Philippe Le Corre on Europe’s Role Between the United States and China
The Wire China
The following is a conversation with Philippe Le Corre, Senior Fellow at the Asia Society Policy Institute's Center for China Analysis originally published in The Wire China.
The academic talks about how the EU [European Union] can pursue its own strategy towards China, what its approach to the Taiwan situation should be, and the state of China-watching in the U.S. and Europe.
Q: Let’s kick off by talking about French President Emmanuel Macron’s visit to China [in April], where he talked about Europe and France having a distinctive approach towards China. Is that something that you see as desirable, or should the EU be looking to put on a united front with the United States?
A: There has been a sort of acceleration of time in geopolitics over the past three or four years, with the pandemic and its aftermath, with the war in Ukraine, and also with the more assertive approach taken by the Xi Jinping regime in China. All of this, on top of the fact that there has been somewhat of a power vacuum in the West. The election of Donald Trump led to a new approach from China to dealing with the West, with their view becoming clear that the West is in trouble; and that therefore China should be more affirmative about the world it wants to see and its position as an alternative leader to the United States. I was struck by the comments I would hear as a European-American, who visits China very frequently. Basically, the Chinese view was: “You guys are in trouble. You’ve got Trump, you’ve got Brexit.” To them it was as if the two pillars of the transatlantic community were in disarray. Not to mention growing populism in several European countries.
So there was one potential approach, which was to enhance the transatlantic alliance, and to address big issues: Russia, climate change — although in the case of Trump, that didn’t really work — and China. But the Trump administration, of course, prevented the transatlantic alliance from working well on China. In fact, the Europeans approached the Trump administration several times to say, “Why don’t we discuss China?” And there was no interest. The Biden administration came in and completely reversed this: They were the ones to say, “We should speak about China.” But, of course, on their terms.
All this leads me to the idea of European strategic autonomy. With the four years of the Trump administration, and the fact that Biden followed through with the ideas of decoupling (although this very term is now being questioned by [National Security Adviser] Jake Sullivan), it’s becoming more and more apparent that the U.S. economy and U.S. technology are getting separated from China. At the same time, globally speaking, China is not isolated because we all trade with China. And therefore from a European point of view, we have to take into account all these elements.
Basically, you have the United States with only two neighbors, Mexico and Canada. They don’t really need anybody, although they do need the Indo-Pacific, because they have an economic and strategic stake there. So they are pivoting towards Asia, that’s been obvious ever since Obama. And meanwhile, in Europe, we are China’s top trading partner, and we also have this very close relationship with the United States, including an economic one that is often forgotten — European investments in the United States and U.S. investments into Europe are huge compared to Chinese investment in the EU, which is only about 3-4 percent of the whole foreign direct investment (FDI) stock.
Also in Europe, you have a German Chancellor [Olaf Scholz] who is not as strong as the previous one [Angela Merkel], running a three party coalition; in the U.K., you have had four prime ministers in six years, Italy changes its prime minister pretty much every year; and in France, the president doesn’t even have a parliamentary majority. And you’re dealing with the ‘emperor’ of China, who basically thinks he is going to be a new Genghis Khan.
So from a European point of view, and from the point of view of those who have a long term concern in preserving the European identity, you do have to look at things not as a follower of the United States. The United States may have saved Europe, certainly France, twice in the 20th century, but it’s now moving towards Asia. And this is a natural trend. Meanwhile there is the debate on Capitol Hill which has become extremely toxic about China, where both Republicans and Democrats have become obsessed. If you’ve spent any time in Washington, whoever you speak to will be talking of China as the competitor, if not the enemy. While in Europe, things are much more settled, and China [and issues around Taiwan] are not top news, because we have a war in Ukraine — that’s enough news for us, plus our local domestic problems, there’s a fair number of crises.
And that’s pretty much what Macron meant when he said, Do we need yet another crisis? He did misspeak when he said [in effect] “It’s not our war, we don’t want to be involved in a war.” I understand what he meant, but that was possibly taken out of context.
What do you think he meant, then?
The major document to look at is EU Commission President Ursula von der Leyen’s March 30th speech [about de-risking Europe’s economic ties with China]. When I speak to the Macron people, they tell me that they agree 300 percent with that speech. Indeed, the von der Leyen/Macron visit was planned for many months. [Macron and von der Leyen visited China at the same time in April].
