MNI: Beijing To Court Closer EU Ties Under Trump
MNI (BEIJING) - Beijing will look to use dissatisfaction with U.S. trade policies next year to revive EU economic ties, but Brussels will likely pushback strongly due to its view of China as a strategic rival and its ties to Russia, policy and trade advisors told MNI.
Donald Trump's policies against the EU will likely weaken U.S. relations with Germany and France in particular, said Dong Shaopeng, president of the Beijing Silk-Road Cooperation Association and advisor to the China Securities Regulatory Commission Investor Education Base, noting Washington's policies could hurt China and the EU simultaneously. Renewed Comprehensive Agreement on Investment (CAI) negotiations, which were shelved in 2021 due to geopolitical disputes, could be used to strengthen trade relations, he suggested.
However, while trade and economic relations could improve, the restart of broad-scale agreements – such as CAI – hinged on China’s relationship with Russia and the Ukraine crisis, said Ding Yifan, former deputy director at the World Development Institute of the Development Research Center of the State Council.
EU PUSHBACK
EU trade sources downplayed the chance of a CAI revival, noting the old agreement would contradict Brussels' current labelling of China as a systemic rival.
One EU trade source told MNI Brussels will likely wait until more is known about Trump's policies before making a move with China. "It is quite a balancing act to appease the U.S. and promote China trade at the same time when the U.S. expects us to be an ally," the source noted.
Bernd Lange, chair of the international trade committee at the European Parliament recently told German media China and the EU were nearing an agreement on electric vehicle tariffs that would involve Beijing committing to a minimum price.
The source said Germany will welcome Beijing's minimum price commitment to avoid any counter measures to tariffs. However, this may clash with the European Commission's subsidy investigation results and will likely need to wait until after Trump's inauguration, the source added.
GLOBAL SOUTH
China will need to enhance trade with emerging markets as a counter to Trump’s trade polices, Ding said, adding relations with the so-called Global South will likely appear significantly in next year's 15th Five-Year Plan. (See MNI: China Domestic Stimulus Needed To Counter Trump-Advisors)
Beijing is also expected to increase economic ties with more Comprehensive and Progressive Agreement for Trans-Pacific Partnership members, including the anticipated China, Japan and South Korea free trade agreement, Dong noted. However, the Trump administration could obstruct China’s participation via U.S. aligned members, such as Australia, Canada and Japan, he cautioned.
China will also continue to develop a digital cross-border transaction platform free of geopolitical considerations and in collaboration with other countries, Dong noted.
The Bank of International Settlements recently exited the China-led central bank digital currency Project mBridge, stating it had reached a level that would allow its partners to continue development.