August 7, 2025 • 45 mins
Host Dr. Elizabeth Economy interviews Noah Barkin, senior advisor with the Rhodium Group, about the evolving EU-China relationship following their July 2025 summit celebrating 50 years of diplomatic ties. Barkin traces Europe's awakening to the China challenge and China's designation as a "systemic rival" in 2019, explaining how the EU has developed its own distinct approach to managing Chinese economic competition. The conversation explores why China's strategy of leveraging Trump-era U.S.-Europe tensions to drive a wedge between allies has largely failed, with Europe maintaining its critical stance on issues like Chinese overcapacity and support for Russia. Barkin discusses the different approaches among EU member states, the significance of China's rare earth controls, and Wang Yi's surprising admission that Beijing wants to keep the U.S. "distracted" with the Ukraine war. Drawing on his expertise from Berlin, Barkin offers insights into whether Europe can maintain unity on China policy and what tools the EU needs to address the growing economic and security challenges posed by Chinese behavior.
Recorded on July 29, 2025.
ABOUT THE SERIES
China Considered with Elizabeth Economy is a Hoover Institution podcast series that features in-depth conversations with leading political figures, scholars, and activists from around the world. The series explores the ideas, events, and forces shaping China’s future and its global relationships, offering high-level expertise, clear-eyed analysis, and valuable insights to demystify China’s evolving dynamics and what they may mean for ordinary citizens and key decision makers across societies, governments, and the private sector.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insight and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy Hargrove, Senior Fellowand co-Director of the program on the U.S.
china and the World at the HooverInstitution at Stanford University.
Today, we're going to focus on therelationship between the European Union
(00:30):
and China, with a dash ofthe United States and Russia sprinkled in.
July was a big month for the EU.
It celebrated 50 years ofdiplomatic relations with China and
it signed a trade agreementwith the United States,
all while continuing to support Ukrainein its fight against Russian aggression.
So to help us understand how the EU iskeeping its head above water with all
that's going on,going to speak with Noah Barkin,
(00:52):
who is a senior advisor with the RhodiumGroup as well as a visiting senior
fellow with the German Marshall Fund.
He's based in Berlin, but
we're lucky to get him while he'svisiting here in the United States.
Welcome, Noah.
>> Noah Barkin (01:05):
Hi, Liz.
Great to be here.
>> Elizabeth Economy (01:07):
So the big news in EU China relations is the summit that
the two sides had in late July,
celebrating 50 years ofdiplomatic relations.
I want to get your take on what happened,what you think is coming next, but
first let's level set the relationship.
If you look back over the past decade oreven more,
what do you see as the definingmoments in the relationship?
(01:28):
How should we understand the evolutionof the bilateral relationship?
>> Noah Barkin (01:34):
Well, I think looking at it from a European perspective,
I would maybe start withthe takeover by Chinese for
media of German roboticsmaker Kuka in 2016.
The German government tried to stopthis but didn't have the tools to do so.
(01:55):
So I think more thanany other single event,
that was the moment when Europebegan to understand that
deeper economic ties with Chinaposed a substantial risk.
And I think it was also the momentwhen European capitals realized
(02:16):
that they needed new instrumentsto deal with this threat.
Other events in recent years,I think back in 2019,
the European Commissionpublished a document,
Strategic Outlook on China,which labeled China a systemic rival.
(02:38):
That was a big shift, I think,in how Europe thought and described China.
I think Europe had always sort of softpedaled its rhetoric on China and
that was sort of a break from that and
a signal that Europe was going to betalking, calling a spade a spade,
(02:59):
talking a bit more franklyabout the relationship.
The pandemic had a big impact, of course.
I think that triggered a sort of a slidein public opinion in Europe towards China.
And then of course,The China's support for
Russia, the no limitspartnership that Xi and
(03:22):
Putin struck just shortly beforeRussia's full scale invasion of Ukraine.
And China's ongoing support for
Russia has had a huge impacton Europe-China relations.
And I think ever sinceEuropean Commission President Ursula
von der Leyen gave thisspeech back in 2023 where
(03:47):
she talked about de risking asthe primary strategy towards China,
I think we've seen a rampingup on the European side
of economic measures topush back against China.
I think that speech was also significantin that it, it signaled a more robust
(04:10):
European approach to some of the economicchallenges related to China.
>> Elizabeth Economy (04:16):
I remember that speech.
I was at the Commerce Department atthe time and it was such a great framing,
that notion of de risking not decoupling,that of course we adopted it as well.
I think that's become the frame for theUS Let me just ask you a little bit more
about that first event that you mentioned,which was the Chinese investment,
(04:37):
I guess, and really takeover of Kuka,their German robotics firm in 2016.
Was it that they suddenlyrealized the Europeans and
the Germans suddenly realized that Chinawas a much bigger economic competitor than
they had sort of assumed, or was therea national security element to this?
Just what,what was the awakening all about?
(04:57):
Would it have had the same impact,for example,
if it had been a US firm that had come inand you know, bought, bought this out?
>> Noah Barkin (05:05):
Well, I think it was a realization that
China was employing a sortof top down strategy.
Of course, made in China.
2025 was launched a year earlier.
There had been other takeoversthat had caused concerns.
(05:30):
You might remember back inthe Obama administration there was
an attempt to take over a Germansemiconductor firm, Extron,
where the Obama administrationintervened because the Germans
were going to approve that andthat deal was reversed in the end.
(05:52):
But it was the sense that, and
Chinese investment in Europe atthe time was at a peak, 2016, 2017.
I think it had been welcomed formany years.
It was seen as a good thing.
And suddenly there wasa realization they are buying
up strategic assets as partof a top down strategy to
(06:15):
become dominant in a set ofkey industries of the future.
This was a key moment, I think in how theGerman government thought about this and
thought about Chinese investment and,and thought about the risks of
Chinese companies buying upstrategic European assets.
And that triggered the developmentof a number of tools and
(06:40):
it ultimately led to thisstrategic Outlook document that
I mentioned where China waslabeled a systemic rival.
>> Elizabeth Economy (06:50):
Right, that was a big moment.
So you mentioned the Obamaadministration intervention and
I know again duringthe Biden administration.
And I think even duringthe first Trump administration,
there was a lot of effort expended to,quote, let's put it in quotation marks,
educate the Europeans aboutthe nature of the economic and
(07:12):
security challenge that China presented.
To what extent do you think the Europeanrelationship with China has
either mirrored the US Relationship?
Has it trailed behindby a couple of years?
How do you see the two, if you wereto juxtapose one against the other,
how do you see the two of them?
>> Noah Barkin (07:32):
Well, it's an interesting question, Liz,
because I think there is a lot ofconfusion, especially in the U.S.
i think, about how Europeanpolicy towards China has evolved.
I think there is a narrative out therethat Europe only got tough on China
because of the US because of pressurefrom the first Trump administration,
(07:54):
then pressure fromthe Biden administration.
I think you can certainly find evidence.
That US Pressure had had an impacton European policy in certain areas.
I'm thinking of, you know,the 5G debate and
the role of Huawei in 5G networks,obviously on export controls,
(08:17):
the restrictions on sales of chip makingequipment from the Netherlands, asml,
et cetera, to China, or the debateabout outbound investment screening.
These are areas clearly,
these themes were driven by Washington.
(08:38):
But I think we do tend to play downEurope's agency in all of this.
I think the EU has been veryaggressive in developing its own tools
distinct from those in the US to tryto level the playing field with China.
The foreign subsidies regulation, forexample, is, is a quite powerful tool that
(08:59):
I think we'll be hearing about more in,in the, in the coming months and years.
Europe moves slower than the U.S.you know,
27 countries, they need time to,to get on the same page.
It's more wedded, as you know,to tools that conform to WTO rules.
(09:21):
It does not have the ability to decidefrom one day to the next with an executive
order that 100% tariffs onChina are going to be imposed.
So, I mean, I would argue thatEurope has at times been too slow,
but I think there's alsoan argument that policy has
(09:42):
been more coherent thanthat of the US at times.
