FRIEDRICH-EBERT-STIFTUNG GLOBAL EUROPE AND GREAT POWER COMPETITION 5 THE CHINA FACTOR As an Indian journalist recently noted:»Once US President-elect Joe Biden's administration has made the relatively easy decisions to re-join the Paris climate agreement, remain in the WHO and attempt to reboot the WTO, it will be confronted with three key foreign-policy issues. In order of importance, they are China, China, and China.« ¹⁴ For the European Union, a»Geopolitical Commission« which can decide on market access based on its own norms and standards in principle has a strong negotiating position towards a China, which is increasingly seen as a competitor and even a»systemic rival«, as stated in the EU's 2019 Strategic Outlook ¹⁵. Chinese assertiveness and European concerns about human rights issues, including Hong Kong and the Uighur detention camps, have only contributed further to a new and more solid consensus within the EU on the need to rebalance relations with China. All these recent developments are pushing Europeans out of their »comfort zone«. In fact, it is to be acknowledged that, initially, the EU succeeded in building a reliable, stable and predictable framework of relations with China – probably more fluent, productive and extensive than what the US has achieved in strictly bilateral terms – structured across a wide and rather unique range of meetings and cooperation arrangements, ranging from the regular EU-China Summits, the Annual Strategic Dialogue, the High Level Economic Dialogue, to over 60 sectoral cooperation mechanisms. Back to the present, where current circumstances such as specific US policies, Brexit, Asian dynamism, China's assertiveness, etc., are driving the EU to carefully re-examine the current framework of EU-China relations, re-confirming what is viable, what has been working and should be kept, and how much should be reconsidered from a new angle. The new US Administration could present a more appealing and balanced offer for renewing transatlantic cooperation on everything from reducing dependency on Chinese trade and investment to setting global norms and standards. From trade to big tech and climate change, there are many important things the US could offer Europe. The mechanism of consultation agreed between Secretary of State Pompeo and High Representative Josep Borrell may serve the purpose, but the roadmap for cooperation is sensitive and difficult to rewrite/overwrite after years of disrupted communication and general uneasiness plaguing the partnership. But even then, it will still be necessary to engage with China, even with the combined strength of the transatlantic partners in full swing. Given the high stakes, forging a convergence of views and principles between the EU and the US would help matters, but both transatlantic parties should brace themselves for a long haul. Despite reassuring conventional wisdom(such as»the West makes the rules and controls the whole game«), the reset with China may take years, probably decades, and the four years of President Trump's term of office have just shown how tough the challenge can be. In the meantime, China is quietly making one move after the other with strategic consistency and rigour. It would not be unreasonable to say that for the last 30 years the West generally underestimated the capacity of the Chinese decision-makers to make the best out of a given situation. And yet, as has happened on many occasions, they never failed to surprise. Beyond embedded features of the Chinese political system, which allow for tighter control of the public administration and economy and facilitate the precise adjustment of their political economy according to needs to a much higher degree than the inertia-laden economies of the EU, Europeans should pay closer and more careful attention to Chinese actions. While some foreign observers quickly dismissed the new Beijing policies as backsliding toward inward-looking self-reliance and defensive withdrawal, the preliminary debates about the next Five-Year economic plan and long-term projection of a»double­circulation« could produce a significant repositioning of China with global consequences. Chinese planners may seek to bring about a new international division of labour, could begin to prepare in economic terms for a selective or a managed decoupling from the world economy or even brace for a period of intense polarisation. They have these options and, if Europe plays its cards badly, it may also add to China's incentives. Since the early 1980s, Chinese policies have reflected pragmatism, flexibility, and strategic inspiration in exploring 1 0