No Breakthrough Expected At China-EU Talks

Top EU leaders meet Chinese Premier Li Keqiang this week at a meeting in Brussels, but their hopes of winning solid commitments on trade look set for disappointment.

Brussels is trying to beef up its approach to the Asian giant as it shows little willingness to listen to longstanding complaints about industrial subsidies and access to its markets, and as fears grow about growing Chinese involvement in European infrastructure.

But the half-day meeting on Tuesday is on course to fizzle out with little to show in terms of agreements, with European sources saying it looks highly unlikely a final joint statement will be agreed.

EU officials say China is unwilling to give binding commitments on their key demands, including the inclusion of industrial subsidies as part of World Trade Organization reform, and they are reluctant to agree the kind of anodyne declaration of good intentions pushed out after last year's summit in Beijing.

The European Commission last month issued a 10-point plan proposing a more assertive relationship with Beijing, labelling China a "systemic rival" -- a move welcomed by French President Emmanuel Macron as a belated awakening.

But while the EU's 15 trillion euro market gives it significant economic clout, it struggles to maintain unity among its 28 members on issues of foreign policy, allowing China to pursue one-on-one deals with individual countries.

"When economic policy intersects with foreign policy and security, the EU lacks the will and capacity to act strategically," Philippe Legrain, visiting senior fellow at the London School of Economics' European Institute, wrote in an analysis for Project Syndicate magazine.

"Apart from France and the UK, which is leaving the EU, member governments lack a geopolitical mindset."

This most striking recent example came last month when Italy became the first G7 nation to sign up to China's "Belt and Road Initiative" (BRI), a massive network of transport and trade links stretching from Asia to Europe.

Concerns have been raised about the way the BRI saddles countries with Chinese debt and leaves key infrastructure nodes owned by a potential strategic rival, though Beijing insists the initiative is a "win-win" arrangement.

Former Greek finance minister and scourge of the EU, Yanis Varoufakis, said Europe only had itself to blame if Mediterranean countries turned to China.

"We created a vacuum and the Chinese are filling it. The Chinese are coming in because there is a dearth of investment in this continent... We are failing to generate investment that would give our business the opportunity to compete with them," he said in Brussels last week.

Macron's own China initiative last week -- hosting President Xi Jinping for a summit with German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker -- may also have been a double-edged sword for the EU.

The meeting in Paris gave the EU -- through its two most powerful members -- the chance to press its concerns directly with the paramount Chinese leader.

But analysts say it also seriously undercut this week's summit in Brussels, where Li will hold talks not with heads of government but with Juncker and EU Council President Donald Tusk.

"The China summit has already taken place. It is not Europe for China without France and Germany in the same room," Hosuk Lee-Makiyama, director of the ECIPE Brussels think-tank, told AFP.

"Xi has already spoken. Xi has already shaken hands with his counterparts so by default the summit has already taken place. In a sense, they only bring out Li for Europe or when something bad is going to happen and somebody needs to take the blame."

At the same time, Lee-Makiyama warned, Europe risks being left playing catch-up if ongoing US-China trade talks result in a deal between the world's two biggest economies.

"China is going to probably offer us some watered down version of what they gave to the Americans, but that also means that we have to give something," he said.

But while Tuesday's meeting may not yield a breakthrough in the EU's complex relationship with China, European officials insist it still has value in keeping up the pressure.

"There is broad agreement within the EU that it is important to communicate to China that we are at a point where we want to see... concrete steps forward on their willingness to work with us at the WTO," an EU diplomat told AFP.

"What is important is that we give a signal to China that the EU is partner but also a competitor and requires Beijing to make some steps." (AFP)