Editor's Note: Greetings from Brussels! This edition of CCCEU Weekly Update aims to keep you updated on the evolving dynamics between China and the EU, especially as the China-EU summit approaches. Enjoy reading and have a restful weekend.

▶︎ Focus

The highly anticipated first in-person China-EU summit in four years is set for next week. While the Chinese agenda remains undisclosed, the EU has outlined its leaders' participation. Notable figures including European Council President Charles Michel, European Commission President Ursula von der Leyen, and the EU's foreign affairs chief Josep Borrell are slated to attend this pivotal event.

Anticipation mounts in Brussels as reciprocal signals exchanged by both parties set a crucial tone ahead of the summit.

Turning our attention to the Chinese perspective, notable signals have emerged. During the regular press conferences held by the Chinese Ministry of Foreign Affairs on November 30 and December 1, spokesperson Wang Wenbin addressed inquiries regarding the EU's 'de-risking' strategies

China Daily: Recently, the EU is preparing the EU-China Summit. We have also noticed that the EU raises concerns to China over its economic slowdown, poor business environment, overcapacity, imbalance in trade, and its pursuit of a China-centered international order and emphasized no decoupling from but "de-risking" with China. Do you have any comment?

Wang Wenbin: "The concerns raised by the EU are inconsistent with the facts. Despite difficulties in global economic recovery, China maintains a good momentum toward stabilizing and improving its economy, which is not easy. In the first three quarters, China's GDP has gone up by 5.2 percent year on year, making China a leader among the major economies.

This year marks the 20th anniversary of the China-EU comprehensive strategic partnership. The experience of the past two decades has shown that staying committed to the comprehensive strategic partnership will charter China-EU relations forward. 'De-risking' and 'reducing dependence' should not evolve into throwing away and weakening cooperation. It is hoped that the EU will observe China's development and domestic and foreign policies in a comprehensive and objective way, adopts a rational and pragmatic China policy, and promotes the mutually beneficial cooperation between the two sides, so as to jointly resolve global challenges."

CCTV: France's Jacques Delors Institute recently released a report saying that for the EU, leveraging China to realize its own development is a necessary choice. The report called on the EU to always be rational on "de-risking", uphold a more rational and pragmatic China policy, and enhance mutually beneficial cooperation in energy, the green sector and technology. What's China's comment?

Wang Wenbin: "We noted the report you mentioned which reflects that people with insights in Europe are positive about the prospect of growing China-EU relations and that the relationship enjoys solid foundation in the people.

China and the EU are partners, not rivals. China-EU cooperation should be a positive cycle that enables our mutual success, not a knock-out match which results in only one winner. Certain individuals selectively emphasize on competing aspects between China and the EU, deliberately overlook partnerships and hype up "de-risking" with China and reducing dependence on China. Such misconception on China not only will reinforce misunderstanding and erode mutual trust, but also goes against the EU's long-held position of upholding free trade and WTO rules and disrupts the growth of China-EU relations, which does not serve any one's interests."

From the EU's standpoint, both Charles Michel and Ursula von der Leyen are confirmed to attend the summit. Recent events have seen limited yet significant mentions of China by these EU leaders.

President von der Leyen, during COP28, acknowledged China's efforts in tackling climate change. Additionally, in a European defense event, she remarked, "The Kremlin has deprived itself of access to Western economies and innovation systems and made itself dependent on China."  

Conversely, Michel focused on critical raw materials, emphasising Europe's dependence on imports, particularly from China.

He said, "on the supply side, we are all dependent on critical raw materials and rare earths from third countries, including China. Graphite, for instance, is the most-used material in the defence industry – for helicopters, submarines, artillery and missiles – and China produces 70% of the world's graphite. Only coordinated European action will ensure that we have access to critical raw materials to increase domestic military production – much like our Chips Act, which strives to strengthen the EU chips value chain."

There's a heightened focus within the EU on the upcoming summit, with reports suggesting that the EU leaders will exert pressure on China concerning 13 companies suspected of circumventing sanctions against Russia. The EU aims to secure China's commitment to peace efforts in Ukraine, hoping for renewed Chinese engagement in discussions.

European media depict the summit as challenging, citing the EU's investigation into Chinese electric vehicle subsidies, which has strained China-EU relations, according to Deutsche Welle.

"Can the wintertime summit in Beijing bring a diplomatic thaw? This week, China's Deputy Foreign Minister Sun Weidong spoke of understanding "core interests" on both sides. But it appears core interests of China and the EU are very different, and that politics still casts a long shadow over trade," it wrote.

▶︎ Hot Topics

Commission unveils consultation results on FDI screening mechanism

On Wednesday, the European Commission released the outcomes of the consultation on the bloc's Foreign Direct Investment (FDI) screening mechanism. The summary highlighted the substantial participation of enforcement departments from various member states, providing valuable feedback.

China-related projects of Horizon Europe

Horizon Europe made significant announcements on Wednesday regarding various research and development projects, including the approval of a project related to China. Titled 'European Hub for Contemporary China,' this project is undertaken by Belgium-based Beyond the Horizon International Strategic Studies Group (BtH).

Moreover, on Friday, Horizon Europe initiated a call for proposals and bids for its China-EU Think Tank Exchange Programme.

These strategic initiatives demonstrate the EU's increased investment in expertises focusing on China, aiming to enhance their understanding of the country's dynamics and policies.

