[Francois Godement] China bargain-hunting in Europe

PARIS ― In Shakespeare’s plays, comedy often meets tragedy. Perhaps Chinese Premier Wen Jiabao reflected on this as he watched a performance of Hamlet in Stratford-upon-Avon during his recent European tour. And, apropos the play, he may have been thinking: “To buy or not to buy?” In Bulgaria last March, one of his ministers quipped that “there will always be someone pointing fingers at us, whether or not we buy.” But, as Wen’s trip to the United Kingdom, Germany, and Hungary showed, China is indeed buying ― and European Union leaders are eagerly selling.

Wen’s tour provided some absurd plot twists. In Budapest, he praised Sandor Petofi, whose nineteenth-century ode to freedom is a Hungarian national treasure, while Viktor Orban, Hungary’s rightist prime minister, lauded China for supposedly including Petofi in high school curricula. That seems unlikely: in one of his most famous speeches, delivered in February 1957, in the wake of Hungary’s anti-Soviet revolution, Mao excoriated the “Petofi club.” He lamented that the Hungarian communists “had killed virtually no counterrevolutionaries: that’s why there was a Hungarian incident”; and he fully supported the Soviets’ brutal repression of the uprising.

It is not difficult to fathom why Orban, who in 2000 received the Dalai Lama, would resort to such insincere praise ― and even wax rhapsodic about Hungary’s “historical alliance” with China. Wen’s government has ensured that Chinese banks will finance 1 billion euros worth of potential investment by Hungarian firms in China, and has promised to buy an unspecified volume of Hungarian government bonds. Unlike in 2000, many Tibetan refugees in Hungary were summoned for prolonged identity checks at the time of Wen’s visit, effectively keeping them out of the streets.

Worse, Orban was in the final days of Hungary’s EU presidency during Wen’s visit, but said nothing about the EU ― except to offer another ecstatic paean to his country’s potential as a logistical and trade center for Chinese goods.

Wen met a cooler reception in London, where he fumed at the U.K. for its criticism of human rights in China, calling it “finger pointing,” and urged “respect” for the Chinese people. Few deals were signed, with agreements on Chinese pig and chicken imports, as well as a reciprocal panda agreement, as much in the limelight as financing for a U.K. energy investor in China. And, to his credit, British Prime Minister David Cameron mentioned the need for “mutual access to the European and Chinese markets.”

And yet there was a common element in Wen’s Hungary and U.K. visits: in each case, China offered financing for British and Hungarian firms to invest in China. This is a new development. Only recently, China was still taking European “development” loans. Indeed, Beijing Airport’s’s shiny Terminal 3, and more recently, China’s alternative-energy investments, relied on billions of euros in European public loans.

It seems, then, that China, having graduated from the ranks of poor countries, has understood the need for what Europeans call reciprocity. This summer, the EU will review its partnerships with large emerging economies ― above all, with China. Europe may well seek terms that befit a rising power rather than a developing country.

Moreover, despite Wen’s rebuke of critics of China’s human rights record, here, too, the message might finally be getting through. On the eve of Wen’s European trip, two opponents of the regime, Ai Weiwei and Hu Jia, were released from jail.

To be sure, the significance of that gesture should not be overestimated: Hu only had six months left on an absurd sentence of three and a half years, and Ai is still under legal threat for supposed “tax evasion.”

But the gesture should not be underestimated, either. China has backed down in these high-profile cases. Until only recently, it seemed that the more important the symbolic importance of a case, the harsher China’s official response invariably would be. China knows that it has a problem with European public opinion, and that this might matter as China’s economic presence becomes more pronounced.

The final leg of Wen’s tour, his visit to Germany, was all business. At the Paris air show, Chinese officials made much of refusing to sign a contract with Airbus in retaliation for Europe’s plans for a carbon tax on air travel. In Berlin just four days later, however, China bought 88 Airbus planes (Chinese official sources put the number at 62). German Chancellor Angela Merkel said little of substance about European policy ― this was strictly a bilateral meeting. But the Germans did talk, without resolution, about human rights, as the Chinese did about gaining market-economy status.

Wen’s visit nonetheless says much about the state of Europe. For starters, Europe’s periphery is demoralized, and in some cases ready to lunge at any Faustian bargain that’s offered. At the same time, Europe’s former powers are evidently struggling with China’s new international primacy, which can be addressed only through greater European unification ― a goal for which they currently show little appetite. Indeed, Germany, the EU’s Middle Republic, is European nowadays only to the extent that Europe furthers German economic interests.

Meanwhile, China is able to adopt a modern version of Mao’s strategy to “encircle the cities from the countryside.” Its leaders are now bargain-hunting in Europe’s crisis-stricken periphery, while expressing only vague support for Europe as a whole.

By Francois Godement

Francois Godement is a senior policy fellow at the European Council on Foreign Relations, and a founder of the Asia Center at Sciences Po in Paris. He has also worked as a consultant to the French Ministry of Foreign Affairs on China, Asia, and Europe. ― Ed.

(Project Syndicate)