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What Did Xi Jinping Want from Europe at the G20?

Beijing’s efforts to drive a wedge through the transatlantic alliance and to deter EU member states from following the US’s lead on China appear to have borne fruit.

Divide and conquer: Chinese President Xi Jinping meets Dutch Prime Minister Mark Rutte at the G20 summit in Bali. Image: ANP / Alamy

The G20 Summit in Bali demonstrated how Xi Jinping’s undisputed power base at home radiates abroad: European and other foreign state leaders queued up for an audience with him. The Chinese readouts from meetings with individual European leaders followed a pattern of Beijing’s asks for promoting better relations, resisting decoupling and ensuring stable supply chains. No real promises of reciprocity were made from China’s side.

But first and foremost, Xi Jinping was buying time in order to make China stronger. He continued to sell his governance model, and what comes specifically to Europe, thawing ties aim to alienate Europe from following the US’s lead on China policy.

During the 20th Party Congress, Xi Jinping made the Politburo safe for himself. He ousted the Youth league, including potential remaining rivals, and surrounded himself with men who will implement his dictates. He was able to further sharpen his major policy initiatives and secured the continuation of his grand strategy – all heavily relying on ideology. But to fully achieve his goals, including making China a superpower and ‘reunifying’ Taiwan with the mainland, he still neds to make the world safe for his one-party, one-man rule. And here, his foreign policy plays a crucial role.

‘Strategic decisions made by the Party Central Committee must be enforced fully, faithfully and unconditionally’, was Xi Jinping’s message to participants of a ministerial and provincial study session in January 2022. He emphasised the importance of having a consistent strategy, while tactics could be flexible. This flexibility of tactics was on display at the G20 meeting. While the European leaders in particular appeared to interpret Xi’s behaviour as more engaged, his grand strategy has not changed. The increasingly assertive focus on realising the Second Centenary Goal of China becoming a modern socialist country ‘in all respects’ (Xi Jinping, Governance of China, 2022: 47) remains Xi Jinping’s guiding strategy – which means not only making China a de facto superpower, but also shaping the international order to reflect ‘different social systems’. While China will keep trying to shift the power balance in the UN in its favour, at the same time, it will increasingly focus on strengthening multilateral organisations that it heads or can easily influence, such as the Shanghai Cooperation Organization and BRICS.

The Power of Bilateral Ties: Divide Them All

During the G20 Summit in Bali, Xi engaged with European national leaders bilaterally, leaving EU leaders including Commission President Ursula von der Leyen and President of the European Council Charles Michel to watch from the side-lines. Both have strongly criticised China, and recently during the China International Expo, an assertive video address by Michel was shelved. In the absence of a bilateral meeting with Xi in Bali, Michel was instead invited to Beijing separately by the Chinese delegation.

Lacking hard power and great power attributes, the EU has never been considered a relevant establishment by Beijing. Traditionally, too, China prefers bilateral relations. This allows China to impact the other party maximally without needing to consider the dynamics of bloc politics or differentiating interests that may be present. Inviting Michel to Beijing alone – and his acceptance of this as a continuation of the European Council’s strategic China discussion in October – further demonstrates that Xi was not only successful in playing EU member states’ self-interests off against one another, but he was also successful in deepening the discord between the leaders of the EU institutions – as sour relations between von der Leyen and Michel are hardly a public secret.

European leaders were asked to promote independent and positive China–EU relations, which translates into Europe not following the US’s lead on China policy and correcting its earlier China-critical approach

Moreover, the institutional structure of the EU not only works in China’s favour, but member states also benefit from it in managing their relations independently with China. Apart from a few exceptions such as Lithuania, individual member states have been keen on hiding behind EU institutions and calling for a unitary voice when needing to confront China. But, with the unanimous voting mechanism on EU foreign policy, and with China influencing the governments of member states directly, it will remain challenging for European capitals to establish a collective approach towards China – especially now when they are also struggling economically.

Buying Time to Make China Stronger

Given that Beijing’s zero-Covid policy is strangling the Chinese economy and making citizens progressively anxious, delaying Europe’s move to diversify its supply chains and decrease its dependency on China, as well as nudging Europeans to push back against the US, are both smart tactical moves from Beijing’s perspective.

In Covid quarantine after returning home, Xi could count his European wins. At least for now, he was able to achieve the most important win of all: making those member states that matter the most to China push back against the US’s efforts to persuade Europe to follow its bans on Chinese high-end chips and semiconductors. In fact, European leaders vowed to maintain their ties with China to such an extent that soon after the G20 meeting, the EU’s top diplomat, Josep Borrell, told the European Parliament that the EU will not necessarily share the US’s policy approach towards China.

