Chinese negotiators this week caught counterparts in the European Union with key market access concessions – after long months of intransigence – that could allow the two sides to reach an agreement on a historic investment deal by the end of the year. .
Although EU officials have not yet revealed the details, a senior EU diplomat said the agreement goes beyond anything it has previously offered Beijing to any foreign partner, both in terms of market access and legal and other guarantees.
EU officials are not naive about the historical timing of the agreement or its political significance. It will come shortly after the Americans elected Joe Biden in early November, following a campaign in which he promised to rally allies from Europe and Asia to work on the common cause to counter the unfair practices of the authoritarian capitalist system. of China.
In Brussels, Beijing’s rush to conclude the investment agreement follows the European Commission’s December 2 proposal to President-elect Biden for a “new transatlantic agenda for global change” based on nothing less than the ambition to bring Europe and the United States together. a global alliance based on common values and history.
EU officials I reached on Friday said they were torn between the opportunity to conclude one of the best investment deals ever offered with China and the desire to take advantage of the first days of the Biden administration to dramatically improve transatlantic relations. If the EU concludes the agreement with China, it is likely to argue with the Biden team that the concessions they obtained from Beijing may also apply to any future US agreements with China.
That being said, President Xi’s basic message to President-elect Biden, paraphrasing the 1974 Rolling Stones single, is that “Time is waiting for no one.”
Xi is unwilling to press the pause button to give President Biden time and space to assemble his Chinese team, reach allies and frame his strategy. He will not do this in terms of trade and investment, nor will he do so in his efforts to combat political dissent at home. It is moving rapidly to achieve greater autonomy in the development of key technologies, especially semiconductors. And he will remove any effort that would hinder his ambition to unify Taiwan with the mainland during his rule.
It is clear that President Xi considers 2021, the centenary of the Chinese Communist Party, to be perhaps the most important year since he came to power in 2013. He sees the next decade as decisive.
Nothing could have made President Xi’s personal ambitions clearer than the fifth plenary session of the Chinese Central Committee, which ended on October 29, just five days before the US elections.
“Judging by the outcome of the Plenary Session, Xi’s political ambition to remain in power for the next 15 years seems increasingly certain,” Kevin Rudd, a former Australian prime minister, said in a keynote speech as chairman. Asia Society Policy Institute. Rudd sees the 2020s as the “face-or-break” decade for the future of Chinese and American power.
President Xi Jinping’s rush to conclude the EU investment agreement is just one of many elements of his evolving preventive approach to the United States in general and President-elect Joe Biden to be precise, with elements ranging from trade initiatives around the world to intensification. actions against pro-democracy activists in Hong Kong and real or perceived dissidents at home.
Seen most charitable, President Xi hopes to stimulate the Biden administration to negotiate similar agreements with Beijing more cooperatively. It had been a much-desired Chinese goal, before relations worsened during the Trump administration, to reach a so-called ILO – or bilateral investment treaty – with the United States, similar to what is being negotiated with the EU.
Seen less generously, Xi is boxing in the Biden administration long before the Jan. 20 inauguration by blocking his closest Democratic allies in investment and trade deals to which Washington is not a party. On human rights issues – including the arrest this week of a Bloomberg journalist and the imprisonment of newspaper founder Jimmy Lai and other democracy activists in Hong Kong – he warns that today’s China will resist President Biden’s planned efforts to highlight human rights issues.
President Xi not only capitalizes on the long-term commercial attractions of nearly 1.4 billion consumers in his country. It also benefits from China’s significant success in controlling COVID-19. This, in turn, will allow China to be the only major economy in the world to grow this year, to about 1.5-2%, with double-digit growth next year.
News in Brussels follows last month’s announcement that 15 member countries of the Association of Southeast Asian Nations and regional partners – including China but not the United States – have signed the Comprehensive Regional Economic Partnership, or RCEP, one of the largest free trade agreements in history. This is the first time that China has brought South Korea and Japan together with the US allies in such an agreement.
In addition, President Xi expressed his interest in joining the Comprehensive and Progressive Trans-Pacific Partnership Agreement. The deal was negotiated with the United States during the Obama administration, but President Trump gave up talks long before they were successfully concluded in 2018 as one of his first U.S. presidential actions.
Despite his determination to revive allied relations, President-elect Biden said trade agreements would not be a priority. There remains an insufficient constituency for them among Republican or Democratic lawmakers.
As always, it would be wrong to underestimate China’s challenges, and there are many.
These include doubts about the Chinese economic model, especially as President Xi strengthens his control over the private sector, including the recent blocking of the ANT’s initial public offering. China’s return to growth this year was mainly determined by the state.
There are growing signs that President Xi’s most ambitious international effort, the Belt and Road Initiative, is in trouble. Chinese officials are quietly ruling in their ambitions – and are facing pressure to reschedule or forgive debts owed by partners in poorer countries.
It is also unclear whether national self-sufficiency efforts will close the remaining technological gaps, especially with regard to semiconductors. The Trump administration escalated tensions this week by placing China’s largest chipmaker and drone maker on a blacklist of exports, urging U.S. companies to obtain licenses to sell them.
Regardless of the problems that President Xi may have, he is more powerful than anyone he anticipated when the coronavirus broke out in Wuhan late last year. In the inaugural year of President-elect Biden, President Xi’s actions are the most noteworthy.
Frederick Kempe is the best-selling author, award-winning journalist and president and CEO of Atlantic Council, one of the most influential global business think tanks in the United States. He worked for The Wall Street Journal for more than 25 years as a foreign correspondent, assistant editor and as the longest-lived editor of the European edition of the newspaper. His most recent book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times bestseller and was published in more than a dozen languages. Follow him on Twitter @FredKempe and ssubscribe here at Inflection Points, his look every Saturday at last week’s top stories and trends.
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