China dominates one-third of EU's cultural product imports in 2022

Eurostat recently released data indicating that in 2022, one-third of the EU's cultural product imports, amounting to 6.8 billion euros, will originate from China. While jewellery remains a significant import category for the EU (sourced mainly from countries like Switzerland and the United States), China's major cultural imports to the EU include video game consoles. Additionally, China supplies books, works of art, musical instruments, and to a lesser extent, jewellery.

COP28 Dubai sees encouraging progress in climate financing

The second day of the COP28 in Dubai opened with the United Arab Emirates establishing a $30 billion fund to bridge climate finance at the opening of the World Climate Action Summit attended by dozens of high-profile leaders on Dec 1, China Daily reported.

UAE President Sheikh Mohamed bin Zayed Al Nahyan's announcement came as COP28 was still reeling from a breakthrough for operationalizing a loss and damage fund on Thursday evening, the official opening of the Conference of Parties.

German finance minister defends 2023 debt brake suspension forced by court ruling

According to Reuters, German Finance Minister Christian Lindner defended on Friday his supplementary budget for 2023 which suspends Germany's cap on borrowing this year after a top court ruling tore up the government's spending plans.

Lindner, leader of the fiscally conservative Free Democrats, has been a staunch defender of the constitutionally-enshrined debt break in the past and is reluctant to agree another suspension in 2024 as Germany tries to find a way out of its budget crisis.

Ukraine blows up two railway connections between Russia and China: Media

According to Politico, Ukraine's security service blew up railway connections linking Russia to China, in a clandestine strike carried out deep into enemy territory, with pro-Kremlin media reporting that investigators have opened a criminal case into a "terrorist attack." The Security  Service of Ukraine set off several explosions inside the Severomuysky tunnel of the Baikal-Amur highway in Buryatia, located some 6,000 kilometers east of Ukraine, a senior Ukrainian official with direct knowledge of the operation told POLITICO." This is the only serious railway connection between the Russian Federation and China. And currently, this route, which Russia uses, including for military supplies, is paralyzed," the official said.

New Chinese visa-free policy welcomed by various sectors in Europe

The Chinese Ministry of Foreign Affairs recently announced a visa exemption policy for ordinary passport holders from France, Germany, Italy, the Netherlands, Spain, and Malaysia. Patricia Flor, the German Ambassador to China, wrote on social media: " This decision will facilitate travel to China for many German citizens to an unprecedented extent. A joyful occasion for relatives and friends of people living in China, for business, tourism, German-Chinese associations, and other bilateral projects." French Foreign Minister Colonna also stated: "My colleague Wang Yi announced great news during my visit! French people staying in China for no more than 15 days will be exempt from visas."

According to the Associated Press, the European Union Chamber of Commerce in China said this move would help boost business confidence. "China is taking steps to promote personnel exchanges, which is a positive signal." The Chamber also expressed hope that more European countries would soon receive the same visa-free treatment. In a statement, the Chamber described this as a "practical improvement that will also enhance business confidence."

▶︎ What are experts talking about？

The "welfare chauvinism" stance of Western European Right-wing Populist Parties and the Policy Adjustments of Mainstream Political Parties.

Source: Institute of European Studies of Chinese Academy of Social Sciences

Author: QI Tianjiao

The economic slowdown, unequal wealth distribution, and social class divisions in Western European countries have triggered structural adjustments in party politics, leading to the rise of populist parties. Among them, right-wing populist parties have gained support from many voters through anti-immigrant and anti-globalization policies, framed as an "us versus them" narrative. In recent years, these parties have expanded their agenda to the socio-economic realm, proposing ‘welfare chauvinism' policies that exclude immigrants from social protection, further meeting the demands of the middle and lower classes for the expansion of redistribution systems for their own nationals. The welfare chauvinism stance of right-wing populist parties is linked to their strategy of responding to voter concerns through elections and seeking governance or coalition formation based on identity politics. As these policies compete with those of mainstream parties, mainstream parties have made moderate policy adjustments to prevent voter loss. Despite widespread attention, the development of right-wing populist parties faces a series of challenges.

Noteworthy Studies on China

The European Council has released its monthly think tank review, featuring several noteworthy studies on China. We believe these studies hold significant importance, offering insight into what EU policymakers are currently focusing on. Keeping track of these developments is crucial for our audience to stay informed about the EU's evolving policies:

Bruegel: De-risking and decarbonising: a green tech partnership to reduce reliance on China

Wilfried Martens Centre for European Studies / Konrad Adenauer Stiftung: China's influence on the Western Balkans' EU accession process: synergies and obstacles

Peterson Institute for International Economics: How trade cooperation by the United States, the European Union, and China can fight climate change

Observer Research Foundation: The dragon in the sands: unpacking China's presence in contemporary West Asia

European Institute for Asian Studies: To BRI or not to BRI: examining european implications of Nepal and China's different perspectives on BRI projects

European Centre for Development Policy Management: China's role in African sovereign debt: implications for Europe

Bruegel: To what extent can urbanisation mitigate the negative impact of population ageing in China?

Center for Strategic and International Studies: In chip race, China gives Huawei the steering wheel: Huawei's new smartphone and the future of semiconductor export controls

Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs): What explains African perceptions of China as a model of development?

Center for Strategic and International Studies: Paper tiger or pacing threat? China's security and defense engagement in Latin America and the Caribbean

END

Please note: the English version of this issue is slightly different from our Chinese one. The views and opinions expressed in this article do not necessarily reflect the official position of the CCCEU.