Media Global Economy 2021.07.21
The article was originally posted on JBpress on June 17, 2021
1．A big mistake made by the Chinese government
I have found through recent exchanges of views with Western experts on China that there is one event with regard to which most of them agree that Beijing has made a big mistake.
That is the sanctions imposed by the Chinese government on the EU in retaliation for the sanctions imposed by the EU on China for human rights abuses in Xinjiang.
China’s countersanctions were so disproportionate and unjustified compared with EU sanctions against China that the European Parliament was strongly hostile to them.
Accordingly, the European Parliament decided to suspend the deliberations in the European Parliament to finalize the EU-China Comprehensive Agreement on Investment (CAI), which was broadly agreed upon between the two parties at the end of 2020.
The EU’s offer to China to resume the deliberations is conditional on the lifting of the above sanctions by China.
With Beijing unlikely to simply lift the sanctions, the dominant view among experts is that the deliberations will be suspended for a long time. Not a few of them even consider that the deliberations may not resume at all in the worst case.
Starting in 2014, the CAI negotiations had been going on for seven years between the EU and China. At the beginning of December 2020, almost all EU officials believed that there was little chance that the talks would produce a basic agreement before the end of 2020.
It was mainly on account of China’s consistent refusal to accept the terms of reciprocity that the EU had strongly demanded for China.
According to China, the reason for the refusal was that it was still underdeveloped and thus incapable of improving competitive conditions of its market in accordance with the same standards as those applied to the EU, whose members were developed countries.
However, in mid-December, Beijing suddenly made a concession and said it would accept the EU’s demands.
The first reason for China’s compromise was that if Joe Biden’s administration scheduled to start in the U.S. in January 2021 adopted a hardline policy on China almost as strong as that of Donald Trump, it was highly likely that the U.S. would put pressure on the EU, thereby making it even more difficult for China to negotiate with the EU.
Second, it was Germany that held the presidency of the EU in the second half of 2020, which rotated among the EU member states every six months.
Beijing may have thought that while it could expect support from the pro-China Chancellor Merkel until the end of 2020, it could not expect a person as influential as she to emerge to support China after that.
The EU was surprised by China’s sudden concession, but seeing it as an opportunity, moved quickly to reach a basic agreement.
In response, Jake Sullivan, who was appointed Assistant to the President for National Security Affairs in the Biden administration, warned against the EU’s move on Twitter on December 22, before he took office.
Nevertheless, the EU and China struck a basic agreement on December 30.
Since the agreement is based on concessions by China, the economic benefits for the country are not great.
That said, the fact that China was able to achieve concrete results in strengthening relations with the EU in the midst of the serious confrontation with the U.S. had great significance for China from a political point of view.
However, as mentioned above, China now faces the risk of losing this important political asset.
The loss to be incurred by China from this is immeasurable. Why did China go to such lengths to take a tough stance against the EU?
In this regard, several China experts in Europe and the U.S. believe that Beijing could not have predicted that the EU would react so harshly that it would decide to suspend deliberations on the CAI.
I would like to explain the background of this issue in some detail below.
2．How the EU and China imposed tit-for-tat sanctions
On March 22, 2021, the EU Council of Foreign Ministers criticized China’s human rights violations in Xinjiang and adopted sanctions against those based in the region and allegedly involved in the violations.
Including such measures as a ban on travel to the EU and the freezing of assets within the EU, the sanctions target four individuals, namely Director of the Xinjiang Public Security Bureau, a senior official of the Party Committee of the Xinjiang Uyghur Autonomous Region (XUAR), a former senior official of the Party Committee of the XUAR, and Party Secretary of the Xinjiang Production and Construction Corps (XPCC), and one entity, the Public Security Bureau of the XPCC.
Coming into line with the EU, the U.S., Canada, and the U.K. subsequently announced similar sanctions.
On the same day, the Chinese authorities imposed retaliatory sanctions against the EU, including a ban on entry into China.
China’s sanctions target a total of ten individuals: five members of the European Parliament, one member of the Dutch Parliament, one member of the Belgian Federal Parliament, one member of the Seimas of the Republic of Lithuania, one German scholar and one Swedish scholar; and four entities: the Political and Security Committee of the Council of the EU, European Parliament’s Subcommittee on Human Rights, the Mercator Institute for China Studies (MERICS) in Germany, and the Alliance of Democracies Foundation in Denmark.
While EU sanctions are limited to local government officials and an entity in Xinjiang, China’s retaliatory measures target politicians, experts and key organizations representing the entire EU, much tougher than their EU counterparts.
This prompted the European Parliament to pass a resolution on May 20 to freeze deliberations on the CAI, which had been discussed in detail for ratification after a basic agreement was reached between the EU and China on December 30, 2020.
It was also decided that deliberations would not resume unless Beijing lifted its sanctions.
3．Intentions and miscalculations of China’s sanctions on the EU
Western experts on China believe that senior officials of the Chinese government were well aware that the country’s countersanctions against the EU were far severer than EU sanctions against China.
Many of them also believe that Beijing did not expect that it would directly lead to the suspension of the CAI deliberations by the European Parliament.
