Europe unites to oppose Chinese expansionism, human rights abuse

Sergio Restelli

Tiny Lithuania is showing the way to Europe, how to protect universal values like human rights and liberal democracy and also the unity of the European Union from the challenges posed by China. Bigger members of the EU, Germany, France and Italy, as well as the United Kingdom, have toughened their stance towards the dragon.

Lithuania has withdrawn from the so-called 17+1 group, a China – led format founded in 2012 with the aim to expand co-operation between Beijing and countries in central and east Europe; through investment and trade focussing on infrastructure projects such as bridges, motorways, railway lines and modernization of ports. Members of the group included 12 members of the EU and five Balkan states. Some of these countries overlapped the Warsaw Pact countries of yore that ended after the collapse of the Soviet Union. The 17+1 group is seen as a forum to split the EU and also to extend China’s flagship Belt and Road Initiative in central and east European countries to extend the footprint of the dragon in Europe.

Lithuania started challenging Beijing’s attempt to extend hegemony over Europe over the issue of human rights; its parliament passed a resolution condemning the suppression of Uyghurs. Lithuania also worked out a new set of ties with Taiwan. In November 2021, Lithuania became the first country in Europe to allow Taiwan to open a de facto embassy in Lithuanian capital Vilnius.
China had started mounting pressure on Lithuania from much earlier to desist it from allowing Taiwan to open an embassy in its own name.

In August 2021 China recalled its ambassador to Lithuania. This was accompanied with a threat, asking Lithuania “immediately to rectify its wrong decision and take measures to rectify the damage and not to move further down the wrong path,” and warning it of “potential consequences.” Not to be browbeaten, however, Lithuania recalled its ambassador to China in September. In December, Lithuania closed its embassy in Beijing and pulled the last diplomat out.

To help Lithuania out from the major economic pressure that it faces from China, Taiwan has created a $200 million fund for investments in Lithuania. Lithuania is a member of the EU and also of NATO. The U. S. has condemned “China’s coercion” of Lithuania and said all countries should be free to determine how to handle relations with Taiwan without interference from Beijing.

Thus, while Taiwan has just 15 formal diplomatic allies, it maintains informal ties with all major nations through trade offices that act as de facto embassies, including in the United States and Japan, despite the threats from China.

On the other hand, China is getting into difficulties in its relationship with major nations of EU, including Germany, France and Italy, as well as the U. K; all G-7 nations. Opinions have started moving against China in these west European countries because of human rights abuses in Xinxiang, suppression of democratic norms in Hong Kong and the threatened invasion of Taiwan. In March 2021, EU imposed sanctions on four Chinese individuals and a Chinese entity for violation of human rights in Xinxiang. Beijing reacted by imposing counter-sanctions on parliamentarians of the EU.

On the economic field, there is concern over the absence of a level playing field in China as well as Chinese attempts at securing critical technologies from the west. There is a growing awareness among member nations of the EU that unless the distortions generated by state capitalism are corrected, European firms cannot compete at par in the Chinese market. Worse, the lack of competition in China can put European companies at a disadvantage in their own market. Foreign companies lack access to the Chinese market and private companies face unequal treatment vis-à-vis state-owned companies. Subsidies, cheap funds and lower tax burden, help Chinese companies finance acquisition of companies abroad. China’s transformation into a market economy should be the best answer to the distortions generated by state capitalism, but China reforming to a true market economy is gloomy, especially under the leadership of Xi Jinping.

Even during the period of Covid – 19 pandemic, Chinese companies have been trying to acquire foreign assets in distress in strategic locations, including the USA, the U.K., Germany, France and India; forcing several countries to tighten their Foreign Direct Investment policies.

“Chinese acquisitions lead to undesirable technology transfers, Chinese acquirers enjoy unfair advantage because of government subsidies and their acquisitions are motivated strategically with the objective to get market dominance or to increase China’s political influence in the target countries. Chinese acquisitions also have adverse consequences for employees of target firms,” says an article titled ‘What drives Chinese overseas M&A (Mergers and Acquisitions) investment? Evidence from micro data,” in Review of International Economic in July 2021; quoting from a European Commission analysis of 2019 on challenges and prospects in relationship with China.

