US, Europe seek united front against China

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The United States and the European Union have unexpectedly announced a new united front against China, setting up a top-level dialogue to be led by Secretary of State Mike Pompeo and EU foreign-policy chief Josep Borrell.

Mr Pompeo said he’d travel to Brussels as soon as possible to kick off the dialogue, which would discuss joint actions to counter the anti-democratic influence of the Chinese Communist Party.

He hoped the dialogue wouldn’t merely be a talking shop. Instead, the two sides would first try to reach a common understanding of the Chinese threat and then resolve ways to act on it.

“The same way the trans-Atlantic alliance has always preserved democracy and freedom, [we will develop] a set of collective responses that will preserve and protect those very freedoms that the Chinese Communist Party wants to undermine each and every day,” he said.

His announcement, at an online German Marshall Fund forum on Thursday (Friday AEST), is the latest in a string of US diplomatic efforts to rally like-minded countries to President Donald Trump’s anti-China crusade.

The traditional Five Eyes intelligence partnership has expanded to include a recent meeting of treasurers and finance ministers. The “Quad” of the US, Australia, Japan and India has also begun holding regular phone hook-ups, and has expanded to include Korea, Vietnam and New Zealand.

Mr Trump has also sought to use the US chairmanship of the G7 group this year to include a group of like-minded Sinosceptic democracies including Australia, Korea and India.

The new US-EU Dialogue on China was announced against a backdrop of rising trans-Atlantic tensions on trade and defence.

Mr Trump is threatening wide-ranging tariffs on European goods in retaliation at both Airbus subsidies and unilateral taxes on the earnings of US digital tax giants.

He’s also signalled a plan to withdraw about one-third of the American troops stationed in Germany, ostensibly because Berlin isn’t spending enough on its own military.

The dialogue underscores the EU’s changing dynamics on China. Brussels and other European capitals have tended to more carefully weigh their approach to China between criticisms of predatory economic behaviour and domestic human rights abuses on the one hand, and trade and investment opportunities on the other.

Vast differences

But European leaders have become increasingly outspoken against China. Last year the EU categorised China as “a systemic rival” and at a virtual bilateral summit with Beijing earlier this week it fired off tough criticism on a host of human-rights questions.

“Six months ago, 2020 was hailed as the year for EU-China relations to reach new heights, but the vast differences between our two respective systems is now more apparent than ever,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China.

“While our economic relationship continues to bridge that gulf, if more is not done to shorten the distance there is a danger we will drift even further apart.”

The EU is preparing policies to defend itself against state-subsidised Chinese takeovers, to reduce its dependence on Chinese supply chains, and to foster European companies that can compete with Chinese companies.

It’s also becoming more gradually more reluctant over the involvement of Chinese telco giant Huawei in its 5G mobile networks.

Mr Pompeo welcomed the tougher line from Brussels: “The Europeans have every incentive to get this right, not for the United States, but for the good of their own people,” he said.

Mr Borrell told the German Marshall Fund forum the EU had been disappointed that China’s values hadn’t converged with those of the West, and now had to deal with new realities.

“We don’t want to engage in a systematic rivalry with China but on the other hand we don’t want to be naive” he said. “Until now it was a provider of cheap goods, now it’s a technological competitor … it’s a rival.”

But Mr Borrell also said dealing with the Trump administration could be difficult, suggesting an ulterior motive for the Dialogue may be to help with some White House wrangling.

“The US administration has been taking decisions unilaterally without saying what they are going to do,” he said. “Every day you learn that the US decides to do something that affects you without taking consideration of the effect you are going to suffer.”

By Hans van Leeuwen
Financial Review

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