I think Europe's aim has been toslowly dial up the pressure on,
give Beijing a chanceto change its behavior.
I think the US has probably decided,or at least the Biden administration
(10:03):
decided that that time hadpassed to give China a chance.
But that said, I do think that we aregoing to see the EU take more aggressive
measures over the coming yearbecause I think its industry
faces really an existentialthreat from China.
And I think that's going to becomemore obvious in the months to come.
>> Elizabeth Economy (10:25):
Yeah, actually, I think that's a really important point
about the care in some ways withwhich the European Union tries to
think through its policy toward China andthe tools that it uses.
I really appreciated, for example, the,
the nuance with which they approachedtheir EV tariffs on China.
(10:49):
Now, one could say that they didit in a nuanced way by tracking
all the subsidies from the coal on tothe actual manufacturing of the EVs.
But in the end, you know, they endedup with what, 35 or 40% tariffs,
which probably not enough to keep,you know, a flood of Chinese EVs to coming
(11:11):
to come into the EU as opposed to the USwhere we just slapped on 100 tariff and
you can't find practicallya Chinese EV on US street.
So I don't know which one is better,but I really do like sort of the.
The intellectual seriousness withwhich Europe approaches how it.
It, you know, tries to bring Chinamore in line with international norms.
(11:36):
So let's turn to the summit now.
You had European CouncilPresident Antonio Costa and
European Commission President Ursulavon der Leyen traveled to Beijing,
you know, for this summit.
Before we talk about it, can you explainwhat the difference is in their jobs and
whether or not the two of them are onthe same page when it comes to China?
(11:57):
Not sure.Many people really understand the nature
of the EU and its various bodies.
>> Noah Barkin (12:04):
Yeah, it can get very confusing with all the different
institutions in Brussels.
But I think the easiest wayto understand this is that
the European Commission presidentis really the driver of EU policy.
The Commission proposes new legislation,
it is in control of trade policy,for example.
(12:27):
The European Council president,on the other hand,
Antonio Costa, is in the position now,
is there really to representthe interests of the 27 member states.
He oversees the quarterlyEuropean Council meeting, so
meetings of European leaders, andin an ideal world, these two positions,
(12:50):
European Commission president, EuropeanCouncil president, work as a team.
I think that was the case in the pastwith, for example, Jean Claude Juncker,
who was European Commission presidentbefore von der Leyen, and Donald Tusk,
who was European Council president,now Prime Minister of Poland.
(13:11):
Poland.
It was definitely not the casein the last commission.
Von der Leyen and Charles Michel,who had the European Council role,
couldn't stand each otheron a personal level.
And they were at odds on policy,including on China,
where Michel favored a much softer line.
(13:31):
So I think it's early days forvon der Leyen and
Costa, but by all accounts,they get along.
Of course, Costa wasPortuguese Prime Minister before.
Before he knew Funder Leyenwell when he came into the job.
And I think the way they coordinatedmessaging at the summit in Beijing,
(13:53):
that went quite well, I think.
>> Elizabeth Economy (13:56):
Okay, so I remember maybe six months ago, there was a lot of
anticipation about this summit,a sense that there was the opportunity
to kind of give a little bit ofa reset to the EU China relationship.
But maybe starting two months ago,that seemed to be less and less the case.
The summit itself seemed toshrink in terms of its duration.
(14:19):
I think it lost a day.
Correct me if I'm wrong on the front end.
What were the expectations of bothsides coming into this summit?
What did they want?
Did they think thatanything was going to come?
As Costa and
von der Leyen were getting on the planeto go to Beijing what was in their heads.
>> Noah Barkin (14:40):
Yeah well I mean as you mentioned I think if you go back a few
months ago to April there wereexpectations on both sides that
the summit might producesomething concrete if not a trade
truce I think perhaps the beginningsof a sort of a pathway to
(15:00):
to a to a trade truce Headinginto the summit I think China's
key demand was the removal ofthe EU's duties on on Chinese
electric vehicles the EU hada very long list of demands
the removal of China's retaliatorymeasures on brandy dairy and
(15:21):
pork better market accessassurances that Chinese FDI in
Europe would add value wouldcreate jobs assurances that
Chinese overcapacities wouldnot be flooding into Europe and
of course a commitment fromBeijing to prevent the export of
(15:41):
dual use goods to Russia these werethe positions that the two sides were
coming from I think China always likes tosend a message of EU Chinese unity and
I think as in the past the picturesof the leaders together can often be.
More important for China than for Europe.
(16:05):
Europe was very reluctantto go to China and
send images into the world ofEU leaders talking with Xi and
working together withthe Chinese leadership,
but without real deliverables.
(16:27):
So in the end,I think neither side got what it wanted.
I think there were two main reasons forthat.
First, China emerged fromthe trade spat with the US
emboldened to a certain extent.
I think back in April.
They were quite eager to work with Europewhen they were under intense pressure,
(16:50):
intense trade pressure from the U.S.
tariffs, of course,were as high as 145% on the U.S. side.
But after the Geneva meeting,the London meeting, I think they felt they
had stared down the US and emerged intact,if not with the upper hand.
So there was less incentive tomake concessions to Europe.
(17:13):
I think second, andthis is related to the first issue,
was the havoc that was wrecked byChina's rare earth controls in Europe.
Not only in Europe, butthis also had a big impact in Europe.
And this sort of poisoned the well,I think,
in the months leading up to the summit.
(17:33):
And it was another reason why Beijingwas not really in a mood to compromise.
It had Europe andother countries in a bit of a vice.
And Europe was furious aboutthese controls, which,
of course, Europe was to a certain extent,
collateral damage because theywere aimed primarily at the us.
(17:57):
But in their conversations withtheir Chinese counterparts,
it was clear that this wasnot a complete accident.
And China was demanding otherthings from Europe in the run up
to the summit in exchange forloosening the rare earth control.
(18:20):
So that really poisoned the well,and it left both sides.
There was a bit of an escalatorydynamic in the run up to the summit.
In the end, the summit was almostlike a carbon copy of the summit,
the last summit in December 2023,a standoff with no real deliverables.
(18:42):
There was a joint statement on climate,which was fairly empty.
There was a pledge to ramp updialogue on export controls,
code for the rare earth issue.
But I don't think anybody expectsthat to produce anything concrete.
(19:04):
I think most significantly, there wasno indication that the EU and China
are making any progress towards resolvingtheir trade dispute over EV tariffs.
I think that's here to stay.
And the term that sort of came, you know,
will remain in our memories afterthis summit was inflection point.
(19:25):
Fonderlyen said that the relationshipwas at an inflection point,
and I think that heralds a tougher EUline in the months and years ahead.
>> Elizabeth Economy (19:38):
Yeah, she's very good for
coming up with the phrases of the task.
You know, you and I have been at someof the same conferences with, you know,
Americans and Europeans andChinese over the past six months.
And, you know, one of the thingsthat has surprised me, you know,
I have to say, you know, in a positiveway, has been despite the sort of,
(19:59):
you know, challenge thatPresident Trump poses to Europe and
sort of the chaotic natureof policymaking here.
I think.Maybe both of us would agree that
the Chinese saw an opportunity inthat to try to wean Europeans away
from the United States because of that.
But that's not what has happened.
(20:21):
And I'm wondering if you have a sense for
how the Europeans are thinking abouttheir space in between the US And China.
Why, in fact, China hasn't been thatsuccessful in bring the Europeans along
because certainly the Trump administrationhas, you know, not been kind to Europe.
>> Noah Barkin (20:41):
Yeah, yeah, yeah.
I mean, I did.
I did think a few monthsago that Trump had
the potential to push Europe and,and China together.
Back in January,I think it was January 20th,
the day Trump wasreentering the White House.
Also the day that Ursulavon der Leyen appeared in
(21:04):
Davos at the World Economic Forum.
She gave a speech which was a bit ofa rhetorical break from the past.