In his meeting with Dutch Prime Minister Mark Rutte, Xi rejected the idea of decoupling and clearly hinted against the US trying to pressure the Netherlands to join its ban on Chinese strategic chips. To become self-reliant and to fulfil its 2025 strategic national goals and eventually the 2049 second Centennial goal, China needs not just high-end chips but other technologies too. The US has managed to curb China’s dual circulation strategy by harnessing the needed technologies from the US, but Europe remains the weak link in helping China achieve these goals. In Xi’s full remarks to the G20 Summit, he specifically called for the removal of sanctions and the lifting of restrictions on scientific and technological cooperation. The EU has already restricted Chinese participation in Horizon Europe and other sensitive research projects – a move that again complicates China’s efforts to reach some of its domestic objectives.

In addition to suggesting the Netherlands reject moves to diversify global trade, Xi also called on France to maintain the stability of industrial supply chains. In the Chinese readouts, each European country was advised to focus on their domestically strong areas: Spain on tourism and Italy on high-level consumer products. Moreover, all European leaders were asked to promote independent and positive China–EU relations, which translates into Europe not following the US’s lead on China policy and correcting its earlier China-critical approach.

For Xi, improving relations with European economies goes far beyond trade, as loosening economic ties would also decrease Beijing’s political influence. A weakened transatlantic alliance and deepened trade dependences of key European economies on China indirectly serve the historical goal of ‘reunifying’ Taiwan with the mainland. Without a collaborative consensus in Europe, EU members will be less likely to form a common, united approach against China, and moreover, they will be less willing to use their militaries to assist the US in the Indo-Pacific. An immediate signal of European economies refraining from pushing China into concessions was on display at the COP27 meeting in Egypt, where Beijing avoided agreeing to any major commitments.

Selling the Chinese Alternative While Undermining Democracies

Weakening the definition of Western democracy and simultaneously attacking it, while also highlighting China’s systemic superiority, has become a key part of China’s foreign policy narrative in recent years. Attacking Western economies as selfish by claiming they are ‘drawing ideological lines, promoting group politics and bloc confrontation’, Xi portrayed China as siding with developing countries in Bali. His Global Development Initiative – which vaguely resembles a foreign policy arm of Xi’s domestic common prosperity policy – would make the world more ‘inclusive’, a concept that is no doubt received well among many developing countries.

Xi is trying to deepen the dependencies of selected European economies on China, and by doing so, he is making the EU less likely to form a united response against Beijing on human rights violations or security issues

In his remarks to the G20 audience, Xi painted global governance as inadequate. arguing it was imperative that all countries embraced his vision of a ‘community with a shared future for mankind’. He made veiled accusations that advanced democracies had failed to make global development beneficial to all. With China’s global initiatives and democracies agreeing to keep their own economies open, including providing Chinese companies a fair business environment, all would change for the better. Needless to say, the openness of foreign markets has served China well, allowing access to critical technologies and giving it the leverage to weaponise trade for political purposes when needed, while protecting its own market.

Western democracy and freedoms are perceived as a threat to China’s one-party system – as highlighted by the determined crackdown on Hong Kong’s pro-democracy movement. Even though the Chinese government has been heavily promoting Xi’s ‘whole process democracy’ as an alternative to Western democracy, Beijing has nevertheless been irritated by the EU’s framing of China as a systemic rival. Foreign Minister Wang Yi has repeatedly expressed Beijing’s disapproval over the use of the term ‘rival’. It would therefore not be surprising if the term became even more intolerable to Beijing, and hence subject to heavier lobbying, now that the EU’s major member states and China have entered a thaw in their relations.

Making Europe Safer for Xi Jinping

Beijing has long tried to drive a wedge through the transatlantic alliance, and its efforts have not been entirely without success. The G20 Summit in Bali could well have taken China a step forward in its quest to weaken the US position in the Indo-Pacific. At a minimum, the likelihood of the US being driven into relative isolation, with its European allies reluctant to stand by it in a crisis, has been strengthened.

While European leaders are playing a short game of economic gains vis-à-vis China, Xi is trying to deepen the dependencies of selected European economies on China, and by doing so, he is making the EU less likely to form a united response against Beijing on human rights violations or security issues. But most importantly, making Europe a lame duck through its economic dependencies and consequently making it fearful of its own vulnerabilities – whether real or shaped by imaginary narratives – serves China’s ultimate strategic goal of making itself stronger against its systemic rivals.

Xi Jinping can be pleased by the outcome of G20 Summit. In Bali, he accomplished probably more than he ever expected. The spectacle of European leaders rushing to Beijing following the Summit demonstrates to Xi that the world has been made a little bit safer for his rule. His success is only tempered by the domestic unrest following his strict Covid policies at home. Considering how tightly Xi has consolidated power in his own hands and how much China has invested in the surveillance and control of its own citizens, it is likely this dissent will be quelled sooner rather than later. After that, Xi can move forward with his grand plan – which will eventually touch us all in the form of a changed international order.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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