China's Xi weaves Poland into 'new silk road' plan
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The EU’s stance on China is slowly hardening. Just four months after Beijing and Brussels agreed to a landmark investment deal, the bloc is now increasingly pessimistic about keeping business interests separate from political concerns. This comes as what the EU described as President Xi Jinping’s “authoritarian shift”, according to a “high-level internal report” seen by Politico.
Inside the EU’s co-called “progress report”, bloc leaders condemn Beijing for not delivering on economic promises.
This is in regard to things like opening up digital and agricultural markets, addressing steel overcapacity and reining in industrial subsidies.
The report calls for “further, robust” measures to deal with the modern-day challenges posed by China, especially in the context of global economic recovery from the coronavirus pandemic.
While the EU now appears to be comprehending the potential pitfalls of business with China, many believe that Beijing has already forged an unbreakable bond on the continent.
For nearly 10 years China has been pumping billions of euros of investment into multiple European countries, including those in Western and Northern Europe.
The bulk of Beijing’s recent attention, however, has focused on Central, Eastern and Southern Europe – countries like Italy, Greece and Serbia.
It appears to have paid off: in 2016, Greece and Hungary broke with the EU’s official line and refused to criticise Beijing’s militarisation of the South China Sea.
Greece has also been silent about Beijing’s actions in Hong Kong.
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The EU’s previous lack of action to counter such things has led people like Anastasia Frantzeskaki, a Greek sociologist and trade unionist, to argue that Brussels’ top brass do not know what they’re dealing with.
She told DW’s documentary, ‘China’s gateway to Europe – the New Silk Road’, that investment makes you “dependent”.
Particularly worried about the EU’s divisions over China, she said: “Europe has not yet reached a consensus on how it wants to deal with China or what its attitude towards China is.
“Europe has no clear analysis of what China is doing.
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“China behaves differently to Western countries and is pursuing particular economic policies.
“Europe no longer has the tools that China has, namely, state-owned enterprises.
“And China is clearly using these tools.”
Much of the investment that has poured into Europe from China has come from state-run firms.
In Serbia, under President Xi’s watch, the country has been given €4billion (£3.5bn) mostly from Chinese government-related organisations since 2011.
China has pledged another €5billion (£4.3bn) in loans and regional infrastructure projects, including major upgrades to highways, railroads, and industry.
Serbia’s President, Aleksandar Vučić, has long viewed China as a major source of foreign investment, last year saying that, “Serbia can count on just one ally, the People’s Republic of China”.
According to a 2020 report published in, ‘US-China Foreign Relations: Power Transition and its Implications for Europe and Asia’, a lot of China’s funding has also found its way into developed European nations.
It said in 2016, the UK, Germany and Italy were the three largest recipients of Chinese capital investment in energy, automotive, agriculture, real estate, industrial equipment, and information and communications technology.
Politico reported that in a letter outlining the report to the European Council comprising leaders of the 27 EU countries, on April 21, European Commission President Ms von der Leyen said: “The reality is that the EU and China have fundamental divergences, be it about their economic systems and managing globalisation, democracy and human rights, or on how to deal with third countries.
“These differences are set to remain for the foreseeable future and must not be brushed under the carpet.”
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