She had become known as the sortof the main China hawk in Europe.
And she talked about, in that speechabout perhaps boosting trade and
(21:24):
investment ties with Chinaunder certain conditions,
which was a new message becauseshe'd been talking about de.
Risking and reducing trade andinvestment for the past couple years.
So that sort of indicated thatthe Europeans were trying to, I think,
leave the door open to China.
(21:46):
But I think what I just describedin the run up to the summit,
sort of China being unwillingto make any substantive
move towards Europe,we did see some measures.
We saw, for example,
the removal of Chinese sanctions onmembers of the European Parliament.
(22:12):
And we saw, for example,I think the head of Marix,
Miko Huatari,just was in China a few weeks ago.
He was also under sanctions.
So China is signalingthat it is taking some
symbolic steps to reach out to Europe.
(22:35):
But on the issues thatEurope really cares about,
which the trade relationship andChina's support for
Russia, it hasn't moved at all.
And I think often in Europe,maybe in the west, we tend to think,
China has a brilliant opportunityhere to drive a wedge between.
(22:59):
Between the US And Europe andreach out to Europe.
But I'm not sure in Beijing they'rethinking about this in the same way.
I think they think they have a hugeamount of leverage with Europe and
they don't need to make concessions.
And they can sit back and watch Trumpdrive a wedge between Europe and
(23:20):
the US Rather than try to dothat themselves by offering
concessions to Europe.
So that's how I interpret it.
I'm sure you have a view, Liz,but I think China is just not
in the mood to make any concessionsto Europe at the moment.
And I think that wasclear from the summit.
>> Elizabeth Economy (23:39):
Yeah, I think maybe my view goes back to a point that you made
earlier, which is thatEurope has its own agency.
And so in that sense, Europe, as you say,has serious concerns about Chinese
overcapacity and Europe being flooded,as the US has the same concerns,
not only with solar panels andevs and batteries, but.
(24:00):
But looking ahead to legacysemiconductors and new materials and
everything else that's on that madein China 2025 list from back in 2015.
So I think that's one.
And then I think from, you know, from whatI've understood again from the meetings,
you know, that you andI have been in together, you know,
(24:21):
the really that red line is Chinesecontinued support for Russia and
Europeans simply cannot accept,you know, or cannot think about a real,
you know, coming together ofEU China relations when China is so
actively supporting, you know,the main aggressor in Europe.
And Europe has real fears, I think,of, you know, what might come next,
(24:44):
you know, you know, in a sort of if,if Ukraine does not, you know,
stand as a sovereign state after this.
So I think, you know,to me that's really the heart of it,
is just that Europe has itsown issues with China now, and
it's not about simply aligning with theUnited States or with what the US Wants.
(25:04):
And Beijing has always had a hard timeunderstanding or acknowledging sometimes.
I think some, some analysts inChina do understand that Europe
does not simply agree with everythingthat the United States says and
doesn't simply follow the US andit's just convenient for
them to say that Europe is an agent of theUS and it needs its strategic autonomy.
(25:30):
But I think that's really probably,for me, in any case,
that's really the sort of mostsalient point is that Europe,
especially now withthe Trump administration,
has carved out and will continueto carve out its own China policy.
And that's, I think, you know,pretty essential for not only for
(25:50):
China to appreciate, but probably for
those of us in the United Statesto appreciate as well.
So let me just talk and I'll ask youa little bit more about the China,
Russia dynamic andwhy you think that China has held on so
firmly to its support of Russiain the face of both, you know,
(26:11):
EU and US Condemnation as well.
As, you know, there are certainlyanalysts within China that are critical
of Xi Jinping's decision to supportRussia as opposed to align with the US as
you look at the two, meaning Russia andChina, do you think there's
anything that might drive a kindof schism between the two of them?
(26:32):
Or is this, you know, really,you know, the no limits partnership?
>> Noah Barkin (26:38):
Well, I'm not,
I'm not an expert on China'srelationship with Russia, but
I think that more than three years intoRussia's full scale war with Ukraine,
we should stop speculating abouta split between Beijing and Moscow.
It's not Happening.
On the contrary,Beijing is becoming increasingly defiant,
(27:00):
I think, about its support of Russia.
There was reporting fromthe South China Morning Post earlier
this month that Wang Yi,the Chinese Foreign minister,
made very clear during a meetingwith the EU's top diplomat,
Kayakalis, in Brussels in earlyJuly that Beijing wants to keep
(27:23):
the US off balance anddistracted with the war in Ukraine.
>> Elizabeth Economy (27:30):
That was an incredible statement, right?
>> Noah Barkin (27:32):
Incredible statement.
>> Elizabeth Economy (27:33):
That was just, I think, a very atypical moment for
Wang Yi where he really thought.
>> Noah Barkin (27:40):
Yeah. >> Elizabeth Economy
China.
Sorry.
Exactly, and she,
according to the people inBrussels that I've talked to,
expressed some exasperationat the EU China summit
with the EU complaints aboutChina's support for Russia.
(28:03):
China has made very clear that it'sgoing to retaliate against Europe for,
for its sanctioning of two regional banksfor facilitating ban trade with Russia.
So I sense maybe a shift inthe early years of the war.
China was sort of denying, deflecting.
(28:28):
No, we don't support Russia.
We don't like what Putin is doing.
We just want peace.
And that message is shifting a little bit.
Certainly in the private conversations.
I think there is more defiancefrom a European point of view.
(28:49):
I don't think this is headingin a better direction.
Can one come up with scenarios in which,were Putin to move
into NATO territory,how would China react to that?
You know, if,if the US were to ramp up sanctions and
get serious about confronting Russia,which I'm still very
(29:13):
skeptical about despite someof the recent rhetoric from,
from Trump, you know,could that weaken Russia and could that.
I think China doesn't want Russia to fail,but I,
my, my sense is that we shouldnot be counting on some
(29:33):
sort of split between China andRussia anytime soon.
China clearly has a strategicinterest in supporting Russia,
working with Russia anddistracting, I think, Europe and
the US from focusing on China, which isperhaps the bigger long term challenge.
>> Elizabeth Economy (29:55):
Right?
And to that end,what about the sort of larger Indo Pacific
security region and Europe's interest?
You know, I think the Biden administrationcertainly worked hard to take what I think
was nascent interest in the EU insort of Indo Pacific security.
(30:17):
I mean, they'd all long had an interestin the region for economic relations, for
trade and investment, but the security,I think, aspect of it was relatively new.
How is the EU looking atthe Indo Pacific today?
Do you sense that sort of givencontinued Chinese military aggression in
the South China Sea, Taiwan, Japan,
(30:39):
that the EU is becoming sort of moreinterested in becoming more engaged,
or is it sort of like we've gotenough going on now with Ukraine and
Russia, and we can't afford to haveour attention diverted here to
be thinking about enhancing ourrole in Indo Pacific security.
>> Noah Barkin (30:58):
Yeah.
I do think that Europe has a loton its plate at the moment.
At the same time,I think that we have seen over the past
few years a greater acknowledgement that
the Indo Pacific is a vital interest forEurope.
(31:21):
So we've seen.
We've seen Germany last year sendinga frigate through the Taiwan Strait,
the first time in over 20 years.
I think the Dutch didthe same earlier in the year.
So these are reallysymbolic steps of course.
(31:43):
France is the only EU countrythat plays a real security
role in the Indo Pacific becauseof its overseas territories there.
So I think it will remain a priority.
I think one, one thing.
Thing beyond the security realmis that we've seen a ramping
(32:04):
up of engagement in the Indo Pacificat the diplomatic level.
You know, in Germany, for example,
Asia was China for many, many years.
I think Angela Merkel went to Japan two orthree times in her 16 years.
(32:27):
Maybe I'm getting that wrong,but it's a very small number.
Whereas she was in Chinaat least a dozen times.
That has shifted.
And we're seeing more Europeanleaders travel to Japan,
travel to Korea, travel to India,travel to Southeast Asia.
