China and Central Europe: View From Warsaw

 In China, Europe

The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy.  This conversation with Dr. Justyna Szczudlik – deputy head of research, head of the Asia-Pacific Program, and a China analyst at the Polish Institute of International Affairs (PISM) – is the 290th in “The Trans-Pacific View Insight Series.”

As China-U.S. relations escalate, analyze how Warsaw is balancing relations between Beijing and Washington. 

For Poland, ties with the U.S. are crucial due to its security guarantees against Russia. The U.S. is Poland’s most important ally. And this alliance is even more important since Russia’s aggression against Ukraine. The recent problems in Poland-U.S. ties – such as the Nord Stream2 issue (the U.S.-German agreement that facilitates pipeline completion and commissioning), or not very “intimate” ties between two countries since Biden’s term – cannot undermine the firmness and importance of this relationship.

At the same time, Poland remains in the EU mainstream when it comes to its China policy. This means that Poland intends to keep channels open with China, hoping for economic benefits from trade by expanding exports to China and connectivity (revenues from cargo trains between China and Europe that pass Poland), despite the fact that in recent years Warsaw is pursuing a rather cautious approach towards Beijing.

The best example of Poland’s cautiousness about China, but also a will to maintain contacts with Beijing is, on the one hand, the U.S.-Poland declaration on 5G; but on the other, assurance that Poland will not exclude Chinese companies from developing the country’s 5G network. However, the upcoming Act on the National Cybersecurity System, probably indirectly, will introduce a ban – not naming China, but setting conditions that cannot be met by Chinese companies.

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What is the long-term impact on Europe of Lithuania’s engagement with Taiwan and allowing Taipei to set up a representative office in the country?

Indeed, there is a discernible process of warming ties between Vilnius and Taipei, but Lithuania does it under a one-China policy framework. There were discussions during the election campaign in 2020 about one-China policy (e.g., the Freedom Party proposed to support Taiwan’s independence and recognition as a country) but the campaign has its own rules. [These statements] are not tantamount to decisions made by the ruling coalition of which the Freedom Party is a part.

The fact that Lithuania allows Taiwan to open a representative office in the country is nothing new and surprising as there are such offices in other countries. The novelty is the current context of an assertive China with Beijing’s oversensitive approach when it comes to its “core interests,” Lithuania’s withdrawal from the 17+1 platform, and the name of the office – not the traditional “Taipei,” but “Taiwanese” – that drew China’s ire.

Lithuania’s friendly approach to Taiwan may have an impact on European institutions and other member states. They may pay more attention to Taiwan – a noticeable trend in the EU in recent months due to China’s assertiveness and Taiwan’s activities – and as a result underpin the EU’s  image as leaning more towards a perception of China as a “systemic rival,” while eschewing the “partner” clause. The EU describes China: 1) as a partner when it comes to global issues like climate change, WTO reform, cooperation on Iran, etc.; 2) an economic competitor in the pursuit of technological leadership, and 3) a systemic rival promoting an alternative model of governance.

Suffice to say that EU High Representative for Foreign Affairs and Security Policy Josep Borrell  announced that he would raise the Taiwan issue  ̶  in a sense of deepening ties with the island and to defend Lithuania against China’s threats  ̶  during the EU-China strategic dialogue with [Chinese Foreign Minister] Wang Yi. One may expect China’s growing pressure on the EU. At the same time, EU’s Taiwan-friendly course might strengthen U.S.-EU ties. Moreover, it seems that the Lithuanian approach may help Central and Eastern Europe (CEE) countries not to be seen any longer by Western EU members and the U.S. as region economically and politically dependent on China due to its previous enthusiasm to reinvigorate ties with the PRC and China’s proposal for investment in the region.

Compare and contrast the concurrent rise of authoritarianism in China and Central Europe and implications for China-Central Europe relations.

