The EU will continue on a combative path towards China over the next five years, according to written statements provided by senior officials nominated to help run Ursula von der Leyen’s European Commission.
More trade probes, tighter screening for unfair subsidies, renewed efforts to counter the impacts of industrial overcapacity, China’s ties with Russia, and weaponised interdependencies all featured prominently across half a dozen submissions on the portfolios most relevant to Beijing.
The written statements landed on Wednesday, ahead of confirmation hearings at the European Parliament in the coming weeks and with the new commission expected to be in place by the end of November. The submissions suggest that von der Leyen’s confrontational approach to dealing with China is here to stay.
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Kaja Kallas, the hawkish German politician’s pick to be the EU’s next top diplomat, said she would “spare no effort in defending the EU’s values … from systemic rivals”, among which she includes China.
“The most pressing challenges here are China’s support for Russia as well as structural imbalances between the EU and China that result from non-market policies and practices, which create unfair competition and an unlevel playing field,” said the ex-Estonian prime minister, who is expected to be much more assertive than outgoing foreign policy chief Josep Borrell.
She said that the bloc should use the “new horizontal sanctions regime on hybrid threats” to protect EU citizens from “actors such as Russia, Iran, North Korea, and partly China”, who she claimed “aim at weaponising interdependencies and exploiting the openness of our societies against us”.
While Kallas would have some influence over the bloc’s foreign policy priorities, they will largely be dictated by its 27 member states.
Competition chief nominee Kaja Kallas says the EU should act to protect citizens from “actors such as Russia, Iran, North Korea, and partly China”. Photo: Reuters alt=Competition chief nominee Kaja Kallas says the EU should act to protect citizens from “actors such as Russia, Iran, North Korea, and partly China”. Photo: Reuters>
The areas over which the commission has full control, however, are trade and competition. On both fronts, von der Leyen has pursued a tough agenda towards Beijing, which looks set to continue.
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Competition chief nominee Teresa Ribera, a Spaniard, threw her full support behind the commission’s foreign subsidies regulation (FSR), a new tool that gives it broad powers to investigate companies suspected of receiving undeclared state subsidies enabling them to undercut EU competitors.
It can be used when non-EU firms bid for procurement contracts or attempt mergers or acquisitions. The commission can also launch an investigation of its own volition and has used this predominantly to go after Chinese firms.
“I will rigorously enforce the FSR to protect the single market from distortive subsidies by countries outside the union to ensure a level playing field for all companies,” Ribera wrote.
Stephane Sejourne, the French nominee to oversee the EU’s industrial strategy, confirmed his support for the tool as well, saying it “has already shown its effectiveness and we will make full use of it”.
Confirming the union’s shift away from its free trading past, he said “industrial, trade and economic security policies” were “two sides of the same coin”.
“We need to make sure that we continue to benefit from international open and rules-based trade, while limiting the risks that excessive dependencies will be weaponised. We have powerful tools at our disposal in this respect, which we should use, such as the foreign subsidy instrument,” Sejourne said.
Maros Sefcovic, a trusty von der Leyen loyalist who has been nominated to take the trade brief, pledged to pursue a “more balanced and reciprocal trade relationship” with China.
This would include “addressing significant level playing field concerns linked to the negative externalities of China’s state driven economic model and industrial policy, as well as the overcapacities that are distorting global markets and supply chains”, Sefcovic said.
“Addressing these challenges will require continuous dialogue as well as the strategic use of our updated toolbox of autonomous instruments whenever necessary,” the Slovak diplomat added.
Sefcovic will also be in charge of the EU’s economic security strategy, which does not name China but was written with Beijing in mind.
He vowed to continue working towards a bloc-wide export controls regime, tightening its inbound investment screening mechanism and also exploring whether an outbound investment screening tool would work.
However, these tools have faced significant pushback from EU members, who have railed against a perceived power grab by Brussels.
“With regard to outbound investments, I will seek, in cooperation with the member states and businesses, a deeper and better understanding of the risks we face, by systematically reviewing and assessing transactions taking place in certain selected sectors. On this basis, I will consider further policy responses in dialogue with the European Parliament and the member states,” Sefcovic said, in language that appeared to acknowledge the broad unease with the strategy.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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Publish date : 2024-10-24 02:30:00
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