in 2009. Bloomberg noted: “Tariffs on Chinese exports to the US imposed by President Trump are starting to pinch the country’s factories.”

Xiang Songzuo, a professor at the Renmin University School of Finance, wrote that China’s GDP growth would only be 1.67 per cent and not 6.5 per cent in 2018. According to the website Chinascope, Xiang also warned that “nowadays, Chinese have become addicted to playing with debt and high leverage financing. This is actually a mirage and will collapse soon.”

L’Affaire Huawei has been a turning point for the Western views on the Middle Kingdom; the telecom equipment company has been at the centre of media attention for the wrong reasons; US officials charged the company with stealing technology from T-Mobile, one of its business partners and wanting to impose its own standards for the 5G, the latest generation of cellular mobile communications. This is the background of Xi’s visit to Italy, Monaco and France.

Chinese strategists were aware that Italy is the weakest link in the Europe Union (EU) and while more and more countries realise that the Belt and Road Initiative (BRI), so dear to Xi, is not offering free meals but often plunges the beneficiary nations into deep debts, Beijing managed to find a European “client.”

On March 23, Xinhua reported that Xi and Italian Prime Minister Giuseppe Conte jointly “elevated the China-Italy relations into a new era”. A Memorandum of Understanding to advance the construction of the Belt and Road was signed. In a diplomatic jargon, the Chinese news agency said that “the two countries have continuously deepened their communication and cooperation in various fields, which helped each other’s social and economic development.”

Xi urged the two sides to accelerate negotiations on a China-EU investment agreement, enhance synergy of the BRI and the EU’s development strategies. Conte answered the Chinese President: “Italy is glad to seize the historic opportunity in joining the Belt and Road construction.”

Other European countries were not amused, though Xi assured Italy that the BRI would be a two-way road for investment and trade. German Foreign Minister Heiko Maas told Welt am Sonntag newspaper: “In a world with giants like China, Russia or our partners in the US, we can only survive if we are united as the EU …and if some countries believe that they can do clever business with the Chinese, then they will be surprised when they wake up and find themselves dependent.”

The EU’s German budget commissioner, Guenther Oettinger, told the Funke newspaper group that Europe should ensure it retains its autonomy and sovereignty when dealing with China.

French President Macron forcefully asserted that the time of European naivety over China was over: “For many years, we had an uncoordinated approach and China took advantage of our divisions,” he said. He called for stricter rules on Chinese investments in the EU; German Chancellor Angela Merkel expressed similar views.

French Finance Minister Jean-Yves Le Drian remarked that “Silk Road cooperation must go in both directions”.

The French Press quoted  the Sri Lankan experience as “the dark side of the new Silk Road.” It mentioned the port of Hambantota and how in the mid-2000s Colombo agreed “to entrust Beijing with the construction of an ex-nihilo port in the town of Hambantota, in the south of the island. It is not yet a question of the Silk Road …but all the ingredients were there.”

Like for the China-Pakistan Economic Corridor, Chinese funds, engineers and workers would build the infrastructure in partnership, supposedly becoming a ‘win-win’ venture. But Sri Lanka, like Malaysia and many other countries, has now discovered that it was in fact a lose-lose operation, with the new assets becoming Chinese as soon as the client state is unable to refund the ‘loans’.

Xi probably did not convince Macron, Angela Merkel and European Commission President Jean-Claude Juncker (the latter two joined Macron in Paris to meet the Chinese President) of Beijing’s bonafide, despite the Chinese President’s enigmatic words: “In politics, we should not only build a strong ‘dam’ of mutual trust, but also a ‘lighthouse’ of ideal.”

However, at the end of his visit, Xi left a small present for the European firm Airbus, a $35 billion jet deal, which included 290 A320-series narrow-body planes and 10 A350 wide-bodies. President Macron observed that Xi’s official visit was an “excellent signal” of the strength and reliability of relations between China and France. He added that the two countries are ready to build a “strong Euro-Chinese partnership, based on clear, strict and ambitious rules” …minus naivety. Will it work?

(The writer is an expert on India-China relations)

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