Beijing is transforming EU-China ties by transforming the context

Beijing is transforming EU-China ties by transforming the context

China is about to alter dimensions of the geostrategic context and it is advisable to consider both realistic and imaginative new routes of action.

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by Augusto SOTO

Strategic Culture Foundation

The announcement by Beijing that it will pledge a multi-billion euro investment in Europe’s new infrastructure 315 billion euro’s fund at a summit on June 29 in Brussels, signals not only a milestone in financial diplomacy, injecting dramatic vitality to EU-China ties at the expense of the US.

It is also the latest step in China’s efforts to shape regional, macro-regional and global economic governance by peaceful means, challenging the US, embarked on a policy of containing China at the South East Asia Sea and at the Asia Pacific in military terms. Beijing’s move deserves EU’s active action, among other things, in order to persuade Washington that in fact there is no Chinese threat to its security, and on the contrary, a series of economic measures aimed at peaceful development encompassing not only EU-China ties, but also the Eurasian landmass as well as the Asia Pacific.

China understood as a chance for common prosperity

Beijing’s latest move follows major EU governments’ decision to join the Beijing-led Asian Infrastructure Investment Bank (AIIB) last March. But China’s plans are even more comprehensive in geostrategic scope, including macro-regional dimensions as well, integrating the Silk Road policy, also known as One Belt One Road (OBOR). It encompasses Eurasia’s hinterland including Central Asia, a region where specifically Beijing has projects worth more than $ 50 billion, plus the maritime route including the South China Sea, the Indian Ocean and the Mediterranean. As a whole, the Silk Road Fund is endowed with $ 40 billion aimed at revamping the old routes connecting Asia to Europe, carrying goods and ideas across Eurasia over centuries, nowadays including some 60 countries.

Chinese strategist Zheng Bijian
Chinese strategist Zheng Bijian

Such comprehensive plans reinforce the idea of China’s «peaceful rise», first made public by Chinese strategist Zheng Bijian at the Boao Forum, in 2003. Zheng explained in subsequent articles that: «China will not follow the path of Germany leading up to World War I or those of Germany and Japan leading up to World War II, when these countries violently plundered resources and pursued hegemony. Neither will China follow the path of the great powers vying for global domination during the Cold War. Instead, China will transcend ideological differences».

Chinese Premier Li Keqiang -- China to extend economic diplomacy to EU infrastructure fund
Chinese Premier Li Keqiang — China to extend economic diplomacy to EU infrastructure fund

On the other side, specifically, in its latest move, Beijing’s pledge of a multi-billion dollar investment in Europe’s 315 billion euros new infrastructure fund is both inclusive and grand strategy-oriented, since albeit its figures are not known yet-it will presumably be in the billions-, it is expected to come with a request to the EU for return investment in China’s westward infrastructure effort – the OBOR initiative – setting up important energy and communications reaching Greece from Central West and South Asia.

Zheng’s vision, more than a decade ago, seems more real than ever. As he stated then, Beijing: «advocates a new international political and economic order, one that can be achieved through incremental reforms».

On the other side, it has been noted by some Western observers that beyond idealism, some of these China plans will predominantly benefit several Chinese firms, particularly midsized ones, more than foreign countries. But rightly said, in view of China’s size, several Central Asian countries and some small EU countries might benefit more than China exactly due their size. Also, presumably, the interrelation of all these projects will bring common benefit and good will and collaboration with foreign companies in areas where Chinese counterparts lack experience and capabilities.

New approaches are needed

If China’s peaceful rise concept is not believed by US State Department’s strategists (still willing to see the new superpower’s emergence through Cold War lenses), it might be strongly argued that all the infrastructure and financial plans show that China is acting as a responsible global player, cooperative in the international arena, not behaving as a «free rider», as frequently accused by the Obama administration in recent years.

During a state visit to Berlin, Chinese President Xi Jinping agreed to create closer ties between the nations, as Frankfurt looks set to become Europe’s renminbi hub
During a state visit to Berlin, Chinese President Xi Jinping agreed to create closer ties between the nations, as Frankfurt looks set to become Europe’s renminbi hub

More important is the lack for many years of refined knowledge among EU’s political and bureaucratic élite to cope with China’s synergies. Indeed, most of Eurocrats were born in the Euro-Atlantic era and principally by that very fact are mentally less prepared to act in a post-American world. In other words less prepared to see all the potential of new China-led initiatives.

