Chinese Premier Li Keqiang seeks to build European ties

Jonathan Radley, Business and Policy Intern

China’s second-highest official, Premier Li Keqiang, is in Europe this week for a five-day tour amid competing visions on the continent for future EU-China relations.

The Premier’s visit follows last month’s European trip by President Xi Jinping, which saw Italy’s endorsement of the Belt and Road Initiative (BRI) – the first endorsement of the project by a G7 nation. Germany was reportedly dismayed by Italy’s decision to sign up to the BRI, highlighting the divisions in the EU over Chinese engagement. Before President Xi’s state visit to Paris in March, French President Emmanuel Macron had stated that “the period of European naivety [towards China] is over,” while the European Commission President, Jean-Claude Juncker, has proven fiercely critical of China over its human rights record.

Li’s visit can be seen as an attempt to counter these European anxieties in what is a key region for China. According to NHK, Beijing is aiming to strengthen its relations with Europe amid trade friction with the United States and President Trump’s ‘America First’ policy.

The Premier has sought to quell anxiety that Beijing is causing divisions between EU member countries, writing in a guest commentary for Handelsblatt that “we emphatically support the European integration process in the hope of a united and prosperous Europe.” According to Xinhua News Agency, ‘it is natural for China and the EU to compete with each other in some areas. However, it is not a “You-lose-I-win” or “Winner-takes-all” game; competition and cooperation go hand-in-hand.’

However, China will need to offer more than media commentary to alleviate European concerns, and there were indications of movement following the first China-EU Leaders’ meeting in Brussels on Tuesday, which Li attended.

Following the meeting, Europe claimed a diplomatic victory over their aim for China to pursue fairer economic policies; a meticulously drafted joint statement indicated important Chinese concessions regarding curbing subsidies to domestic industries and facilitating market access for foreign companies.

China also claimed a diplomatic win as EU leaders appeared to soften their recent strong criticism by refraining from any references to China as a “systemic rival” or explicitly branding its trade practices “unfair.” Some critics within Europe remained sceptical, though, as they believe China’s words on fairer trade often do not transfer into action. Li Keqiang addressed this concern, stating after the China-EU Leader’s meeting that ‘we must deliver what we promised.’

Both sides also reaffirmed their joint commitment to co-operate on WTO reform during the meeting. This could be a positive sign of unity in the face of the ‘America First’ challenge to the multilateral order. Other burning concerns discussed included developing mutual synergy on the BRI; upholding Intellectual Property rights; opposing forced technology transfers and Huawei’s ability to supply equipment for future 5G networks.

Premier Li will now attend the 16+1 meeting between China and Central/Eastern European countries in Croatia.

Despite unease in some quarters, China is establishing a strong foothold in Central and Eastern Europe. Last week, the parliament of the Federation of Bosnia and Herzegovina approved a €614 million loan for an energy project involving China. The Greek port of Piraeus, acquired by China’s Cosco group in 2016, will soon become the busiest port in the Mediterranean. Numerous Central and Eastern European nations have also signed pacts with China over the BRI, including many EU member states (Bulgaria, Croatia, Czechia, Estonia, Hungary, Greece, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia).

Whilst in Croatia, Li is expected to witness the signing of an MoU between Huawei and the Croatian Central State Office for the Development of Digital Society.