Thursday, December 26, 2024

How will EU shift to right alter China trade and other elements of relationship?

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Wang Yiwei, a Europe specialist at Renmin University, said the right-wing surge was likely to spur the EU – which already has a de-risking strategy to cut economic dependence on China and boost its own competitiveness – to toughen its stance by pressing ahead with punitive measures, such as recently-introduced increased tariffs on Chinese-made electric vehicles.

He said the most direct impact would be on green cooperation, as right-wing politicians are highly sceptical of the EU’s green agenda.

“The original purpose [for EV imports] was to reduce emissions, but they now say … the Green New Deal is wrong and harms the industry and employment. This would cause greater troubles for China,” Wang said.

The EU set an ambitious climate goal to cut net greenhouse gas emissions by at least 55 per cent by 2030, prompting a surge in electric vehicle imports from China. Of 1.8 million EVs China sold to the world, more than a quarter went to Europe.

Cristina Vanberghen, a senior expert at the European Commission, said the EU still sought cooperation with China on green energy, and the right-wing influence in this area should not be exaggerated.

But she said they might impose “slightly stricter scrutiny of Chinese investments in Europe and more rigorous evaluations of trade agreements to protect domestic industries”.

“The EU might adopt a more cautious approach to its dependencies on China for critical raw materials, technology, and consumer goods, but in fact this is already happening,” she said.

“Right-wing parties’ views on China can vary, but they often emphasise national interests. This might lead to a more transactional approach in EU-China relations, where cooperation is pursued selectively based on clear benefits to the EU.”

The right-wing faction Identity and Democracy (ID) also made significant gains in the parliamentary polls thanks to the French opposition party National Rally’s landslide victory against Macron’s ruling party.

Philippe Le Corre, a senior fellow specialising in China-EU relations at the Asia Society, said the agenda of the National Rally party led by Marine Le Pen was France first, which might see her continue to push for “reduced trade dependency” on China.

Le Pen proposed to halt wind power development, a move expected to further hit China, which is already facing an anti-subsidy probe into wind turbines sold to Europe. China exported over €1 billion worth of wind turbines to Europe last year.

Wang said the EU’s future policy towards China remained to be seen, depending on who would fill the top jobs, including president of the European Council and the foreign policy chief.
Apart from trade disputes, China-EU relations have been tense amid accusations of espionage, human rights abuses in Xinjiang and Hong Kong, and the supply of dual-use goods that support Russia’s war against Ukraine.

Wang said past criticism that “the reason the Ukraine war could not be won is because China supports Russia” may not hold up in future as far-right politicians who appeared to be “pro-Russia” and opposed to continuous funding for Ukraine could create pressure on the EU’s Ukraine policy.

Right-wing winners in the elections, such as Le Pen’s National Rally and Austria’s Freedom Party, were suspected of having close ties with Russia, including receiving funding from the Kremlin and empowering its propaganda amid the Ukraine war.

The Alternative for Germany Party, which beat Scholz’s Social Democratic Party to rise to second in the election, was also accused of spying for Russia and China. However, it was kicked out of the ID faction before the election because of these scandals.

Frans-Paul van der Putten, a China expert at the Dutch think tank Clingendael Institute, said existing EU policies towards China were likely to continue following the elections, including continued pressure on Beijing regarding its trade with Russia, with the Ukraine war and growing US-China tensions having “a major impact on Europe’s perception of China as a potential or actual threat”.

The EU has been increasingly caught up in the US-China rivalry, facing growing pressure from Washington to impose hi-tech restrictions on Beijing. Meanwhile China has urged the EU to maintain its “strategic autonomy” while appearing to ramp up efforts to improve relations with the bloc.

Chinese President Xi Jinping travelled to France to meet Macron and von der Leyen last month, his first trip to the country since the pandemic, and Scholz visited China in April.

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Chinese-made electric vehicles face additional EU import tariffs of up to 38%

Chinese-made electric vehicles face additional EU import tariffs of up to 38%

Ding Chun, director of Fudan University’s Centre for European Studies, said he did not expect major change from Brussels following the right-wing rise, but cautioned that the bloc might adjust its priority in policy areas from energy transition to economic and technological autonomy.

“The voice about … EU strategic autonomy has lessened amid the Russia-Ukraine conflict, but it has not completely disappeared. Its future direction will depend on multiple variables, including the policy of the new EU administration and the US election.”

Former US president Donald Trump has reportedly threatened to pull US funding for Ukraine and extend tariffs to all European goods if re-elected.

Vanberghen said Trump might foster closer ties with the EU’s right-wing parties as they share similar “nationalist and populist” agendas, including trade protectionism, which “could significantly impact EU-China relations”.

She said Europe might “find economic alignment with China more appealing, especially in terms of market access and investment opportunities” if Trump escalates protectionism measures. But she said “a complete pivot towards China is unlikely” because European countries are not likely to distance themselves from the US on security.

“Despite tensions with the US, Europe might not necessarily align with China due to broader strategic concerns … European countries may instead pursue a balanced approach, maintaining strong ties with both major powers.”

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