Trade bloc needs to defend its security and economic interests, she says ahead of trip to China .China’s Global Peacemaker Ambitions Put It in Competition With U.S.
BRUSSELS—China
is seeking a new international order with Beijing as the dominant player, and
the European Union must be more assertive in defending its security and
economic interests, including possible EU-wide controls on outbound investment,
the bloc’s top official said Thursday.
In a
speech Thursday ahead of her trip to China alongside French President Emmanuel
Macron, set to take place next week, European Commission President Ursula von
der Leyen said the EU must continue engaging with Beijing but needs a strategy
for “de-risking” its relationship and dependencies on China.
She also
tied the future of Europe’s links with China to Beijing’s actions over the war
in Ukraine and effectively called a halt to remaining hopes of enacting a 2020
EU-China investment agreement.
Citing
China’s backing for Russia in the Ukraine war, its Belt and Road global
infrastructure initiative and its assertiveness in multilateral bodies, Ms. von
der Leyen said the Chinese Communist Party’s “clear goal is a systemic change
of the international order with China at its center.”
“One,
where individual rights are subordinated to national sovereignty. Where
security and economy take prominence over political and civil rights,” she said
in a speech hosted by two European think tanks, one of which, the Mercator
Institute for China Studies, has been sanctioned by Beijing.
Ms. von
der Leyen’s comments come at a pivotal moment in Europe’s relations with China,
which have been frayed by years of economic spats and, since Russia’s invasion of
Ukraine, by Chinese President Xi Jinping’s close ties with Russian President
Vladimir Putin.
Facing
crosscutting pressures from Washington to harden its line toward Beijing and
from China not to put its large economic interests at risk, most EU countries
are keen to continue to engage with Beijing and not to be drawn directly into a
confrontation between the U.S. and China.
The EU
and China do close to 1 billion euros, equivalent to roughly $1.1 billion, in
trade a day, and China is the EU’s biggest import market.
The
coming trip by Mr. Macron and Ms. von der Leyen is one of a number by leading
European officials to China in coming weeks.
Officials
say among the key goals is to prod Chinese leaders to take a more balanced
approach to the war in Ukraine and warn that any decision by Beijing to support
Russia militarily in Ukraine would have serious consequences for ties.
Ms. von
der Leyen spelled out that message on Thursday. She said that China’s relations
with Russia have grown tighter despite what she called Russia’s “atrocious and
illegal invasion of Ukraine,” even while Beijing is emerging as the dominant
partner.
Referring
to China’s talk of a peace plan, she said that any proposal “which would in
effect consolidate Russian annexations” of Ukrainian territory “is simply not a
viable plan.”
“How
China continues to interact with Putin’s war will be a determining factor for
EU-China relations,” she added.
China
continues to be a vital trading partner, Ms. von der Leyen said. But she warned
the economic relationship between China and Europe is becoming increasingly
unbalanced and that China’s “explicit fusion of its military and commercial
sectors” poses risks to European security.
She said
the bloc could also better enforce the tools it already has to safeguard its
economic interests.
New
foreign subsidy rules set to take effect later this year will allow the EU to
bar Chinese and other companies from making certain acquisitions or winning
large public contracts if they previously benefited from government support
that the bloc deems distortive. The EU is also close to agreeing on new rules
that aim to make it easier to retaliate against countries that try to use trade
or investment restrictions as a pressure tactic.
EU
countries will need to work together “for a bolder and faster use of those
instruments when they are required and a more assertive approach to
enforcement,” Ms. von der Leyen said.
BusinessEurope,
a lobby group, said any new tools that could have a significant impact on trade
or investment flows between the EU and China, such as controls on outbound
investment, should be assessed and discussed with industry.
Other
steps to reduce economic risks from China should include reducing the bloc’s
heavy reliance on Beijing for the critical raw materials needed for the EU’s
clean-tech and digital industries and working more closely with like-minded
governments, Ms. von der Leyen said.
She also
signaled that the European Commission is no longer pushing for the revival of
an investment pact with China, which European officials believed would have
opened some economic sectors to EU businesses.
The
enactment of the pact, the Comprehensive Agreement on Investment, was stalled
after the EU sanctioned Chinese officials over human-rights abuses and Beijing
imposed counter-sanctions on EU lawmakers and other officials as well as think
tanks. However, some in Brussels, Paris and Berlin had hoped to revive the
pact.
Ms. von
der Leyen said “we have to recognize that the world and China have changed in
the last three years—and we need to reassess CAI in light of our wider China
strategy.”
***Laurence
Norman at laurence.norman@wsj.com and Kim Mackrael at kim.mackrael@wsj.com
https://www.wsj.com/articles/china-wants-to-be-at-center-of-new-world-order-top-eu-official-says-22987030