So I think the engagement is increasing.
(32:48):
I am a bit skeptical about whetherEurope can play any sort of major
role beyond a symbolicrole in the Indo Pacific.
I think,I think it should continue to do this.
And we've had debates, I think, at someof the recent conferences we've been at
about this, because the messagecoming from the Trump administration,
(33:11):
at least certain figures, Elbridge Colby,people like that, is very much Europe
should focus on its home front andnot get involved in the Indo Pacific.
I think it's important thatEurope does remain engaged,
even if its security rolein the region is likely
to be certainly a lot morelimited than the United States.
>> Elizabeth Economy (33:34):
Yeah, I think many people in the US in previous
administrations, including in Trump,one, would agree,
despite what Bridge has to say,that having a greater degree
of European security engagementin the Indo Pacific is,
frankly, all upside fromthe perspective of the US And
(33:57):
I think forthe countries in the region as well.
So, Bridge's comment, I think,has been interpreted in many ways.
I think the most generousinterpretation is simply that,
in fact, Europe, for the moment,because it does have a war
right in its home to address,should focus on that for now.
(34:21):
But yes, and sowithout a further explanation from Bridge,
we are left to just try to figureout what he might have meant.
But I can kind of take fromthe response of certain people who
were in the meeting that they were verytaken aback at the time by his remarks.
(34:43):
Let me ask you anotherquestion about the EU.
And obviously youmentioned 27 member states,
and they don't all have the sameapproach to China, right?
How different, you know, is you,you've been sitting in Germany now for
a number of years, andGerman has traditionally been certainly
(35:03):
at the forefront of the economicrelationship and an advocate for a strong,
you know, eu, China relationship.
You mentioned Angela Merkel andher intense, you know, interest and
leadership, really, I think,within the EU on the economic front,
driving for the comprehensive agreementon investment a number of years ago.
(35:26):
How, what do you see as sort of the rangeof views among the member states Today,
are we talking about a fairlynarrow band or are we, you know,
are we 180 degrees apart from,you know, Hungary to a Lithuania?
>> Noah Barkin (35:42):
Yeah, well, I mean, I think you have,
you could call them maybe opportunistsin a country like Hungary.
Increasingly, Spain,I would say, falls into this,
this camp willing to sortof compromise on policies,
whether it's sort of electricvehicle duties or something else,
(36:07):
in order to ensure that Chinesecompanies make investments in Spain.
But my sense is that maybewe play up the role of
a country like Hungary a bit too much.
I think there is a growingconsensus among the big states,
Germany, France, the Netherlands,that China poses a growing
(36:32):
threat both economically andfrom a security perspective.
I think if these countriesare on the same wavelength,
then I am less worried aboutcountries on the sort of
dovish fringe underminingEU policy as a whole.
(36:52):
I think in recent years, andyou touched on this, the biggest problem
child when it comes to EU unity on Chinahas not been Hungary, it's been Germany.
And under Olaf Scholzthe past three years,
we saw Germany moving againstthe European consensus,
(37:13):
whether it was on EV duties,whether it was on 5G policy,
5G policy, whether it was onapproving the state, Costco,
the Chinese shipping giant,taking a stake in the Hamburg port.
But we do have a new government in Germanyand that could produce some changes.
>> Elizabeth Economy (37:37):
Okay, so I always end with a couple of just quick questions.
So what article orbook on China would you most recommend?
>> Noah Barkin (37:49):
Well, I'm reading a lot of fiction lately to stay sane, Liz, but.
So I'm not going to give youa terribly original response here.
But I, I just started Apple in China,which I think is a book that all,
all people thatare interested in China and
the West's relationship withChina should be reading.
(38:13):
I saw in recent days that Apple isshutting its first store in China,
which is an interesting development.
So that's a timely peg, I think,for recommending this book.
>> Elizabeth Economy (38:27):
And I was just Talking to Patrick McGee, the author,
last week.
I'm sure he would apprec.
Appreciate your plug, butI also have he doesn't actually
need it because that->> Noah Barkin: He probably doesn't need
my plug, right?
It's selling through the roof.
So next time I want you to think aboutsome poor author who's written a great
book but isn't getting quite the attentionthat that Apple and China is getting.
(38:51):
Well deserved attention, I have to say.
Okay.
And what do you think we don't knowenough about when it comes to China,
Obviously there are 1,001,you know, China experts, and
there are an equal number ofpeople who pretend to be experts.
But what do you think?
What do you think the average person justdoesn't, or even the expert really doesn't
(39:12):
understand about China that youwould like to know more about?
>> Noah Barkin (39:16):
Well, I think a broader issue, and this will sound familiar
because my colleagues atRhodium Group talk about this.
Dan, for example,Dan Rosen is just the, the, you know,
the, the economic,trustworthy economic data from China.
(39:37):
Now, this is not something that is gonnaexcite the, the layman on the street.
But I, I think, you know,we have seen Chinese
economic data become more and more murky,
and we, we've seen certaindata not being published in.
(40:01):
Anymore and all that.
So I think we,we still have struggle to understand
what is really going onin the Chinese economy.
And that is such a big, a big question,not just for China, but
for the globe,because of China's importance.
(40:22):
So I would say that is something that we,we all need to understand much better.
>> Elizabeth Economy (40:29):
I think that's an excellent point because it also underpins
so much of how we understand China andthe challenge that it poses, right?
It's one thing if China's economy isstruggling, it's another if it's booming.
It's another if it's half and half andjust having a sense for where its economy
is at and what that means forits sort of foreign policy ambitions.
(40:52):
Its ability to realize allof the different strategic
objectives that Xi Jinping has set out,
I think is maybe at the heartof what we need to know better.
Okay, and last question,
what do you think the EU should be doingdifferently in its approach to China?
You've talked about a pretty significantevolution in policy over the past
(41:14):
nine to 10 years, beginning in 2016.
Does the EU have it about right right now,or
is there something more thatyou think it should be doing?
>> Noah Barkin (41:25):
The EU has been moving in the right direction.
I don't think anybody would callthe EU naive about China anymore.
I think largely thanks toUrsula von der Leyen and
the European Commission,we've seen over the past
couple years a real ramping upof economic responses to China,
(41:49):
development of new tools,the use of these tools.
I think the big challengereally going forward is the big
member states sort of assumingleadership on China and
taking some of the burden offof the European Commission.
(42:10):
I think that's been impossible because Ithink Germany was not in the right place.
But my hope is that,as I mentioned before, that Germany,
France, Poland, Poland, the Netherlands,and some Nordic countries,
maybe Italy, can increasinglydrive the agenda a bit more.
(42:33):
Because a lot of whatthe Commission is proposing,
it can't do without the agreementof the member states.
For example, on connected vehicles,the Biden administration introduced rules.
The Trump administration islikely to develop these further.
The Commission can come out withrecommendations on this, but
(42:54):
this is really something that isin the hands of the member states.
So why not have Germany, France anda few other countries come together,
reach a consensus, anddrive a certain approach to this
conditioning of Chinese FDIis another issue.
(43:15):
So I would like to see the memberstates assume more of the burden.
I think the Commission hasdone a very good job, but
it's limited in how farit can push things and
we do have a change of government inGermany, so there is an opportunity here.
Merits has taken a much more, I think,Europe first approach as opposed
(43:38):
to a Germany first approach whenit comes to foreign policy.
So far it's still early days.
He's been in officeless than three months.
But this would be my, my, my big wish for
the coming year because Ithink Europe has a window.
The politics in Europe is very difficult.
You know, we saw the Dutch governmentfall apart just a few months ago.
(44:01):
So there's a window here beforeelections in France, for example, in,
in a couple years.
Time for Europe to really move forward.
And I think it's the big memberstates that need to drive that.
>> Elizabeth Economy (44:13):
A great point and it's great to hear you be so optimistic,
you know, because I know cautiouslyoptimistic, I know that,
that you tend to see a little bit of the,the darker side of things.
