The Big Picture – China’s EU Overtures

Why has Italy’s deal with China raised eyebrows?

  • It is the first G7 country to have broken the ranks and signed the BRI initiative
  • Italy was in financial trouble and has a very high debt burden. It had faced recession last year. Though it wanted to spend a lot of money to come out of recession, the EU prevented it from doing so as it would have deeper implications.
  • Italy was attracted by China’s offer of investments and market access in China for Italian products specially luxury goods and fashion goods for which Italy is well known.
  • There are divisions within Italy where some have seen China’s attempt as a beginning of the colonization of Europe.
  • The US also has reservations about one of China’s telecom companies, Huawei, intruding in the name of 5G and then posing problems of a strategic nature.
  • This is also one of the first ridges in the unity of the European Union.
  • But, Italy maintains that agreements like 5G are included in its ‘golden power legislations’ on which Italy has powers to decide on.

What is the situation in Europe?

  • European Union is already divided in the name of Brexit where Britain is exiting from EU.
  • Many of the southern countries of Europe are cash strapped and looking upto foreign investments.
  • Germany has been negotiating hard for Russian investments.
  • The US has also asked Europeans to contribute from their defence budget in maintaining NATO security forces.
  • On the whole, Europe has lost its clout in the global arena.

What is China’s position?

  • Wants to be a world power by 2050.
  • Following a political and geostrategic influence.
  • Through the BRI, they have made inroads in Asia – ASEAN countries, Pakistan through CPEC, Africa and now Europe.
  • Gained a position to counter the US.
  • China’s offer of 5G technology means giving access to Artificial Intelligence.
  • Every country is wary of the fact that giving access to China’s telecom sector would eventually give it the access to world’s communications.

China and EU

  • China is the second largest trading partner of the EU after the US.
  • It is also the largest investor in EU
  • China’ company has already taken over Greek port of Piraeus.
  • China has also taken hold of the steel plant in Serbia which has offered employment in Serbia. Serbs have welcomed the move as it has put Serbia in a strategic advantage in terms of exports and other related issues.
  • EU has termed China as a systemic rival and it has similar concerns to that raised by the US in moving against China last year.
1. intellectual property theft 2. not playing fairly by the rules of the game like subsidies where China offers some hidden subsidies to its nationals. 3. state owned enterprises which often back financial deals keeping China in front
  • In terms of Make in China initiative by 2025, the US is concerned that it will give technological dominance to China in the world. US maintains that technological advances should come from private enterprises and endeavors and should not be state funded.
  • China’s strategy of running a country into debt through heavy loans and investment and then getting hold of some strategic infrastructure is a constant cause of worry.

Way forward

  • India should maintain its growth prospects and try and achieve double digit growth in two decades.
  • India should also become militarily strong as a weak military cannot guarantee a strong foreign policy.
  • Also all political parties in India should be on a common platform regarding issues of security.
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