China-EU Relations

European Union to tackle China’s red tide in the Indo-Pacific

Closer ties with Japan, South Korea, Singapore and Taiwan on the EU agenda

China and the European Union are squaring up for a verbal brawl in the Indo-Pacific region as tension escalates.

Brussels is reportedly ready to pursue a digital partnership with Japan, South Korea and Singapore in a move to combat Beijing’s high-tech dominance.

A closer trade and investment relationship with Taiwan is also cited in a draft policy document, according to Nikkei Asia.

“The draft strategy warns that tensions around contested territories and maritime zones, such as in the South China Sea and the Taiwan Strait, ‘may have a direct impact on European security and prosperity,’” the Japanese media group pointed out.

Sea of strife:

  • Friction between the ruling Communist Party of China and the 27-member states of the EU bloc has increased in the past 18 months.
  • Issues driving a wedge between them include the militarization of the South China Sea and the Taiwan question. 
  • China claims more than 90% of the maritime superhighway, flouting international law.
  • Up to US$3 trillion of trade traverses through the South China Sea.
  • The PLA Air Force and Navy have also stepped up “exercises” around Taiwan this year.
  • The island has become a bastion of democracy and a high-tech economy.
  • Taiwanese public opinion has never favored unification.
  • But Chinese President Xi Jinping has vowed to reunite the island with the “motherland” by force if necessary.  

Stronger ties: A powerful European Parliament committee called for stronger ties between the EU and Taiwan earlier this month. The move could herald a bilateral investment agreement between Brussels and Taipei.

What was said: “[Taiwan is] a key partner and an ally in the Indo-Pacific that contributes to maintaining a rules-based order in the midst of an intensifying rivalry between the great powers in the region,” the European Parliament committee said in a media statement.

Delve deeper: The EU and the United States are on the same page when it comes to Taiwan and problems in the South China Sea. They also realize the risks associated with a high-tech supply chain that stretches back to China.

Special relationship: “The EU Commission must now intensify EU-Taiwan relations and pursue a comprehensive enhanced partnership with Taiwan,” Swedish Democrats MEP Charlie Weimers said in the committee’s statement to the media.

Big Picture: Major democracies in the region, Japan, South Korea and Taiwan, are leading high-tech economies.

Chips war: Semiconductor rivalry is at the frontline of geopolitical tension between China and the EU, as well as the US. Taiwan and South Korea dominate the chip manufacturing landscape. Global semiconductor sales jumped by 6.5% to $439 billion in 2020.

Why it matters: Chips are the building blocks of the modern world, a 21st-century version of oil. Without them, nothing runs in today’s plugged-in society of smartphones, smart cars and smart factories.

Beijing blues: “Some members of the European Parliament are using the Taiwan question to provoke China’s sovereignty and are urging the EU to reduce its reliance on China. But these activities are harming the mutually beneficial China-EU ties and adding uncertainties to the EU’s future,” state-run Global Times reported last week.

China Factor comment: The EU is rapidly becoming concerned about the rise of nationalism in China, stoked by Xi’s Communist Party government. Dealing with democratic partners in the Indo-Pacific makes more sense than relying on the whims of Beijing. The red tide appears to be turning.

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