Europe Turns Down Chinese Offer For Grand Alliance Against The US

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Originally appeared at Zero Hedge

Publicizing its growing exasperation in dealing with president Donald Trump who refuses to halt the tit-for-tat retaliation in the growing trade war with China – which is set to officially begin on Friday when the US slaps $34 billion in Chinese exports with 25% tariffs – but has a habit of doubling down the threatened US reaction to every Chinese trade counteroffer (after all the US imports far more Chinese goods than vice versa)…

Europe Turns Down Chinese Offer For Grand Alliance Against The US

… China has proposed a novel idea: to form an alliance with the EU – the world’s largest trading block – against the US, while promising to open up more of China’s economy to European corporations.

The idea was reportedly floated in meetings in Brussels, Berlin and Beijing, between senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, according to Reuters. Willing to use either a carrot or a stick to achieve its goals, in these meetings China has been putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit later this month.

However, perhaps because China’s veneer of the leader of the free trade world is so laughably shallow – China was and remains a pure mercantilist power, whose grand total of protectionist policies put both the US and Europe to shame – the European Union has outright rejected any idea of allying with Beijing against Washington ahead of a Sino-European summit in Beijing on July 16-17.

Instead, in the tradition of every grand, if ultimately worthless meeting of the G-X nations, the summit is expected to produce a “modest communique”, which affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO. Incidentally, the past two summits, in 2016 and 2017, ended without a statement due to disagreements over the South China Sea and trade.

Then there is China’s “free-trade” reputation: a recent Rhodium Group report showed that Chinese restrictions on foreign investment are higher in every single sector save real estate, compared to the European Union, while many of the big Chinese takeovers in the bloc would not have been possible for EU companies in China. And while China has promised to open up, EU officials expect any moves to be more symbolic than substantive.

Almost as if behind the facade of smiles and agreement, Europe has absolutely no belief that Beijing will ever follow through with its promises.

In other words, not even when faced with the specter of a full-blown trade war, is Europe willing to terminally alienate the world’s biggest buying power: the US consumer, in exchange for some vague promises for “open trade” from Beijing.

That doesn’t mean that China won’t try however.

Vice Premier Liu He has said privately that China is ready to set out for the first time what sectors it can open to European investment at the annual summit, expected to be attended by President Xi Jinping, China’s Premier Li Keqiang and top EU officials.

Meanwhile, as the US-China trade war has drifted into the front pages of domestic propaganda, Chinese state media has been promoting the message that the European Union is on China’s side, putting the bloc in a delicate position according to Reuters.

In a commentary on Wednesday, China’s official Xinhua news agency said China and Europe “should resist trade protectionism hand in hand”.

“China and European countries are natural partners,” it said. “They firmly believe that free trade is a powerful engine for global economic growth.”

Or maybe Europe’s position is not all that delicate, because when push comes to shove, Europe is nowhere near ready to abandon its trans-Atlantic trade routes:

“China wants the European Union to stand with Beijing against Washington, to take sides,” one European diplomat told Reuters. “We won’t do it and we have told them that.”

But why does Europe – which has so staunchly publicized its disagreement with Trump’s policies – refuse to align with China? Simple: behind closed doors it admits that Trump’s complaints about Beijing are, drumroll, spot on.

Despite Trump’s tariffs on European metals exports and threats to hit the EU’s automobile industry, Brussels shares Washington’s concern about China’s closed markets and what Western governments say is Beijing’s manipulation of trade to dominate global markets.

“We agree with almost all the complaints the U.S. has against China, it’s just we don’t agree with how the United States is handling it,” another diplomat told Reuters.

And while Europe’s position is understandable, if hypocritical – after all if it believes that Trump’s approach to dealing with an ascendant China is the right one, why not just say it – the attention will shift to China, and the admission that Beijing is terrified about the consequences of a full blown trade war.

As Reuters notes, China’s stance is striking given Washington’s deep economic and security ties with European nations. It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars worth of Chinese imports on July 6.

It also underscores China’s new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

“Trump has split the West, and China is seeking to capitalize on that. It was never comfortable with the West being one bloc,” said a European official involved in EU-China diplomacy.

Wait, that’s the exact same thing the media claims about Putin is doing, although usually in the context of some grand “Kremlin mastermind” when the establishment does not get the desired outcome. The irony is that whereas Putin is merely sitting back and enjoying the show, it is China that is actively engaging in secretive negotiations trying to shift the global balance of power.

“China now feels it can try to split off the European Union in so many areas, on trade, on human rights,” the official said.

