“Europe has a China problem.”
These are not words you would have heard from a budding EU trade commissioner a decade ago, when cutting juicy deals with booming economies like China was the top line of the job description.
But in 2024, this might be the kind of rhetoric needed if you want to be handed the keys to the EU’s directorate of trade for the next five years.
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“China is challenging us in such a fundamental way that it would be naive to deny that Europe has a China problem. Just read the reports of the Dutch intelligence agencies,” said Wopke Hoekstra, the ex-Dutch foreign minister, in a stump speech for a China-facing portfolio in the next European Commission.
The current climate commissioner went on to blame China for “derailing our economy”, in the sort of language it would be hard to imagine coming from Valdis Dombrovskis, the taciturn Latvian incumbent.
“That is unacceptable. We aim not to sever ties with China. But we will have to restore the balance. Equal rules for both parties, plain and simple. To achieve this, we will no longer just talk, but we also have to act, if competition continues to be unfair,” Hoekstra said.
China hawk Ursula von der Leyen will again lead the European Commission. Photo: EPA-EFE alt=China hawk Ursula von der Leyen will again lead the European Commission. Photo: EPA-EFE>
It is silly season in Brussels. Rumours of who gets what job are fuelling the post-summer rentree drinks receptions and keeping the coffee flowing on the terraces around the EU’s Berlaymont nerve centre.
Every five years, each of its 27 member states sends a politician to the Belgian capital to represent its interests in the European Commission, the arm of the EU that proposes, designs and enforces policy.
The biggest jobs are already sewn up, and the EU leadership already looks more forceful on China than in its previous term.
Germany’s Ursula von der Leyen, Europe’s most famous China hawk, will again lead the commission, while ex-Estonian prime minister Kaja Kallas will be its top diplomat – provided she survives a grilling and vote of European Parliament members next month.
Kallas is as hawkish as they come on Russia, but was seen to have less developed, more moderate views on China by insiders in Tallinn than those outside Estonia would perhaps expect. Nonetheless, given the EU-China relationship is seen by many in Brussels entirely through the lens of Beijing’s ties with Moscow, she and von der Leyen are expected to collaborate closely on the file.
Former Estonian prime minister Kaja Kallas will be the EU’s top diplomat. Photo: AFP alt=Former Estonian prime minister Kaja Kallas will be the EU’s top diplomat. Photo: AFP>
Making up the triumvirate of leaders is Antonio Costa, the former Portuguese prime minister who will be the European Council president. Costa is seen to be less strident on China, having overseen a fire sale of public assets in bankrupt Portugal, often to Chinese buyers.
Costa personally knows the incoming Chinese ambassador to the EU, Cai Run, through the latter’s five-year stint as an envoy in Lisbon. Beijing may hope that gives it an opening at the council, made up of member states.
A rung or two down the ladder, however, is where the real action currently is.
High-profile nominees are scrapping it out for the chance to steer the bloc’s trade and competition policies – the only two briefs for which Brussels has full decision-making powers, and with that, the opportunity to mould the de-risking agenda introduced by von der Leyen last year.
Ex-Portuguese prime minister Antonio Costa will take over as European Council president. Photo: Reuters alt=Ex-Portuguese prime minister Antonio Costa will take over as European Council president. Photo: Reuters>
France’s Thierry Breton, the current internal market commissioner, will return to Brussels and oversee “industry and strategic autonomy”, according to a report in German newspaper Die Welt. A French diplomat said Breton had been promised industry and strategic autonomy, and an executive vice-president title that would ensure the trade and defence directorates fall under his command.
The rumour is hard to square with the fact that Breton and von der Leyen famously do not get along. By taking on all of those roles, he could become the most powerful man in Brussels.
A leaked table of future commissioners circulating on Thursday confirmed that Hoekstra was a shoo-in for the trade brief. Austria would take the competition file, while Hungary – Beijing’s closest friend in the EU – would be given an unnamed “weak portfolio”, the document showed.
Whether Hoekstra would accept being subservient to the flamboyant French entrepreneur remains to be seen, but both France and the Netherlands have good reason to have sway over the bloc’s economic security strategy.
French diplomats commonly say that Brussels, in its embrace of industrial and protectionist policy, is becoming more French. Few embody that shift better than Breton, seen as Emmanuel Macron’s loyal henchman in Berlaymont.
He has for the last five years been the bad cop to Macron’s good cop on China, pushing for trade action on products from electric vehicles to wind turbines, even as the French president built a personal bond with Xi Jinping.
His broad brief as internal market boss has also seen him target Huawei’s 5G presence and TikTok’s content moderation.
“He wants it all and would really push hard on each front if he got it,” the diplomat said. “It would be like von der Leyen was the queen, then five or six princes or princesses as executive vice-presidents, with all the commoners below them.”
Thierry Breton has been pushing for trade action on Chinese products. Photo: dpa alt=Thierry Breton has been pushing for trade action on Chinese products. Photo: dpa>
Hoekstra, meanwhile, represents a Dutch government that finds itself caught in the crossfire of the US-China tech war.
Due to the US’ cajoling of Dutch chip equipment giant ASML to follow its export controls, the Netherlands has been forced to get ahead of the economic security curve and has done arguably more work on the topic than any other EU member.
As a result, it has been pushing for a Europe-wide export controls regime, with the logic that it is easier for 27 countries to push back against Washington than one.
“The Dutch are free traders, but due to their semiconductor sector, they woke up on the need for economic security before the Germans,” said Sander Tordoir, chief economist at the Centre for European Reform.
“Hoekstra would be a sensible choice for trade commissioner: positioned in between von der Leyen and [Olaf] Scholz, France and Germany, on trade with China and this issue more widely,” he added.
A senior Dutch source said the trade portfolio would be one welcomed in The Hague – but only if it retains its economic security competence. Hoekstra comes from von der Leyen’s European People’s Party and would have to leverage that political power to “balance out Breton”.
“They know our preference for an economic portfolio, trade fits in that and on semiconductors we want a bigger export control role for the commission and a proactive approach so for us it could make sense,” they said.
The saga could rumble on for months. Media reports on Thursday suggested the new commission would not be in place until December, by which point the US election will have passed and new wrinkles could be added to Europe’s efforts to craft coherent China policies.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.
