Transatlantic Relations with China: The Endgame
Historical Context
The 1950s saw the United States (U.S.) make a concerted effort to purge the country of Communist values, a growing ‘threat’ they felt could rupture the capitalistic framework upon which they had established their dominance as a world leader. A strong anti-communist rhetoric enabled Richard Nixon to secure the 1952 Vice-Presidential nomination on Dwight Eisenhower’s ticket. Fast-forward 20 years, Nixon became the first U.S. President to visit mainland China while in office in 1972. This was not a sudden shift in his ideological beliefs nor a compromise of his political values, but rather the successful implementation of a strategy devised from the beginning of his presidency. Nixon had long recognised the importance of increased strategic diplomacy in order to counter the growing influence of the Soviet Union and help achieve their long-standing military aspirations in North Vietnam. Nixon saw the normalization of diplomatic ties with the People’s Republic of China (PRC) as a way to cause further division in Sino-Soviet relations and pressure them into reducing their support for North Vietnam. Nixon famously dubbed his visit to China and meeting with Mao Zedong as “the week that changed the world” but neither Nixon nor political analysts could predict just how much the world would change.
The official recognition of the PRC by the U.S. in 1979 and the European Parliament’s establishment of the "Delegation for relations with the People's Republic of China" (D–CN) in the same year, helped spur economic activity between the PRC and Western powers. While the U.S. Presidency faced the challenge of countering the Soviet Union and maintaining its position in the world order in 1972, they now face the same challenge with China.
Shifting Perspectives
A decade ago, Sino-Transatlantic relations could be described within a framework of “engagement” and partnership. A decade later, Sino-Western engagement on security, economics and the global world order is contentious at best. The once warm relations between the transatlantic and China now lie cold. Perceived as a threat to North American and European interests, the China question lacks a coherent strategic engagement plan in the Transatlantic.
The end of the Cold War ushered in a Rules-Based International Order (RBIO) with democratic liberalism and capitalism established as viable systems of political and economic organization. The global assumption was that China would emerge as a responsive and responsible player in the established order. Across the 1990s and 2000s, China’s trajectory did not align with the expectations of the U.S. and the European Union (EU). Whether it was the aggressive market reforms pushed by the Xiaoping government or the introduction and implementation of ‘socialism with Chinese characteristics’ which operationalized a state-owned and directed, non-mercantilist economy in diametric opposition to the liberal capitalist model of Washington or the social market economy of Europe.
China’s economic ascent was well-paced and began from a soft and encouraging discourse of maintaining a ‘harmonious society’ and peacefully rising without the disruption of the existing world order (hexie shehui and heping jueqi) to a more aggressive stand adopted by Xi Jinping where Beijing shifted from a more passive stance to one where the country was to “strive for achievement” (fenfa youwei), establish global leadership and counter American hegemony. To supplement this vision and narrative, was the economic growth of the Chinese economy which saw a growth rate of 9.4% between 1984 to 2004. China’s membership in the World Trade Organisation (WTO) in 2001, accelerated the process with China’s trade growing from $500 billion to $4.6 trillion. By 2019, China was producing approximately 30% of the global manufacturing output. So great was the impact of this on economics that it is often known as “the China Shock”.
Sino-US Relations
Sino-U.S. relations have always oscillated between cooperation and competition. The U.S. while deeply uncomfortable with the political positioning of China relating to what has been called the “3Ts - Taiwan, Tibet and Tiananmen Square”. However, the inclusion of China in the WTO was seen as a beacon of positive responsibility and better economic ties. This belief did not last long and America was not slow in declaring China to be a “strategic competitor” and a “revisionist rival” - today Sino-American relations rest on a power rivalry with technology and data emerging as its cornerstone of competition. The Chinese threat was formalized at NATO’s Vilnius Summit in 2023 and the Madrid Summit in 2022 through the recognition of China as an important threat to the alliance that required immediate action.
Some major areas of contention between the two countries include issues of “intellectual property theft, currency manipulations, unequal market access, and forced technology transfers”. The deep discomfort that the Americans feel from Beijing stems from what is seen to be incessant ‘manipulations of economic interdependence’ and connectedness that the Chinese have established, reaping technological advancements, its growing proximity with Russia and its heightened presence in the Indo-Pacific and the North Atlantic. “The US and China are competing on not only the traditional high-politics chessboard of military and maritime security but also the low-politics chessboard of infrastructure connectivity building, technology, trade, and other nonmilitary domains.”
In all the decline of the hegemonic US global order cannot be denied which has resulted in America adopting a defensive and protectionist stance. The Chinese will be more than happy to use this to promote a more “Eastphalian” order which uses sovereignty, equality, non-interference and territorial integrity.
The Sino-EU Relationship
The EU has always seen China as an economic partner while trying to keep its political concerns at bay. The 2000s to 2020s focused on bettering access to Chinese markets and investments. European states joined China in the Asian Infrastructure Investment Bank and the Belt and Road Initiative, and many states have become a part of the 17 +1 initiative of cooperation extended by Beijing.
However, the EU is becoming increasingly sceptical of the aggression that China has begun to display in the Transatlantic. The EU is trying to understand the “security implications of Chinese activities, including the mandated sharing of sensitive technologies, the exporting of high-tech products that could fuel China’s military surveillance- industrial complex, investment in European technologies and critical infrastructure (ports, energy, telecommunications), espionage through 5G networks, joint military activities with Russia, IP theft efforts, and various attempts to divide European states.” The European Council has officially addressed China as a “systemic rival”, a “competitor” and a “partner” which sums up perfectly Sino-Chinese relations in terms of the world order, the security regime of the region and economics, respectively.
Keeping in mind the growing tensions between Brussels and Beijing, certain measures against Chinese aggression have been implemented.
The EU has established the EU FDI screening mechanism which protects EU interests while keeping markets open for investment through a thorough security risks analysis.
The Anti-coercion instrument that will protect EU members from any coercive third-country actions that could affect trade and investment. This will allow the EU to act as a bloc even when action occurs against one member-state.
The establishment of a ‘Geopolitical Commission’ in 2019 under President Ursula von der Leyen to ascertain international cooperation and security risk assessment.
Where do relations stand now?
The Sino-Transatlantic relationship is in a tumultuous era. Despite greater economic interdependence, the security and strategic risks of China cannot be overlooked. There is a clear lack of a comprehensive policy on the Chinese question in the region. While acknowledged, the economic, security and strategic threat that Beijing poses to the U.S. and the EU has not been prioritized in policy.
Economically de-risking is the official policy being used by North America and the European Union in their approach to China. The U.S. wants to defend its economic hegemony while the EU seeks to diversify its trade relations with China. In the security domain, the EU and the U.S. have been willing to use sanctions and restrictive measures to ensure China meets compliance. However, the Sino-U.S. diplomatic track saw a positive sign during the G20 summit in Bali where Biden and Xi both engaged in a long talk. With the EU, cooperation has been envisioned along the lines of capacity building in functional areas like connectivity and infrastructure development, climate change action, human security, and the industrial and technological aspects of defense.
The U.S. and EU are also concerned about the disregard that China shows towards global norms and principles like UNCLOS, human rights violations, forced labor claims and its stance towards Taiwan. Chinese restrictions on foreign investment represent a source of concern. The Chinese vision of the world order which sees an Asia-led-world regime is to be countered to maintain the Westphalian model. China has been insistent on maintaining UN institutions, establishing the basis of digital governance and reducing the developmental gap that exists between the Global North and Global South. A more pragmatic stance needs to be devised for the incorporation of the Global South needs to be imaged globally to come close to combating the Chinese Wave.