At the G7 summit of industrialized countries in June, the headline deliverable was an agreement to develop a shared approach to China. This was supposed to be operationalized through a new global development program, awkwardly dubbed “Build Back Better World” (B3W), to rival China’s “Belt and Road Initiative” (BRI). 

But reports of Western unity are exaggerated, and the shows of unity strain credibility. There is no evidence that B3W is anything more than a slogan. German Chancellor Angela Merkel’s farewell visit to Washington last month failed to produce any meaningful agreement on it — or even a statement of shared principles on a common China policy. Despite the Biden administration’s rhetorical focus on alliances, European states see a common interest in avoiding having to take sides in “Cold War II.” The chaotic American withdrawal from Afghanistan, which the EU opposed, has only highlighted the rift. As a result, despite their internal disagreements, the European Union’s member states are gradually coalescing around a shared approach. Their emerging technocratic, no-drama playbook prioritizes European “strategic autonomy” and lets Brussels take the lead. 

True, the U.S. and its major European allies agree on several important points about China. They think it is prudent to limit China’s ability to access “strategic infrastructure” such as ports and 5G. (Many EU member states, most recently Denmark, are in the process of passing tough investment screening laws.) They also agree — in principle, at least — on a set of common values and operating principles for international institutions. The G7 readout, for example, described B3W as “a positive alternative” to the BRI “that reflects our values, our standards and our way of doing business.” It pledged to “call on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and… Hong Kong.”

But the real story of the G7 is not one of “the West” coming together on a common China policy. It is a story of the U.S. and Europe coming together around separate, partially overlapping China policies. In diplomatic contexts, it suits both sides to emphasize areas of agreement. But symbolic statements and promises of investment make little difference if they don’t lead to tangible results. 

The best example of this is Italy, which briefly flirted with the BRI under its previous government in 2019. Italy’s decision to sign up was motivated mostly by domestic considerations. The left-wing Five Star party, the dominant partner in the governing coalition, hoped to boost Italian exports to China and entice more Chinese luxury tourists. The nationalist League, and particularly its leader Matteo Salvini, wanted to show that Italy would protect its interests, even if that meant breaking with Europe.

But the promised economic windfall from China never materialized, and Europe has stepped in to fill the gap. Italy will be the biggest beneficiary of Next Generation EU (NGEU), the largest fiscal transfer program in EU history. The country will receive up to €69 billion (roughly 4 percent of GDP) in grants and €120 billion (around 6.7 percent  of GDP) in loans over the next five years. This will dwarf any investment gains Italy might have hoped to get from Beijing: China’s entire stock of foreign direct investment in Italy is worth only €10 billion. 

Now, Italy has become one of the most pro-Europe member states in the union. Prime Minister Mario Draghi, who previously served for a decade as governor of the European Central Bank, is revered for saving the euro during the 2012 banking crisis. Draghi’s foreign policy is not “pro-Western,” as Ludovica Meacci has argued, but pro-Europe. As far as the United States and China are concerned, Draghi has triangulated, signing on in principle to B3W without making any concrete commitments, while keeping Italy’s symbolic affiliation with the BRI.

With Italy on board, Europe’s largest member states are now on the same page on China. Merkel and French President Emmanuel Macron use almost identical language to Draghi when they speak of the China challenge: Beijing is a “competitor” and “partner” — but not, as the Donald Trump and Joe Biden administrations have called it, a “rival.” At the Berlin Global Solutions Summit in May, Draghi said that “it is not a question of whether to work with China, but of how.” 

In the security domain, Europeans simply don’t see China as the same kind of threat that Americans do. This difference in perspective is most clearly seen in NATO statements, which can be read as reflecting compromise language between U.S. and European perspectives. The Alliance’s latest communiqué, released in June, calls Russia a “threat” numerous times and criticizes Russia’s “aggressive” behavior and policy of “strategic intimidation.” China, by contrast, is not labelled a threat, but rather a “systemic challeng[e] to the rules-based international order” that engages in “assertive” behavior. The document also pledges to “maintai[n] a constructive dialogue with China where possible” and “welcome opportunities to engage with China on areas of relevance to the Alliance and on common challenges such as climate change.” It extends no equivalent olive branch to Moscow. 

…[T]he real story of the G7 is not one of “the West” coming together on a common China policy. It is a story of the U.S. and Europe coming together around separate, partially overlapping China policies.

Most of Europe’s interaction with China is in the economic domain. Here, it obviously makes sense to negotiate as a bloc, using low-profile tools like regulations on market access rather than public confrontation. Grzegorz Stec of the Mercator Institute for China Studies has astutely dubbed this, a “technocratic mitigation” strategy. EU member states may disagree about what language to use regarding Chinese island-building in the South China Sea, but they can all agree to let Brussels work its regulatory magic to ensure a level playing field for European companies. 

Europe’s emerging consensus on China seems unlikely to change in upcoming elections. In fact, it is likely to strengthen. When Germans elect Merkel’s replacement in September, they have three main choices: CDU candidate Armin Laschet, who represents continuity with current policy, SPD candidate Olaf Scholz, who is even more dovish and steadfastly opposes “decoupling” with China” or cooperation with the United States on the China challenge, and a Green party that wants a tougher line on Chinese human rights policies but has made few specific promises. Hungary, which has long been China’s closest partner in Europe, is also headed to elections soon. But if the Hungarian opposition takes power and adopts a more hawkish line on China, it will not change the position of Europe’s larger member states. It will simply make it easier for the bloc to speak with a common voice.

The EU is not yet a foreign policy superpower. Decision making in Brussels still operates under unwieldy consensus rules that allow small member states in the south and east to play spoiler. Nevertheless, it is notable that the leaders of Europe’s three largest economies — and Scholz, the frontrunner to be the next German Chancellor — are now using almost identical talking points on China policy. 

This is the first step toward a more coordinated European approach to the U.S.–China relationship. It overlaps with U.S. policy in some respects, including by paying lip service to human rights. Yet it is fundamentally a strategy to advance European interests — particularly commercial interests — by engaging and trading with both sides. American diplomacy therefore needs to tread carefully. The Western coalition is less unified than meets the eye.

---