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Europe Is Stuck in a Toxic China Relationship

The continent wants to shift its China policy but can’t figure out how.

On a quiet visit to Europe last week, Taiwanese Foreign Minister Joseph Wu met several politicians on the continent to discuss China’s recent attempts to intimidate and coerce his government. In April, China had gone so far as to simulate encirclement of the self-governing island.

But the flow of information during Wu’s visit was also intended to flow in the other direction. He was in Europe take stock of how the mood toward China had changed on the continent since Russia’s invasion of Ukraine and how that might affect Europe’s Taiwan policy. But compared with the message Wu delivered, the one he received was probably far less clear.

The European Union’s Taiwan policy is dictated by two parallel strands—relations with its traditional ally, the United States, and its economic dependence on China. While the United States wants Europe to adopt a firmer anti-China view, vital economic ties hold them back.

Ever since Russia’s invasion of Ukraine forced European nations to scramble for alternative energy suppliers, however, a realization has dawned in some countries that they must limit their dependence on China in case relations were to sour and China resorted to disruption of critical supply chains. But any de-risking campaign will take years, if not decades, leaving Taiwan concerned about exactly how Europe will act if Chinese President Xi Jinping were to seek inspiration from Putin and attack.

On his first stop in Prague, Wu attended a think tank event and sat in the front row to hear Czech President Petr Pavel speak. It was the first time that a Taiwanese leader was reported to be in the same room as a head of state of a European country. (China has warned against official engagement with Taiwan, and the EU has obliged)

In Brussels, Wu was welcomed by European Parliament Vice President Nicola Beer and met a bunch of parliamentarians and journalists. “Taiwan is an important and reliable economic partner for the EU,” Beer tweeted of a country whose sovereignty the EU doesn’t recognize and with which it doesn’t have any diplomatic ties. Officially, the EU pursues a strategy that mirrors the U.S. “One China” policy, in line with Beijing’s expectations.

The visit was supposedly a secret. Wu’s agenda and itinerary were not public information. As Wu met Beer, Taiwanese representatives in Brussels feigned ignorance about his whereabouts. FP learned that they are not supposed to announce or advertise such visits at the insistence of the host country to not upset the Chinese.

Peter Stano, a spokesperson of the European External Action Service, said his ministry was not in a position to confirm any “meeting with the representatives of the EU institutions,” but reassured Taiwan of the EU’s support. “If the status quo is changed unilaterally by force,” he said, “the EU cannot be a passive onlooker when our own interests are at stake.”

Nearly half of the global trade passes through the Taiwan Strait, the waterway that separates Taiwan from mainland China, and a Taiwanese company is the world’s biggest manufacturer of the electronic chips used to power everything from mobile phones to electric vehicles. Tensions in Taiwan could disrupt Europe’s supply chains and cut off the export of semiconductor chips—a modern necessity. Taiwan’s security is hence critical for Europe’s economic interests and stability.

Analysts believe while European governments are earnest when they say they won’t sit on their hands were China to invade Taiwan, there is thus far no clear strategy or consensus on what they could do. They may back sanctions proposed by the United States, but only reluctantly, wary of a Chinese backlash to their businesses.

Taiwan is right to worry that there is still a general reluctance to scale down ties with Beijing and that Taiwan simply isn’t a priority.

In April, as European parliamentarians called for a clarity on the EU’s China policy, Josep Borrell, the EU’s foreign policy chief, said that while ties were under strain, among other reasons, due to Chinese military exercises in the Taiwan Strait, the EU still needs to keep talking to China. “We cannot stop talking to it because it is not a democracy,” he said. “China is not Russia; it is a superpower that is growing.”

This week, Germany finally released its national security strategy and noted that rivalry and competition with China has increased in recent years. China is “increasingly aggressively claiming regional supremacy” and “repeatedly acting in contradiction to our interests and values,” it said. But experts noticed that the paper not once mentioned Taiwan. Germany is expected to release a specific China strategy next month.

France has already rattled Taiwan. Two months ago, French President Emmanuel Macron suggested that the EU should not get involved in a confrontation over Taiwan. He said that in a growing rivalry between the United States and China, the “great risk” Europe faced was getting “caught up in crises that are not ours.”

“It will be very much our crisis,” Jana Puglierin, the head of the European Council on Foreign Relations’ (ECFR) Berlin office, told FP. “It would dwarf the impact of Russian war in Ukraine. There will be a massive impact on European trade and economy.”

