Europe's Role in an Ambiguous Global Future: Remaining a Major Power with Multilateralism
Henry Huiyao Wang's contribution to the Trilogue Salzburg 2024 Background Paper.
From August 26 to 28, Henry Huiyao Wang, President of the Center for China and Globalization (CCG), and Mabel Lu Miao, CCG Secretary-General, participated in the Trilogue Salzburg 2024 in Salzburg, Austria. The event, themed "Europe's Role in an Ambiguous Future – Pioneer, In-Between or Laggard?", was organized by Wolfgang Schüssel, former Austrian Chancellor, and Liz Mohn, Representative of the Bertelsmann Stiftung.
Henry Huiyao Wang contributed an article to the Trilogue Salzburg 2024 Background Paper, titled "Europe's Role in an Ambiguous Global Future: Remaining a Major Power with Multilateralism." In his piece, Wang argues that Europe can sustain its global influence in a multipolar world by embracing strategic multilateralism, fostering cooperation with emerging powers like China, and tackling critical challenges such as energy dependency, geopolitical risks, and internal fragmentation.
Below is the full text of Henry Huiyao Wang's contribution.
Europe’s Role in an Ambiguous Global Future: Remaining a Major Power with Multilateralism
Huiyao Wang
Europe holds a significant position globally with its own unique political, economic and cultural character. Its pursuit of strategic autonomy enables Europe to act as a crucial balancer among major powers, but while Europe has numerous advantages, it also faces several challenges. In the near future, the EU may address some of these challenges by strengthening multilateral ties, including those with China and the Global South, while maintaining a balanced relationship with other powers.
I Historical and Cultural Legacy
Europe’s long history has put it at the fore of the development of human civilization for thousand years. Today, the European Union wields considerable soft power and leadership in global governance through its commitment to democracy and humanitarianism. As a pioneer in the Industrial Revolution, Europe has maintained significant economic influence and its capacity for innovation. Its contributions to global culture and science are immense. Many of its renowned scientists, artists, writers and philosophers lead the way towards to the modernized future.
Geographically, Europe sits on the North-Western edge of the Eastern Hemisphere, surrounded by seas on three sides and connected to Asia in the East. Historically and presently, Europe has always played a pivotal role in the world by its political, cultural and economic strength. It is the origin of the industry revolution and has long maintained a leading position in the global economy. Wielding multilateralism as its core diplomatic value, the EU has been viewed a trustworthy partner to many countries as well as international institutions in the Post-cold War era.
Nonetheless, unlike the United States, which benefits from its vast territory and abundant natural resources, European economy relies heavily on external resources, which renders it relatively vulnerable to geopolitical turbulence. Over half of Germany’s mineral resources are imported, and in 2021, 96 percent of the crude oil consumed in the EU market was imported, with 40 percent coming from Russia. Overlapped with the problems of energy dependency, the radical decarbonization policy – such as the decision to phase out nuclear powers in some of its members – pursued by the EU has worsen its energy shortage.
Unfortunately, Europe’s history includes an integrated market whose formation has been prolonged and gradual. Persistent divisions and differentiation among European nations have led to numerous contemporary challenges, such as the Eurozone crisis highlighting the issues that arise from having a unified currency without a unified fiscal policy, resulting in inefficiencies in collective action. This structural weakness brewed the 2010 Euro debt crisis. Echoed with the energy crisis since the outbreak of the Russia-Ukraine war, the inconsistency of its member countries on industrial policies destabilizes the supply chain in Europe and thus raise doubts to the EU’s future economic prospect.
II Pressing Challenges
Europe faces several pressing challenges. The security crisis, embedded in its geopolitics and economic structures, is a direct repercussion of the Russia-Ukraine war, while the migration crisis and the sovereign debt crisis of the 2010s have undermined the EU’s economic capacity, endangered its industrial prowess, and led to numerous social problems. Europe needs to start by addressing its energy problems and embracing the digital transformation. Although its determination to transition to a green economy is ambitious, Europe must significantly increase its investment to maintain the momentum, and partner with counterparts elsewhere to build up technology knowhow.
