Most Europeans see China’s ‘aggressive practices’ as a threat to their economic interests, survey shows



Chloe Taylor | CNBC

The majority of EU citizens believe China’s “aggressive competitive practices” are a threat to their economic interests, a new survey has claimed.

In a report published Thursday, the thinktank the European Council on Foreign Relations (ECFR) found that 57% of Europeans felt their country’s economy, and the wider European economy, were being insufficiently protected by lawmakers from Chinese trade practices.

The ECFR polled 60,000 people across 14 EU member states to gauge voter sentiment toward foreign policies.

Less than 20% of voters in each individual member state felt their country’s interests were well insulated from aggressive Chinese competitive practices.

In France and Italy, almost three quarters of respondents felt their governments were failing to safeguard their economic interests from China’s trade and economic policies, with more than 60% saying the same in Spain, Germany and Greece.

More than a third of French, Italian and Spanish voters said the EU needed to do more to keep the region’s economy competitive and minimize the countereffects of China’s dominance.

″(Europeans) are ahead of their politicians in understanding the need for a stronger Europe in a world where it could be pushed around by ever more aggressive and nationalistic superpowers,” Susi Dennison, a senior fellow at ECFR, said in a press release Thursday.

However, there was some confidence in the EU’s role as a political force. Respondents said that if the EU were to fall apart tomorrow, the third biggest loss — following the collapse of the single market and the euro — would be European states’ ability to act as a continent-sized power in contests with global players such as China, Russia, and the United States.

Why is China seen as a threat?

With a population of more than 1.3 billion, the Chinese market is already a huge source of revenue for companies around the world — but the state’s economic policies have faced heavy criticism.

It’s been accused of pressuring companies to hand over tech blueprints as a condition for doing business in the country. Foreign firms operating in China also complain about “lengthy and opaque administrative procedures, especially with respect to permits, registration, and licensing.” China has also been criticized for distorting markets with heavy state sponsorship of its own firms — it paid a record $22 billion in subsidies to its domestic corporations last year, the Financial Times reported.

In a joint statement in May, the U.S., European Commission and Japan said countries were creating unfair advantages for their workers and businesses by using “harmful subsidies,” “forced technology transfer policies” and developing state enterprises into national champions — although no country was explicitly named.

Chinese authorities argue that China has created a trading environment that benefits the international economy. In a white paper last year, the Chinese government said it had “comprehensively fulfilled its commitments to the WTO, substantially opened its market to the world, and delivered mutually beneficial and win-win outcomes on a wider scale.”

New rules in Europe?

The EU already has some rules in place to regulate competition with China.

China is part of the EU’s competition cooperation partnership in Asia, alongside 13 other countries including India, Japan and South Korea. The European Commission also signed a framework with China in 2015 to strengthen cooperation between the two powers on reviewing cross-border company mergers.

However, EU lawmakers have suggested that regulations on both sides need to be updated to allow a level playing field.

In April, European Commission President Jean-Claude Juncker said in a statement that the EU and China needed to “find a better balance and level of reciprocity.”

“Europe wants to trade more and invest more in China, but we need rules that allow us to do so,” he said. “We want to work with China, because we believe in the potential of our partnership.”

But the Commission has urged EU member states to work as a whole when it comes to partnering with the world’s second-largest economy.

A March report by the European Commission, which dubbed China “an economic competitor” and a “systemic rival,” noted China’s ambitions to become a leading global power.

“This requires a flexible and pragmatic whole-of-EU approach enabling a principled defence of interests and values,” the Commission said, arguing that “neither the EU nor any of its member states can effectively achieve their aims with China without full unity.”

Earlier this year, Italy became the first major European economy to join China’s belt and road initiative, the country’s huge investment and infrastructure project. Analysts at the time told CNBC the move undermined Europe’s ability to stand up to China.

Meanwhile, EU antitrust chief Margrethe Vestager told members of the European Commission in January that China had a competitive edge over the bloc, according to the Financial Times, due to its “significant levels of strategic subsidies, restrictions on inward investment and state-sponsored outward investment.

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