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The Comprehensive Agreement on Investment Strengthens the ‘European Party’ in China

From the series News from the Silk Road

“Chinese people treat [US democracy] as a variety show which is much more interesting than House of Cards’ [...]”. Beijing does not feel the same embarrassment as the old democracies of the West faced with the grotesque scenes of demonstration against the Capitol organised by the president of the United States. Zhao Minghao from the Chongyang Institute spelled out the obvious in his analysis some time earlier: “the political farce by the incumbent president and some Republican lawmakers is reflecting the profound crisis on US domestic politics.”

The Global Times is serving a hefty bill to the ideologies of liberal interventionism: “the ‘beacon of democracy’, and the beautiful rhetoric of ‘City upon a Hill’ [...]” are undergoing a serious debacle or in other words, a “Waterloo of US international image”. It will be a while before the US can “interfere in other countries’ domestic affairs with the excuse of ‘democracy’[...]”.

Attention is also drawn to the distinction between the image of the United States and die totality of American power, but Beijing still holds the “US democracy” accountable to its “complicated and long-standing systemic crisis”. Zhang Tengjun of the CHS (China Institute of International Studies of the Foreign Ministry) in Beijing notes how “American democracy’ has been unable to prevent characters like Trump from being elected”. Global Times writes that “the Republican party hesitated”. Zhang predicts that “the reordering of the chaos will depend on the capacity of die two parties to find consensus again”. Finally, Global Times again asks itself whether the United States will be more “unpredictable in the future”.

A burden to share

For Jia Qingguo, former dean of Peking University’s School of International Studies, the Chinese Dragon has no interest in American instability in the medium and long term, but can take advantage of it in the short term.

Jia is a proponent of Chinese "strategic composure” and writes that, in their rise to power, the United States continued to “use the British-led international order to strengthen itself” (The Great Country Persists, Shanghai, 2019). Subsequently, “with the expansion of their international interests, [the United States] began to pursue their own interests in an increasingly authentic manner, participating in the maintenance of the international order”. Only after the Second World War did they discover the “cost of maintaining an international order, which protected American interests, was extremely high”.

The theory seems to echo Henry Kissinger’s criticism of the American management of the Suez crisis in 1956 when, after unnecessarily damaging the image of France and the UK, the United States then saddled itself with the regional burden and, ten years later during the Vietnam war, found itself alone. Beijing, writes Jia, “should reflect on how to protect its interests through the protection of the international order”, although this means cooperating with the United States. For 40 years China has "used the order used by the United States, including American resources, for its own development, when China becomes stronger in the future, it will still need to use American resources. If China is to become the world’s leading power, it has to acknowledge this fact without proper use of American resources, the cost of maintaining a world order will be markedly higher”.

American party and European party

According to Fu Ying, of the National People’s Congress Foreign Affairs Committee, the predominant currents of the Chinese consensus are calling for the reopening of a dialogue with the United States, as a consequence of Joe Biden’s inauguration. These are components of that ‘American party’ whose transformation we have been following in the context of the “peaceful rise” and the relative abandonment of the “low profile”, including the proposal of a "new type” of relationship with the USA or the updating of the Shanghai Communiqué. However, in the negotiations with Washington the Comprehensive Agreement on Investment (CAI), concluded at the end of December with Europe, is now an additional factor.

For Xin Hua, of the Centre for European Studies of the SISU (Shanghai International Studies University), Europe is "carefully balancing” between the consensus for a “transatlantic geopolitical coordination to deal with China” and the strategic autonomy required for “dealing with China on its own terms”. The spotlight is on Berlin.

Atlanticist pressure to delay the signing of the agreement, triggered via Twitter by the American National Security Advisor Jake Sullivan, was enough to “embarrass some of the old European guard, especially the German establishment” and cause an “intensifying debate between Atlanticists” and pro-Europeans, i.e., "those Europeans who support more independence and autonomy from the US and NATO”. This debate is complicating the ratification. But “this time”, the analyst in Shanghai observes, Europe has not caved in to American pressure.

Germany: multilateral power

Sun Keqin, a researcher of the CICIR (China Institutes of Contemporary International Relations) who worked at the Chinese embassy in Germany, writes that Berlin “has begun to give a new response to Washington’s demands”.