It is not an easy job. The rising influence of the Global South, coupled with an increasingly polarized and self-isolated United States, threatens traditional transatlantic relations and challenges Europe’s global leadership. Closer to home, the rise of populism and extremism, fueled by political polarization and a sluggish economy, also poses a serious challenge to the common values composing the founding pillars of the EU.
Multilateralism, emphasized by the European External Action Service (EEAS) as “a central element of the EU’s external policy,” will help the EU expand its global leadership and ultimately provide solutions to its own problems.
Europe’s unique position in the world is marked by both its historical contributions and its long successful participation in global governance. However, it must navigate a complex landscape of geopolitical, economic and domestic challenges to maintain its influence and stability in a world with growing uncertainties. To address its security and economic concerns, Europe needs to evaluate its partnerships with various stakeholders, including but not limited to transatlantic relations. It would be better for the EU reconsider its policy toward China – the second largest economy in the world and a leading power in the Global South – given their long-term partnership in an all-dimension sphere.
III Europe and China: A Feasible Partnership
The official relationship between Europe and China dates back to 1975, when China established diplomatic relations with the European Economic Community. In 1998, China and Europe established a long-term, stable and constructive partnership for the 21st century. Then, in 2003, they established a comprehensive strategic partnership (CSP), and the Chinese government published its first policy paper on the European Union. The partnership was further highlighted in 2013 when the two sides published the “EU-China 2020 Strategic Agenda for Cooperation.”
To date, over 60 mechanisms for consultation and dialogue have been established between the two sides, covering various fields such as politics, economy, trade, culture, science and technology, energy and the environment. The EU and China have been significant trade partners for more than two decades and in 2023 China and the EU were each other’s second-largest trading partners. China was the EU’s third-largest export market and the largest source of imports, while the EU was China’s second-largest export market and second-largest source of imports.
China and Europe have also collaborated in various other fields with fruitful results. Official science and technology cooperation began in 1981, leading to the formation of the EU-China Science and Technology Cooperation Working Group in 1991. In response to climate change, the EU and China established a climate change partnership in 2005, working together to hold ministerial dialogues and release joint statements that strengthened collaborative efforts, including the Paris Climate Agreement. Beginning in 2020, digital cooperation focused on high-level dialogues aimed at enhancing digital collaboration. Energy collaboration between China and Europe spans decades and has resulted in agreements on nuclear energy research, clean energy initiatives and strategic dialogues. At the grassroots level, the EU-China High-Level People-to-People Dialogue, established in 2012, fosters cultural and educational exchanges.
Despite recent challenges, both sides continue to show a willingness to cooperate. From July 2018 to December 2022, President Xi Jinping engaged in a series of meetings and phone conversations with European Union leaders. In April 2023, President Xi met with European Commission President Ursula von der Leyen during her visit to China, and they met again in May 2024 during President Xi’s state visit to France.
The development of China-EU relations demonstrates their mutual interest in areas that may be beneficial to the world. Climate change, a key area of interest for the EU, has been hailed by China in the past decade as it being crucial to the future of humanity. The Paris Agreement would not have been signed had there been no joint endeavor from the EU and China. So would be the WTO, had the two sides not delivered a joint statement to save the paralyzed Appellate Body of the World Trade Organization (WTO) in 2018. The EU has actually aligned with China to defend the WTO since then.
IV Future Collaboration
There are various areas where the two sides can continue to work together, despite the increasing protectionism influenced by changing domestic politics in Europe and the potential return of a more populist US president. The fundamental reason for this cooperative momentum is the reciprocal nature of the EU and China’s economies, markets and global leadership ambitions, along with their determination to practice true multilateralism.
In the future, China and Europe have the potential to collaborate in many areas. As the global landscape evolves from an unipolar to a multipolar world, the international community is undergoing a transformation and current global challenges make it imperative for China, the United States and Europe, as the top three economies, to form some sort of a “G3” mechanism for regular high-level dialogue and coordination to lead the recovery of the world economy and improve the governance of international affairs. With such a platform, these three major players could put issues on the agenda and discuss solutions in areas of common concern and global challenges, thereby effecting real change.
