Chinese and EU flags. Photo: Flickr
Relations between China and the EU have been strained, casting doubt on their proposed trade deal. Photo: Flickr

Over the past decade, China has become central to the world economy. Building on its economic successes, it is becoming increasingly central in world politics. China is also now more ambitious, aiming to establish itself as not just a regional but a global power.

In his October 2017 report to the Chinese Communist Party’s 19th Congress, President Xi Jinping stated that by 2050, China will have “become a global leader in terms of composite national strength and international influence.”

For materializing such a grand strategy, in many parts of the world, China’s presence takes place through economic channels; Beijing has also become an exporter of political influence. However, through some of its most vocal representatives, it increasingly presents itself as an alternative to the Western democratic model, leading numerous Western analysts to call China a “revisionist” power.

Beijing’s narrative has had an impact on a number of governments around the world – a majority of them classifiable as “illiberal”: Egypt, Ethiopia, Pakistan, the Philippines, Sudan, and Turkey, for example. What is newer and perhaps unprecedented is China’s growing influence in European countries, such as Cyprus, the Czech Republic, Greece, Hungary, Macedonia, Montenegro, Poland, Portugal, and Serbia, to name just a few.

Some of these countries became Chinese strongholds in the aftermath of the 2008 financial crisis, whereas others are part of the Chinese plan – whether the Belt and Road Initiative (BRI) or an overall growing presence on the European continent – to counterbalance the complexities of the US-China relationship.

China’s influence

China has already succeeded in creating a narrative – in Prague or Athens, political elites and the media talk about China in a way that is unprecedented over the past 20 years. As part of these new links, local business communities engage with Chinese companies. Journalists travel to China, citizens take Mandarin language courses at schools and universities, Confucius Institutes, or cultural centers.

For the past two years, the subject of China’s geoeconomic assertiveness has attracted a lot of attention within the policy and scholarly communities. The growing discussion in Europe about China’s interest in sectors such as energy, transport, port and airport facilities, and especially information and digital technology, which would lead to stronger influence within European societies.

In 2016 Chinese investment in the European Union jumped to nearly €36 billion ($40bn), up from €20bn the previous year, according to Rhodium Group, an American research firm. For the most part, this money is welcome. Europe’s trading relationship with China has made both sides richer.

Regional trends

Chinese investment is marked by regional trends. In eastern Europe, the focus is on infrastructure that can solidify links between the old continent and BRI projects farther east. In southern Europe, Chinese buyers participated in the wave of privatizations during and after the eurozone crisis. In Portugal, they snapped up stakes in ports, airlines, hotels and much of Energias de Portugal, the country’s main electricity operator. In Greece, China provided valuable capital during the crisis.

China’s focus in Germany is on high-tech firms with the specialized knowledge it needs as part of Xi’s “Made in China 2025” strategy to make his country more industrially and technologically self-sufficient. German authorities were alarmed by the purchase of almost 10% of Daimler, the owner of Mercedes-Benz, in February. The Chinese media’s portrayal of the deal as a triumph for its domestic industry did not help.

However, China is also using its financial muscle to buy political influence. The Czech president, Milos Zeman, wants his country to be China’s “unsinkable aircraft carrier” in Europe. Last year Greece stopped the European Union from criticizing China’s human rights record at a UN forum. Hungary and Greece prevented the EU from backing a court ruling against China’s expansive territorial claims in the South China Sea. Faced with such behavior, it is only prudent for Europeans to be nervous.

What does China want, ultimately? It would be a mistake to attribute too much grand strategy to its actions

What does China want, ultimately? It would be a mistake to attribute too much grand strategy to its actions. It is not, like Russia, interested in precipitating the collapse of the EU. Quite the opposite: it sees in Europe’s openness and wealth advantages for itself.

China, it is true, used to wonder whether Europe might become a partner in a multi-polar world. It watched with glee as Franco-German resistance to the American-led invasion of Iraq in 2003 splintered Western unity. It sought to learn from European capitalism, especially the Nordics’ social-market model. But the enthusiasm for Europe as an equal did not last. Today Chinese leaders enjoy lecturing ambassadors and visiting European leaders about the West’s failures.

The supreme goal, of which its leadership never loses sight, is for China to become an advanced, modern superpower that others dare not gainsay. Its idea of Europe is as a wealthy, innovative region that could help it reach that goal. In contrast, it is obsessed with America, seeing an aging, vengeful hegemon that could stop it from achieving its aims. So where China once considered the EU a prospective partner and even a model in some areas, now it approaches Europe with less respect – as a sort of supermarket of opportunities to extract benefits that can help it rise, neutralize opposition to its foreign policy and keep the West from acting as one against it.

As China becomes a global actor with ambitions beyond the geoeconomic sphere, the rest of the world – including Europe and possibly the United States – needs to assess this new situation. China perceives its relationship with the US as a competitive one, even though the ongoing US-China trade war under the Trump administration may ultimately lead to a Sino-European rapprochement.

This is Europe’s challenge. Its countries and institutions are among the most open in the world. Prague, with its history of standing up to Soviet oppression, is a symbol of that openness, but the city is increasingly also an example of how China is taking advantage of it to pursue its national interest. In this special year, Europe would be foolish not to heed the Chinese president’s wise words, and grab “the opportunity to gain wisdom and the power to march forward.”

However, despite a growing internal debate about the country’s international positioning in the context of taking a confrontational tone with the United States, Xi believes he has the power to realize these ambitions. Recently he chaired the 40th anniversary of reform and opening up at the Great Hall of the People in Beijing on December 17, which reaffirmed the notions of nation’s strength: “No one is in a position to dictate to the Chinese people what should or should not be done.”

Anu Anwar is a fellow at the Faculty of Arts and Sciences and a non-resident associate at the Fairbank Center for Chinese Studies at Harvard University. He is pursuing a PhD at the Johns Hopkins School of Advanced International Studies.

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