EU-China News Brief - 28 February 2020
LISTEN TO OR READ THIS WEEK’S TOP 5 EU-CHINA STORIES
This week’s TOP 5:
Coronavirus Hits Italy and Impacts European Business in China
Swedish Citizen Gui Minhai Gets Sentenced in China for 10 years
Germany CDU’s Elections May Disrupt EU-China Relations in 2020
Contradictory Messages About Postponing EU-China Summit
Europe, China, and Russia Come Together on Iran Nuclear Deal
1. Coronavirus Hits Italy and Impacts European Business in China
The coronavirus continues to spread in Europe, while the European businesses linked to China are struggling to restart operations.
China: Director of WHO announced that on February 25th "the number of new cases reported outside China exceeded the number of new cases in China for the first time". On that day China's National Health Commission reported more than 400 new confirmed cases compared to 2,790 new cases outside of China.
While there is a dispute over the reliability of Chinese data given suspected government data manipulation (claims fueled by recent changes of diagnostic criteria), the situation in China seems to be getting under control, as the country slowly returns to work.
Europe: In Northern Italy more than 520 people were tested positive for the virus with 14 deaths connected to the virus as of February 27th. Among fatal cases most of the unfortunates were over 80 year old. According to reporting, around 80% of the infected only develop minor syndromes.
Aside from already infected countries, in last days first cases were reported in Switzerland, Spain, Austria. Estonia, Denmark, Norway, North Macedonia, Greece and Romania.
EU action: On 24th of February the EU announced a €232 million aid package:
€114 million - support for WHO
€100 million - search for a vaccine and fund other research projects on combating coronavirus
€15 million - preventive measures in Africa
€3 million - costs of EU citizens’ repatriation from Wuhan
Impact on European businesses in China - Eurochamber’s survey:
“Almost 90% of respondents report a medium to high impact, while half plan to lower annual business targets.
Nearly half of respondents forecast a double-digit drop in revenues for the first half of 2020, and a quarter expect to see a drop of over 20 per cent.
Major challenges include unpredictable rules, highly restrictive quarantine demands and extensive pre-conditions to restart operations.
Half of respondents face inconsistent rules applied across different jurisdictions and at different levels of government, which can frequently change, often at short notice. For example, deliveries can be subject to multiple onerous restrictions when passing through provinces, cities and even districts.
More than 300 European companies are actively supporting efforts to contain the COVID-19 outbreak, and around 70% have donated medical equipment to crisis regions, contributed financially to the fight against the virus, and supported logistically” - link to the full report below
READ MORE:
Coronavirus: More New Cases Are Now Reported Outside China Than Inside - NPR, Feb 26
Today's coronavirus news at a glance - The Guardian, Feb 27
EU leads global efforts against COVID-19 - EEAS, Feb 25
COVID-19: The I mpact on European Businesses in China - European Union Chamber of Commerce in China, Feb 27
2. Swedish Citizen Gui Minhai Gets Sentenced in China for 10 years
On 25th of February a court in Ningbo sentenced a Swedish citizen Gui Minhai (桂民海) for 10 years in prison for “illegally providing intelligence abroad” and stripped him of “political rights” for 5 years. The case is going to further escalate Sino-Swedish tensions and has challenging implications for citizenship disputes with China.
Context: Gui Minhai - Moved to Sweden in 1990s following Tiananmen protests and acquired Swedish citizenship. He later ran an independent bookstore in Hong Kong selling controversial books about CCP leadership. Mr. Gui went missing in 2015 along with 5 other people associated with the store.
He was detained by Chinese authorities - officially in relation to 2003 drunk-driving incident that took place in Ningbo. Mr. Gui was in 2017 under the condition of not leaving China, but he got arrested again next year in presence of two Swedish diplomats. He has been under arrest since then and Swedish consulate has not been able to reach him.
Escalation: In November 2019 a Swedish NGO awarded Mr. Gui with freedom of speech award and a Swedish Minister for Culture and Democracy attended a related ceremony. Chinese Embassy in Sweden deployed a highly confrontational language over the matter, for example, comparing Swedish media critical towards China’s activity to “a 48kg weight boxer that keeps challenging an 86kg weight boxer to a fight.”
Over these tensions, a number of Swedish regions served their ties with Chinese partners, as we discussed in the news brief last week.
EEAS says: “The European Union has raised Gui Minhai’s case with the Chinese authorities on numerous occasions, both in private and publicly, including at the highest level, and will continue to do so. We expect the Chinese authorities to cooperate fully with their Swedish counterparts, in full transparency.”
TAKEAWAY:
China doesn’t allow dual citizenship. And Chinese authorities stated that in 2018 Mr. Gui requested restoration of his Chinese nationality upon which ”according to law, he is recognized as a Chinese citizen only”. It means that, from China’s perspective, he is not entitled to receive support from Swedish consulate.
This case proves that changing citizenship does not protect former Chinese nationals from China’s legal system. Such practices can have a significant impact on discussions on Xinjiang and other politically sensitive topics, which involve former Chinese nationals.
