Between the Eagle and the Dragon

Geopolitics of the EU n.5

“China vs US” by ciberpensadores is licensed under CC BY-NC-ND 3.0

We are currently living through a pivotal phase of global history, a rising power is openly challenging the current hegemonic Superpower, a geopolitical event defined as “Thucydides’ Trap”. The United States of America, after the Cold War and two decades of undisputed supremacy, must now defend their geopolitical status against the People’s Republic of China, who aims at rebalancing the world’s equilibria and becoming the dominant power in the Indo-Pacific region. The fate of numerous international actors will be shaped by this duel. Although the US have so far managed to keep the front-line in Beijing’s backyard, Europe has already become a battlefield. If we ignore or fail to understand the magnitude and the importance of this challenge, we will ultimately lose that bit of geopolitical autonomy we have left. So let us take a deep breath and carefully analyze the situation starting from the beginning.

THE DRAGON’S REVIVAL THREATENS THE AMERICAN EMPIRE

A satirical poster of the 1800s depicts Western powers and Japan battle each other for greater influence over the weakened China. Available at Slideplayer and free to use without modifications.

China has always been accustomed to dominating its neighbors. The first imperial dynasty (221 BC-206 BC) set the basis for regional supremacy, the emperor was known as the “Son of Heaven” due to his divine right to rule over “all under Heaven”. Imperial China didn’t even have official borders because the monarchs saw them as a limit to their power. This state of affairs was disrupted in the mid-nineteenth century when Western colonization reached the Far East. China, following its demise in the Opium Wars (1839-1842; 1856-1860), was divided in spheres of influence among the Western powers and Japan. Finally, in 1949 the Chinese Communist Party came to power and the newborn People’s Republic of China regained its geopolitical independence.

Now the ruling elite dreams of celebrating the 100th anniversary of the founding of the PRC (2049) with its comeback as regional hegemon, finally getting over the previous “Century of Humiliation” (as the Chinese remembers it) started with the Opium Wars. However, Chinese supremacy over the Indo-Pacific region would mean the end of the US’ role as a global hegemon. Although Washington knows that Beijing does not have the power to take its place, the Superpower must defend its position even at the regional level and it does so by isolating and keeping its rival at bay. The main battleground is the South China Sea, which the Dragon wishes to control and where the Eagle has set the stage for the siege of its rival. But the naval power of the former is not sufficient to challenge the navy of the latter, therefore China has to extend the confrontation to other fronts to keep the Superpower busy. Europe is a key battleground where Beijing seeks to gain influence at the expense of America.

THE BATTLE FOR EUROPE

The Old Continent is the shiny diamond of the American Empire. Washington’s global supremacy strongly relies on the domination of Europe, there is no other continent as much geographically strategic and with a human capital as much valuable. If America rules the world it’s mainly because it rules over Europe, Washington is well aware of that and so is Beijing.

China’s plan is to charm America’s European partners and to sow discord in the transatlantic relationship. The Dragon’ seduction techniques revolve around economic well being, a matter of huge interest for the EU and its Member States. In particular, Beijing’s arsenal to win Europe over includes:

• The Belt and Road Initiative (BRI)

• 5G network

• Investments and mutual access to each other’s markets

Allow me to take a closer look at each one of these instruments.

The Belt and Road Initiative

Chinese propaganda depicts the Belt and Road Initiative as the legitimate successor of the ancient Silk Road, along which trade occurred between the West and the Far East.

“The Silk Road in the 1st century” by Kaidor is licenced under CC BY-SA 4.0

Back in 2013 the Chinese president Xi Jinping unveiled his neocolonial plan which has come to be known as the Belt and Road Initiative. The BRI has been poorly disguised as a global infrastructure development strategy. Its declared aim is to promote connectivity and economic cooperation between the European, Asian and African continents by financing and co-financing infrastructure projects along the historic Silk Road. In reality the intent of the Chinese investments is to take control of foreign countries’ strategic economic sectors leveraging the subsequent burdensome debt. Basically, the amount of the investment is intentionally exaggerated as to force the investee to cede key assets in order to repay its debt. So far, 78 countries (16 of which are Member States of the EU) have adhered to the project. Some of them (the most fragile economically), like Sri Lanka, have already fallen to the “Debt Trap”, while others, like the South-East Asian nations, hope to enjoy the project’s economic benefits without having to cede part of their sovereignty to Beijing.

In Europe the BRI was received with mixed reactions. Most Member States have preferred to keep business as usual with China, others hope to emulate the approach of South-East Asia. Among the latter we find all of the former Soviet satellites, Greece, Portugal and Italy. All of them hoped to gain economic advantages by signing the Memoranda of Understanding with Beijing, but the outcome has so far been disappointing for every party involved, including China. Eastern-European countries had hoped to enhance the connectivity of the region, but they haven’t so far seen any boost in investments with respect to the previous situation. Beijing expressed particular interest towards the Greek port of Piraeus and the Italian port of Trieste, this raised some concerns in Washington. The US strengthened the relationship with Greece by signing a major military agreement to discourage the Dragon. Italy instead tried to channel investments to the port of Genoa, given the peculiar status of Trieste, but China had well in mind what it wanted and in the end it focused its efforts in the Mediterranean on the Piraeus while the control of the port of Trieste was handed over to a German corporation. In Portugal, where the Chinese presence in the national economy is already significant, the strategic Atlantic port of Sines is now stimulating the Dragon’s appetite, the Eagle knows that and it’s getting ready for the match. The European Commission’ scarce attention to the BRI confirms the European unawareness of the project’s true nature. Luckily its effectiveness in Europe seems to be limited, partly due to Washington’s intervention but mostly because the plan is still at an early stage and most of its operations are based in Asia. But there are other things to be worried about.

