Daily Times

The second decade of the 21st century is marked by the restoration of a concert of powers. The multilateral world order is slowly fading into the past with new alliances forming and established ones questioned by their founders. The United States seems to pursue an isolationist policy. Europe is internally undecided, and China and Russia have cemented their marriage of convenience. In this battle for hearts, minds and wallets, the transatlantic relationship has never been weaker. But there is one actor that could bring the United States and Europe closer together again.

China’s rise is not a new phenomenon. China’s economy is already as large as that of the US, and over the next decade, Beijing will contribute three times more than Washington to global commerce. The Chinese challenge is multidimensional, including trade, military, technology, and values. US rivalry with china is of civilisational and ideological nature, suggested by Kiron Skinner, who heads policy planning for the US Department of State. The Trump administration has officially called Beijing a strategic competitor, while the new strategy paper from the European Commission describes this Asian power as a systematic rival with the ambition to become a technological leader promoting alternative models of governance. Could the Chinese factor be enough for Europe and the US to close ranks, and present a united front vis-à-vis a formidable adversary?

Washington was the first power to respond to the Chinese challenge. The ongoing tensions between the two and tit-for-tat tariffs could not be resolved in negotiations. In the past two years, Washington imposed tariffs on more than 250 billion dollar worth of Chinese goods. Beijing was not shy about retaliating with increased levies on American made products, which were limited in value, although China does not import enough to match the US numbers.

Additionally, the Trump administration put the Chinese telecom giant Huawei on a list of companies that need special permission to buy US microchips, software and other components. Interestingly, the structure of the first wave of US tariffs as well as the espionage accusations against Huawei point to the fact that Washington is not only keen on changing the trade relationship with China but also looks to thwart the Chinese technological upgrade. The US- China trade frictions are here to stay as part of the struggle for hegemony in the global arena.

China’s economy is already as large as that of the US, and over the next decade, Beijing will contribute three times more than Washington to global commerce

The European Union, with the world’s largest trade surplus, is the only power that could potentially balance the scale between Washington and Beijing. However, Europe is unwilling to pick a side just yet. The internal divisions towards China do not help. In 2016, Hungary and Greece, major recipients of the Chinese capital, blocked a strong EU council declaration on Beijing’s operations in the South China Sea. Historically, the European Union could emerge as a winner in the conflict of its two major partners.

The composition of EU exports suggests economic opportunities both in China and the US, with the greater gains to be expected in the latter. Although Europe now exports across the Atlantic twice as much as to China, in the long term, Beijing is envisioned to call the shots not only in the global economy but also in technology, with quantum computing or bullet trains, and politics, where the recent trend, also observed in Europe, has favoured a model of strong centralised government. This poses a fundamental dilemma regarding alliances for policymakers in Brussels.

Aligning with China, next to economic benefits, might seem rational for Europe for other reasons as well. Europe and China share convergent positions on climate change, clean energy, and the value of the multilateral global order. But there are also points of dispute. After a number of Chinese takeovers of strategic European businesses, such as the Greek Port of Piraeus, the German Robotics Company KUKA, and elements of Italy’s electricity grid, Europe has begun to filter foreign investments. Another roadblock includes barriers in market access for European capital and lack of reciprocity on the Chinese side. Also complicating the relationship are the excessive role of state-owned enterprise;, Beijing retains a majority share in 99 out of its 100 largest public companies, as well as forced technology transfer.

The grievances that divide Europe and China draw Europe closer to the US. In theory, the common understanding of issues such as values, trade investment, and geo-economics significance of the Belt and Road initiative could be a solid foundation for a fruitful cooperation. Yet to forge a new transatlantic deal on China, the US embodied by President Donald Trump, must become less arrogant and Europe less lethargic and naïve concerning the future of multilateralism.

For now, Europe carefully maneuvers the murky international waters in which Trumps twitter torpedoes, occasionally, diminish the transatlantic bond. And the Chinese lifeboat could appear as a rescue only at first glance. In the midterm, however, the US and the EU should side with each other in order to prevent a truly effective China agenda.

The writer is a biotechnologist and a columnist