So if you're being optimistic, then I takethat as a really positive, positive note.
So let me thank you, Noah, forsharing your expertise with us and
particularly for doing sowhile you are on vacation.
(44:36):
Let me also commend to our viewers and
listeners your Watching China in Europemonthly newsletter in It's a terrific way
to keep up to date on allthe happenings in that relationship.
>> Noah Barkin (44:47):
Thanks for inviting me, Liz.
Great to chat and look forward toseeing you at a China conference soon.
>> Elizabeth Economy (44:54):
If you enjoyed this podcast and want to hear more reasoned
discourse and debate on China, I encourageyou to subscribe to China Considered
via The Hoover Institution YouTube channelor podcast platform of your choice.
Welcome to China Considered, a podcast that brings fresh
insight and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy Hargrove, Senior Fellowand co-Director of the program on the U.S.
china and the World at the HooverInstitution at Stanford University.
Today, we're going to focus on therelationship between the European Union
(00:30):
and China, with a dash ofthe United States and Russia sprinkled in.
July was a big month for the EU.
It celebrated 50 years ofdiplomatic relations with China and
it signed a trade agreementwith the United States,
all while continuing to support Ukrainein its fight against Russian aggression.
So to help us understand how the EU iskeeping its head above water with all
that's going on,going to speak with Noah Barkin,
(00:52):
who is a senior advisor with the RhodiumGroup as well as a visiting senior
fellow with the German Marshall Fund.
He's based in Berlin, but
we're lucky to get him while he'svisiting here in the United States.
Welcome, Noah.
>> Noah Barkin (01:05):
Hi, Liz.
Great to be here.
>> Elizabeth Economy (01:07):
So the big news in EU China relations is the summit that
the two sides had in late July,
celebrating 50 years ofdiplomatic relations.
I want to get your take on what happened,what you think is coming next, but
first let's level set the relationship.
If you look back over the past decade oreven more,
what do you see as the definingmoments in the relationship?
(01:28):
How should we understand the evolutionof the bilateral relationship?
>> Noah Barkin (01:34):
Well, I think looking at it from a European perspective,
I would maybe start withthe takeover by Chinese for
media of German roboticsmaker Kuka in 2016.
The German government tried to stopthis but didn't have the tools to do so.
(01:55):
So I think more thanany other single event,
that was the moment when Europebegan to understand that
deeper economic ties with Chinaposed a substantial risk.
And I think it was also the momentwhen European capitals realized
(02:16):
that they needed new instrumentsto deal with this threat.
Other events in recent years,I think back in 2019,
the European Commissionpublished a document,
Strategic Outlook on China,which labeled China a systemic rival.
(02:38):
That was a big shift, I think,in how Europe thought and described China.
I think Europe had always sort of softpedaled its rhetoric on China and
that was sort of a break from that and
a signal that Europe was going to betalking, calling a spade a spade,
(02:59):
talking a bit more franklyabout the relationship.
The pandemic had a big impact, of course.
I think that triggered a sort of a slidein public opinion in Europe towards China.
And then of course,The China's support for
Russia, the no limitspartnership that Xi and
(03:22):
Putin struck just shortly beforeRussia's full scale invasion of Ukraine.
And China's ongoing support for
Russia has had a huge impacton Europe-China relations.
And I think ever sinceEuropean Commission President Ursula
von der Leyen gave thisspeech back in 2023 where
(03:47):
she talked about de risking asthe primary strategy towards China,
I think we've seen a rampingup on the European side
of economic measures topush back against China.
I think that speech was also significantin that it, it signaled a more robust
(04:10):
European approach to some of the economicchallenges related to China.
>> Elizabeth Economy (04:16):
I remember that speech.
I was at the Commerce Department atthe time and it was such a great framing,
that notion of de risking not decoupling,that of course we adopted it as well.
I think that's become the frame for theUS Let me just ask you a little bit more
about that first event that you mentioned,which was the Chinese investment,
(04:37):
I guess, and really takeover of Kuka,their German robotics firm in 2016.
Was it that they suddenlyrealized the Europeans and
the Germans suddenly realized that Chinawas a much bigger economic competitor than
they had sort of assumed, or was therea national security element to this?
Just what,what was the awakening all about?
(04:57):
Would it have had the same impact,for example,
if it had been a US firm that had come inand you know, bought, bought this out?
>> Noah Barkin (05:05):
Well, I think it was a realization that
China was employing a sortof top down strategy.
Of course, made in China.
2025 was launched a year earlier.
There had been other takeoversthat had caused concerns.
(05:30):
You might remember back inthe Obama administration there was
an attempt to take over a Germansemiconductor firm, Extron,
where the Obama administrationintervened because the Germans
were going to approve that andthat deal was reversed in the end.
(05:52):
But it was the sense that, and
Chinese investment in Europe atthe time was at a peak, 2016, 2017.
I think it had been welcomed formany years.
It was seen as a good thing.
And suddenly there wasa realization they are buying
up strategic assets as partof a top down strategy to
(06:15):
become dominant in a set ofkey industries of the future.
This was a key moment, I think in how theGerman government thought about this and
thought about Chinese investment and,and thought about the risks of
Chinese companies buying upstrategic European assets.
And that triggered the developmentof a number of tools and
(06:40):
it ultimately led to thisstrategic Outlook document that
I mentioned where China waslabeled a systemic rival.
>> Elizabeth Economy (06:50):
Right, that was a big moment.
So you mentioned the Obamaadministration intervention and
I know again duringthe Biden administration.
And I think even duringthe first Trump administration,
there was a lot of effort expended to,quote, let's put it in quotation marks,
educate the Europeans aboutthe nature of the economic and
(07:12):
security challenge that China presented.
To what extent do you think the Europeanrelationship with China has
either mirrored the US Relationship?
Has it trailed behindby a couple of years?
How do you see the two, if you wereto juxtapose one against the other,
how do you see the two of them?
>> Noah Barkin (07:32):
Well, it's an interesting question, Liz,
because I think there is a lot ofconfusion, especially in the U.S.
i think, about how Europeanpolicy towards China has evolved.
I think there is a narrative out therethat Europe only got tough on China
because of the US because of pressurefrom the first Trump administration,
(07:54):
then pressure fromthe Biden administration.
I think you can certainly find evidence.
That US Pressure had had an impacton European policy in certain areas.
I'm thinking of, you know,the 5G debate and
the role of Huawei in 5G networks,obviously on export controls,
(08:17):
the restrictions on sales of chip makingequipment from the Netherlands, asml,
et cetera, to China, or the debateabout outbound investment screening.
These are areas clearly,
these themes were driven by Washington.
(08:38):
But I think we do tend to play downEurope's agency in all of this.
I think the EU has been veryaggressive in developing its own tools
distinct from those in the US to tryto level the playing field with China.
The foreign subsidies regulation, forexample, is, is a quite powerful tool that
(08:59):
I think we'll be hearing about more in,in the, in the coming months and years.
Europe moves slower than the U.S.you know,
27 countries, they need time to,to get on the same page.
It's more wedded, as you know,to tools that conform to WTO rules.
(09:21):
It does not have the ability to decidefrom one day to the next with an executive
order that 100% tariffs onChina are going to be imposed.
So, I mean, I would argue thatEurope has at times been too slow,
but I think there's alsoan argument that policy has
(09:42):
been more coherent thanthat of the US at times.
I think Europe's aim has been toslowly dial up the pressure on,
give Beijing a chanceto change its behavior.
I think the US has probably decided,or at least the Biden administration
(10:03):
decided that that time hadpassed to give China a chance.
But that said, I do think that we aregoing to see the EU take more aggressive
measures over the coming yearbecause I think its industry
faces really an existentialthreat from China.
And I think that's going to becomemore obvious in the months to come.
>> Elizabeth Economy (10:25):
Yeah, actually, I think that's a really important point
about the care in some ways withwhich the European Union tries to
think through its policy toward China andthe tools that it uses.