Germany’s “multilateralism is in stark contrast with the US’ unilateralism under President Trump. And the great power competition for Germany is the competition and cooperation between the US, Russia, Europe, and China. It is not merely about an Atlantic alliance proposed and lead by the US targeted against China.” Sun warns that "Europe will try to take care of American emotions” and that "the counterweight of NATO” will ensure that Berlin "could not simply reject US’ demands”. But he sees possibilities opening up for China to balance "the influence of pressures exerted by the US on Europe”.

It is useful to fake a step back to frame these Chinese currents interested in European power, returning to a collection of works edited by Sun Keqin in light of the Atlantic "serious discrepancy” that saw Berlin fake a stand against the war in Iraq in 2003 (Germany and China in the New Century, Beijing, 2003).

Bonn in the Maoist theory of the united front

As early as 1956 Zhou Enlai declared that Beijing would welcome the normalisation of relations with the Federal Republic of Germany. Pan Qichang, of the Institute of European Studies of CASS (Chinese Academy of Social Sciences) gives the following assessment of the real purpose of what would later become the “Maoist theory of the united front”: “to attack not only the US, but also the USSR”, and to counterpose Western Europe and Japan to these major powers. China would also seek “something in common” with both Europe and Japan.

In January 1964, Gaullist France opened up to China. In May Chen Yi alluded to good relations with West Germany. In Bonn, Pan Quichang writes, a major discussion ensued. This discussion was revived, we should add, after the clashes on the Ussuri river. This China-USSR conflict was one closely followed by Arrigo Cervetto (Lotta Comunista — The Bolshevik Model, Marxist Science Publication, 2019).

The following was the situation at the time according to Pan Qichang. The “dominant currents”, he writes, thought that Germany could not use China to influence the USSR and challenge the Hallstein doctrine, which prevented diplomatic relations with countries apart from the USSR - that recognised the German Democratic Republic. But “many thought that the time had come to play the Chinese card on the German question.” One “should test whether and to what extent the conflict between the USSR and China could be used”, and in particular whether Beijing was willing to weaken or reconsider its relations with the GDR. This could have been done by signing a trade treaty as German industrialists were also demanding. In any case, the negotiations with Beijing would give Bonn more diplomatic breathing space “to counteract the cooperation between the USA and the USSR”. However, Erhard, initiating ‘secret’ negotiations in Bem, “dared not” move without Washington’s knowledge.

The ‘tweet’ of 1964

There was no Twitter then, but “the Americans required that the Federal Germany consulted with America before it took an important decision ”. Bonn decided not to follow Paris and Erhard declared, on a visit to Washington, that he did not intend

to sign a “trade treaty” that would recognise Beijing, but a “state agreement on the trade in goods". In the Chinese view, it was a "surrender” and the “renunciation by Erhard of a policy of independence”. Germany was “undoubtedly one of the forces that could be combined” in the “united front theory”. But the Bern talks, broken off in September 1965 by Chen Yi, account only for a chapter of the story.

By 1966, Ostpolitik on the one hand and the Cultural Revolution on the other shelved the Chinese card. Germany could not achieve its strategic goal of détente in the East by involving a China in open contention with Moscow. The Chinese card will have to wait It is no coincidence that it will be played first by the United States.

The Chinese card and the European card

In the article “The East-West Oscillation of the German Question” (May 1982), Cervetto estimated that the opening of Nixon and Kissinger to China had been, “from many points of view, [...] a response to the German initiative and the offer to the USSR of new conditions in order to shore up the Yalta agreement”. In essence to serve an anti-European function. According to Chen Feng of the CICIR, even after establishing diplomatic relations with Beijing in October 1972, Bonn remained heavily influenced by this dynamic. It would take Helmut Kohl to “greatly” develop bilateral relations after German reunification and the collapse of the USSR — when Germany’s strategy of “diplomatic globalisation” looked to China to promote “the emergence of multiple identities in the world economy” and “a stable multipolar world”.

In power relations with Washington, meanwhile, the European process was changing the balance. “Before reunification, the Federal Republic had always adopted a diplomatic strategy of ‘hiding its forces and biding its time’ [...]”. Since the 1990s, Berlin has been expressing itself as a “political power” through the European Union. It “does not yet have the strength to control half the sky and must still rely on the power of the United States to pursue its own status and influence as a world power. Therefore, it is impossible for Germany to separate itself from the United Stats, which sooner or later will seek a compromise”.

Meanwhile in Beijing the ‘American party’ is flanked by the ‘European party’.

Lotta comunista, January 2021