Time for Europe to get tough on China
Marco Polo may not have been a conservative, but he was certainly a capitalist. The thirteenth century Italian explorer not only opened Europe’s eyes to the splendours, and wealth, of medieval China, he also greatly increased traffic along the Silk Road, the network of trade routes between East and West first opened up in the second century.
In the era that followed, paper, pasta, tea and gunpowder were among the discoveries originating in China from which Europe would profit. From the very earliest days, it was an exploitative process, and as the centuries went by and Chinese power declined, it was Europe’s “belt and road” approach that determined the nature of the relationship.
By the nineteenth century, with control of the opium trade the principle means by which the West, now including the United States, kept China quiescent, the resentment felt in Beijing was approaching boiling point. What began as rebellion, brutally suppressed, ended in revolution. First came the 1911 Uprising that overthrew the last imperial dynasty. Next, in response to Japan’s murderous attempt to make China a virtual slave state, came the Kuomintang, led by the nationalist Chiang Kai-shek. Finally, in the years immediately following the Second World War, it was the Communists who triumphed, inspired by the ruthless, messianic figure of Mao Zedong. Mao would not only bring fundamental change to China, but by the turn of the new millennium his heirs would usher in a new world order.
The problem for Europe today is that Chinese payback for the years of humiliation is starting to eat away at the foundations of the continent’s economic independence. This month, as Beijing celebrates 70 years of Communist rule, the feeling is growing that a shift is taking place that may soon become unstoppable.
No world leader, not even Donald Trump, could fail to be impressed by the sight of hundreds of thousands of marching feet moving in unison in front of the Great Hall of the People, interrupted only by lines of tanks and vast machines on which were installed ballistic missiles capable, apparently, of breaching all known defences.
But as the West draws its breath in the face of China’s formidable military displays, it must also confront the decades-long scandal of the eleven million Uighar people held captive in the western province of Xinjiang. The Uighar, Muslims of Turkic origin, are regarded by Beijing as primitives, rather like the natives of Tibet. Trained to perform only simple tasks, they are allowed no freedom of movement. Protesters are arrested and jailed. Journalists who step out of line are similarly detained. Across Xinjiang, there are no fewer than 27 internment camps, in which an estimated 800,000 Uighar are held prisoner.
Beijing does not like to talk about the Uighar anymore than it likes to talk about the resettling of Tibet with ethnic Chinese or the presumed “democratic” rights of the people of Hong Kong. Relying in part on the West’s own concerns over Muslim expansion, but mainly on the well-founded belief that other world leaders know better than to incur China’s wrath, Beijing is unimpressed by liberal rebukes.
Few doubt that China will be the dominant global power in the second half of the century, dwarfing Russia, outpacing India and even eclipsing the United States. All that Europe can do is circle the wagons and bind ever closer together, hoping to project a united front.
In this context, Britain’s decision to leave the EU can be seen as aberrant behaviour. It is not as if the United Kingdom is remembered with fondness by Beijing, which recalls as if it were yesterday the era of gunboat diplomacy that, at its height, permitted Hong Kong to be ripped from the motherland. Revealingly, however, China does not regard the UK’s decision to go it alone as a matter of more than peripheral importance. Britain is too small and remote to be considered a priority. What matters to President Xi and the Communist hierarchy is that Europe as a whole, including Britain, should be brought to heel, along with the US, so that a new age dawns in which China is the undisputed world number one.
“Belt and road” – a term dating back to the original “belt” of silk roads – is one of three interlocking strategies aimed at achieving China’s primary goal, the others being military might and a dynamic domestic economy. First Asia, then Africa, now Europe had to be made dependent on Chinese money and purchasing power. It was a simple plan, direct in its objectives, that could only be accomplished by a country with 1.4 million people and an ambition to match. First, you offer to build roads, railways, airports and seaports, lending money to the applicant states that in many cases, as in Sri Lanka, can never be fully repaid. Then you operate the infrastructure of the client state as if it were Chinese, following up with factories and marketing that tie everything back to Beijing.
In Europe, Italy is clearly a key target in the revised Great Game. Rome spent the money years ago that should have been used to upgrade and replace its creaking roads and bridges. Now China is stepping in, taking advantage of the country’s political instability and ongoing financial crisis. Contracts totalling more than €900 billion were signed earlier this year, including one to rebuild the port of Trieste, vital not only to Italy but to the neighbouring Balkan states. The prospect of Italy as a sino-trojan horse is causing disquiet across Europe, but at this early stage in the game there seems to be little that Brussels (or Berlin, or Paris) can do to stop it.
Elsewhere, Athens handed over control of the port of Piraeus to Cosco, the Shanghai-based shipping and logistics conglomerate owned by the Chinese state. Cosco also runs container ports in Valencia and Bilbao in Spain. In Portugal, Chinese investment in infrastucture is costed at €6 billion, and rising, while in the Czech Republic a visit by Xi in 2016 led to massive investments in media companies, an airline and one of the country’s leading football clubs.
