Donald Trump‘s antagonistic encounter with his G7 allies in Sicily last week has set up an easy public relations victory for Li Keqiang, China’s premier, who is meeting EU leaders in Brussels this week.
On his European trip, Mr Li will reiterate China’s previous commitments to combating climate warming and promoting free trade in meetings with EU leaders and German Chancellor Angela Merkel, presenting a sharp contrast with the US president’s lack of enthusiasm for the Paris accord.
Mr Trump is poised to withdraw from the Paris climate accord, according to two White House officials.
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A decision by Mr Trump to back out of the Paris agreement the same week that Mr Li is in Europe would revive memories of the World Economic Forum’s annual Davos meeting, when President Xi Jinping portrayed China as a responsible global citizen just days before his US counterpart declared a new “America First” era at his inauguration.
“It has certainly given us an opportunity, especially on climate and trade issues,” said Wang Hui at the University of International Relations in Beijing. “Trump is a businessman who emphasises America’s own interests rather than common interests. China and Europe must now step up and assume our international responsibilities together.”
While China and the EU are seen as joining forces to fill the vacuum left by Mr Trump’s retreat, particularly from action on climate change, European diplomats warn that tangible agreements may take time to reach given the EU’s reservation over “globalisation with Chinese characteristics”.
In private, they also complain about what they see as efforts by Beijing to drive a wedge between the EU’s founding nations and newer eastern European member states, who tend to be more welcoming of Chinese investment.
At last month’s “New Silk Road” summit in Beijing, the EU’s representative was not invited to a leaders’ meeting at which EU member states were represented. “They didn’t want the EU to have a voice at the table,” said one European diplomat. For its part, Beijing has been frustrated by slow progress on everything from a decision by Brussels to grant it “market economy status”, which would make it harder to punish Chinese companies for alleged dumping, to bilateral extradition agreements.
EU officials were encouraged by Mr Xi’s forceful defence of globalisation at Davos. But Cecilia Malmström, EU trade commissioner, took a swipe last week at China saying “welcome commitments” about liberalisation have not been matched by concrete action. “The country needs to walk the talk,” she said. “Our companies would like to invest more in China but their investments are held back by the lack of market access,” Mats Harborn, president of the EU Chamber of Commerce in China, told reporters on Wednesday. In 2014 the EU and China began negotiating a major investment treaty aimed at aligning EU investment in China with Chinese investment into the EU. Currently, only 2 per cent of EU foreign direct investment goes to China, while 30 per cent goes to the US.
China has its own trade issues with Europe, after launching a legal challenge against the EU almost six months ago over its reluctance to treat it as a market economy under WTO rules.
Europe has taken steps to overhaul anti-dumping laws that are tied to a WTO protocol that expired on the 15th anniversary of China’s accession to the global trade regulator last December. Under separate measures, however, Brussels proposed laws that would make it easier for Europe to impose higher US-style duties on steel allegedly dumped on European markets by China.
A joint statement agreed by Brussels and Beijing for Friday’s summit, seen by the FT, refers to the “historic achievement” of the Paris accord and stresses the two sides’ determination to “forge ahead”.
But despite a determination to fill the vacuum left by the US, some divisions over execution are expected.
EU and Chinese leaders will set out plans to co-operate on renewable energy, electric mobility, energy efficiency and emissions trading schemes — initiatives that would assume added global significance if Mr Trump withdraws from the Paris deal. The EU has agreed to give China €10m to support its plan to roll out a national emissions trading system this year.
Brussels and Beijing will also pledge joint efforts to support low emission energy schemes in Africa and less developed nations elsewhere, which China previously claimed was the sole responsibility of developed nations. This might spark disagreement over proposals to oblige developed nations such as EU member states to fund efforts by developing countries to confront climate change.
Questions over the reliability of emissions reporting by Beijing are another potential source of conflict. China’s emissions trading scheme is set to become fully operational in 2018, after four years of EU-supported pilot tests.
Arthur Beesley and Rochelle Toplensky in Brussels and Tom Mitchell, Charles Clover and Xinning Liu in Beijing