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Belgian PM faces high-wire act in China as EU, Taiwan fears intrude

Belgian PM faces high-wire act in China as EU, Taiwan fears intrude

by host

BRUSSELS — Wearing two hats — one coordinating the EU’s policy agenda and the other leading his own country — Belgian Prime Minister Alexander De Croo will be walking a tightrope when he visits China this week.

Not only are tensions mounting over the EU’s yawning trade deficit with China, but De Croo’s visit comes days ahead of a presidential election in Taiwan, in which President Xi Jinping has intervened by saying the island nation’s reunification with China is a “historical inevitability.”

De Croo departs for his two-day state visit on Wednesday, 10 days after his country assumed the presidency of the Council of the EU, the intergovernmental part of the 27-nation bloc. The trip comes at a difficult time in the relationship, with tensions on display in December at the first face-to-face summit between EU and Chinese leaders in four years.

Last week, China also launched a tit-for-tat trade investigation into EU liquor exports, signaling its displeasure over a probe launched by the Commission last fall into subsidies for made-in-China electric vehicles.

It amounts to a diplomatic minefield for the 48-year-old De Croo, for all his experience of running a seven-party, bilingual coalition government.

“At all cost, we must avoid a situation where the Belgian position contradicts the European position,” said Tanguy Struye, professor of international relations at UCLouvain and an expert on EU-China relations. 

“If Belgium takes a different stance than the EU, this will clearly benefit China, who will once again be able to divide us.”

De Croo’s visit culminates on Friday when he meets Xi in one of the Chinese president’s last public appearances before this weekend’s presidential election in Taiwan — which China regards as a breakaway province.

A victory for Taiwan’s ruling Democratic Progressive Party, which Beijing sees as pro-independence, could infuriate the Chinese government and trigger a military response, security analysts warn.

Back home, meanwhile, recent reports have exposed China’s penetration of Belgian politics, in a scandal involving a far-right lawmaker paid by Chinese spies to influence political decisions.

Mood swing

The mood music will be quite different this time compared to 2019, when a Belgian trade mission led by then-Foreign Minister Didier Reynders and Princess Astrid sought business opportunities accompanied by over 300 business executives. 

Then the pandemic hit, disrupting industry supply chains and transforming perceptions of opportunity and risk in Europe’s trade relationship with China.

Not only did the economic dislocation caused by COVID inflate the EU’s bilateral trade deficit with China to €400 billion in 2022, but the bloc also realized it had become too dependent on Beijing in sensitive sectors like energy and green tech — such as the batteries that power electric vehicles.

The buzzword in Brussels is currently how to “de-risk” the EU’s economic relationship with China. That’s easier said than done, however, and the EU faces hard choices in continuing to trade with Beijing while safeguarding its strategic interests. A new economic security strategy, announced by Commission President Ursula von der Leyen last year, is due to be unveiled in late January.

In comparison to its neighbor, the Netherlands, which last year bowed to U.S. calls to restrict exports to China by tech champion ASML — the leading maker of chip fabrication equipment — Belgium has been slow to catch up with EU countries that are more hawkish on trade with China.

Just last week, Flemish public transport provider De Lijn came under fire for ordering new buses from China’s BYD rather than from local manufacturer Van Hool. In French-speaking Wallonia, Chinese e-commerce giant Alibaba’s significant presence at Belgium’s largest cargo airport has also raised national security concerns.

“I’m a big fan of free trade, and trade with the rest of the world and also with China is an important one, but I just want to see more elements of reciprocity,” De Croo told POLITICO in late December.

“For me, there is no problem with the Chinese coming to take over something here, but I just want to be able to do it with them too,” the liberal prime minister said.

The business delegation on this trip will be far smaller — just 25 CEOs will accompany De Croo to Beijing. During the visit, he and Chinese counterpart Li Qiang will sign a memorandum of understanding on investing in green energy. 

Strategic reciprocity

Francesca Ghiretti, a senior analyst at the Adarga Research Institute, said it was “quite strategic” to put reciprocity back on the agenda of relations with China. But she warned against losing sight of the progress that has been made on economic security and sliding instead into tit-for-tat trade dynamics.

Like the Netherlands, Belgium is still figuring out how to shield its strategic assets from Beijing’s grasp. The country is home to Imec, a world-leading semiconductor research center, which also has a presence in China.

Imec was recently urged to choose sides. The research center, which gets tens of millions in government subsidies annually, should focus “mainly on the like-minded countries,” Flemish Economy Minister Jo Brouns told POLITICO in November. 

The hint was swiftly taken: Imec CEO Luc Van den Hove said in December that there are still projects with Chinese companies, but promised those “will be phased out” during a visit to the U.S., where Imec recently opened a new office. 

Pieter Haeck, Barbara Moens and Stuart Lau contributed reporting. 

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