China is playing divide-and-rule between the United States and Europe and it’s working

• The incoming Biden administration has raised concerns about a controversial new investment pact between China and Europe.
• The pact has been agreed despite misgivings in the US and Europe about China’s human rights record and role in the coronavirus pandemic.
• China’s successful divide-and-rule tactics threaten to divide Biden from his European allies, say experts.
• “It is a Chinese effort to destabilize Europe,” said Dalibor Roháč, a resident scholar at the American Enterprise Institute.
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When an investment pact between China and the EU was first floated in 2013 it did not draw a huge amount of controversy.

However, the geopolitical landscape is vastly different now that it has been finalized some seven years later.

With China cracking down on democracy in Hong Kong, building suspected detainment camps for Uighur Muslims, and facing an international investigation into its response to the COVID-19 pandemic, the agreement is much more controversial and risks driving a wedge between Europe and the incoming Biden administration.

Team Biden, which has resolved to take a tough line on China, has already made it clear its opposition to the comprehensive investment agreement, which aims to liberalise trade between China and the EU. The timing of it – weeks before a new president takes office and weeks after the EU proposed a new alliance with the US to counter “the strategic challenge” posed by China – has also raised eyebrows in Washington.

In the diplomatic language of the incoming administration – a novelty after four years of President Trump’s bullish foreign policy rhetoric – Biden’s national security adviser Jake Sullivan tweeted that the incoming administration would welcome “early consultations” on the then-proposed deal, a call which was ultimately ignored.

Trump's well-respected deputy national security adviser Matthew Pottinger, who resigned this week in the wake of siege Capitol, was more blunt and said that Democratic and Republican lawmakers in Washington were "stunned and perplexed" at the nature of the deal.

"We've allowed China to drive a huge wedge between the US and Europe," Reinhard Bütikofer, chair of the European parliament's delegation on China, told the Financial Times this week. 

European officials will be watching closely to see just how much pressure Biden's White House exerts on the EU over the deal, which may yet be thrown out by the European parliament, but the move to reset US relations with Europe after Trump is already off to a shaky start.

Dividing Europe

Regardless of its impact on US-EU relations, the move can also be interpreted as an example of China successfully using its economic might to create tensions between European member states themselves.

"It is a Chinese effort to destabilize Europe," said Dalibor Roháč, a resident scholar at the American Enterprise Institute, of the deal in an interview a week before the deal was agreed.

The EU Commission defends the deal partly on the grounds that the deal accepts China's promise to make "continued and sustained efforts" on ratifying international conventions on forced labour.

—EU Trade 🇪🇺 (@Trade_EU) December 30, 2020

But several member states were angered at the way that German Chancellor Angela Merkel pushed through the deal in the last days of Germany's EU presidency at a time when China is drawing such intense international condemnation.

Officials in Poland, Italy, Belgium and Spain told Politico this week that they felt crushed by the "German engine" of the European Commission, referring not only to Chancellor Merkel, but also Commission president Ursula von der Leyen and trade director Sabine Weyand, who are German. 

At the heart of this problem is that the EU-China deal was disproportionately in Germany's interest because of its close  economic links with the country while other member states were less concerned about the benefits of such a deal and more concerned with the country's human rights record.

That difference means that finding a "common line" on its broader interactions with Beijing is generally difficult, said Rosa Balfour, director of Carnegie Europe and an expert on European politics, in an interview last month before the deal was finalised.

"Member states are diversely interdependent with China," Balfour said, "so it's difficult to find a common ground."