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18/12/2018
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Europeans worried on their dealings with China

Facing a trade war with the United States that they know it is impossible to win, the Chinese government try to find alternative markets and investment opportunities in Europe, but as Chinese investment pours into the European Union, the Europeans are beginning to worry too. Europeans do not feel safe with the huge trade deficits in their dealings with China."

China has designs on Europe. Here is how Europe should respond.

Oct. 4.– Europe has caught China’s eye. Chinese investments there have soared, to The huge European trade deficit with ChinaThe huge European trade deficit with Chinanearly €36bn ($40bn) in 2016—almost double the previous years’ total. Chinese FDI fell in 2017, but the share spent in Europe rose from a fifth to a quarter. For the most part, this money is welcome. Europe’s trading relationship with China has made both sides richer.

However, China is also using its financial muscle to buy political influence (see Briefing). The Czech president, Milos Zeman, wants his country to be China’s “unsinkable aircraft-carrier” in Europe. Last year Greece stopped the European Union from criticising China’s human-rights record at a UN forum. Hungary and Greece prevented the EU from backing a court ruling against China’s expansive territorial claims in the South China Sea. Faced with such behaviour, it is only prudent for Europeans to be nervous.

And not only Europeans. The terms on which the emerging undemocratic superpower invests in the outside world are of interest to all countries—particularly if other things, such as foreign policy, may be affected. Americans, increasingly consumed by fears that China poses a commercial and military threat, should be mindful of competition for the loyalties of its oldest ally. For everyone’s sake, it matters that Europeans gauge their welcome to China wisely. Just now, they do not.

A sense of perspective

Many of China’s plans in Europe are just what you would expect of a rising economy. Some investments are private, profit-seeking and harmless. Acquiring technology by buying innovative firms, including in Germany’s Mittelstand, is reasonable, too, so long as deals are scrutinised for national-security risks. There are also things that China, unlike Russia, does not want, such as to undermine the EU or sow chaos by furtively supporting populist, xenophobic parties. It would rather Europe remained stable and open for business. On issues such as climate change and trade, China has acted more responsibly than the Trump administration, seeking to uphold global accords rather than chuck grenades at them.

Some Europeans take this to suggest that China is a useful counterweight to an unpredictable Uncle Sam. That is misguided. Europe has far more in common with America than China, however much Europeans may dislike the occupant of the White House. Moreover, China has used the EU’s need for unanimity in many of its decisions to pick off one or two member states in order to block statements or actions of which it disapproves—as with human rights ...

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