China Laughing on the Sidelines

Blog | November 09, 2016


For years, Europe has been running from one crisis into the next, the Greek financial disaster, the Ukraine conflict, the refugee inflow, the terrorist attacks, the Brexit, the rise of right-wing populism, the Italian banking trouble … the EU and European countries are in continuous trouble-shooting mode, and recent elections and referendums, some with unexpected or unwanted results, don’t make it any easier.

China has been watching quietly from afar how Europe grapples with its challenges. While a German saying—used to describe an event of little significance—goes that one couldn’t care less when a bag of rice falls over in China, the Chinese view on what happens in Europe does matter nowadays.

That said, the EU as a whole, i.e. as a supranational institution, has seldom been of great interest neither for the Chinese media nor for the Chinese public. For instance, in People’s Daily, a mouthpiece of the Chinese Communist Party (CCP), among 39,683 articles and commentaries between April 2015 and April 2016, less than 0.5% had to do with EU–related affairs. Paradoxically, it is thanks to the multiple European crises, especially the refugee crisis and the Brexit, that the EU has recently become a more prominent topic in the Chinese media. It is worth examining why the mostly state controlled media have an interest in doing so, and why the Europeans should care.

China, the wounded Elephant

Any attempt to understand current developments in China must take history into account. China has an elephant’s memory, for instance of how the late Chinese Empire was humiliated by Western powers in the 19th century. Actually, the debate among Chinese elites, whether the western system and western democracy could serve as a model for China’s development, began some 200 years ago. In the mid-19th century, a group of reform-oriented mandarins blamed China’s defeats in the opium wars on the backwardness of Chinese industry and military, coupled with an encrusted political system based on traditional Confucian values. These reformers propagated a western style modernization. This cost some of them their heads. The rulers rejected the proposed westernization, as they concluded that the western system and values were unsuitable to rule this vast and diverse country. Isn’t it striking that you can hear almost the same argument from Chinese leaders nowadays?

Chinese state media use the European crises as a proof for the flaws of the western system and western democracy

From the tens of thousands of articles we screened and analyzed, I want to share with you just a couple of quotes. Here are some (translated from Chinese by the author) which speak for themselves:

“The so-called ‘universal values’ promoted by the West have brought disaster to the Middle East and caused the refugee crisis.”  – Zhang Weiwei, Dean of China Academy, Fudan University”, CCP magazine “Qiu Shi (Search for the Truth)” 02/15/2016

“The refugee crisis is the result of a self-righteous democracy idea"  - Wu Sike, China's former special envoy on mid-east, People’s Daily, 10/07/2015

In addition to making the Europeans responsible for their crises, some commentators have identified the United States as the main culprit behind the scenes:

“This refugee crisis was triggered by the United States, who provoked the war in Iraq and Afghanistan, ... the United States are the culprit, Europe is siding with the bully.” – Chen Shuguang, Professor from Wuhan University, CCP magazine “Qiu Shi” (Search for the Truth), 12/15/2015 

The Brexit, in particular, offers an ideal case to argue for the falsehood of democratic elections and referendums:

“The defects of making a national-level decision with an arbitrary referendum are obvious……it was ‘tyranny of the majority’ ” Xinhua News, 06/26/2016

“The key to understanding England’s current disorder is that its ‘Western democracy’ is only a façade, and that the real decisions are taken in the backroom by powerful economic groups.” Luo Siyi, Renmin University, Global Times, 07/04/2016

The reasons for launching such opinions in Chinese media are manifold. The Chinese government has learned to be more aware of public opinion, and bad news from abroad are a fine distraction from internal problems, and apt to fuel patriotic emotions. But that is only one side of the coin. We also need to take a closer look at China’s regional and global ambitions.

China’s Going Out Strategy: Occupy the periphery to encircle the center

While Europe is busy with managing various crises, China is buying up the world. In 2015, President Xi Jinping announced an investment of $250 billion USD in Latin American and Caribbean countries over the next 10 years, and a 60 billion USD investment in Africa over the next three years. At the same time, ASEAN-China trade volume increased from eight billion USD in 1991 to 472.2 billion USD in 2015. That’s by nearly 60 times within 25 years. China’s annual investments in the EU are over 20 billion euros, whereas the annual investments from the EU in China are only 10 billion euros. Beijing prefers to talk to London, Paris and Berlin directly rather than via the EU. Despite concerns from the United States, 14 EU member states became founding members of the Asian Infrastructure Investment Bank (AIIB), Germany alone injected 4.5 billion USD into the AIIB.

China also established new platforms with selected groups of EU member states, such as the 16+1 cooperation of China and 16 Central and Eastern European countries, while a wide range of cooperation agreements in energy, infrastructure, trade and tourism, etc. was concluded in this format. China is also reaching out to northern and southern Europe to establish similar platforms. While Europe does need Chinese investment in the wake of the various financial crises and a stagnating Euro-zone economic growth, not everybody is amused about this piecemeal approach. Is China pursuing a strategy of “divide & conquer” towards European countries?

China’s most ambitious and far-reaching “One Belt, One Road” project which aims at developing infrastructures and trade in ASEAN countries, Central Asia and Europe has also triggered concerns. Actually, China’s investments are moving on, from Asia and Africa gradually towards Latin America, the U.S. and Europe.

 Those who know the game of Go, or“The Art of War“ by Sun Tzu—Mao Zedong was a great fan of both—may recognize some familiar strategic moves, such as “Occupy the periphery to encircle the center”.

While China’s proactive overseas investment strategy is evident, a parallel paradigm shift in China’s foreign and security policy remains less noticed. China has moved from its long time non-interference policy towards actively engaging in e.g. the peace process in Afghanistan and—albeit indirectly—even the Syria conflict. China is now the second-largest contributor to the United Nations peacekeeping budget, right behind the United States. This lays the ground for China having a substantial say on where the UN will engage and where not. By the way, if you added up contributions of EU member states to the UN budget, the EU would stand as the biggest contributor and could exert a dominant influence—if only member states got their acts together to speak with one voice.

Is China the biggest winner of Brexit?

China sees the European crises as a good chance to buy up strategic assets in Europe and reach better deals as the EU member states are competing against each other. Look at the recent takeover of the German robotics firm Kuka by the Chinese company Midea, or the construction of the nuclear power station Hinkley Point C in England.

In a nutshell: On the domestic front, the European crises and the “snapshot” referendums have given the Chinese leadership welcome proofs for discrediting the western system and western democracy. And in the international arena, a weakened Europe already helps China to play a more important role economically; it is foreseeable that a divided Europe will be even more dependent on China. In the medium term, China will also have a better position for negotiating tricky issues like lifting the EU arms embargo, having China’s market economy status recognized, and in the long term even for promoting the Chinese view of global issues, such as sovereignty and human rights. Is it fair to say, as blogger and economist Dr. Li Xiaopeng put it, that “China is the biggest winner of Brexit”