Xi Jinping and Van Rompuy - EU-China Economic Diplomacy at its best
Xi Jinping and Van Rompuy – EU-China Economic Diplomacy at its best

The 1985 EU-China trade and cooperation agreement plus seven legally binding agreements document signed by Brussels and Beijing have been governing bilateral relations for most of the four decades. The overview propelling that agreement is Eurocentric in nature, encompassing a «change through trade» approach. Nothing contradictory here, except by the fact that several Eurocrats have thought that a way to contribute to a democratic and open society in China is a possible goal to reach via the transformational powers of trading with Europe.

Now the idea is back under a new guise, in the most potential positive way in a continent whose leaders have domestically been unable to tackle the economic crisis and show at some points, clear signs of lack of unity as EU partners. Just think for example at the prospect of Greece or Britain’s potential exit from the EU, to the perplexity of Xi Jinping’s administration, eager to see stability at home and abroad among its closest trading block partner.

As the European Commission announced it last November, the 315 billion euro Investment Plan (also known as Juncker Plan following European Commission President’s name) is aimed at mobilizing European growth again and get more people back to work. Presumably, when Beijing announces its contribution in Brussels, by the end of the month, with specific details to be announced in Beijing in September, China, will have won higher prestige among many European citizens in the year of the 40th anniversary of the establishment of bilateral relations.

Recent Facts and figures

2015 it is the year to turn back and see that one decade after the EU-China trade and cooperation agreement was signed, in 1985, Europe enjoyed a trade surplus with China, in those times a big Third World country largely isolated and communicated by modest infrastructure. Now its economy is over three times what it was in 2005. According to International Monetary Fund purchasing power parity estimations last December, China’s economy it is worth $17.6tn, lower than the EU block, worth $ 18.5tn (both higher than the US, worth $17.4tn).

In 2015, as in most recent years, the EU is China’s biggest trading partner while China is now the EU’s biggest trading partner, just behind the United States. Immersed in an impressive bilateral trade well over 1 billion euros a day, China might well become the EU’s first trading partner within this decade.

Surprisingly enough, in the last year EU’s closest US ally, Britain, has been clearly assessing its own interests in tune with the new Asia Pacific era, distancing itself from Washington’s views. One innovative measure is London’s decision to become the first country in Europe to open a yuan-denominated money market fund. Another more than technical and clearly geopolitical attitude has been distancing itself from US position of non-adherence to the Asian Infrastructure Bank. London’s adherence to the bank last March was hastily followed by several European capitals as if they were no partners but competitors trying to get a seat first. Brussels had little special to say about a move of both historic and geostrategic significance. Now, with the prospect of prime minister Li Keqiang visiting Brussels this month to announce China’s compromise with Juncker’s plan, a new engagement can be forestall.

A broader scope is needed

Several former European leaders have all tried to explain in Europe the need to act without internal divisions for a common foreign policy and long-term projects with China. Now the big moment has come, but more is necessary.

Beijing defines China and Europe, whose bilateral relation reached strategic partnership status in less than two generations, as ‘civilizational partners’. China’s driving force is showing a Eurasia path, including Russia as a major partner. Under the present circumstances of economic crisis and volatile security prospects, it is a fact that should be taken into account as soon as possible in Brussels and in the main EU capitals for the development of a cooperative Eurasia including all the members of the macro-continent. China is about to alter dimensions of the geostrategic context and it is advisable to consider both realistic and imaginative new routes of action. Actually it is a pressing issue.

3 COMMENTS

  1. a sobering article, largely because it underlines the possibility of a less bellicose approach to geo-politics than that current in the US and even in the EU (NATO’s baleful role is both actively aggressive and provides a background of prejudice to milk by the West’s warmongers)
    However, the massive pressures from any mega-power or combination may mean the bull-dozing of small nations in economic and , eventually, in political terms. Sovereignty has its appeal, and, to put it bluntly, Bhutan , for example,may be a happier place if it stays out of the grand plans of the economic mega-powers. Well, I think so, and a world dominated by plutocrats, technocrats and bureaucrats, however well-intentioned these folk may think they are, could be a fairly awful place to live in. Top-downism is not the (only) solution or even the best feasible one-the Latin Americans who believe another world is possible have shown an alternative.