The Europeans are not happy with the U.S.’s Inflation Reduction Act, and the new trade mechanisms against China, they think it’s gone a bit too far in terms of trade. The irony is that Europe now has its own trade policy and defense mechanisms, which are pretty strong when you look at its FDI screening mechanism, or if you look at the anti-coercion instruments it has introduced. But we’re not going as far as the Americans when it comes to forbidding technology companies from exporting to China. What we in Europe don’t allow is for China to take over a European company that would endanger the technological sovereignty of one of the EU members.
I do think also that the Germans and the French have a different approach to China. The Germans are very business minded, they are very transactional and practical. Volkswagen, of course, makes a lot of money from the China market. Some of the CEOs of German multinationals don’t see how they could do without China. They’re already doing without Russia: that’s been painful enough. Can Germany afford to break links with both Russia and China? No: That was the idea behind the Scholz visit [to China in November 2022].
The Macron visit was much more political. It was much more to engage China on international issues. China’s new Premier Li Qiang, for example, is attending the Paris Summit for a New Global Financing Pact on June 22-23. The second thing that they’ve been saying was a success was re-engaging, from a European point of view, with China. And of course, using this triptych of China as a partner, as a competitor, and a systemic rival. Now, obviously, the Chinese don’t like the third one. But the partnership aspect had been completely put aside during the three years of COVID.
Do you think Macron had in mind at all a grand bargain, where he could say to Xi: you help us on Russia and Ukraine, and we’ll maybe pull back the pressure on you over Taiwan?
I’m aware that public opinion is split in many European countries. But overall, I would say, a majority supports the anti-Putin stance. Obviously, Macron has tried to engage with Putin and that failed. At the same time, most people in governments now think Russia is not going to come back as it was before. The dream of a great, renewed Russia under the Tsar Putin is hard to envisage. And Russia’s dependency on China is becoming more and more obvious. I don’t believe we can go back to Russia and say let’s be friends again.
At the same time, the situation around Ukraine is still very uncertain, which is why the Ukrainian part of the Macron/von der Leyen visit to China was important, even though the expectation was not that the crisis would suddenly be sorted after they met with Xi. But it was important to engage with him on this issue, as the Europeans have been trying to do to no avail for the past year. The Chinese, as you know, are very slow in their thinking processes and strategies, and they need weeks, or months to come up with a clear strategy.
Anyway, a few leaders have tried to convince Xi that he should do something about Ukraine. I don’t want to sound like a Macron advocate, but you could say that his visit did lead to the Xi-Zelensky phone call, which had been in the works for some months. And that’s a small achievement. I don’t think that France is suggesting a grand bargain with Xi. First, because France has nothing in common with the Chinese regime and the Russian regime. On the Russia side, we need to sort out the war, Russian troops need to get out of Ukraine. Hopefully the Chinese can play a role.
On Taiwan and China, France is the only EU nation that has an active military presence in the Indo-Pacific. We have troops and Navy ships in both the Indian Ocean and the Pacific Ocean, and territories — almost 1.6 million French citizens live in the region, with about 8,000 troops stationed there. It’s not huge, but that gives some credibility to the French president when he speaks about the Indo-Pacific. I also understand that around the table of the European Council, there are countries that do not want to address the Taiwan issue too openly, such as Spain and Cyprus, as they are worried about separatism in their own countries. Having said that, the Taiwan issue has become a global issue, and it is being addressed gradually by Europeans. When you go to Brussels, you can speak to officials or Members of the European Parliament who are interested in the Taiwan issue, which wasn’t the case just three years ago. I think the conversation on China has changed and has improved, it’s better informed.
The unofficial ambassador of Taiwan to France now regularly appears in the mainstream media to make the case for his country. People say that Taiwan was very efficient in dealing with COVID-19 and that it should have been a member of WHO and that China misbehaved. So overall, Taiwan has been pretty successful in promoting its name and its democratic achievements, and the fact that it was diplomatically isolated by China. All of this means that the Taiwan issue has become a major one, and people are aware of the comparison that’s been made between Ukraine and Taiwan.
Now, how can the EU practically address it? Can they address it diplomatically? Yes. Can they think about the long-term consequences of an attack on Taiwan by the PLA? Yes, they can start doing that. Can they send forces to the Indo-Pacific or to the Taiwan Strait? Probably not. Because as I just said, the only country in the EU that can do so is France: the only other European country that could is the U.K., but the U.K. doesn’t have many territories in the region, and it isn’t in the EU anymore.