However, she agreed that Macron’s comment was in sync with the broader sentiment among Europeans. According to a poll carried out by the ECFR in April, a majority of Europeans would prefer to remain neutral if a conflict between the United States and China broke out regarding Taiwan.

“Americans would find the most supporters among the populations of Sweden, Poland, the Netherlands, and Denmark” the poll said, “but even in these countries, majorities (or 49 per cent in the case of Sweden) would opt for neutrality.” Many Europeans do not see China as a power that undermines Europe, and that view has changed little when compared with the results of the poll conducted in 2021—before Russia’s war on Ukraine.

Puglierin said there are several reasons for such an outcome, notably: anti-Americanism and the physical distance between Europe and Taiwan, but mainly the fact that European leaders haven’t taken the pains to explain to their people why Taiwan is important for Europe.

“It is European instinct to say no to war. For many others it was a hypothetical question, as they didn’t think war between China and Taiwan was imminent. There was also a fair dose of anti-Americanism,” she said over the phone. “People also just don’t understand how much our interest align with those of the United States. It depends on what the U.S. would ask the EU to do—it won’t be military support, but sanctions.”

Elvire Fabry, a senior research fellow at the Jacques Delors Institute, said there was no doubt that Europe would side with the United States in the event of such a conflict, but defended Macron’s comments on Taiwan and said they had triggered an important debate on exactly what sanctions the United States had in mind. “What are these sanctions? What can the EU do? It’s time to talk about specifics.”

Analysts believe the key to the China conundrum lies in disentangling a deeply mangled economic relationship with the Chinese and reducing vulnerabilities.

At the end of this month, the European Council will meet to discuss new legislation and tools to de-risk the EU’s relationship with China. It will work on a structure that European Commission President Ursula von der Leyen will lay out in the EU’s broader economic strategy this week.

Noah Barkin, a senior visiting fellow at German Marshall Fund, said he expected the European Commission to lay out a multifaceted approach based on several pillars: reducing dependencies in critical sectors, making supply chains more resilient, protecting critical infrastructure at home, and restricting transfers of technology that could bolster China’s military development.

But the path to reducing dependencies on China is strewn with minefields. Von der Leyen has already given a direction by calling for de-risking and not decoupling with China, but even that raised eyebrows in many European capitals.

The first daunting challenge is to reconcile differences among the 27 nations, each of which views the relationship through the prism of national interest. Those who carry out less trade with China, such as Sweden and Denmark, and those more dependent on the United States for security guarantees in the face of Russian aggression, such as the Eastern and Baltic European states, find it easier to limit ties with China rather than those such as Germany, whose economy is deeply intertwined with the Chinese—its biggest trading partner.

Last week, the French president called on the EU to impose tariffs on Chinese electric vehicles manufactured with huge state subsidies and sold in Europe on the cheap. The move, he argued, would protect European carmakers. But such a measure, decried as a trade war in media reports, won’t go down well with either the Germans, whose car manufacturers find a very lucrative market in China and may become a target of Chinese backlash, and among Scandinavians who advocate free trade.

In another measure this week to rein in China’s influence, Internal Market Commissioner Thierry Breton reminded EU member states to remove Chinese vendors from their 5G networks. “We cannot afford to maintain critical dependencies that could become a weapon against our interest,“ he said, and called for a ban on Huawei and ZTE without delay.

“After years in which EU member states ignored recommendations from Brussels to remove Chinese vendors from their 5G networks, the Commission is trying to shame them into doing so by going public with its concerns,” Barkin added. Over the years since Breton’s first warning, only 10 European states took steps to restrict these companies.

China has the world’s largest reserves of rare earth minerals and has built itself over the years as the biggest hub of refining other critical minerals, such as lithium. The EU, meanwhile, is still scrambling to sign deals with resource-rich nations and only planning to strengthen its own refining capacities. The parliament has brought in a critical minerals act to diversify procurement from countries such as Chile and Australia, and proposed a semiconductor chip act, too, envisaging a Chinese blockade to the supplies from Taiwan.

Fabry, however, questioned the EU’s ambitions and said the bloc desperately needs a plan, a commitment, and coherence to carry out these initiatives and launch new ones to effectively de-risk its economy from China to any substantial degree. “But it doesn’t have that coherence,” she added.

Finding that coherence would be a major help to Taiwan—but also for the EU itself.

Source: Foreign Policy