China’s offer to the EU: tough negotiations or a coalition against Trump? OSW Commentary, August 23, 2018

Donald Trump’s aggressive policy towards Beijing and the spectre of a trade war have served as a catalyst for the resumption of dialogue between China and the EU. Within a period of less than two weeks, the Chinese prime minister held three meetings with EU leaders: within the 16+1 framework, a German-Chinese intergovernmental consultation, and a China-EU summit. Beijing’s diplomatic offensive was intended to show openness to the EU’s demands to liberalise access to the Chinese market, and to neutralise allegations that China has been exploiting divisions between EU member states. Beijing hopes that improving the climate of the talks, together with making some small concessions to Brussels, and especially to Berlin, will allow it to bring the EU onto its side in its conflict with the United States at relatively little cost. This puts the EU in a dilemma. On the one hand, supporting the pressure Washington is currently putting on Beijing could lead to a real opening-up of the Chinese market, and also reduce the growing imbalance in international trade whose roots lie in China. However, this risks a collapse of economic growth in China, which would mean losses for many European companies. On the other hand, if the EU cooperated with Beijing on this matter, it could strengthen the multilateral trading system based on the WTO, and also help to defend the Iran agreement and the Paris agreement on climate change. However, if Brussels openly joins the Chinese coalition against Washington, that could cause serious divisions within the EU and in trans-Atlantic relations, and also limit Beijing’s determination to undertake domestic reforms