The European Parliament recently voted overwhelmingly to freeze the China-EU investment agreement. And six months ago Beijing was celebrating this major strategic victory. According to an analysis by the Nikkei Asian Review, Xi Jinping’s hard-line foreign policy is backfiring and the Communist Party is losing Europe.
The Nikkei said the European Parliament’s move to freeze the China-EU investment agreement sent shock waves throughout China, just over a month before the 100th anniversary of the Communist Party’s founding. The event is seen as the most important of the Xi Jinping era.
Some party members fear that the centennial atmosphere will be weakened by harsh diplomatic realities. Not only does the CCP have poor relations with the United States, but now relations with the European Union are also in trouble.
Xi Jinping also does not seem to have many cards to play to salvage the situation, according to the article.
China’s Communist Party Fails to Save Investment Agreements Until the Last Minute
The CCP and the EU finalized the China-EU Comprehensive Investment Agreement (CIA) at the end of 2020 amid tensions between China and the United States. Beijing trumpeted this achievement as a huge victory for it on the international political stage. Analysts explain that the agreement has greater strategic significance than mere economic benefits.
Dark clouds now loom over the future of the investment agreement. The European Parliament’s decision on May 20 to shelve the China-EU agreement makes it difficult for the agreement to enter into force early.
On May 17, Chinese Premier Li Keqiang held a telephone conversation with Italian Prime Minister Mario Draghi and said that “both sides should work together to ensure the early signing and entry into force of the China-EU investment agreement.
EU member Italy is the only G7 member to join the Communist Party’s “Belt and Road” initiative and is also the rotating G20 presidency, which will host the G20 summit in late October.
The Chinese Communist Party had expected the European Parliament’s deliberations on the China-EU investment agreement to be concluded by the G20 summit at the latest. Just a day before the vote in the European Parliament, Chinese Foreign Ministry spokesman Zhao Lijian on Wednesday urged the European Parliament to “ratify it as soon as possible”, saying it was in the “interests of both China and Europe”.
But Li’s and others’ urging did not yield any results. The European Parliament still voted to freeze the agreement as scheduled.
According to the article, China’s human rights problems have made the tensions between Europe and China difficult to resolve.
In March, the EU imposed sanctions on four Chinese Communist Party officials and one entity for human rights violations in Xinjiang. This was the first time in more than three decades that the EU imposed sanctions on the CCP for human rights violations.
The article says the EU is unlikely to set aside the human rights issue and move forward, despite the CCP’s claim that this is a win-win agreement.
Lithuania’s withdrawal from the 17+1 threatens to trigger a domino effect
China’s diplomatic efforts in Europe suffered another blow when EU member Lithuania announced its withdrawal from the 17+1 cooperation framework on May 22. “The 17+1 cooperation framework was initiated by the Chinese Communist Party and includes 17 countries in Central and Eastern Europe and China. It is an important framework for the Communist Party’s influence in Central and Eastern Europe, and complements the Communist Party’s Belt and Road Initiative.
The importance of the “17+1” cooperation mechanism to the CCP is evident from the fact that Xi Jinping personally attended the “17+1” leaders’ videoconference in February this year, instead of the usual Li Keqiang.
The Nikkei notes that some of the 17+1 members are members of the European Union, and the goal of the Chinese Communist government has always been to interfere with EU policy in favor of the Communist Party and to rely on its European friends in the 17+1 in order to influence EU policy.
On May 20, the Lithuanian parliament passed a resolution by a majority vote recognizing the “genocide” committed by the Chinese Communist Party against the Uighurs in Xinjiang. This move made the Chinese Communist Party jump.
According to an analysis by the Nikkei, Lithuania withdrew from the “17+1” cooperation framework. The country’s consideration was that Lithuania, as a member of the European Union, could deal more effectively with the Chinese Communist Party rather than allow itself to be trapped in a pro-Chinese Communist Party “17+1” meeting. Thus, it chose to get rid of the influence of the Chinese Communist Party. Such a move by Lithuania could affect Estonia, Latvia and other 17+1 members.
Another article published in the Nikkei said that the lack of progress on promised investments by the Chinese Communist Party in many countries has added to the frustration of Central and Eastern European countries. The Communist Party’s state-owned China Guangdong Nuclear Corporation had agreed to invest in and expand a nuclear power plant in Romania, but the plan was put on hold for several years, and Romania cancelled the deal in 2020 and signed an agreement with the United States.
The article notes that enthusiasm for China has now cooled in much of Central and Eastern Europe, and that Beijing has been alarmed by human rights issues and a stalled China-Europe investment agreement that has caused some countries to turn to the United States.
President Biden attended a preparatory meeting for the upcoming NATO summit this month. The nine Central and Eastern European countries hosting the meeting have high hopes for U.S. military capabilities.
Expert: Central and Eastern Europe Will Continue to Distance Themselves from Communist China
The Communist Party’s top diplomat Yang Jiechi visited Slovenia on May 26 to urge stronger ties between Beijing and the European Union. Slovenia will hold the rotating presidency of the EU in July this year. The Nikkei analysis suggests that Yang Jiechi’s visit shows that Beijing is keen to bring the country to its side to help push the China-EU investment deal forward again.
But relations between the two countries are fraught with uncertainty. Last August, Slovenia signed a declaration on a 5G security network that would essentially block Chinese company Huawei from participating in the construction of the country’s 5G network.
Xi Jinping is now under increasing pressure to reassess the Communist Party’s strategy toward the region, but it is unclear how Beijing can reverse the already deteriorating relationship, the article said.
Atsuko Higashino, an associate professor at the University of Tsukuba in Japan and an expert on Central and Eastern European affairs, said, “Central and Eastern European countries will continue to distance themselves from China [the CCP].”
Meanwhile, the Chinese Communist Party has been in a dispute with Australia for some time.
U.S. House Speaker Nancy Pelosi (D-Calif.) recently called for a “diplomatic boycott” by global leaders of the Winter Olympics to be held in Beijing next February.
A new divide appears to be emerging, one that has not been seen before.
The United States, Japan, the United Kingdom, other G-7 members, the European Union, India, Australia and other countries are now watching the Chinese Communist Party and keeping their distance. While all eyes are on China, meaningful direct dialogue with that country remains stagnant in many respects.
The Nikkei’s analysis says the CCP’s only response seems to be to double down on “wolf-war diplomacy. As Xi Jinping prepares to seek a successful re-election at next fall’s national congress, he will not bother to acknowledge diplomatic failures. As a result, no major reversal in relations between the CCP and the West is imminent.
If that is the case, the Nikkei notes, the current stalemate could become the “new normal” for Western diplomacy with China. Xi Jinping’s dilemma will remain great until the 100th year of the Communist Party.