China is playing divide-and-rule between the United States and Europe and it’s working

European Commission President Ursula von der Leyen, European Council President Charles Michel, German Chancellor Angela Merkel, French President Emmanuel Macron and Chinese President Xi Jinping are seen on a screen during a video conference, in Brussels, Belgium December 30, 2020. REUTERS/Johanna Geron/Pool/File Photo REUTERS/Johanna Geron/Pool/File Photo
  • The incoming Biden administration has raised concerns about a controversial new investment pact between China and Europe.
  • The pact has been agreed despite misgivings in the US and Europe about China’s human rights record and role in the coronavirus pandemic.
  • China’s successful divide-and-rule tactics threaten to divide Biden from his European allies, say experts.
  • “It is a Chinese effort to destabilize Europe,” said Dalibor RoháÄ, a resident scholar at the American Enterprise Institute.
  • Visit Business Insider’s homepage for more stories.

When an investment pact between China and the EU was first floated in 2013 it did not draw a huge amount of controversy.

However, the geopolitical landscape is vastly different now that it has been finalised some seven years later.

With China cracking down on democracy in Hong Kong, building suspected detainment camps for Uighur Muslims, and facing an international investigation into its response to the COVID-19 pandemic, the agreement is much more controversial and risks driving a wedge between Europe and the incoming Biden administration.

Team Biden, which has resolved to take a tough line on China, has already made it clear its opposition to the comprehensive investment agreement, which aims to liberalise trade between China and the EU. The timing of it — weeks before a new president takes office and weeks after the EU proposed a new alliance with the US to counter “the strategic challenge” posed by China — has also raised eyebrows in Washington.

In the diplomatic language of the incoming administration — a novelty after four years of President Trump’s bullish foreign policy rhetoric — Biden’s national security adviser Jake Sullivan tweeted that the incoming administration would welcome “early consultations” on the then-proposed deal, a call which was ultimately ignored.

Trump’s well-respected deputy national security adviser Matthew Pottinger, who resigned this week in the wake of siege Capitol, was more blunt and said that Democratic and Republican lawmakers in Washington were “stunned and perplexed” at the nature of the deal.

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“We’ve allowed China to drive a huge wedge between the US and Europe,” Reinhard Bütikofer, chair of the European parliament’s delegation on China, told the Financial Times this week.

European officials will be watching closely to see just how much pressure Biden’s White House exerts on the EU over the deal, which may yet be thrown out by the European parliament, but the move to reset US relations with Europe after Trump is already off to a shaky start.

Dividing Europe

Regardless of its impact on US-EU relations, the move can also be seen as an example of China using its economic might to create tensions between European member states themselves.

“[The deal] is a Chinese effort to destabilize Europe,” said Dalibor RoháÄ, a resident scholar at the American Enterprise Institute, of the deal in an interview a week before the deal was agreed.

The EU Commission defends the deal partly on the grounds that the deal accepts China’s promise to make “continued and sustained efforts” on ratifying international conventions on forced labour.

But several member states were angered at the way that German Chancellor Angela Merkel pushed through the deal in the last days of Germany’s EU presidency at a time when China is drawing such intense international condemnation.

Officials in Poland, Italy, Belgium and Spain told Politico this week that they felt crushed by the “German engine” of the European Commission, referring not only to Chancellor Merkel, but also Commission president Ursula von der Leyen and trade director Sabine Weyand, who are German.

At the heart of those tensions is that the EU-China deal was disproportionately in Germany’s interest because of its close trade links with the country. Other member states were less concerned about the economic benefits of such a deal. Germany exported over over â’¬100 billion worth of goods there last year.

The divergence between member states means that finding a “common line” within the EU on China is often difficult, said Rosa Balfour, director of Carnegie Europe and an expert on European politics, in an interview last month.

“Member states are diversely interdependent with China,” Balfour said, “[…] so it’s difficult to find a common ground.”

That Chancellor Merkel was the driving force behind the deal is, again, the result of a strategic success on China’s part — namely in the means by which it has cultivated close economic ties with Germany over decades.

“Beijing, according to my perception, has been very clever in instrumentalising the German leaders of industry to actually do the lobbying for them,” said Theresa Fallon, director of the Centre for Europe Asia Russia Studies, a Brussels think-tank in a December interview.

“So it’s not that the Chinese ask Germany to do these things. Rather, it’s the largest German industries that are making plenty of money in the PRC who do the lobbying for China.”

Several prominent members of the European Parliament have already promised to fight the ratification of the EU-China deal, meaning it is far from a done deal. What is clear, however, is that it has already dealt a blow not only to transatlantic relations but to European relations as well.