Powerful pact? China EU the investment agreement or a power play.

 China Eu relationship from an economic, value-based, and power-based perspective.

The power-based perspective in particular can reveal an often overlooked reason why the European Union and China may have completed the CAI.

This analysis will  show why much of the international criticism CAI has received to date is unlikely to convince leading European decision-makers.

After seven years of negotiations, China and the European Union concluded the CAI at the end of 2020. of the President of the European Council, CC BY-NC-ND 2.0, accessed via Flickr.

Economy or values ​​or both?

The core of the CAI is to expand market access for European investors to Chinese sectors such as electric vehicles and chemical or health services.

This goal is to be achieved through improved legal protection for EU companies, increased transparency of the Chinese markets and lower requirements for the conclusion of joint ventures.

Chinese companies, in turn, will have better access to strategically important European markets.

In addition to these economically oriented clauses, China has undertaken to further reduce the causes of the current climate crisis and to ratify the relevant international agreements on forced labor.

Overall, economic and value-based motives seem to dominate the recent investment agreement.

The economic motives are particularly clear. From the point of view of the European Commission, the agreement was hailed as a significant “business gain” as it aims to create a level playing field for European in China.

As the cherry on the cake, the hitherto exorbitant amount of Chinese investment in the European Union will now also be limited, prompting political decision-makers to hope for a new era of increased European competitiveness in the global economy.

From the point of view of the Chinese government, the CAI fulfills its purpose of securing Europe both as a partner in the ever-increasing globalization and as a source of cutting-edge technology.

On the one hand, China will be able to continue to exploit existing economic and systemic differences in order to become more prosperous and powerful.

On the other hand, it will be able to manufacture technological goods of ever higher quality and thus effectively remain the “factory of the world”.

Value-based motives were probably particularly present in the minds of EU officials when negotiating with the Chinese side about the specific composition of the CAI.

Although this is largely controversial, some idealistic Europeans could still hope that China’s increased integration into the international system will provoke the country’s democratization.

By discussing economic issues separately from human rights issues, these optimists foresee a broader Sino-European consensus in the economic area, which will ultimately lead to a broader human rights consensus.

When China admitted during the diplomatic CAI negotiations that it could allow EU diplomats to travel to Tibet or Xinjiang, regions where the Chinese regime has been shown to have committed human rights violations, European leaders celebrated the prospect as a great achievement.

Xi Jinping, general secretary of the Chinese Communist Party, who has often been criticized for his regime’s human rights abuses. by UK Foreign, Commonwealth & Development Office, CC BY 2.0, accessed through Flickr.

Power and prestige

However, many of the clauses contained in the CAI, which were previously introduced as evidence of economic and value-oriented motives, can also be interpreted as clauses aimed at increasing the international standing of China and the European Union.

As many scholars have argued before, China is very unhappy with the unipolar political order that the United States has built over the past few decades.

While it is hotly debated whether Beijing intends to overturn the United States as a global hegemon or merely maintain its dominance in the Indo-Pacific region, accomplishing either of these goals would require China to somehow find a way to exert international influence limit from the United States.

One way could be through expanded Chinese cooperation with the European Union to promote an increasingly multipolar order.

In this sense, the CAI can be seen as a strategic win for China, as it politically isolates the United States, thereby challenging its global leadership.

Such an interpretation would explain why Chinese diplomats wanted to pass the deal in late 2020 – just weeks before the inauguration of new US President Joseph Biden and the likely renewal of a strengthened transatlantic partnership.

It would also explain why Xi Jinping, general secretary of the Chinese Communist Party, has consistently emphasized the political implications of the CAI, rather than its economic advantages.

While this power-based motive behind the CAI may have been comparatively obvious to the Chinese side, the question remains how the agreement could possibly have increased the international standing of the European Union.

Did the European of state and government, like the Chinese, want to create a multipolar order without US dominance?

Given how many European countries frequently praise and benefit significantly from the global hegemony of the United States, such motives seem unlikely.

Instead, it is actually the normative force that the European Union has developed over the past few decades that has been strengthened by increased cooperation with China.

As an article by two scholars from Sweden and Hong Kong argues, EU-China strategic partnerships (such as the CAI) should be understood as “arenas in which actors play role-playing games to assert their international identity and improve their status”.

In other words, the CAI negotiations allowed the European Union to define certain role expectations that China had to fulfil in order to reach an agreement, and vice versa.

Both actors were able to partially project their own worldviews onto the other.

According to this interpretation, Europe’s attempts to project its liberal worldview onto the communist regime in Beijing were classified as the value-oriented motives of Europe behind the CAI.

Efforts to promote the democratization of China can therefore be seen as efforts to demonstrate the moral superiority of Europe’s political ideology.

For example, when China allowed EU diplomats to travel to Tibet and Xinjiang, European leaders successfully exported some of their liberal, democratic values ​​to Beijing.

Examples of such value exports extend beyond the human rights sector.

The Chinese government has also expressed an interest in Europe’s expertise on social security and health and safety regulations for the workplace.

None of these aspects will transform China into a fully democratic regime itself, but they massively strengthen the normative power of the European Union at the international level.

The leaders of the European Union, whose normative power has been massively strengthened by the CAI. of the European Parliament, CC-BY-4.0, © European Union 2019, accessed via Flickr.

Unheard of criticism

This rise in Europe’s normative power is the main reason why much of the economic or value-based criticism that the CAI has received is unlikely to affect European policy-makers in any way.

Some analysts have suggested that the deal would not benefit much of the European economy enough, but would only please “a handful of German multinationals“.

Many others have condemned Europe’s reluctance to coordinate with the new US administration prior to the conclusion of the investment deal with China, effectively undermining a possible “democratic consensus” on how to confront Beijing in the post-Trump era.

Such denunciations, however, have largely fallen on deaf ears as they fail to explain the normative prestige that the EU leadership has achieved through the CAI negotiations.

Although Europe has probably made a pact with the devil in terms of cooperation with an authoritarian regime, even the slightest Chinese concession can now be characterized as a successful export of the highest democratic values ​​of the European Union.

While Europe may not lead the world militarily or economically, it wants to do so at least normatively.

Therefore, contrary to the conventional wisdom of Europe and China, which always fundamentally misunderstand each other, it seems that both sides were driven by several fairly reasonable incentives in concluding the CAI.

In addition to the obvious economically focused and value-oriented motives, the often overlooked power-focused motive in particular explains well why most of the CAI critics have so far not had a major influence.

If commentators want to be more persuasive in their criticism – especially given the fact that the European Parliament has yet to approve the CAI – they should consider how European officials could use this agreement to increase Europe’s international normative standing.

Because this agreement is much more of a powerful pact than a cultural conflict.

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