News

Mr Xi goes to Brussels



31 March 2014

It is a telling fact that despite nearly 40 years of formal diplomatic relations between the EU and China, and over a decade as key strategic partners, a Chinese head of state has never formally visited the headquarters of the European Commission in Brussels. There have been plenty of visits by Chinese premiers and important Politburo members over the years to the Berleymont Building where the Commission sits. But never by the number one in the Chinese system. Xi Jinping will rectify this anomaly when he pays a brief visit on 31 March during his trip to Europe.

Why leave something as important as this so late? Why did Xi's predecessors, Hu Jintao and before him Jiang Zemin never take this step? There are three possible reasons for this, one about the EU and its behaviour, one from domestic dynamics in China and one connected to both the EU and China and their sense of common interest at the moment.

For the EU, a possible interpretation of Xi's visit would be that the stand-off over solar panels last year did the bilateral relationship no harm, and in fact might have even done the EU some political good. The dispute threatened to get nasty when the EU started to put in place tariffs in response to the flooding of the European market by Chinese panel producers. Both sides snarled. Harsh things were said. But in the end, a pragmatic deal was done.

Plenty lambasted the EU at the time for what they felt was caving in. But the more foresighted saw that this was the first time, over such a complex issue, that a compromise was reached. And it showed at least to some in the Chinese system that for all their frustration and complaint about the EU over the years, it did have the ability to send nasty tremors through their market with its threat to close off some of the access points. For the Chinese leader, therefore, the lesson for last year was not to take the EU too much for granted. It needs time and attention.

For President Xi, there is a domestic calculation. Eighteen months into his post as general secretary of the Communist Party, and with over a year's experience as head of state, he now has his feet firmly under the table domestically, and is able to differentiate his leadership increasingly from that of his predecessor Hu. One of the many unwritten rules of the Hu era was that the US belonged to his area of responsibility, and his premier Wen Jiabao took the lead with the EU. The reconfiguration we might be starting to see now is that Xi is the overlord over all major foreign relations, and that he will have a more direct involvement in the EU. Li Keqiang as premier works with the EU on the all-important macroeconomic issues, but for the political aspects Xi will be a more activist president than Hu ever was.

That would be an upgrading of sorts for Brussels, but whether this really becomes the default will depend on what sort of messages they prioritize when Xi is there. Here the common interest kicks in. With many of the 28 member states of the EU limping back to positive GDP growth and the trauma of the eurozone crisis still fresh in people's minds, the urgency of finding better access to the all-important Chinese domestic market remains strong. Member states are all thinking hard and creatively about how to attract Chinese direct investment. The UK has even produced a Mandarin Chinese booklet targeted at potential investors. Brussels leaders have to bang out relentlessly the message that they, with the Chinese government, are allies in continuing trade liberalization, joint enemies of protectionism, share the same international trade values and are allies of a global, predictable, stable finance and services system.

This is a good message, because it is in fact largely what both sides, despite all their differences, believe is in their interest. They already have much common ground here. In this context, Xi's visit to Brussels is not in his role as head of state, but as the leader of the world's most dynamic market. And it is as leaders of one of the world's great markets that the EU will host him.

In terms of creating a new framework for the relationship between these two markets so that they can both fulfil their different but very great potential, there is every reason for Xi to be in Brussels. It is a significant enough task for him to put aside all the irritations of the last few years Beijing may have felt towards Brussels. And if the meetings don't lead to a new intensity in the relationship and a new tone, then the Eurocrats will only have themselves to blame. Xi's visit is a massive opportunity. They have to seize it, or see another two decades elapse before a Chinese head of state passes their way again.