In my opinion, there is a methodological flaw in comparing and contrasting CEE EU democracies – members of the European Union, the biggest integration organization based on liberal norms and values – with China’s authoritarianism, which from the onset constitutes the PRC political regime. I admit that there are several problems with some democratic norms and procedures in a few CEE countries, but this situation cannot be compared with the PRC. To put it bluntly, there is no ideological affinity between the CEE EU and China. Even non-EU CEE countries mostly use cooperation with China as a leverage to create a better position in talks with the EU, underscoring, for example, that China does not require any political changes in the countries while offering cooperation.

When it comes to China-CEE relations, the region is becoming cautious on China not only due to a widespread disillusionment with the 17+1 formula, mostly in the economic domain, but also growing disenchantment with China’s increased authoritarianism and coercive diplomacy.

How is the China challenge dividing western and eastern Europe through platforms such as “17+1” and the Belt and Road Initiative (BRI)?

It is a paradox that those two initiatives are very divisive, although the results of both of them are negligible or almost non-existent. What I mean is the perception in Western Europe and U.S. that the CEE is (over)dependent on China due to its pledged infrastructural investments, etc. This is not true.

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Although trade is steadily growing, only about 3 percent of China’s overall exports go to the CEE, and the PRC constitutes less than 2 percent of CEE regional exports. When it comes to Chinese investment in CEE EU members, the value is around 9.5 billion euros combined; far less than 1 percent of Chinese global outward investment stock is hosted by the CEE. Also, politically, CEE countries are becoming cautious or even critical towards China, while CEE societies’ attitudes towards China are changing from positive or neutral to negative.

But in recent months, it seems that Western Europe and U.S. are becoming aware about the reality and CEE countries are not seen as China’s Trojan horses. An important role in changing this perception has been played by the recent 17+1 (online) summit, held in February, that ended up with abysmal failure for China as six CEE countries were represented by lower-level officials and the CEE blocked adoption of the “Guidelines” – a standard joint document released after the meeting. This was a setback for Xi Jinping, who presided over the summit for the first time. Then, Lithuania has withdrawn from the format.

Assess the strategic implications of the Biden administration’s hardline approach towards China on the transatlantic relationship and specifically on U.S.-Poland relations.

Since Biden assumed office one may notice a raising convergence on the issues relating to China between the U.S. and Europe. Biden, despite being tough on the PRC, sees spheres of potential cooperation with Beijing such as climate. In that sense, there are similarities between U.S. and EU on China.

However, one should not expect full convergence or a united front on China. The U.S. and EU share the diagnosis, in a sense of perceiving China as a challenge or even threat, but the means to address [the problem] are different. The U.S. approach – embedded in political consideration of being a global leader who does not want to lose it supremacy – is proactive and offensive, with an ultimate goal to counter and alienate China via building blocs against the PRC. While the EU mindset  – underpinned by economics as a critical factor in EU’s China policy – prefers a defensive approach to focus on EU’s resilience via neutral (without naming China), technical instruments to mitigate selected behaviors that are detrimental for the EU.

These differences create tensions in transatlantic ties, as the U.S. is trying to exert pressure on the EU to adopt American maximalist approach towards China and does not fully comprehend the EU’s maneuvering stance on Beijing. U.S. anxiety results in attempts to build various coalitions on China with those partners who would like to do so and do not express doubts – the recent example is AUKUS. Meanwhile, the EU does seek its own way of dealing with China in order to protect its economic interests, but also [out of a desire] not to be seen as a blind executor of U.S. policies. One should expect such tensions in the future.

However, there are attempts to focus on selected issues that both sides perceive as detrimental for their security such as technology and digital issues due to raising interdependencies with China. The Trade and Technology Council that was established in June during the EU-U.S. summit and its first working meeting on September 29 in Pittsburgh was a good test of whether transatlantic cooperation on China is feasible.

When it comes to U.S.-Poland relations, the situation in a microscale epitomizes the EU-U.S. ties. There are expectations from Washington that Poland will adopt a tougher approach on China, while Poland goes in line with the EU’s China stance.

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