In 2021, China overtook the United States to become the European Union’s largest trading partner. In 2022, China was not only the EU’s largest importer, but also the EU’s third-largest exporter, behind the U.S. and the United Kingdom.
The EU-China Comprehensive Agreement on Investment, once hailed as a historic investment agreement, came to fruition after seven years of negotiations. However, in May 2021, the European Parliament withheld ratification due to China’s counter-sanctions on its members as well as other European scholars and think tanks. Previously, the EU imposed sanctions on Chinese officials who were accused of human rights abuses in Xinjiang.
Gunnar Wiegand, former managing director for Asia and the Pacific at the European External Action Service, is currently a visiting distinguished fellow at the German Marshall Fund of the U.S. From 2016 to 2023, Wiegand was a key contributor to the EU’s policy on relations with China, India and other Indo-Pacific partners.
In a recent interview with RFA Mandarin, Wiegand discussed the EU-China relationship, challenges to trade relations and the effect of China’s “pro-Russian neutrality” on bilateral ties in the context of the Russo-Ukrainian War. The interview has been edited for length and clarity.
RFA: What factors are currently beneficial to the China-EU relations?
Wiegand: The relationship between the European Union and China is first and foremost strong in the context of our economic relations. … We are very important partners for each other, and there is, therefore, economic interdependence. And that requires a lot of responsible decision making on both sides.
I will now enter into the specifics of the difficulties, which, of course, exist in such a vast economic relationship. These are linked to significant state subsidization of production in China, violations of intellectual property rights and forced technology transfer, or to the fact that there are certain sectors of the Chinese economy which remain closed to foreign investors.
I also want to emphasize that there is a common conviction that we need to cooperate closely, and we do so on everything related to climate change, the greening of our economies, and also to biodiversity, to name a few. Other international challenges are linked to the debt management of so many countries which are overly indebted, or to global health questions where we hope to have a global pandemic treaty at some point. These are examples which I would say are rather on the side where Europe and China are used to working together as partners.
Sometimes, of course, when it comes to technologies for certain industries, we are also strong competitors.
RFA: What is the anti-subsidies probe into electric vehicles (EVs) manufactured in China that the EU introduced last year about?
Wiegand: For example, there are about 140 car-producing companies in China, active with a massive overproduction of cars. When you have highly subsidized products which you cannot sell on your own market, you have to look after markets in other countries. The effect is then similar as with a dumped product when you have a highly subsidized product.
I cannot comment on the state of this investigation. There will be a proposal once the investigation is finalized, whether, and if so, at which level, specific import duties would be applied so as to balance out the price differences. I only wanted to say that the rules for imposing anti-dumping duties or anti-subsidies duties are encoded in the trade defense instruments, remedies agreed under the World Trade Organization.
RFA: Will the EU’s goals to reach a zero-emissions target for new passenger cars registered in Europe by 2035, and to accelerate the production and sale of low-emission vehicles to achieve carbon neutrality by 2050 conflict with the probe or the competition with China’s EVs industry?
Wiegand: China has, of course, built up over the last few years a formidable production capacity for the greening of its own industry. This includes solar panels, wind power, batteries, EVs and many more items. China has seen the need for industrial output, which facilitates this green transition. And this is, of course, important also for us. … However, it is not possible for Europe to deal with the products put on the European market for this green transition, which are produced in a way … that they are highly subsidized and result in overproduction. We are together with China to meet our goals of decarbonizing, moving out of greenhouse gas emissions, but it must be done in a way that our wide-open market will not become the dumping ground.
RFA: What about factors that might be harmful to the EU-China relations?
Wiegand: Among the problematic areas, we should first and foremost mention the impact of the war of Russia against Ukraine. China has certainly underestimated the Russian invasion of Ukraine in terms of its impact on relations between Europe and China.
Because in the beginning, there has been, let’s say, hope and certainly the encouragement expressed by all our leaders when engaging with China … and [Chinese] President Xi Jinping was encouraged to reach out not only to [Russian] President Vladimir Putin but also to [Ukrainian] President Volodymyr Zelenskyy.
China has opted for something which we call pro-Russia neutrality. China does keep contact with both sides, but it keeps much more contact with Russia because they have a limitless friendship. China has never condemned Russia for raging war against its neighbor and taking part of its territories. While China is officially supporting the territorial integrity of all states, including Ukraine, it has never indeed officially recognized the annexation of Crimea or Donetsk and Luhansk, southern parts of Ukraine. China has not done anything vis-à-vis Russia to reverse this and to restore Ukrainian territory.
While the need for negotiations and the principles of territorial integrity, sovereignty and independence of states were emphasized, “China’s Position on the Political Settlement of the Ukraine Crisis” did not include the necessity for Russia troops to withdraw.
Russia uses China’s very reasoning that certain states and alliances are seeking to obtain military advantages to the detriment of the security of others, the so-called indivisible security. This interpretation of that principle negates the right of each state to decide how to secure itself and whether or not to belong to an alliance, which is equally enshrined in the security architecture of Europe in the 1990 Paris and the 999 Istanbul Charters under the Organization for Security and Co-operation in Europe.
RFA: There have been multiple media and U.S. intelligence reports on civilian and military dual-use equipment flowing to Russia. What is the EU’s understanding of this issue?
Wiegand: When it comes to the question of delivery of arms or ammunition, which has been clearly put forward as a red line by our leaders, China has emphasized at the last EU-China summit in Beijing that it does respect this red line. That no lethal aid is provided for the Russian war effort.
There’s a lot of discussion whether dual-use goods, which have components that could be used for arms production, are indirectly coming into Russia. … And the expectation for Chinese involvement and engagement in this direction has not been sufficiently met with actions. That is certainly an issue in our bilateral relationship.
The latest round of sanctions has included the interdiction for European companies to deal with a number of companies in countries, where one has seen a significant increase of trade volumes with goods that can be used for military purposes. … It’s quite a number of different countries, and this is also for the first time directly affecting a few companies from China, which are also in Chinese ownership.
Edited by Roseanne Gerin and Joshua Lipes.