READ MORE:
Hong Kong bookseller Gui Minhai jailed for 10 years in China - The Guardian (Lily Kuo), 25 Feb
China: Statement by the Spokesperson on the case of Gui Minhai - EEAS , Feb 25
Foreign Ministry Spokesperson's Remarks on Gui Minhai case - Mission of the PRC to the EU, Feb 26
[VIDEO] China's TV Confessions Explained - Al Jazeera English (101 East), 21 Feb 2019
3. Germany CDU’s Elections May Disrupt EU-China Relations in 2020
The party of the outgoing Chancellor Angela Merkel - Christian Democratic Union (CDU) - is getting ready to choose its new leadership. This may disrupt the China policy of the country, which has been the most influential proponent of engagement. The timing couldn’t have been more tricky - Leipzig Summit and German Presidency of the European Council are on the horizon.
Reshuffling: On February 10th the leader of CDU and Merkel’s appointed heir - Annegret Kramp-Karrenbauer - resigned over far-right AfD related scandal in Thuringia. Consequently, the party is on track for leadership elections, which will take place at a party gathering in Berlin on the 25th of April.
Three candidates and China angle:
Armin Laschet - State Premier of North-Rhine Westphalia, candidate from Merkel’s camp, focused on “social cohesion”
Unlikely disruption to China policy - If he wins, Merkel is likely to remain in position until Bundestag elections in 2021.
Friedrich Merz - Bundestag MP, conservative candidate, emphasising law and order
Possible disruption to China policy - If he wins, it is possible that Merkel will have to step down, even before Leipzig Summit. It is unclear whether Merz would continue the same approach to China policy.
Norbert Röttgen - Chair of the Bundestag's Committee on Foreign Affairs, close to Greens
Likely disruption to China policy - Röttgen is a China hawk, who led internal CDU opposition against allowing Huawei to participate in German 5G. If he wins, China is in for a rough change of Germany’s policy.
TAKEAWAY:
CDU elections can be a game-changer on a European scale. Merkel has been one of the most influential supporters of engagement with China - even despite inner-party criticism over her stance on Huawei.
If Merkel’s chancellorship gets cut short ahead of the Leipzig Summit in September and ahead of the German presidency in the second half of 2020, the European China agenda may get a serious adjustment. Let’s not even mention Germany’s final decision on Huawei, which will impact BIT negotiations.
READ MORE:
China watching uneasily as Germany picks Angela Merkel’s successor - SCMP (Stuart Lau), 21 Feb
Who wants to follow in Merkel's footsteps? - BBC, 26 Feb
4. Contradictory Messages About Postponing EU-China Summit
It seems that the EU-China Summit in Beijing will get postponed beyond the planned 31st of March, but the contradictory messaging is worth noting.
Disruptions: The problem is naturally the coronavirus, which was also the cause of China’s decision to postpone the Two Sessions (两会) - the annual meeting of National People’s Congress and Chinese People's Political Consultative Conference.
Also, due to the outbreak, the trip of Vice-Premier Liu He (famously leading China-US trade talks) to Brussels for high-level economic dialogue scheduled for last week got cancelled. That’s a missed opportunity for talks on BIT.
Diverging messaging: According to media reporting and our discussions in Brussels, the Chinese side is still operating under instructions that the Summit is to take place as scheduled, but the European side is reluctant to go with the original arrangements. China seeks to send a message that “things are back on track” amid the global fears over the coronavirus and it does not want to be the side cancelling the meeting. But most likely the EU-China Summit is going to have to take place on a different date.
TAKEAWAY:
If the EU-China Summit gets postponed, the same is likely to happen to 17+1 China-CEE Summit scheduled to take place in Beijing mid-April. It would be so, as Brussels has been adamant on ensuring that the EU-China Summit has to precede the 17+1 meeting, to make sure that the CEE-China talks can follow the previously set EU-China line.
Progress on EU-China BIT is likely to be stalled and it does not seem likely for the negotiations to conclude ahead of the Leipzig Summit in September.
READ MORE:
China ‘resisting calling off’ EU summit in March as coronavirus threatens delay - SCMP (Wendy Wu), Feb 25
5. Europe, China and Russia Come Together on Iran Nuclear Deal
On February 26th China, France, Germany, Russia, the UK and Iran met in Brussels to express their continuous support for the nuclear deal despite US’ withdrawal.
Details: The meeting was chaired by EU High Representative Josep Borrell Fontelles and EEAS Secretary General Helga Schmid. According to Schmid, the meeting "concluded with substantial discussions on next steps."
Tweeter news: The Permanent Representative of Russia to International Organizations in Vienna - Mikhail Ulyanov - offered more insights by tweeting that the meeting “was held in the businesslike atmosphere. […] Observers noted that today’s meeting of Joint Commission of #JCPOA was the shortest one ever. That was because the participants demonstrated high degree of coincidence of views on major topics. Controversial issues were touched upon but briefly and in non-confrontational manner.”
TAKEAWAY:
The Iran deal remains the point of convergence between EU and China on the international stage. It was also prominently highlighted during the visit of Minister Wang Yi to Brussels in December 2019.
READ MORE:
Europe, China and Russia urge preservation of Iran nuclear deal - DW, Feb 26
JCPOA: Chair's statement following the meeting of the Joint Commission - EEAS, Feb 26