In China, the central government decides on state management policies. Recently, it has begun to seek public comments on important bills in advance and make amendments, as necessary.
However, the policy-making process from the internal deliberations by the government to the final decision is not disclosed to the public. Therefore, public opinion and public sentiment rarely influence policy.
The recent freezing of deliberations on the CAI in the European Parliament was, meanwhile, influenced by the growing anti-Chinese sentiment in the EU over the human rights issue in Xinjiang in response to China’s retaliatory measures.
Many experts believe that China could not have foreseen that its countersanctions would provoke such an outcry from the EU and result in the suspension of the CAI deliberations.
If the country’s retaliatory sanctions against the EU had been limited and balanced with EU sanctions against China, anti-Chinese sentiment would not have been so bitter, and the decision to suspend deliberations on the CAI would not have been made.
The problem was that China’s retaliatory measures targeting politicians, experts, and key organizations representing the entire EU were taken as a serious challenge to democracy.
China experts in Europe and the U.S. agree that this was a major mistake by China.
If China were a democratic nation, it could have foreseen the grave consequences of the sanctions against the EU.
However, according to several Western experts on China, it failed because of its different political systems to consider the serious implications of the retaliatory sanctions it would impose, and the huge price it would have to pay for them.
4．President Xi Jinping hints at a shift in China’s wolf warrior diplomacy
On May 31, shortly after the European Parliament announced the suspension of deliberations on the CAI, President Xi Jinping reportedly told senior Communist Party officials that when communicate with the outside world, they “must not only display self-confidence but also strive to create an image of China that is humble, credible, loveable, and respectable” .
China experts in the West take this as an indication that leaders of Beijing, faced with the grave consequences, i.e., the European Parliament’s decision to suspend deliberations on the CAI, thought that China should relax its extreme hardline stance toward the outside world. I think the same.
Nevertheless, no expert believes that this will immediately lead to a relaxation of the country’s aggressive diplomatic stance referred to as “wolf warrior diplomacy.”
Skeptical that the Chinese government will change its diplomatic policy, most experts agree that we need to wait and see if anything actually changes.
5．The price of an eye for an eye and a tooth for a tooth
Up until around 2010, China maintained a low-key attitude toward the outside world in accordance with Deng Xiaoping’s policy of “tao guang yang hui (韜光養晦)” (waiting for the right time while hiding one’s capabilities and accumulating internal strength).
However, China was the only country in the world to achieve a remarkable economic recovery after the collapse of Lehman Brothers, and was credited with saving the world economy from the Great Depression.
This triggered an upsurge of nationalism within the country, and a hardline diplomacy of “an eye for an eye and a tooth for a tooth” became noticeable.
Recently, China’s sanctions against the Czech Senate President for his comments in support of Taiwan during his visit to Taiwan in September 2020, and Foreign Minister Wang Yi’s statement on the issue of the Senkaku Islands made at a joint press conference immediately after the Japan-China Foreign Ministers’ meeting during his visit to Japan in November 2020, which was incompatible with the Japanese government’s position, generated strong resentment from Europe and Japan.
Besides the European Parliament’s decision to suspend deliberations on the CAI in retaliation for China’s sanctions, some of Central and Eastern European countries (CEECs) have recently begun to display a negative attitude towards China, including withdrawal from China’s 17+1 initiative, an economic cooperation mechanism between China and CEECs.
Amid the prolonged confrontation with the U.S., it is very important for China to maintain stable and good relations with Japan and the EU, and Beijing has been making various efforts to improve and strengthen relations with them.
It is not that the Chinese side alone wanted good relations with Japan and the EU, but attaching importance to relations with China, the Japanese and EU sides have also been endeavoring to improve bilateral relations shoulder-to-shoulder with the Chinese government.
And yet, Beijing’s hardline stance on the diplomatic front has led to the loss of these achievements one after another.
By taking a tough diplomatic stance, China’s Ministry of Foreign Affairs can save face in the short term. It is also supported by nationalism in the country.
However, the price to be paid for this is high.
China has instantaneously destroyed the achievements that it has accumulated so painstakingly over a long period of time in collaboration with many other parties at home and abroad.
The weight of the short-term reputation gained from the bellicose stance towards the outside world is not balanced by the weight of the enormous effort thus far put into the achievements that would disappear because of the hardline stance.
China appears to be coercing other countries into joining its camp and accepting its claims through the use of its economic and military power.
Eastern philosophy, the traditional spiritual culture of China, emphasizes the “governance by virtue,” which values the human qualities of leaders.
The governance by virtue advocates for governance by a virtuous leader who sincerely endeavors to do his/her best for the people, thereby making them appreciate him/her and want to support him/her on their own accord.
As one of the major reasons for China’s dissatisfaction with U.S. leadership, it is considered that China feels that recent U.S. policy management is lacking the elements of the governance by virtue.
If that is the case, then China should not imitate the U.S.’ attitude, but rather, as the originator of the governance by virtue, demonstrate it itself.
If China puts this philosophy into practice in diplomacy, the belligerent stance of wolf warrior diplomacy is expected to be corrected consequently.