So, when “they” say Putin, they really mean Xi? Confusing…

* * *

Never one to act without a long-term strategic plan, Beijing’s approach to cozy up with Europe may have an entirely different motive than isolating Trump: China’s offer at the upcoming summit to open up reflects Beijing’s concern that it is set to face tighter EU controls. Just like in the US, the European Union is seeking to pass legislation to allow greater scrutiny of foreign investments.

Said otherwise, China is suddenly scrambling because it realizes that unless it locks up Europe, it may well be Trump who succeeds in convincing Brussels to sign a bilateral deal with the US, at the expense of cracking down even more on China, a move which would send China’s annual GDP growth well below 6% as Beijing loses full access to its biggest trading partner.

Summarizing Europe’s position, a third diplomat told Reuters quite simply that “we don’t know if this offer to open up is genuine yet,” adding that “it’s unlikely to mark a systemic change.”

To be sure, European envoys say they already sensed a greater urgency from China in 2017 to find like-minded countries willing to stand up against Trump’s “America First” policies. And yet, according to the Reuters report, Europe is not one of those “like-minded countries.”

Almost as if everything that is publicly taking place on the international stage is nothing but a spectacle, one in which everyone’s true motivations are 180 degrees the opposite of what is stated.

Europe Turns Down Chinese Offer For Grand Alliance Against The US

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  • Mike

    Of course the neutered lap dog Europeans would turn that down.

    • BMWA1
    • Attrition47

      It’s too soon, American Caesar has been buying Europols for decades. They’re a wasting asset so it will happen eventually but for now only working class people in Britain and Europe are suffering.

      • Sinbad2

        But the Chinese did the honourable thing and offered to spare Europe.
        When it’s over, China will politely point out that we offered to save you.

        • goingbrokes

          Definitely, lol!

        • Attrition47

          I’d rather suffer under the yoke of Chinese imperialism than the US variety, at least the food will be better. ;O)

          • Sinbad2

            I once heard an Australian politician say.
            Chinese and American businessmen are the same, but the Chinese don’t pretend to be your friend.

          • Attrition47

            Fnar!

  • Jan Tjarks

    Thanks, that was some insightful information. It is clear that China is not on the path of Konfuzius, while it should be.

  • Tudor Miron

    Euro elites are not ready yet. But that will come soon enough.

    • paul ( original )

      Well they might come, but if they do I hope China kicks them in the teeth and several other places and tells then to sod off. I wish both China and indeed Russia showed a bit more pride . Those that have shit on you for decades deserve no consideration.

    • Wise Gandalf

      sure not. first we let fight chones with russians, then we take russia. :DDDDDDDDDDDDD

  • BMWA1

    Doesn’t Merklova know it’s impolite to point?

  • Neurasth

    Not enough zios in China for their taste i guess

    • Sinbad2

      Exactly, the Chinese don’t like religions, for obvious reasons.

  • Drogba

    Merkel is not finished with her zionist agenda,how the fuck is this traitor still in power is beyond me.

  • Nasty Animal

    EU will be crawling on it’s knees soon.

    • hhabana

      EU is soooo stupid that they don’t realize these foriegn adventures in Libya, Syria and rest of Muslim world propogated this migration to EU! American government wants this to happen to weaken them, the fools. They would be better off to take a stand to U.S. Government and make them think twice with their decisions. Keep buying those bonds, suckers!

      • Wise Gandalf

        donotcare abiut us. solve the problems in your life

    • Wise Gandalf

      in your wet dreams

  • Joe Kerr

    Merkel has aged a few decades and put on some weight since that photo was taken… part of the price to be paid for being a Rothschild/Soros clown.

  • Wise Gandalf

    the white race does not make alliance with the yellow race.

  • Hide Behind

    There are far more entrepreneurs in China than in US or European nations, and majority are on small scale, family owned concerns.
    Euro and US subsidize damn near all financial entities through taxation systems.
    When US/ Euro sovereign funds give out low low interest billions to their largest buisness, that is a hell of a subsidy that in end is paid for by commoners.
    Borrow money at 1% and under to invest, yes even into Chinese firms and get 6% per year returns?
    Ever wonder why the distance from the rich grows above the poor.
    Europe is part and parcel of US dominated WTO, they are no longer money changers and they cannot nor do they want to, break away from Petro Dollars.
    Come down to it The so called Federal Reserve, a multi national concern, has more control of Petro Dollars then Executive Branch of US government.
    Europe fears breaking ranks from US militarism that keeps its energy needs and profits out of hands of Asian or Russian concerns.
    Europe is floundering, as is US, and must continue to colonize for resources and financial cotrols by joining and aiding US military power.
    Full spectrum warfare is in hands of US and It’s allies, and China, Russia or any non white nation can go against that massive a power.
    Economic warfare is ages old siege warfare.
    China’s going to eventually join TWO and it will have a better seat than any Russia can attain.