If you’re the French president, you have to take this into account. For sure, even though China’s reputation and image have been badly tarnished in the EU, I don’t think the animosity towards China is as strong as against Russia in Europe. Of course, all these factors, the pandemic, the war and the so-called Chinese neutrality towards the war — all this is affecting China’s image plus human rights, the Uighurs, Hong Kong. Besides the economic consequences of a military crisis over Taiwan, Europe wants to have its own voice and will have to make a decision.
So do European leaders need an answer to the question now, which is: If China invaded Taiwan, and the United States acted to defend Taiwan, what would Europe do?
The real question is on economic sanctions, and that’s also a very interesting debate. Because if China continues to respect the sanctions regime against Russia — of course, there are all kinds of side deals going on, I’m sure, because even the central government can’t control everything — but by and large, they haven’t openly broken the sanctions. That’s very important vis-a-vis the Europeans. The Xi Jinping visit to Moscow [in March] was provocative enough, when Xi said we haven’t seen changes like this in 100 years, and Vladimir [Putin] and I will be here to watch this big change.
But so far, there is a discrepancy between what the Chinese are saying, giving face to the Russians and feeding the Chinese propaganda machine — and breaking the set of sanctions that have been imposed by the West against Russia. That would be a tipping point. If China starts breaking that rule, then the Europeans would probably shift entirely into the U.S. camp, which some Eastern European countries have already done.
I don’t think EU policy towards China has changed just because of this interview Macron gave to Politico. Read the Von der Leyen speech: that’s the EU policy, she’s the president of the European Commission. There was countless back and forth between her office and all the capitals. People are aware of what the EU policy is, and that the French president speaks for France, he doesn’t speak for the EU.
In my April paper for the Asia Society Policy Institute I focused on France and Germany, because the other countries that China is trying to do business with in Europe, it’s a lost cause. The 16-plus-one mechanism [a forum for China’s engagement with Central and Eastern European countries] is a complete fiasco, as far as I can tell. That’s because China did not deliver, that’s their problem. They did not deliver in terms of investments.
But of course, Germany and France are economic heavyweights. And that matters a lot to China, because China knows that Germany especially has a lot at stake in this game, because it needs the Chinese market, and France wants to continue to be a big player.
How do you read what’s going on in Beijing at the moment, given the mixed signals: you have the new Premier, Li Qiang, saying we’re open for investment, but at the same time, we see these stories coming out about the hostility that seems to be there towards foreign business.
I don’t think there are divisions in the leadership, not within the standing committee or the politburo for that matter. They are following the leader.
Li Qiang is this interesting character. He was liked by foreign businessmen in Shanghai, but at the same time he failed in handling the COVID lock down a year ago, and he is now technically the number two of the whole regime. So obviously, he’s not in a very strong political position, because just like his standing committee colleagues, he’s there because the leader picked him, and he’s dependent on his relationship to Xi. Even though he technically ranks number two in the Politburo’s Standing Committee, very few China scholars consider him as such.
On the business side, the Chinese continue in their mode of Made in China 2025: “We want to bring in technologies, bring in talent, whoever can help us to grow. But let’s get rid of all the things we don’t need. And we’re going to give a hard time to foreign companies that are competing with our national champions.”
The general trend of the Chinese regime is more control, more monitoring. The espionage law that is about to be passed is an example, as well as the increased presence of the CCP within companies, including foreign companies. Of course, this is not completely new, but it’s now an open secret. And that’s a signal to many companies that if they want to do business freely in China, it’s not going to be easy; one day, you’re in, one day you’re out — if you don’t have the right friends, or if you’re not in fashion, then you’d better pack your bags. So I recommend a lot of prudence when it comes to China. The political agenda, the domestic agenda always comes first in China, and foreigners always come second.
Germany is a piece of the jigsaw that I wanted to discuss. It’s a complex picture that the Scholz government is dealing with, and they don’t seem to have come to a conclusion internally. Where do you see the German government landing on China?
I agree with your assessment. There are different camps and different plans, you could say. Everything started in 2016 when the Chinese acquired Kuka, the robotics company. I remember going to Berlin in 2015, there were very few people who specialized in China by then; for example, in the economics ministry, they didn’t have a China desk. Until then there had been many acquisitions of medium sized companies, German family businesses, all in good cooperation with the Chinese.
