As EU-China relations cool, Europe increasingly looks to Taiwan

Amid Western criticism of China over the escalating pressure on democratically-ruled Taiwan, which China claims as its own territory, and the strengthening of ties with Russia during the invasion of Ukraine, Beijing’s diplomacy suffers in Europe.

US House Speaker Nancy Pelosi’s trip to Taiwan, the latest in a series of Western visits, has heightened tensions between the US and China. Beijing opposes all government-to-government contacts with Taiwan; as a result, the US has so far maintained only informal ties with the island, in deference to Beijing.

Likewise, growing disillusionment with China has created new opportunities for Taiwan in Central and Eastern Europe, which increasingly started seeing the self-governing island as an ideological ally and strategic partner.

Beijing has repeatedly reminded the EU and its member states of their promise to observe the One-China principle, saying it hopes they will “oppose any action to split Taiwan from China”.

At the same time, the row comes as governments in many eastern European countries have become increasingly hawkish on China.

First cracks

Last year, Lithuania was the first in Central and Eastern Europe to quit what it called the “divisive” Chinese 17+1 forum, created in 2012 to promote cooperation between China and Central and Eastern Europe (CEE).

Relations between Vilnius and Beijing worsened after Lithuania allowed Taiwan to open a de facto embassy in the country late last year, and were followed by increased diplomatic pressure from Beijing, including the sanctioning of ministers for visits to the self-ruled island.

After a five-day visit to Taipei in August, Lithuanian Deputy Minister of Transport and Communications Agnė Vaiciukevičiūtė emphasised the importance of economic ties with Taiwan and endorsed a G7 statement criticising the Chinese military exercises surrounding the island.

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In response to her visit, China’s foreign ministry announced last Friday that it was suspending “all forms of interaction” with her ministry as well as “exchanges and cooperation with Lithuania in the area of international roadway transport.”

Lithuania’s economy and innovation ministry announced on Wednesday (17 August) that the country will open a trade office in Taiwan in September and has appointed Paulius Lukauskas, currently an adviser to Prime Minister Ingrida Šimonytė, to head the office.

The new Lithuanian trade office in Taiwan will be called Lithuania’s Trade Representative Office in Taipei, not Taiwan. Lithuanian officials also stress it will be a commercial, not a diplomatic, office, according to a report by the Baltic News Service (BNS).

China losing CEE

The 17+1 China-CEE initiative was set up by Beijing with the aim of strengthening relations with members of the EU as well as Serbia and others – in part, to further its signature Belt and Road campaign to build bridges, railways, power plants and other infrastructure across the Eurasian continent.

Now the number of European partners has fallen to 14.

Although cooperation in the mechanism is officially slated to continue, with the next summit planned for 2023, Vilnius is not the only country in the region that has grown increasingly wary of Chinese influence and stepping up diplomatic activity which is likely to be interpreted as hostile by Beijing.

Only last week, Latvia and Estonia followed their Baltic neighbour and withdrew from the 16+1 cooperation format, reducing it to 14+1.

Latvia’s foreign ministry said the country’s continued participation in the group with China was “no longer in line with our strategic objectives in the current international environment.”

During an interview on Estonia’s public broadcaster ETV, Estonian Foreign Minister Urmas Reinsalu said that it “makes sense” to leave the framework and part of the decision was informed by the fact that “China has not condemned the Russian Federation’s war against Ukraine in clear terms.”

Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Poland, Romania, Slovakia and Slovenia are among the countries that remain in the cooperation format, but even their scepticism about the feasibility of the format is growing.

The Czech Republic’s foreign ministry said in May that the promise of large Chinese investments and mutually beneficial trade were not being fulfilled, following calls within the country’s parliament to quit the group.

After Moscow’s invasion of Ukraine in February, Chinese President Xi Jinping and Russian counterpart Vladimir Putin heralded a new era and declared a “no limits” partnership during a joint meeting in Beijing in February.

Since then, China has walked a thin diplomatic line between seeking to avoid explicitly backing Russia’s war and selectively voicing muted criticism of the invasion.

While, ahead of the EU-China summit in April, Chinese diplomats were lobbying to keep the subject of the war low, EU leaders decided to warn Beijing ‘not to interfere’ with international sanctions imposed on Russia, after Chinese leaders had increasingly echoed Moscow’s talking points.

Concern intensified after Beijing, though avoiding violation of Western sanctions against Moscow, became the top buyer of discounted Russian crude oil.

Indo-Pacific woes

Meanwhile, Europeans fear that Beijing could watch Russia’s Ukraine scenario and draw its lessons for its plans toward Taiwan in the future.

European diplomats in Brussels and in the capitals are aware of the enormous risks the Taiwan Strait stand-off poses but have said that their response would never be equal to what the Western reaction to Ukraine is.

In 2021, the EU unveiled a new strategy for raising its presence in the Indo-Pacific and countering China’s increasing influence in the region, strengthening cooperation with countries in the region.

EU aims for bigger diplomatic weight on Indo-Pacific matters

The European Union outlined on Thursday (16 September) a new strategy for raising its presence in the Indo-Pacific and counter China’s increasing influence in the region, which has become the latest arena of the international geopolitical race.

A major part of the strategy acknowledges the need for “enhanced naval deployments by EU member states to help protect the sea lines of communication and freedom of navigation in the Indo-Pacific while boosting Indo-Pacific partners’ capacity to ensure maritime security.”

Several European countries, including France and Germany, have since then sent naval forces into the South China Sea.

At the same time, increased tensions in the Taiwan Strait would put Europe’s tech supply chains at risk, with machinery and appliance making up almost 60% of EU imports from Taiwan last year.

Shaky Belt and Road

Beijing’s flagship Belt and Road initiative has also taken a blow after Moscow invaded Ukraine, with rail transport disruptions and a slowdown of growth on trade routes through Russia and neighbouring countries.

Few projects, with the notable exception of the Peljesac Bridge in Croatia, have been implemented, with Romania having frozen all Chinese projects and countries like Poland wary of the growing trade deficit with Beijing.

At the same time, the EU over the past two years has stepped up efforts to respond to China’s investment initiatives, dubbed Global Gateway.

The plan foresees investing €300 billion by 2027 in infrastructure, digital and climate projects around the world to strengthen Europe’s supply chains, boost EU trade and help fight climate change.

EU officials say privately that the financing terms offered by Beijing under its initiative are often unfavourable or not transparent and make some poorer countries, especially in Africa, dependent on China through debt.

The Commission said the Global Gateway plan would aim to forge links with other countries without creating dependencies.

In early February, the EU announced an investment package for Africa of €150 billion under the Global Gateway framework, which will be financed in equal parts by public investments, loan guarantees and private investments.

However, as EURACTIV reported last November, some EU diplomats express doubts whether the bloc will be able to compete with the financial firepower of Beijing and Moscow, with them, unlike the EU, not asking for anything in return.

[Edited by Nathalie Weatherald]

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