In the UK, investment from China is welcomed, though never referred to in the same breath as Belt and Road. There will be Chinese participation in the building of the Hinkley Point nuclear power plant, as well, it is thought, as in the projected Northern Hub high-speed railway. But since the departure from government of sinophiles David Cameron and George Osborne, and the more recent backpedaling, under pressure from Washington, on a role for Huawei in setting up Britain’s 5G network, the subject has taken an inevitable back seat to Brexit.
Not so in France, whose President, Emmanuel Macron, generally regarded as Europe’s most activist leader, will visit China next month for talks focused on climate change cooperation and trade. He has already made clear to President Xi that China’s cavalier approach cannot continue unaltered and that, at the very least, there must be progress over European demands for a relaxation of the rules covering foreign investment.
Reflecting in Brussels on Italy’s Belt and Road initiative, he said that the time of “naivety” in regard to China was over. “For many years we had an uncoordinated approach and China took advantage of our divisions. What Europe needs now is a clear, unitary view.”
During his visit, Macron will also raise with Xi his concerns over the impact on Europe of the debilitating trade war between Beijing and Washington. The EU has tried to avoid harsh rhetoric in responding to events brought to a head on an almost daily basis by an unpredictable Donald Trump. But there are real fears that unless it kow-tows to America, the resulting imposition of tariffs on European exports to the US, on everything from cars to Scotch whisky, could be extremely damaging.
This summer, during a visit to India, Macron said that the rise of China was good for everybody. “It’s good for China itself and its middle classes, and it’s good for global growth and regional growth.” But if “hegemony” – a word much employed by the Chinese – was to be avoided, it was important that there should be rules-based development, leading to (another Chinese favourite) “balance”.
Unsurprisingly, Xi has, up until now, shown himself somewhat less than moved by Europe’s expressions of disquiet. Indeed, he seems entirely sanguine. “French investors are welcome to share development opportunities in China,” he wrote this year in the French conservative newspaper Le Figaro. Ties between France and China were like “a myriad of small streams converging into a mighty river”.
Macron remains to be convinced. He wants there to be not so much a mighty river, flowing into the South China Sea, as a two-way street, in which European investors can more easily put money into Chinese businesses or open factories and offices that do not immediately fall foul of China First regulations.
Beijing would have Europe believe – or at least pretend to believe – that its mercantile imperialism is essentially benign. Europe needs the investment; China needs something useful to spend its money on. It is win-win – much as the opium trade was win-win, with Chinese peasants desperate for some form of relief from the drudgery of their existence and the West only too happy to supply the means.
But on the ground, the trend is less than encouraging. Three years ago, Synutra, a leading Chinese baby-milk producer and distributor, opened a massive processing plant in Carhaix, in central Brittany, that was supposed to ensure a good living for dairy farmers through the region for decades to come. The issue is that though the market is undoubtedly there – China has developed a dairy habit that in past centuries would have been regarded as faintly disgusting – the price is far from guaranteed. Moreover, it is decided by Synutra. When Sodiaal, France’s biggest dairy cooperative, whose products include Yoplait, Entremont and Candia, looked into the possibility of buying the Chinese plant, it was made clear that the market did not go with the factory and that the only way to sell into the Chinese market was with a Chinese partner.
On the Uighar front, it seems highly improbable that China is about to change its behaviour. The fact is, it refuses even to admit that there is an issue to be resolved. For Europe to make its response to this and other human rights violations the lynchpin of its stance on China would require an act of great collective courage that is surely lacking.
As far as Xi, the Communist Party Politburo and the National People’s Congress are concerned, any interference in the affairs of the People’s Republic is an affront to Chinese dignity that cannot be tolerated. The plight of the Uighar is to China a purely internal matter. In the same way, having handed back Hong Kong in 1997, Britain is seen as having no residual rights to interfere in the territory’s development, or even to offer comment.
Power, as Mao observed, comes out of the barrel of a gun.
Speaking of which, who can possibly ignore all those marching feet? The People’s Liberation Army is by far the largest in the world. China’s Navy and its Air Force are growing in leaps and bounds. Europe, by contrast, looks powerless. The absence of even an EU rapid reaction force, still less a European Army, is viewed by Beijing as evidence of a lack of serious intent, giving rise to contempt. Soft power is one thing – and China has that in abundance. But raw power, measured in missiles, warships and aircraft, are what count when the chips are down.
In the meantime, trade continues to dominate much of the public dialogue between Europe and China, with no shortage of either talking points or controversy. Heiko Mass, the German foreign minister, probably put it best when he warned this year that the EU had to stand united when confronting the world’s giants. “If some countries believe that they can do clever business with the Chinese, they should not be surprised when they wake up and find themselves dependent.”