I really appreciated, for example, the,
the nuance with which they approachedtheir EV tariffs on China.
(10:49):
Now, one could say that they didit in a nuanced way by tracking
all the subsidies from the coal on tothe actual manufacturing of the EVs.
But in the end, you know, they endedup with what, 35 or 40% tariffs,
which probably not enough to keep,you know, a flood of Chinese EVs to coming
(11:11):
to come into the EU as opposed to the USwhere we just slapped on 100 tariff and
you can't find practicallya Chinese EV on US street.
So I don't know which one is better,but I really do like sort of the.
The intellectual seriousness withwhich Europe approaches how it.
It, you know, tries to bring Chinamore in line with international norms.
(11:36):
So let's turn to the summit now.
You had European CouncilPresident Antonio Costa and
European Commission President Ursulavon der Leyen traveled to Beijing,
you know, for this summit.
Before we talk about it, can you explainwhat the difference is in their jobs and
whether or not the two of them are onthe same page when it comes to China?
(11:57):
Not sure.Many people really understand the nature
of the EU and its various bodies.
>> Noah Barkin (12:04):
Yeah, it can get very confusing with all the different
institutions in Brussels.
But I think the easiest wayto understand this is that
the European Commission presidentis really the driver of EU policy.
The Commission proposes new legislation,
it is in control of trade policy,for example.
(12:27):
The European Council president,on the other hand,
Antonio Costa, is in the position now,
is there really to representthe interests of the 27 member states.
He oversees the quarterlyEuropean Council meeting, so
meetings of European leaders, andin an ideal world, these two positions,
(12:50):
European Commission president, EuropeanCouncil president, work as a team.
I think that was the case in the pastwith, for example, Jean Claude Juncker,
who was European Commission presidentbefore von der Leyen, and Donald Tusk,
who was European Council president,now Prime Minister of Poland.
(13:11):
Poland.
It was definitely not the casein the last commission.
Von der Leyen and Charles Michel,who had the European Council role,
couldn't stand each otheron a personal level.
And they were at odds on policy,including on China,
where Michel favored a much softer line.
(13:31):
So I think it's early days forvon der Leyen and
Costa, but by all accounts,they get along.
Of course, Costa wasPortuguese Prime Minister before.
Before he knew Funder Leyenwell when he came into the job.
And I think the way they coordinatedmessaging at the summit in Beijing,
(13:53):
that went quite well, I think.
>> Elizabeth Economy (13:56):
Okay, so I remember maybe six months ago, there was a lot of
anticipation about this summit,a sense that there was the opportunity
to kind of give a little bit ofa reset to the EU China relationship.
But maybe starting two months ago,that seemed to be less and less the case.
The summit itself seemed toshrink in terms of its duration.
(14:19):
I think it lost a day.
Correct me if I'm wrong on the front end.
What were the expectations of bothsides coming into this summit?
What did they want?
Did they think thatanything was going to come?
As Costa and
von der Leyen were getting on the planeto go to Beijing what was in their heads.
>> Noah Barkin (14:40):
Yeah well I mean as you mentioned I think if you go back a few
months ago to April there wereexpectations on both sides that
the summit might producesomething concrete if not a trade
truce I think perhaps the beginningsof a sort of a pathway to
(15:00):
to a to a trade truce Headinginto the summit I think China's
key demand was the removal ofthe EU's duties on on Chinese
electric vehicles the EU hada very long list of demands
the removal of China's retaliatorymeasures on brandy dairy and
(15:21):
pork better market accessassurances that Chinese FDI in
Europe would add value wouldcreate jobs assurances that
Chinese overcapacities wouldnot be flooding into Europe and
of course a commitment fromBeijing to prevent the export of
(15:41):
dual use goods to Russia these werethe positions that the two sides were
coming from I think China always likes tosend a message of EU Chinese unity and
I think as in the past the picturesof the leaders together can often be.
More important for China than for Europe.
(16:05):
Europe was very reluctantto go to China and
send images into the world ofEU leaders talking with Xi and
working together withthe Chinese leadership,
but without real deliverables.
(16:27):
So in the end,I think neither side got what it wanted.
I think there were two main reasons forthat.
First, China emerged fromthe trade spat with the US
emboldened to a certain extent.
I think back in April.
They were quite eager to work with Europewhen they were under intense pressure,
(16:50):
intense trade pressure from the U.S.
tariffs, of course,were as high as 145% on the U.S. side.
But after the Geneva meeting,the London meeting, I think they felt they
had stared down the US and emerged intact,if not with the upper hand.
So there was less incentive tomake concessions to Europe.
(17:13):
I think second, andthis is related to the first issue,
was the havoc that was wrecked byChina's rare earth controls in Europe.
Not only in Europe, butthis also had a big impact in Europe.
And this sort of poisoned the well,I think,
in the months leading up to the summit.
(17:33):
And it was another reason why Beijingwas not really in a mood to compromise.
It had Europe andother countries in a bit of a vice.
And Europe was furious aboutthese controls, which,
of course, Europe was to a certain extent,
collateral damage because theywere aimed primarily at the us.
(17:57):
But in their conversations withtheir Chinese counterparts,
it was clear that this wasnot a complete accident.
And China was demanding otherthings from Europe in the run up
to the summit in exchange forloosening the rare earth control.
(18:20):
So that really poisoned the well,and it left both sides.
There was a bit of an escalatorydynamic in the run up to the summit.
In the end, the summit was almostlike a carbon copy of the summit,
the last summit in December 2023,a standoff with no real deliverables.
(18:42):
There was a joint statement on climate,which was fairly empty.
There was a pledge to ramp updialogue on export controls,
code for the rare earth issue.
But I don't think anybody expectsthat to produce anything concrete.
(19:04):
I think most significantly, there wasno indication that the EU and China
are making any progress towards resolvingtheir trade dispute over EV tariffs.
I think that's here to stay.
And the term that sort of came, you know,
will remain in our memories afterthis summit was inflection point.
(19:25):
Fonderlyen said that the relationshipwas at an inflection point,
and I think that heralds a tougher EUline in the months and years ahead.
>> Elizabeth Economy (19:38):
Yeah, she's very good for
coming up with the phrases of the task.
You know, you and I have been at someof the same conferences with, you know,
Americans and Europeans andChinese over the past six months.
And, you know, one of the thingsthat has surprised me, you know,
I have to say, you know, in a positiveway, has been despite the sort of,
(19:59):
you know, challenge thatPresident Trump poses to Europe and
sort of the chaotic natureof policymaking here.
I think.Maybe both of us would agree that
the Chinese saw an opportunity inthat to try to wean Europeans away
from the United States because of that.
But that's not what has happened.
(20:21):
And I'm wondering if you have a sense for
how the Europeans are thinking abouttheir space in between the US And China.
Why, in fact, China hasn't been thatsuccessful in bring the Europeans along
because certainly the Trump administrationhas, you know, not been kind to Europe.
>> Noah Barkin (20:41):
Yeah, yeah, yeah.
I mean, I did.
I did think a few monthsago that Trump had
the potential to push Europe and,and China together.
Back in January,I think it was January 20th,
the day Trump wasreentering the White House.
Also the day that Ursulavon der Leyen appeared in
(21:04):
Davos at the World Economic Forum.
She gave a speech which was a bit ofa rhetorical break from the past.
She had become known as the sortof the main China hawk in Europe.
And she talked about, in that speechabout perhaps boosting trade and
(21:24):
investment ties with Chinaunder certain conditions,
which was a new message becauseshe'd been talking about de.
Risking and reducing trade andinvestment for the past couple years.
So that sort of indicated thatthe Europeans were trying to, I think,
leave the door open to China.
(21:46):
But I think what I just describedin the run up to the summit,
sort of China being unwillingto make any substantive
move towards Europe,we did see some measures.
We saw, for example,
the removal of Chinese sanctions onmembers of the European Parliament.
(22:12):
And we saw, for example,I think the head of Marix,
Miko Huatari,just was in China a few weeks ago.