V Addressing Security Concerns
The priority of a G3 would not be to dominate the world, but to prevent imminent global conflicts. The ongoing wars in Ukraine and Palestine have resulted in millions of people being left helpless and homeless. China is willing and capable of playing a significant role in mediating these ongoing conflicts. As a major global power with strong diplomatic ties to both Russia and Ukraine, China can leverage its influence to encourage dialogue and foster a peaceful resolution. Apart from these, China can also help the EU facilitate a possible deal in the Middle East, relieving security concerns on the EU’s Southeastern border.
Concerning the growing risk of the conflicts, China has also strengthened its engagement with relevant parties in recent days. Apart from the six-point consensus jointly issued by China and Brazil in May, China’s leaders hosted a visit from Prime Minister Viktor Orban, whose country took over the six-month rotating presidency of the European Council in July. The meeting was described by Prime Minister Orban as the third leg of his ambitious “peace mission.” The visit by Foreign Minister Dmytro Kuleba to China in July – the first visit of a Ukrainian foreign minister since 2012 – demonstrates China’s ambition to mediate the Russia-Ukraine war by bridging the two sides. The recent meeting of Palestinian factions in Beijing and the Unity Declaration signify that China is committed to regional peace and hopefully bring signs of peace to all actors in the region.
In exchange, Europe could play a pivotal role in recalibrating the complex and often contentious relationship between China and the United States. Europe is uniquely positioned to bridge this gap and foster understanding between Beijing and Washington. By promoting multilateral dialogue and encouraging cooperation on global issues, Europe could help mitigate tensions and buffer the spillovers caused by the confrontation between China and the US. Europe’s balanced approach and commitment to international norms can serve as a model for constructive engagement, encouraging both China and the United States to pursue collaborative solutions to shared challenges. Through diplomatic initiatives and strategic partnerships, Europe could significantly contribute to reducing friction and fostering a more cooperative global environment.
VI Revitalizing Trade and Investment Cooperation
Unfortunately, despite extensive common interests and a solid foundation for cooperation, China-EU relations have rapidly deteriorated over the past two years, reaching an impasse on the Comprehensive Agreement on Investment (CAI). This agreement, hailed as the impetus for a second wave of reform and opening up in China, includes many conditions and benefits not previously enjoyed by the US and establishes a more open and higher-level standard for European companies. To overcome this impasse, China’s National People’s Congress ratified the International Labour Organisation’s 1930 Forced Labour Convention and the 1957 Abolition of Forced Labour Convention in order to comply with the labor standards required by the EU Resuming communication would help negotiations, possibly lift sanctions and ultimately revive the CAI deal to the benefit of both Chinese and European enterprises.
The latest European Parliament election resulted in a significant reshuffle of MEPs. This change opens a window for both sides to potentially lift the mutual sanctions imposed in 2021, as the new parliament is not bound to uphold the previous decisions. The removal of these sanctions could deescalate the mutual political tension and lead to recover the trade and investment cooperation between the two sides amongst the period of economic downturn.
Finally, while bilateral or multilateral investment and trade agreements seem to be on the rise, the WTO remains a central institution for promoting investment and trade facilitation, reducing tariff and non-tariff barriers, and eliminating differential treatment in international trade. It still plays an irreplaceable role in promoting trade liberalization, optimizing global resource allocation, and expanding the production and flow of commodities. WTO reforms would boost the international community’s confidence in the multilateral trading system and multilateralism itself. Europe and China should enhance their coordination in the WTO rather than blaming each other violating WTO rules.
