“China is now also seen as a threat”

Simona Grano, what do people in China associate with Europe?

Simona Grano: Before the coronavirus pandemic, people in China had a very positive view of Europe. For many Chinese, it was the home of various brands that are popular and that they identify with. Politically, and above all economically, Europe was a continent with which they had good relations and could do business and build trading relations without major restrictions. But all that has changed since the pandemic. During Joe Biden’s term of office, the transatlantic alliance between America and Europe grew stronger. Meanwhile, China became embroiled in a bitter trade war with the US. China therefore now sees Europe as a bigger problem economically and politically than it did a few years ago. Countries such as the Netherlands that moved much closer to the United States made an ideological choice in doing so.

How did China respond to this bolstered transatlantic alliance?

Grano: China tried to instigate a rapprochement with Europe and to improve relations with the EU. But that has been difficult in certain areas. EU Commission President Ursula von der Leyen linked economic issues to security issues in her China strategy. And she is keen to prevent China flooding the European market with cheap goods and electric cars. Ultimately, security aspects will be more important than trade issues going forward. Looked at this way, the golden era of China-Europe relations is now over. China is no longer thought of simply as a country with which we can have good trading relations, it is also seen as a threat – due partly to its alliance with Russia, the issue of Taiwan, but also in the context of industrial espionage.

In other words, relations between Europe and China have again become more shaped by ideology?

Grano: Yes, the focus has shifted back to differing values. Europeans are seeing that China can’t be trusted in certain areas and that the country is pursuing strategies that aren’t compatible with Europe’s value system. These differences will lead to the EU and China distancing themselves from each other politically. However, that doesn’t rule out the possibility of better trade conditions being established in some areas.

Under President Trump, the alliance between Europe and America may potentially be weakened. Another trade war with China is possible. What would that mean for Europe’s relations with China?

Grano: If Trump does step up his trade war with Europe and China, this could cause problems for the continent. A drastic increase in US tariffs on Chinese goods would be a double blow for Europe. This is because some of the Chinese exports destined for the US would be redirected to Europe, where they would probably further push up the EU’s trade deficit with China. Another chunk would go to other markets where Chinese exports would be competing with European ones.

In your book China-US Strategic Competition: Impact on Small and Middle Powers in Europe and Asia, which was published two years ago, you criticize the fact that Europe lacks a consistent China strategy. Has that changed since?

Grano: Yes, I think the EU seems more united than it did two years ago, at least in terms of trade. This is shown by the punitive tariffs on electric vehicles which were imposed last year to protect the domestic industry. At the political level, it is obviously more difficult as countries make their own decisions when it comes to foreign policy. And of course there are China-friendly voices, such as Hungarian Prime Minister Viktor Orbán. But the European Commission has a very unified position, which sees China in part as a geopolitical threat. For example, it spoke out clearly in favor of Taiwan, saying that the island could only be ruled by a government elected by the Taiwanese people. Such a clear stance on the Taiwan question would have been inconceivable a few years back. That really annoyed China.

Where does Switzerland stand on all this?

Grano: That’s an interesting question. Switzerland has moved in the opposite direction. Five years ago, Swiss Foreign Minister Ignazio Cassis openly criticized China on account of its problematic human rights record in Xinjiang, but also in Hong Kong. This resulted in a cooling of relations. But that has since changed. My impression is that for about the last 18 months, not to put too fine a point on it, Switzerland has been cozying up to China – for very pragmatic economic reasons. As an export-focused country, Switzerland wants to maintain good trading relations with as many partners as possible and basically not have to decide. Switzerland doesn’t want to be overly critical of China either as it sees itself as a neutral and impartial country. But that’s not really a neutral stance though, it’s pro-Chinese neutrality.

How important to China are its relations with Switzerland?

Grano: I think Switzerland was always a lucky coincidence for China. Switzerland was one of the first western countries with which China had good diplomatic relations and with which it could trade without any ideological background noise. That is important to China, particularly now in the current difficult economic situation. China hopes that this will show that it can have maintain good relations with a trade and finance-oriented country and can even further develop an existing free trade agreement.

How will relations between Europe and China evolve, and what are the challenges?

Grano: One problem is definitely China’s economic overcapacity. The country produces too much and therefore has to export cheap products on a grand scale. The impact of that will be that Europe will have to impose further tariffs, which in turn will fuel tensions. Another challenge is China’s human rights record, for example in relation to the Uyghurs and Tibetans, as well as the fraught situation with Taiwan and Hong Kong. A third point concerns science and research and associated security issues. Science cooperation with China is important, but it is sensitive in research fields where technologies are developed that can also be used for military purposes.

What is the impact of that?

Grano: In the EU, but also in Switzerland, guidelines are being drawn up that seek to put in place stricter rules for research cooperation. But some in Europe are also saying that this hinders important collaboration and means Europe is missing out on major opportunities. There are no easy solutions. Perhaps we should be a bit less naive and be more skeptical in those research fields where progress is expected in technologies that can be used for military purposes. But in many other areas, scientific cooperation is unproblematic and desirable.

In which areas does cooperation between Europe and China hold the greatest potential?

Grano: Besides academic exchange in non-critical areas, joint efforts to tackle climate change have great potential. China is a leader in the development of green technologies, for example solar panels. In this area, good cooperation between China, Europe and the United States is therefore crucial. This is the only way we can solve the global challenges we currently face. And at a diplomatic level it is important that countries keep talking and engaging as this is the only way to keep a lid on tensions.

And what about Switzerland?

Grano: The Federal Council will continue to muddle through and maintain good relations with China. Unless of course there are China-critical motions in the Swiss parliament or civil society, such as a referendum against the free trade agreement. That could tarnish the good relations.