Economists from 74 percent of the countries surveyed are more critical of foreign investment from China than of that from other countries. Many Chinese investors have close government ties. Chinese state-owned enterprises follow a less cautious investment strategy and are less financially constrained; they go for full or majority acquisitions. The Chinese government provides subsidies to state-owned companies to acquire western manufacturing rivals, writes the Wall Street Journal.

Following the hostile takeover of Kuka by China’s home appliance manufacturer Midea, Germany has become aware of the danger of doing business with China. After the takeover, the German chief executive of the firm was shown the door. The acquisition of one of the most technologically advanced makers of industrial robots by a Chinese firm has caused much controversy due to national security concerns. Both Berlin and Brussels, the headquarter of the EU, have warned against letting cutting-edge technology fall into Chinese hands.

After the recent change in government in Germany, Berlin is revising its earlier accommodative policies towards China; making them more EU-centric. The text of the coalition treaty that the three ruling partners in Germany have signed will not be exactly music to the ears of Beijing: “Partnership, competition and system rivalry must shape our relations with China; human rights and applicability of international law, fair rules of the game in increasing international competition.” The ruling coalition would promote “Transatlantic co-operation in China policy and co-operation with like-minded countries to reduce strategic dependence.”

The coalition would be “committed to resolve territorial disputes in south and east China seas based on international laws of the sea. Any change in status quo in the Taiwan Strait must be peaceful and mutually agreed upon.” It would also support the participation of democratic Taiwan in international organizations. “We clearly address China’s human rights violations, especially in Xinxiang. The one country two systems in Hong Kong must be reasserted. We are committed to a free and open Indo – Pacific region, based on global norms and international law.” The three coalition partners are also firm on imposing restrictions on Chinese vendors for 5G telecommunication infrastructure.

Like other European countries, France, too, has hardened its position on China in recent years; due to the human rights abuses in Xinxiang, the threatening attitude Chinese diplomats have often adopted in France and the growing Chinese threat to maritime security across the Indo – Pacific. Human rights abuses in Xinxiang and Hong Kong have led to a negative image of China in France; unfavourable views of China have increased in France from 42 percent in 2002 to 70 percent in 2020, like in the USA from 35 percent to 73 percent in the same period. The Chinese embassy in Paris has publicly attacked the French government, independent researchers and members of French parliament.

France has overseas territories across the Indo – Pacific where more than 1.6 million French citizens reside. France also has a large exclusive economic zone in the area. To ensure their protection, Paris has deployed more than 8,000 French troops in the area permanently. The French navy is sending warships to South China Sea and Taiwan Strait, both of which Beijing claims as its backwater. The chief of the French navy has recently denounced Chinese ships following French vessels and manoeuvring dangerously.

Britain’s policy towards China has also undergone a sea change since the past few years, from being accommodative to adversarial. Its new policy “Global Britain in a Competitive Age” issued in March 2021 takes note of China’s increasing international assertiveness and the growing importance of the Indo – Pacific and resolves to invest in enhanced China – facing capabilities, ensuring that national security and values are protected. As a part of this, Chinese firm Huawei would be completely removed from the 5G network of the UK by 2027.

Beginning from January 2021, the purchase of new Huawei equipment has been banned. Politically victimized people in Hong Kong have been offered visas and work opportunities in the U. K.

Britain has taken a firm stand against the hegemonism of China in the Indo – Pacific by joining AUKUS, a military alliance between Australia, the U. K. and the US, participating in joint military exercises in the Indo – Pacific. Relations between London and Beijing have strained further after President of China Xi Jinping and the Argentine President Alberto Fernandez issued a joint statement during the Winter Olympics in Beijing affirming Beijing’s support for Argentina’s sovereignty over the Falkland Islands. Britain has “completely rejected” any question over sovereignty of the Falklands, which are a part of the British family. Britain would defend their right to self-determination, British Foreign Secretary Liz Truss has said.

Italy has been the only member of G – 7 to have signed the Belt and Road Initiative with China in 2019 to revive its economy. Two years down the line in the G – 7 summit in June 2021 Prime Minister of Italy Mario Draghi asserted that China’s expansionist BRI would be assessed carefully. He described China as “an autocracy that does not adhere to multilateral rules and does not share the same vision that democracies have.” In fact, none of the BRI projects has taken off in Italy. Rome has also prevented Italian telecom group Fastweb from signing a deal with Huawei to supply equipment for its 5G core network.