VII Engaging with the Global South in a World Global Order
A G3 should emphasize cooperation with members of the Global South to balance the gap between developing and developed countries. China, as a founding member of BRICS, has engaged heavily with developing countries in commerce and trade through BRICS. This mechanism is an increasingly influential force in the global financial sector and political security. Measured by purchasing power parity, the BRICS countries have already outpaced the G7, accounting for 35.6% of the world's GDP compared to the G7's 30.3%. By 2028, this disparity is projected to grow even more in favor of the BRICS, with estimates showing a ratio of 36.6% to 27.8%. The robust intra-BRICS economic cooperation attracting more “middle power” nations to join. For example, in June, Turkish Foreign Minister Hakan Fidan discussed his country’s pursuit of new opportunities to cooperate with BRICS in a speech at the Center for China and Globalization (CCG), a non-governmental think tank in Beijing.
The rising influence of the Global South is reshaping the world order. Sub-Saharan Africa, traditionally seen as economically underdeveloped, is being transformed after filling a veritable vacuum in infrastructure, green development and digital economy projects. Similarly, as Latin American countries have created solid economic foundations and achieved a high degree of global integration. The EU cannot overlook the significant economic and social benefits of these markets. An established G3 could unleash Sub-Saharan economic potential, including its rich natural and human resources, closing gaps in regional development. A G3 could also assist Latin America in escaping the middle-income trap, given the region’s growing clout in global affairs, especially in the context of the climate crisis.
At the right time, a G3 could also work to achieve some level of coordination on global infrastructure development by coordinating between the Belt and Road Initiative (BRI), the EU’s Global Gateway and the G7’s Partnership on Global Infrastructure and Investment. If investments under these initiatives are uncoordinated and shaped by geopolitical competition, they could lock countries into high-carbon paths for decades to come. Since being launched in 2013, the BRI has become a vector of globalization, growth and investment in many regions. Yet reshaping the BRI into a more multilateral endeavor promoting global governance and development is a necessary step in its next phase of development.
VIII Green Issues and Data Collaboration
Green issues may prove to be one of the most promising fields with the potential to forge consensus and meaningful reform. Specifically, China could work with the EU and the US to create a dedicated UN institution focused on climate change, which is a universal crisis that will continue to affect many aspects of global cooperation. This would augment the leadership of the UN in addressing climate change through the UN Environmental Programme (UNEP) and the UN Framework Convention on Climate Change (UNFCCC). The EU itself, from the perspective of green development, need to be adopt more inclusive trade policy. For instance, it should reconsider the recent tariff imposed on imported electric vehicles (EVs) from China and encourage Chinese acquisitions and investments in the EU market, particularly in the sector of renewable energy. The two sides can strengthen their economic reciprocity while continuing to lead global efforts to combat climate change by exploring the market of renewable energy and EVs in the rest of the world.
Similarly, as the “petroleum” of the 21st century, digitalization empowers the world economy with better allocation of information and optimization of resources. Data flows are key factor to boost market integration in digital age. Yet it creates complexities such as national security, geopolitics and privacy protection that have kept countries from agreeing on how to promote free data flows and enhance data localization. A G3 could take the lead in establishing a new group consisted of digital powers – like the G20, it can be named with D20 or similar – providing countries in need of digital collaboration with a platform to reach a consensus on cross-border data flows. Additionally, establishing a “global data organization” would lead the way in formulating standards for global data security or data regulation, as the world has yet to reach a comprehensive multilateral solution to either issue.
Last but not least, the EU is playing a leading role in regulating artificial intelligence, with China and the US following its example. In June this year, the CCG hosted a seminar at its Beijing headquarters titled “European and Chinese Perspectives on AI Governance,” in collaboration with the German and French Embassies. The seminar is one of the many trials among China and the EU members to highlight the significant potential for collaboration between Europe and China on AI governance. Amid the early stage of global AI regulation, the consensus to advance this agenda is urgent for all stake holders. The longer we wait, the wider we are divided.
IX Conclusion
Europe’s historical legacy, economic strength and strategic geopolitical position will no doubt ensure its continued influence on the global stage. However, addressing its geographical limitations, resource dependencies and internal unity challenges will be crucial for maintaining and enhancing this influence. Ultimately, it has become increasingly clear that strengthening partnerships with emerging powers like China and engaging in multilateral cooperation can help Europe navigate an ambiguous future and reinforce its role as a major global power.