President Biden is moving to “reengage” Europe, seeking to rebuild transatlantic ties. The Chinese regime, however, doubts he will succeed. America’s traditional allies, the Communist Party’s Global Times stated on Friday, “are economically dependent on China.”
Indeed, they are. China overtook the United States last year as the European Union’s largest merchandise trade partner. In 2020, the EU’s exports to China increased 2 percent from the year before, according to Eurostat, the trading bloc’s statistics agency. EU imports from that country jumped more than 5 percent. At the same time, the EU’s exports to the U.S. fell 8 percent and imports fell 13 percent. China’s accomplishment is all the more impressive because EU trade volume declined last year, with exports dropping 9 percent and imports falling more than 11 percent.
Beijing is continually touting its replacement of America at the top of the EU trade rankings. Xinhua News Agency this month called the increase in EU-China trade “a hard-won victory.” Not so fast. Trade includes services, and when services are added — Eurostat’s fourth quarter numbers are not yet available — the figures will show the United States is still by far the EU’s largest trade partner.
There are limits on what Beijing can do. For one thing, last year’s EU-China trade results could be a blip. “The headline claim that China has somehow replaced the U.S. as the EU’s major trading partner is meaningless,” said Gregory Copley, president of the International Strategic Studies Association, to The Hill. “Statistics from 2020 are, by definition, distorted, so the U.S. should not worry about the EU gaining more trade with the People’s Republic of China that year.”
Copley, the author of “The New Total War of the 21st Century,” doubts that China, with a stumbling economy, can maintain trade momentum. Whether one believes China grew by more than 2 percent last year, the country will not be able to continue growth until it successfully vaccinates its population. Despite months of head start, it has yet to come up with a vaccine proven to be both effective and safe. The United States, on the other hand, already has two such vaccines and will soon have a third.
Moreover, American merchandise trade is more beneficial to the EU than China’s. China last year flooded Europe with imports, particularly personal protective equipment and home electronics, a popular item across a continent locked down to prevent the spread of disease. As a result, the bloc’s trade deficit with China jumped almost 10 percent last year. At the same time, the EU maintained a healthy trade surplus with America, which despite everything fell by less than 1 percent.
European companies, like their American and Asian counterparts, are increasingly frustrated by the rapidly declining business climate in “the world’s biggest market.” “There is a growing chorus of complaints from many European businesses, which find it difficult to repatriate profits, export their own data, and protect their technology in China,” said Theresa Fallon, director of the Brussels-based Centre for Russia Europe Asia Studies.
Yet for all the obstacles China faces in wooing Europe from America, Beijing has one crucial advantage. “Perceptions matter,” Fallon said, referring to China becoming the EU’s biggest trading partner. “These figures make it look like China is rising and the United States is in decline. Who do you want to hitch your cart to?”
The answer in Europe is the People’s Republic. In January, the European Council on Foreign Relations reported that most Europeans doubt America can “make a comeback as the pre-eminent global leader” because the U.S. is unlikely to “repair its internal divisions.” Moreover, a majority — six out of ten respondents — believe “China will become more powerful than the United States within the next ten years.” Therefore, Europeans generally think they should “stay neutral” in China-U.S. matters.
Europe’s startling opinions are led by Germany, the heart of the EU economy, and Berlin looks like it is throwing in its lot with China. Its growth strategy is based on China, and therefore many of its leading figures turn a blind eye to Chinese atrocities. Volkswagen’s chief executive Herbert Diess famously said he was “not aware” of China’s detention camps in a now infamous interview in 2019.
China’s topping the trade rankings comes soon after Brussels and Beijing announced the Comprehensive Agreement on Investment. The late December announcement was seen as a slap in the face of Biden, who had campaigned on strengthening ties with America’s traditional allies as a means of dealing with Beijing. China wanted to rush the announcement — negotiations had lasted seven years — to pre-empt Biden and cut ties across the Atlantic. Beijing succeeded.
China is making great strides in eroding, and maybe one day ending, the most important partnership of the 20th century, the grand alliance across the Atlantic. Europe is in the process of defecting to China.
Gordon Chang is a columnist and the author of “The Coming Collapse of China.” You can follow his updates online on Twitter at @GordonGChang.