5G network

Chinese tech companies Huawei and ZTE are the almost undisputed front runners in the global race to develop 5G technology. ZTE is a state-owned company while Huawei is (supposedly) private-owned but in any case, both firms (as any other in China) serve the interests of the Communist Party. Huawei and ZTE have been trying for years to have the EU countries grant them rights to develop 5G networks on their national soil, the US have warned that Beijing’s goal is to secure access to European networks and steal sensitive data through hidden backdoors. The Americans have so far offered no concrete proof of that, but their habit of spying on their own allies tells us that they know what they’re talking about. The threat is real regardless of how much we can trust Washington.

US’ pressure has so far managed to convince the UK, Italy and Sweden to ban the Chinese tech firms from participating in the 5G infrastructure development. France moved faster than its European partners and excluded China by choosing European firms Nokia and Ericsson to build its 5G network without officially banning Huawei and ZTE from taking part in any future project. The German solution has been far more conciliatory, Berlin passed a law that gives the government the power to exclude companies from the 5G network for national security reasons. No action was taken directly against the Chinese firms which still have the possibility to operate in Germany. Apparently, the German economy is too reliant on the Chinese market and the Germans care far too much about business to poison the relationship with Beijing. On the other hand, Hungary behaves, as always, as the black sheep of the EU. Huawei has been warmly welcomed by Budapest and is currently in charge of developing the country’s 5G network. The cooperation doesn’t even stop there, the Hungarian government doesn’t seem to see China as a threat as it underwent other important projects with the Chinese firm. It’s worth remembering that Hungary is getting ready to become the first and only EU country to approve the use of the Chinese vaccine against COVID-19 on its own citizens.

The European Commission has tried to raise awareness against the threat posed by Huawei and ZTE but with clearly no commitment or concrete action to protect European data. If it wasn’t for the US’ intervention, right now China’s agents would be much more present on the Single Market and Beijing would have an easier access to our networks. And yet, two European companies, Nokia and Ericsson, are Huawei’s most feared competitors in the 5G-related market. But Europe is so blind it doesn’t catch the unique opportunity of turning them into true European champions against China and even against any alternative Washington would propose in the future.

Investments and mutual access to each other’s markets

The European Union and the People’s Republic of China have always been at odds on the matters of investments and markets’ access. The EU has always complained of asymmetric economic relations, in which Chinese firms have an easier access to European markets with respect to European firms who want to participate in the Chinese market.

In 2013 the European Commission was given a 7-year mandate to negotiate an investment deal with China on behalf of all Member States. The two parties finally reached an agreement that was signed on the 30th of December of 2020, just two days before the Commission’s mandate expired. Every aspect of the Comprehensive Agreement on Investments (CAI) is controversial, including the events which built up to its signature. Germany used its position as president of the Council of the EU to speed up the negotiations and conclude the deal before the new American president would take office. Washington had obviously expressed concerns about the agreement, so Berlin took advantage of the American transition of power to shake off Biden’s warnings. But complaints for the German rush came from inside the EU as well. Apparently, France was not happy with Berlin’ sprint, but in the end Paris was seduced by the prospect of finalizing the ratification under its presidency of the Council in the first half of 2022. Supposedly this had been Chancellor Merkel’s idea to win Macron’s backing over. Many Member States’ government officials had expressed frustration over how the Commission (whose president is a German politician and a friend of Angela Merkel) handled the last phase of the negotiations, underlining how themes like forced labor and human rights abuse have been overlooked. First of all, the EU’s commitment to protect the Uighur persecuted minority from the CCP’s forced labor programs is far from being sufficient. China has agreed to “make continued and sustained efforts” to ratify international conventions against forced labor, clearly a worthless promise. Many argue the EU should have never made a deal in the first place with an authoritarian regime directly responsible for an ongoing genocide. The Commission answered the numerous critics by pointing out how China reached a similar agreement with the US after the trade war and stated how important it is to keep up with the Eagle if Europe too is to join the efforts against the Dragon’s growing influence. To be fair, the EU does need to mature its own approach to world affairs in general and to China in particular, but this agreement perfectly represents the Union’ short-sightedness in handling strategic matters while caring solely for economic returns. There are no elements that would actually bind China to its promises and there is no designated body that would settle eventual disputes, the only thing we are certain of is the Dragon’s hunger for European assets and the Commission has decided to trust this despotic deceitful regime. The ultimate proof of this agreement’s rotten nature is Beijing’s enthusiasm, the Dragon gained a bit of ground on the European battleground and it’s not hiding its satisfaction. Fortunately, there are also several MEPs who don’t seem to be fond of the CAI and the approval of the European Parliament is essential to the ratification process. Let us hope the only democratically elected institution of the Union can put a limit to the Commission’s recklessness.

Europe is incapable of thinking strategically, it fails to see the world in geopolitical terms and the only thing it truly cares about is economic gains. Europeans have literally sold their geopolitical independence to the US in return for economic well being, because of our inertia we are now a desired prey in a clash between two titans who fight each other for the fate of the world. We think we are smarter than them, we believe we can outplay them, we believe that as long as we fuel our GDP everything is going to be alright. Yet the more we let Beijing gain ground because of our ingenuity, the more Washington breaths down our neck. Even these two giants understand the value of Europe more than we do.