Questionable EU sanctions against China

by Rolf D. Cremer and Horst Löchel*

(29 May 2021) The EU hopes to improve the situation of the Uyghurs by imposing sanctions on China. This is the wrong way to go about it. The EU should view China’s rise as an economic and cultural asset and promote constructive agreements with the country.

The new US administration has continued Donald Trump’s tough stance on China. There can be little doubt that the recent EU sanctions against China came about on US instigation and are intended to demonstrate transatlantic cohesion. The EU is now surprised that China is reacting with countermeasures. What did they expect?

Anyone who really knows China realizes that the country has undergone epochal change over the past 40 years, to the clear benefit of its 1.4 billion inhabitants and the rest of the world. Life in Chinese mega-cities is now almost indistinguishable from that in Western metropolises. The economic poverty of the Mao era has gone. Average per-capita income has risen more than a hundredfold. It is a success story of the economic and social history of the last centuries. A combination of openness, international cooperation and far-sighted economic policy by China has led to this result.

The international community can now only solve any major global problems in cooperation with China. So, despite all our differences and disagreements, we should carefully weigh up our options. However, the EU is letting tensions escalate and following in the footsteps of Donald Trump’s disengagement vision.

Not only do sanctions not lead to progress for the Uyghurs. They have negative economic consequences, also in and for Europe. And it is not just about corporate profits, as those who claim to hold the only truth repeatedly and dismissively imply. In fact, millions of jobs, salaries and supplies in the EU are at stake. We cannot, on the one hand, want to increase our prosperity thanks to China while, on the other hand, continuing to put it in the pillory and stir up resentment.

It is surprising in this regard that human rights violations in other parts of the world are of little or no concern to the EU. Why is the focus always on China? Because what should not be cannot be? Because China does not share our political system, although it is economically and socially successful? Or because China wants to impose its authoritarian political system on us, although this is really out of the question? Rather the opposite is the case.

Overcoming the challenges

The EU sanctions also refer to the concept of the Western community of values. However, when applied to other cultures with a different understanding of history and the relationship between the individual and the community, this concept is entirely questionable from a historical point of view. We have a good institutional and political system for our societies, for our problems and for our time. But do we really think we have the best system for all societies? Europe and the US now make up less than ten percent of the world’s population, and “the West” accounts for only around one third of the world economy.

The economic, political and military ascent of China to the rank of superpower is a challenge for the US in particular, not for the EU. In the EU, we should view China’s rise as an economic and cultural asset, just as we shape our coexistence with the US in a positive way. Inevitably, economic and political conflicts will arise from time to time. For decades, we have got along with the US and its sometimes difficult positions; we need only think of the Iraq war, Nord Stream 2 and US sanctions against European companies as part of the country’s Iran policy. In contrast to this approach, the current EU sanctions will certainly not help to promote constructive agreements with China.

Source: Neue Zürcher Zeitung (NZZ) of April 28, 2021  (Reproduced with kind permission of the authors and the NZZ)

(Translation “Swiss Standpoint”)

Rolf D. Cremer was for many years Professor, Dean and Vice-president of the China Europe International Business School (CEIBS) in Shanghai; Horst Löchel is Professor of Economics at the Frankfurt School of Finance and Management and Director of the Sino-German Centre.