  2. Dear MCS:

    Good article about the benefit of the Chinese push for the New Silk Road for the Eurasian landmass. This is similar to Hitler’s Economic Miracle in Nazi Germany from 1933 – 1938. Proof of this success shown with Hitler on the cover of Time Magazine as “Man of the Year” in 1938. However, the world’s banksters (Rothschilds) did not want this success of Nazi Germany outside their private Central Banking Fiat Currency ponzi scheme, so they got France, Great Britain, Russia and eventually America to fight against Hitler. Thus 80 million Germans against the world. However, today with China/Russia and BRICS/AIIB, you have an alternate system representing 60% of the worlds’ population against this Rothschild private Central Banking scheme used by America and her western partners. So they will fight against it. At least that is what it appears to be on the surface, but upon closer inspection by people like James Corbett, this is a fallacy. The China/BRICS/AIIB is just the other side of the same Rothschild private Central Banking Ponzi scheme (coin). It is just made to look more friendly to the sheeple to suck them in to the false paradigm. Even if the China/BRICS alternative is a good thing, it still just represents another way to gain more control by the Rothschild International Banksters. A shell game with the same outcome – more control of humanity through electronic banking via marks on the forehead or right-hand. The Rothschilds have controlled both sides of conflicts for years since the time of the French Revolution. There is no reason to think that this Obama/FED/private Central Banking vs. Putin/Russia/China/BRICS/AIIB is any different. If you doubt this then think about the formation of the FED in America in 1913 and that they promised to remove/prevent boom-bust bubble cycles from the economy. But since that time have done nothing but instigate them whether by ignorance or by actual design by expanding and contracting the money supply. Is it only a coincidence that from boom-bust bubble cycles like the stock market crash of October 1929 and others that the rich get richer and pocket more money while everyone else gets poorer. This fact is proven by the fact that the American middle-class is shrinking and more people are getting poorer and can not find real full-time jobs. Yes, China represents a hope for a better future, but like Obama’s Hope and Change, is it just an illusion to hoodwink sheeple to their own eventual demise (like the calm before the storm). If Rothschild schemes worked before they will work again, but eventually the scheme bankrupts itself because the debt is more than the earth can produce in resources. Thus the scheme bankrupts this generation but all future generations to come into debt slavery and servitude which is unsustainable and must collapse for you can only kick the can down the road for so long before the consequences become too great to maintain. This is want Greece represents today and we are at a crossroads from which we can not turn back. Global Economic collapse despite China’s best intentions is unavoidable as the game is rigged. Rigged by the Rothschild International Jewry Banksters. If you doubt this do your own research under Google. Thanks, Norbert.

  3. There is hope. Michael Hudson says that Russia needs to move away from its very Conservative economic system back to a mixed economy. Only a government can create debt free money and the best way to get that out into the economy is to pay for and own the public services. The public servants will then spend their wages into the wider economy boosting businesses. The ruling class, though, have taken control of most of the public services and now make a fortune out of them. These privatisations have been a terrible failure for ordinary people. The rich also create all our money supply via the banks that they own. People are now loaded down with huge debts and have no money left after paying their bills to buy products and services that private companies supply. This means that there are less rich and middleclass people, but the mega rich, the ruling class, gain most of it.

    Michael Hudson: Russia obviously needs to free itself entirely from Western banks. More important, it doesn’t need their credit. (Look at how China built up its economy without foreign bank credit!) Russia needs a real central bank to finance government deficits, and a public bank to extend credit on concessionary terms. The government can create credit on its computer keyboards in the same way that commercial banks do on their keyboards. That is how the Soviet Union functioned for many decades, after all.

    There is no need whatever for Western or Russian banks to finance public budget deficits. There are plenty of Modern Monetary Theorists (MMT) who can explain how Russia might do this. It is the only way to minimize the cost of doing business.

    If private-sector (Western, BRICS or even domestic Russian) financial charges are built into the cost of living (housing) and doing business, it will be difficult for Russia to be competitive. It needs to do what the U.S., Germany and China have done. Every successful economy in history has been a mixed economy. Instead, Russia swung from one extreme to an even worse one – from a statist economy to an extreme Ayn Rand/Hayek/Chicago School economy in 1991, with disastrous consequences – as if there were no knowledge of Western financial history or, for that matter, Volume III of Marx’s Capital and Theories of Surplus Value. The most effective response would be proactive credit creation to subsidize reindustrialization and agricultural modernization.

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