How COVID-19 and the war in Ukraine could change EU-Taiwan relations

The COVID-19 pandemic and Russia’s war in Ukraine have changed the way the European Union thinks about the future of its relations with China – with great potential for changes in policy toward Taiwan.

The latest (virtual) EU-China summit on April 1, at which European leaders wanted to focus on the war in Ukraine, was a stunning display of the current situation. There was no dialogue, no new or constructive offers from Beijing on the table. Each side presented its positions with limited resonance on the other side of the screen. A few weeks later, European allies also acknowledged that China’s “stated ambitions and coercive policies” pose a challenge to transatlantic interests and security in NATO’s new strategic concept.

The new “China crisis situation”

Relations between Europe and China have been slowly deteriorating for years due to a variety of reasons, from Beijing’s economic policies — including its market-distorting practices, industrial policies and global investment that drive European competitiveness — to President Xi Jinping’s authoritarian advances in Hong Kong. Kong and gross human rights violations in Xinjiang.

But previously, the Chinese leadership was either neutral or even supportive whenever Europe faced a crisis: With Russia’s 2008 war against Georgia and the annexation of Crimea in 2014, Beijing remained on the sidelines. During the 2008 global financial crisis and the subsequent European sovereign debt crisis, Beijing acted as a stabilizing factor for international markets and even as a booster for turbulent European economies.

This was the European version of the ‘crisis situation in China’. Thus, despite the growing problems in bilateral relations, Beijing’s insistence at home and abroad during the pandemic – from zero COVID to concealing diplomacy – has surprised Europeans.

However, this alone will likely not be enough to instigate a fundamental reassessment of China’s priorities. Despite the Sino-Russian joint declaration on February 4, in the early days of the war in Ukraine, many EU member states assumed that Beijing would play a constructive role and would have an interest in doing everything they could to quickly stop the bloodshed. The idea that the Chinese leadership will put political considerations over economic considerations remains alien to many European policymakers.

After the first few weeks of the war passed and China showed no sign of changing its rhetoric, compounding the narrative that Russia was defending itself against aggressive NATO expansion, and amplifying Moscow’s disinformation in the Global South, it became clear that China was. He will not come to the aid of Europe. Nor will it stop Russian President Vladimir Putin’s aggression, or even stop supporting his regime. Beijing’s diplomatic support and dramatically increased imports are bolstering Putin’s financial ability to continue his fight.

The epidemic and the war in Ukraine put Taiwan on the map of Europe

The European Union is the largest foreign investor in Taiwan. More than 25% of the island’s foreign direct investment came from EU countries in 2020 and 15 out of 27 EU member states have representative offices in Taipei. Bilateral trade volume increased to more than $68 billion in 2021. While this is significantly less than trade with China, the supply chain disruptions caused by the pandemic, as well as the global shortage of semiconductors, have emphasized the need for greater flexibility and the like . Trusted partners.

Europe’s attitude toward Taiwan has changed during the pandemic. Taiwan’s response to COVID-19 has been remarkable not only in its effectiveness, but in its support for Europe, including the delivery of protective equipment. This contrasts starkly with Beijing’s divisive agenda, with its overtly hostile rhetoric that attempts to underscore the inability of democratic governments to deal with the pandemic.

Recognizing Taiwan’s central role in semiconductor supply, along with acknowledgment of rising geopolitical tensions and the militarization of trade, made European governments more interested in developments in the Taiwan Strait. Policymakers began to take China’s ongoing incursions into Taiwan’s air defense and identification zone and massive military gathering more seriously, even before the Russian invasion of Ukraine.

The European Parliament’s October 2021 recommendation to the EU Commission’s High Representative for Foreign Affairs and Security Policy on relations with Taiwan states the following: it not only stated that Taiwan and the EU are like-minded partners who share common values, but also praised Taipei’s efforts during the pandemic as an “example concrete action on Taiwan as a partner, and to demonstrate that it should be treated as such.” Barely a month later, the first European parliamentary delegation visited Taipei.