He was also under sanctions.
So China is signalingthat it is taking some
symbolic steps to reach out to Europe.
(22:35):
But on the issues thatEurope really cares about,
which the trade relationship andChina's support for
Russia, it hasn't moved at all.
And I think often in Europe,maybe in the west, we tend to think,
China has a brilliant opportunityhere to drive a wedge between.
(22:59):
Between the US And Europe andreach out to Europe.
But I'm not sure in Beijing they'rethinking about this in the same way.
I think they think they have a hugeamount of leverage with Europe and
they don't need to make concessions.
And they can sit back and watch Trumpdrive a wedge between Europe and
(23:20):
the US Rather than try to dothat themselves by offering
concessions to Europe.
So that's how I interpret it.
I'm sure you have a view, Liz,but I think China is just not
in the mood to make any concessionsto Europe at the moment.
And I think that wasclear from the summit.
>> Elizabeth Economy (23:39):
Yeah, I think maybe my view goes back to a point that you made
earlier, which is thatEurope has its own agency.
And so in that sense, Europe, as you say,has serious concerns about Chinese
overcapacity and Europe being flooded,as the US has the same concerns,
not only with solar panels andevs and batteries, but.
(24:00):
But looking ahead to legacysemiconductors and new materials and
everything else that's on that madein China 2025 list from back in 2015.
So I think that's one.
And then I think from, you know, from whatI've understood again from the meetings,
you know, that you andI have been in together, you know,
(24:21):
the really that red line is Chinesecontinued support for Russia and
Europeans simply cannot accept,you know, or cannot think about a real,
you know, coming together ofEU China relations when China is so
actively supporting, you know,the main aggressor in Europe.
And Europe has real fears, I think,of, you know, what might come next,
(24:44):
you know, you know, in a sort of if,if Ukraine does not, you know,
stand as a sovereign state after this.
So I think, you know,to me that's really the heart of it,
is just that Europe has itsown issues with China now, and
it's not about simply aligning with theUnited States or with what the US Wants.
(25:04):
And Beijing has always had a hard timeunderstanding or acknowledging sometimes.
I think some, some analysts inChina do understand that Europe
does not simply agree with everythingthat the United States says and
doesn't simply follow the US andit's just convenient for
them to say that Europe is an agent of theUS and it needs its strategic autonomy.
(25:30):
But I think that's really probably,for me, in any case,
that's really the sort of mostsalient point is that Europe,
especially now withthe Trump administration,
has carved out and will continueto carve out its own China policy.
And that's, I think, you know,pretty essential for not only for
(25:50):
China to appreciate, but probably for
those of us in the United Statesto appreciate as well.
So let me just talk and I'll ask youa little bit more about the China,
Russia dynamic andwhy you think that China has held on so
firmly to its support of Russiain the face of both, you know,
(26:11):
EU and US Condemnation as well.
As, you know, there are certainlyanalysts within China that are critical
of Xi Jinping's decision to supportRussia as opposed to align with the US as
you look at the two, meaning Russia andChina, do you think there's
anything that might drive a kindof schism between the two of them?
(26:32):
Or is this, you know, really,you know, the no limits partnership?
>> Noah Barkin (26:38):
Well, I'm not,
I'm not an expert on China'srelationship with Russia, but
I think that more than three years intoRussia's full scale war with Ukraine,
we should stop speculating abouta split between Beijing and Moscow.
It's not Happening.
On the contrary,Beijing is becoming increasingly defiant,
(27:00):
I think, about its support of Russia.
There was reporting fromthe South China Morning Post earlier
this month that Wang Yi,the Chinese Foreign minister,
made very clear during a meetingwith the EU's top diplomat,
Kayakalis, in Brussels in earlyJuly that Beijing wants to keep
(27:23):
the US off balance anddistracted with the war in Ukraine.
>> Elizabeth Economy (27:30):
That was an incredible statement, right?
>> Noah Barkin (27:32):
Incredible statement.
>> Elizabeth Economy (27:33):
That was just, I think, a very atypical moment for
Wang Yi where he really thought.
>> Noah Barkin (27:40):
Yeah. >> Elizabeth Economy
China.
Sorry.
Exactly, and she,
according to the people inBrussels that I've talked to,
expressed some exasperationat the EU China summit
with the EU complaints aboutChina's support for Russia.
(28:03):
China has made very clear that it'sgoing to retaliate against Europe for,
for its sanctioning of two regional banksfor facilitating ban trade with Russia.
So I sense maybe a shift inthe early years of the war.
China was sort of denying, deflecting.
(28:28):
No, we don't support Russia.
We don't like what Putin is doing.
We just want peace.
And that message is shifting a little bit.
Certainly in the private conversations.
I think there is more defiancefrom a European point of view.
(28:49):
I don't think this is headingin a better direction.
Can one come up with scenarios in which,were Putin to move
into NATO territory,how would China react to that?
You know, if,if the US were to ramp up sanctions and
get serious about confronting Russia,which I'm still very
(29:13):
skeptical about despite someof the recent rhetoric from,
from Trump, you know,could that weaken Russia and could that.
I think China doesn't want Russia to fail,but I,
my, my sense is that we shouldnot be counting on some
(29:33):
sort of split between China andRussia anytime soon.
China clearly has a strategicinterest in supporting Russia,
working with Russia anddistracting, I think, Europe and
the US from focusing on China, which isperhaps the bigger long term challenge.
>> Elizabeth Economy (29:55):
Right?
And to that end,what about the sort of larger Indo Pacific
security region and Europe's interest?
You know, I think the Biden administrationcertainly worked hard to take what I think
was nascent interest in the EU insort of Indo Pacific security.
(30:17):
I mean, they'd all long had an interestin the region for economic relations, for
trade and investment, but the security,I think, aspect of it was relatively new.
How is the EU looking atthe Indo Pacific today?
Do you sense that sort of givencontinued Chinese military aggression in
the South China Sea, Taiwan, Japan,
(30:39):
that the EU is becoming sort of moreinterested in becoming more engaged,
or is it sort of like we've gotenough going on now with Ukraine and
Russia, and we can't afford to haveour attention diverted here to
be thinking about enhancing ourrole in Indo Pacific security.
>> Noah Barkin (30:58):
Yeah.
I do think that Europe has a loton its plate at the moment.
At the same time,I think that we have seen over the past
few years a greater acknowledgement that
the Indo Pacific is a vital interest forEurope.
(31:21):
So we've seen.
We've seen Germany last year sendinga frigate through the Taiwan Strait,
the first time in over 20 years.
I think the Dutch didthe same earlier in the year.
So these are reallysymbolic steps of course.
(31:43):
France is the only EU countrythat plays a real security
role in the Indo Pacific becauseof its overseas territories there.
So I think it will remain a priority.
I think one, one thing.
Thing beyond the security realmis that we've seen a ramping
(32:04):
up of engagement in the Indo Pacificat the diplomatic level.
You know, in Germany, for example,
Asia was China for many, many years.
I think Angela Merkel went to Japan two orthree times in her 16 years.
(32:27):
Maybe I'm getting that wrong,but it's a very small number.
Whereas she was in Chinaat least a dozen times.
That has shifted.
And we're seeing more Europeanleaders travel to Japan,
travel to Korea, travel to India,travel to Southeast Asia.
So I think the engagement is increasing.
(32:48):
I am a bit skeptical about whetherEurope can play any sort of major
role beyond a symbolicrole in the Indo Pacific.
I think,I think it should continue to do this.
And we've had debates, I think, at someof the recent conferences we've been at
about this, because the messagecoming from the Trump administration,
(33:11):
at least certain figures, Elbridge Colby,people like that, is very much Europe
should focus on its home front andnot get involved in the Indo Pacific.
I think it's important thatEurope does remain engaged,
even if its security rolein the region is likely
to be certainly a lot morelimited than the United States.
