Leadership changes in Brussels call for quick action, experts say

The European Union's new leaders have been urged to meet their Chinese counterparts as soon as possible so they can agree on how to proceed with their relationship over the next few years.

European think-tank advisers made the call as Donald Tusk, the former Polish prime minister, prepares to become European Council president on Dec 1 and after Jean-Claude Juncker took office as European Commission president this month and Martin Schulz was elected as European Parliament president in July.

As the EU leadership transition has proceeded, China has been a keen observer, given the "strategic partnership" status that the relationship enjoys.

The importance China attaches to the partnership was reflected in the visit of President Xi Jinping to EU headquarters in Brussels in March, the first such visit by a Chinese president. In addition to Belgium, he also visited the Netherlands and France at the time. Last month, Premier Li Keqiang completed his second visit to Germany in the space of less than five months and also visited Russia and Italy.

Xi said China and the EU should forge "a partnership for peace, reform, growth and civilization", and when Li had a dinner meeting with the outgoing EU Council president Herman Van Rompuy and the former European Commission president Jose Manuel Barroso he said he would meet the new EU leaders as soon as he could.

With the leadership changes the annual China-EU summit was postponed and there are likely to be two summits next year, and reliable sources are tipping that the first one will be held in March.

Juncker said he would attend the G20 meeting in Brisbane, Australia, from Nov 15 to Nov 16, which Van Rompuy was also to attend. But as China Daily European Weekly went to press it was still to be decided whether they would meet Xi on the sidelines of the summit.

"I believe it is urgent that Juncker and his team extend a hand of friendship to China as quickly as possible," says Shada Islam, director of policy with the think tank Friends of Europe in Brussels.

"This means setting a date very quickly for an EU-China summit, holding high-level dialogue and making clear through other meetings and contacts that there will at least be continuity in EU-China relations."

China is changing rapidly, Islam says, and the EU needs to make sure that its policies are in tune with these changing realities.

She also suggests that it is important that the EU learn more about Xi's Silk Road initiatives and of the opportunities for further collaboration presented by the national reform agenda.

Li promoted China's Silk Road initiative at the Asia-Europe summit in Milan last month, urging Europeans to respond to the idea to improve road, rail and other connections between Asia and Europe.

At the Asia-Pacific Economic Cooperation forum that ended in Beijing on Dec 11 China put proposed a Silk Road fund to offer financial and technical support to promote the initiative.

When European leaders meet their Chinese counterparts, the focus needs to be on getting a bilateral investment treaty as a possible first step towards a free trade agreement, Islam says.

The two sides have held two rounds of talks on an investment treaty, and insiders say progress has been faster than expected, although they did not set a deadline for the negotiations, or for free trade talks.

Islam says there is "vast untapped potential for more cooperation in managing urbanization and contributing to China's quest to become an innovation hub".

But the EU needs to get its economic and monetary house in order before it can realistically harbor such ambitions, she says.

The EU, which is trying to reduce its energy dependence on Russia, is perturbed by the increased collaboration between China and Russia, she says.

"Relations with Russia are Europe's biggest foreign policy headache."

Fredrik Erixon, director and founder of the European Centre for International Political Economy, a think tank in Brussels, says Europe is in the throes of diversifying its energy sources, in particular by reducing its dependence on gas from Russia, which is important economically and strategically.

"So China and Europe hang together as they are both part of the same energy market. But they are choosing different strategies as far as general energy import and consumption patterns are concerned."

As the United Nations Climate Change Conference in Paris, to be held in November and December next year, looms, there will be greater focus on climate change internationally, Erixon says, as efforts are made to define global game rules on carbon emissions from 2020 to 2030.

That means issues of energy and developing non-carbon energy sources will be high on the agendas of China and the EU Commission.

"Whether there is a cooperative model that is of mutual benefit remains to be seen," he says.

The world would benefit from greater dispersion of reserve currencies, but for that to happen there will have to be significant changes in policy in Europe and China, Erixon says.

After the financial crisis of the past few years, the euro still faces credibility problems, he says, and the renminbi needs to be more transparent and more predictable if more investors are to opt to deposit their holdings in the currency.

" But we are increasingly moving towards a polycentric world currency order. The renminbi and other currencies of the emerging world will take up a greater share of trade."

However, Erixon plays down the possibility that the EU's new leaders have any grand plans to respond to the increasing attention China is giving to economic reform.

"Generally, I think the approach of the previous commission will be carried over to the new commission."

Erixon says the preoccupation will be commercial affairs, trade and investment policy in particular and as Europe's quest for jobs and growth will be even more pressing, there will be more emphasis in Europe on securing more export opportunities.

Europe will attract more investment from China, even if that is not as straightforward as one may think given Europe's precarious economic position, he says.

"I think this commission will be more transitional than the past commission, with less room for visionary activities and a more realistic take about what Europe and China could do together that would benefit both parties."

Karel Lannoo, chief executive of the Centre for European Policy Studies in Brussels, says that on EU-China relations the biggest question is whether Brussels will do better in coordinating its policies towards Beijing.

"The main challenge for Europe is that we do not have a single voice on China and Asia in general at the moment."

Brussels more or less speaks with one voice to the United States, Canada and Russia he says.

"If we want to have a single voice toward China, again, the member states need to delegate the power to the EU."

Contact the writers through fujing@chinadaily.com.cn.

During his visit to Europe, Premier Li Keqiang talked with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso. Zhang Duo / Xinhua

(China Daily European Weekly 11/14/2014 page22)