It wasn’t just Parliament that became more vocal. Commissioner Margrethe Vestager, who is at the fore in managing the challenges posed by China’s market-distorting practices to European industry, said China’s actions and increasingly aggressive behavior in the Taiwan Strait “may have a direct impact on European security and prosperity.”

One EU member state decided to take bolder action. In November last year, Lithuania decided to open a representative office in the name of Taiwan (not Taipei, the usual form used throughout Europe for Taiwanese quasi-embassies). The result was massive repercussions between Vilnius and Beijing that led not only to a freezing of diplomatic relations, but also to a virtual cessation of economic activity between the two countries. It soon involved the entire European Union as Beijing used the full power of its market against all European (and American) companies that had Lithuanian products in their supply chain or produced in the Baltic state for export to China.

EU member states were initially reluctant to support Lithuania, but Beijing’s attempt to force international companies to change their supply chains was seen as an attack on the European single market. This provoked a strong reaction, which included an acceleration of member states’ proposal to create an anti-coercion tool to defend Europe against Beijing’s arming of trade relations. But while Taiwan has pledged to support the Lithuanian economy, the damage to Lithuania as an investment destination has been real. In early 2022, domestic support in Lithuania for the government’s more forward-looking, values-based approach was under intense scrutiny at home. Then Russia invaded Ukraine.

Vilnius’ bold move now appears to be more strategic. Lithuania has always warned other EU members about Russia’s intentions and its stance on China and Taiwan has been clear from the same principled approach, even if it pushes other Europeans out of their comfort zone. The relationship between Ukraine and what might happen in East Asia was immediately mapped out—something Europe has long resisted as a real possibility in its policy planning.

What does this mean for relations between the European Union and Taiwan?

Taiwan is not Ukraine. Europe’s reaction to any potential emergency for Taiwan will depend on the circumstances. A unilateral action by Beijing to change the status quo and military aggression could lead to a strong reaction: The arsenal of economic sanctions currently on offer against Russia could target China, but Beijing is likely to try to make the decision less clear-cut, potentially framing its actions as a response to a provocation or accident.

The trend towards strengthening EU-Taiwan relations below the level of challenge of the “one China” policy encourages Europeans to engage in conflict situation. This would increase the deterrent effect of any transatlantic response and raise the cost to China of violently changing the status quo.

The most active political player is likely to be the European Parliament. Parliament even suggested that the EU should consider “[changing] The name of the European Economic and Trade Office in Taiwan to the “EU office in Taiwan” in order to reflect the broad scope of relations. “

But the European Commission has also reinforced its approach: after the invasion of Ukraine, a regular trade dialogue with Taipei was held in a developed form in early June 2022. Europe is eager to help Taiwan in the semiconductor crisis and wants to attract Taiwan’s leaders. Companies to set up shop within the European Union. Taiwan’s willingness to support the Western sanctions package toward Russia has increased confidence. The EU-Taiwan Bilateral Investment Agreement, proposed by Taiwan, remains a distant option.

Germany is the European country most economically dependent on China. Putting Taiwan on the map in Berlin is the single most important factor in sustainably changing Europe’s standing. The relatively neo-liberal social-democratic-green-green German government is currently working out its new strategy on China, and its attitude towards Taiwan will be one of the most interesting and hotly debated aspects.

It’s unlikely that Berlin was as bold as Vilnius, but it also changed its tone. For the first time, the German government’s coalition treaty became explicit about the need to maintain the status quo in the Taiwan Strait and support Taiwan’s participation in international organizations. A document of this type usually refers only to China as a business opportunity and never mentions Taiwan. Germany could budge off course and put political weight behind Europe’s enhanced engagement. For Taipei, this means that outside of Washington and Brussels, Berlin should be the center of diplomatic attention.

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