Then in 2016, you have Kuka, one of the top robotics companies in the world, being acquired by Midea Group, a state owned company of China. That shifted people’s minds enormously. And suddenly, you had at least two camps: the BDI, which represents the broader German industry, published a very strong report that called China a rival, and was very cautious on the technology side. And then you had all the big companies which have been investing in China for 30 or 40 years; for example, I visited Volkswagen’s factories in Shanghai, in 1990, and it was incredibly efficient. This has been a long term investment. You can’t easily get out of such an important deal.
But on the technology side, there’s a convergence between most German and European companies, that on things like semiconductors or biotech, Europe needs to be autonomous. The EU actually handled the pandemic fairly well: there was chaos at the beginning, then in the end, the coordination was surprisingly good. But we were lacking masks, we were lacking ventilators, the vaccines took a while. And this raised the question of China and India’s roles in manufacturing vaccines and pharmaceutical products. Who knows when the next pandemic will fall upon us, but certainly you don’t want to have your supply chains in a country that you can’t entirely rely on. That’s exactly what happened; and you remember the ports in China were sometimes blocked and the shipments couldn’t leave the harbor and all of this. And that creates a huge concern in Europe, among other places.
So the Germans are trying to navigate between these different viewpoints. Like under Merkel, the China portfolio is still very much in the Chancellor’s hands, just like in the case of America. The CEOs of these big companies are very influential, perhaps more so than in France, for example, and even more so than in the United States; but now the pro China group in the United States, the companies like Coca Cola or Boeing or these people, they cannot make the case as well as they did in the past in Washington. In Germany, it is still possible.
Is there a strong enough China-watching community in Europe? Conversely, what’s your assessment of the state of China watching in America?
Let’s take America first. Back in 2014-16, you still had a regular flow of contacts between Chinese experts and U.S. experts. Some were traveling very frequently to China or even spending a year or two on Chinese campuses. Chinese scholars were visiting very frequently, discussing every issue, and the doors of Chinese scholars were also open.
Now of course, Trump was elected and things became very polarized. And the people who filled his administration were not coming from the think tank community, but were coming from other sectors. When I testified before the U.S. Congress during the Trump administration, I was surprised by the other witnesses, I’d never heard of them. Even the congressmen were asking very strange questions at the time.
During the Biden administration, I also testified; it was a very different atmosphere and it was more like the back to the good old times — except that as far as the China watching community in Washington goes, there are very few voices saying, “Let’s do business with China, because the polarization has become really strong, especially on Capitol Hill.”
In Washington, with all the interactions between the politicians, the staffers, the think tanks — they know each other too well. You’ve got all these people spending time together, and it’s a bit incestuous. So the problem is, you have a few voices of people who spend a lot of time in China, and think we should engage.
In Europe, there’s probably less funding available for research [although] there are some pan-European think tank networks that have been put together. The problem is very few have had a chance to live in China, or to engage with China, which is very sad. This is actually bringing us back to the core of our conversation, do we need to engage with China? Or do we need to close the door? Well, if we want all these young Chinese speakers to continue to analyze China properly, of course, they need to go to China. But these past three years have been similar to the Cultural Revolution when it comes to access. And by the way, there’s still a huge problem in accessing Chinese sources. I don’t see much improvement in the near future.
I am certainly in favor of transatlantic discussion on China. That is something I’ve always insisted upon. But I do believe it’s also good to take a global approach. There’s a lot going on between the EU and various Asian countries: Japan, South Korea, India, Singapore, I’m thinking of these four in particular, they are really engaging with European scholars and policymakers.
Of course, you have the case of [Germany’s] MERICS, which is an exception in Europe, in the sense that they’ve set up this huge think tank focused only on China, with a bunch of very good, young China scholars. There’s no equivalent anywhere in the U.K., in France, in Sweden. Sure, you have a number of U.S. think tanks that are based in Europe, and they cannot really claim to be a European voice. You need European voices to emerge. And they need to come out of either think tanks, but more likely universities. Because that’s where the money is, so to speak.
The summary of all of this is that more and more people are keen on studying China, but there is no choice but to go there and spend time there, trying to engage with Chinese colleagues and sources. We need to fight for that. I hope our leaders when they travel to China do make that point, because it’s not just about the BMWs. The same thing with journalists. I’m a former foreign correspondent in China: it’s a shame really that foreign correspondents are in such deep trouble and that very few reporters can travel to China to do their work.