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China is considered both a threat and a potential partner for the European Union, as the relationship between the two sides relies on interdependence and friction. Economically, such a relationship has fueled growth and created opportunities, especially in China, but in the last decades, a lot of concerns arose about unfair competition and job losses. Beijing’s posture on the international stage has deeply changed since 2001, when the country adhered to the World Trade Organisation (WTO). China is now a leading actor at all levels, playing an important and yet growing role in Africa, South America, and obviously Asia. Chinese investors started to flow to Europe already in the 2000’s; the financial crisis of 2008 and its catastrophic effects on countries such as Greece were seen as an opportunity for Chinese capitals to enter the European environment, with Chinese groups buying at discount prices strategic infrastructure projects. The launch of the New Silk Road in the 2010s, later labelled the Belt and Road Initiative, brought new reasons for concern among the European chancelleries. The general fear is that Chinese groups and firms, gaining a stronger position in the EU economy, can somehow manage to influence the labour market within the Member States and the economic policies taken by the governments. All this can have a direct impact on European citizens, as China’s labour practices, particularly regarding worker rights and safety, can become a new standard even on the continent, especially in smaller economies that need to rely deeply on Chinese investments.

There are, of course, also positive notes in the EU-China relationship. Trade continues to be the cornerstone of such a dynamic, as the EU is China’s largest trading partner, and China is the EU’s second-largest. This interdependence has fueled economic growth for both: in the past decades, affordable Chinese goods have boosted European consumption, while European exports have found a massive market in China. However, this economic boom has not been evenly distributed, and the EU is willing to promote a major balance in such a dynamic. We all know that, as a negative aspect of economic globalisation, European manufacturing sectors have faced intense competition from cheaper Chinese imports, leading to job losses and factory closures. This has had a direct impact on social stability in many EU member states and led to political troubles that favour populist and radical right parties.

Another issue that casts some concern in Europe is the one related to investment and infrastructure: in many countries in the east of the continent, Chinese investments created jobs and improved connectivity, while many issues emerged in relation to transparency, debt burdens, and potential strategic influence by Beijing. The recent visit of Chinese President Xi Jinping to Serbia and Hungary can be seen from this perspective, as the role played by China in developing and building critical infrastructure in the two countries clearly risks creating a sort of dependency on Chinese money and thus a political relationship that is not balanced. In the future, the governments in Belgrade and Budapest, as well as other nations in Europe, could find themselves not free to take actions that go against Chinese interests, limiting the power of democratic mechanisms and leaving the citizens armless in front of a political process decided in Beijing. It is not surprising that the 16+1 Initiative (also called Cooperation between China and Central and Eastern European Countries) lost its momentum in the past years after the Baltic nations and later on other states decided to quit due to the suspicion of an uneven relationship established in such a format by China.

Written by: Francesco Marino