>> Elizabeth Economy (33:34):
Yeah, I think many people in the US in previous
administrations, including in Trump,one, would agree,
despite what Bridge has to say,that having a greater degree
of European security engagementin the Indo Pacific is,
frankly, all upside fromthe perspective of the US And
(33:57):
I think forthe countries in the region as well.
So, Bridge's comment, I think,has been interpreted in many ways.
I think the most generousinterpretation is simply that,
in fact, Europe, for the moment,because it does have a war
right in its home to address,should focus on that for now.
(34:21):
But yes, and sowithout a further explanation from Bridge,
we are left to just try to figureout what he might have meant.
But I can kind of take fromthe response of certain people who
were in the meeting that they were verytaken aback at the time by his remarks.
(34:43):
Let me ask you anotherquestion about the EU.
And obviously youmentioned 27 member states,
and they don't all have the sameapproach to China, right?
How different, you know, is you,you've been sitting in Germany now for
a number of years, andGerman has traditionally been certainly
(35:03):
at the forefront of the economicrelationship and an advocate for a strong,
you know, eu, China relationship.
You mentioned Angela Merkel andher intense, you know, interest and
leadership, really, I think,within the EU on the economic front,
driving for the comprehensive agreementon investment a number of years ago.
(35:26):
How, what do you see as sort of the rangeof views among the member states Today,
are we talking about a fairlynarrow band or are we, you know,
are we 180 degrees apart from,you know, Hungary to a Lithuania?
>> Noah Barkin (35:42):
Yeah, well, I mean, I think you have,
you could call them maybe opportunistsin a country like Hungary.
Increasingly, Spain,I would say, falls into this,
this camp willing to sortof compromise on policies,
whether it's sort of electricvehicle duties or something else,
(36:07):
in order to ensure that Chinesecompanies make investments in Spain.
But my sense is that maybewe play up the role of
a country like Hungary a bit too much.
I think there is a growingconsensus among the big states,
Germany, France, the Netherlands,that China poses a growing
(36:32):
threat both economically andfrom a security perspective.
I think if these countriesare on the same wavelength,
then I am less worried aboutcountries on the sort of
dovish fringe underminingEU policy as a whole.
(36:52):
I think in recent years, andyou touched on this, the biggest problem
child when it comes to EU unity on Chinahas not been Hungary, it's been Germany.
And under Olaf Scholzthe past three years,
we saw Germany moving againstthe European consensus,
(37:13):
whether it was on EV duties,whether it was on 5G policy,
5G policy, whether it was onapproving the state, Costco,
the Chinese shipping giant,taking a stake in the Hamburg port.
But we do have a new government in Germanyand that could produce some changes.
>> Elizabeth Economy (37:37):
Okay, so I always end with a couple of just quick questions.
So what article orbook on China would you most recommend?
>> Noah Barkin (37:49):
Well, I'm reading a lot of fiction lately to stay sane, Liz, but.
So I'm not going to give youa terribly original response here.
But I, I just started Apple in China,which I think is a book that all,
all people thatare interested in China and
the West's relationship withChina should be reading.
(38:13):
I saw in recent days that Apple isshutting its first store in China,
which is an interesting development.
So that's a timely peg, I think,for recommending this book.
>> Elizabeth Economy (38:27):
And I was just Talking to Patrick McGee, the author,
last week.
I'm sure he would apprec.
Appreciate your plug, butI also have he doesn't actually
need it because that->> Noah Barkin: He probably doesn't need
my plug, right?
It's selling through the roof.
So next time I want you to think aboutsome poor author who's written a great
book but isn't getting quite the attentionthat that Apple and China is getting.
(38:51):
Well deserved attention, I have to say.
Okay.
And what do you think we don't knowenough about when it comes to China,
Obviously there are 1,001,you know, China experts, and
there are an equal number ofpeople who pretend to be experts.
But what do you think?
What do you think the average person justdoesn't, or even the expert really doesn't
(39:12):
understand about China that youwould like to know more about?
>> Noah Barkin (39:16):
Well, I think a broader issue, and this will sound familiar
because my colleagues atRhodium Group talk about this.
Dan, for example,Dan Rosen is just the, the, you know,
the, the economic,trustworthy economic data from China.
(39:37):
Now, this is not something that is gonnaexcite the, the layman on the street.
But I, I think, you know,we have seen Chinese
economic data become more and more murky,
and we, we've seen certaindata not being published in.
(40:01):
Anymore and all that.
So I think we,we still have struggle to understand
what is really going onin the Chinese economy.
And that is such a big, a big question,not just for China, but
for the globe,because of China's importance.
(40:22):
So I would say that is something that we,we all need to understand much better.
>> Elizabeth Economy (40:29):
I think that's an excellent point because it also underpins
so much of how we understand China andthe challenge that it poses, right?
It's one thing if China's economy isstruggling, it's another if it's booming.
It's another if it's half and half andjust having a sense for where its economy
is at and what that means forits sort of foreign policy ambitions.
(40:52):
Its ability to realize allof the different strategic
objectives that Xi Jinping has set out,
I think is maybe at the heartof what we need to know better.
Okay, and last question,
what do you think the EU should be doingdifferently in its approach to China?
You've talked about a pretty significantevolution in policy over the past
(41:14):
nine to 10 years, beginning in 2016.
Does the EU have it about right right now,or
is there something more thatyou think it should be doing?
>> Noah Barkin (41:25):
The EU has been moving in the right direction.
I don't think anybody would callthe EU naive about China anymore.
I think largely thanks toUrsula von der Leyen and
the European Commission,we've seen over the past
couple years a real ramping upof economic responses to China,
(41:49):
development of new tools,the use of these tools.
I think the big challengereally going forward is the big
member states sort of assumingleadership on China and
taking some of the burden offof the European Commission.
(42:10):
I think that's been impossible because Ithink Germany was not in the right place.
But my hope is that,as I mentioned before, that Germany,
France, Poland, Poland, the Netherlands,and some Nordic countries,
maybe Italy, can increasinglydrive the agenda a bit more.
(42:33):
Because a lot of whatthe Commission is proposing,
it can't do without the agreementof the member states.
For example, on connected vehicles,the Biden administration introduced rules.
The Trump administration islikely to develop these further.
The Commission can come out withrecommendations on this, but
(42:54):
this is really something that isin the hands of the member states.
So why not have Germany, France anda few other countries come together,
reach a consensus, anddrive a certain approach to this
conditioning of Chinese FDIis another issue.
(43:15):
So I would like to see the memberstates assume more of the burden.
I think the Commission hasdone a very good job, but
it's limited in how farit can push things and
we do have a change of government inGermany, so there is an opportunity here.
Merits has taken a much more, I think,Europe first approach as opposed
(43:38):
to a Germany first approach whenit comes to foreign policy.
So far it's still early days.
He's been in officeless than three months.
But this would be my, my, my big wish for
the coming year because Ithink Europe has a window.
The politics in Europe is very difficult.
You know, we saw the Dutch governmentfall apart just a few months ago.
(44:01):
So there's a window here beforeelections in France, for example, in,
in a couple years.
Time for Europe to really move forward.
And I think it's the big memberstates that need to drive that.
>> Elizabeth Economy (44:13):
A great point and it's great to hear you be so optimistic,
you know, because I know cautiouslyoptimistic, I know that,
that you tend to see a little bit of the,the darker side of things.
So if you're being optimistic, then I takethat as a really positive, positive note.
So let me thank you, Noah, forsharing your expertise with us and
particularly for doing sowhile you are on vacation.
(44:36):
Let me also commend to our viewers and
listeners your Watching China in Europemonthly newsletter in It's a terrific way
to keep up to date on allthe happenings in that relationship.
>> Noah Barkin (44:47):
Thanks for inviting me, Liz.
Great to chat and look forward toseeing you at a China conference soon.
>> Elizabeth Economy (44:54):
If you enjoyed this podcast and want to hear more reasoned
discourse and debate on China, I encourageyou to subscribe to China Considered
via The Hoover Institution YouTube channelor podcast platform of your choice.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.