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Europe's China Challenge with Noah Barkin | China Considered | Hoover Institution · China Considered

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>> Elizabeth Economy: Welcome to China Considered, a podcast that brings fresh
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insight and informed discussion to one of the most consequential issues of our time,
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how China is changing and changing the world.
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I'm Liz Economy Hargrove, Senior Fellow and co-Director of the program on the U.S.
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china and the World at the Hoover Institution at Stanford University.
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Today, we're going to focus on the relationship between the European Union
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and China, with a dash of the United States and Russia sprinkled in.
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July was a big month for the EU.
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It celebrated 50 years of diplomatic relations with China and
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it signed a trade agreement with the United States,
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all while continuing to support Ukraine in its fight against Russian aggression.
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So to help us understand how the EU is keeping its head above water with all
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that's going on, going to speak with Noah Barkin,
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who is a senior advisor with the Rhodium Group as well as a visiting senior
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fellow with the German Marshall Fund.
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He's based in Berlin, but
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we're lucky to get him while he's visiting here in the United States.
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Welcome, Noah.
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>> Noah Barkin: Hi, Liz.
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Great to be here.
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>> Elizabeth Economy: So the big news in EU China relations is the summit that
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the two sides had in late July,
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celebrating 50 years of diplomatic relations.
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I want to get your take on what happened, what you think is coming next, but
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first let's level set the relationship.
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If you look back over the past decade or even more,
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what do you see as the defining moments in the relationship?
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How should we understand the evolution of the bilateral relationship?
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>> Noah Barkin: Well, I think looking at it from a European perspective,
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I would maybe start with the takeover by Chinese for
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media of German robotics maker Kuka in 2016.
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The German government tried to stop this but didn't have the tools to do so.
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So I think more than any other single event,
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that was the moment when Europe began to understand that
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deeper economic ties with China posed a substantial risk.
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And I think it was also the moment when European capitals realized
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that they needed new instruments to deal with this threat.
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Other events in recent years, I think back in 2019,
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the European Commission published a document,
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Strategic Outlook on China, which labeled China a systemic rival.
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That was a big shift, I think, in how Europe thought and described China.
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I think Europe had always sort of soft pedaled its rhetoric on China and
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that was sort of a break from that and
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a signal that Europe was going to be talking, calling a spade a spade,
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talking a bit more frankly about the relationship.
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The pandemic had a big impact, of course.
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I think that triggered a sort of a slide in public opinion in Europe towards China.
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And then of course, The China's support for
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Russia, the no limits partnership that Xi and
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Putin struck just shortly before Russia's full scale invasion of Ukraine.
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And China's ongoing support for
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Russia has had a huge impact on Europe-China relations.
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And I think ever since European Commission President Ursula
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von der Leyen gave this speech back in 2023 where
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she talked about de risking as the primary strategy towards China,
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I think we've seen a ramping up on the European side
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of economic measures to push back against China.
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I think that speech was also significant in that it, it signaled a more robust
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European approach to some of the economic challenges related to China.
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>> Elizabeth Economy: I remember that speech.
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I was at the Commerce Department at the time and it was such a great framing,
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that notion of de risking not decoupling, that of course we adopted it as well.
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I think that's become the frame for the US Let me just ask you a little bit more
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about that first event that you mentioned, which was the Chinese investment,
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I guess, and really takeover of Kuka, their German robotics firm in 2016.
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Was it that they suddenly realized the Europeans and
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the Germans suddenly realized that China was a much bigger economic competitor than
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they had sort of assumed, or was there a national security element to this?
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Just what, what was the awakening all about?
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Would it have had the same impact, for example,
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if it had been a US firm that had come in and you know, bought, bought this out?
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>> Noah Barkin: Well, I think it was a realization that
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China was employing a sort of top down strategy.
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Of course, made in China.
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2025 was launched a year earlier.
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There had been other takeovers that had caused concerns.
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You might remember back in the Obama administration there was
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an attempt to take over a German semiconductor firm, Extron,
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where the Obama administration intervened because the Germans
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were going to approve that and that deal was reversed in the end.
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But it was the sense that, and
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Chinese investment in Europe at the time was at a peak, 2016, 2017.
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I think it had been welcomed for many years.
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It was seen as a good thing.
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And suddenly there was a realization they are buying
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up strategic assets as part of a top down strategy to
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become dominant in a set of key industries of the future.
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This was a key moment, I think in how the German government thought about this and
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thought about Chinese investment and, and thought about the risks of
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Chinese companies buying up strategic European assets.
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And that triggered the development of a number of tools and
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it ultimately led to this strategic Outlook document that
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I mentioned where China was labeled a systemic rival.
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>> Elizabeth Economy: Right, that was a big moment.
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So you mentioned the Obama administration intervention and
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I know again during the Biden administration.
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And I think even during the first Trump administration,
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there was a lot of effort expended to, quote, let's put it in quotation marks,
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educate the Europeans about the nature of the economic and
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security challenge that China presented.
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To what extent do you think the European relationship with China has
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either mirrored the US Relationship?
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Has it trailed behind by a couple of years?
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How do you see the two, if you were to juxtapose one against the other,
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how do you see the two of them?
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>> Noah Barkin: Well, it's an interesting question, Liz,
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because I think there is a lot of confusion, especially in the U.S.
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i think, about how European policy towards China has evolved.
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I think there is a narrative out there that Europe only got tough on China
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because of the US because of pressure from the first Trump administration,
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then pressure from the Biden administration.
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I think you can certainly find evidence.
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That US Pressure had had an impact on European policy in certain areas.
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I'm thinking of, you know, the 5G debate and
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the role of Huawei in 5G networks, obviously on export controls,
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the restrictions on sales of chip making equipment from the Netherlands, asml,
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et cetera, to China, or the debate about outbound investment screening.
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These are areas clearly,
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these themes were driven by Washington.
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But I think we do tend to play down Europe's agency in all of this.
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I think the EU has been very aggressive in developing its own tools
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distinct from those in the US to try to level the playing field with China.
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The foreign subsidies regulation, for example, is, is a quite powerful tool that
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I think we'll be hearing about more in, in the, in the coming months and years.
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Europe moves slower than the U.S. you know,
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27 countries, they need time to, to get on the same page.
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It's more wedded, as you know, to tools that conform to WTO rules.
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It does not have the ability to decide from one day to the next with an executive
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order that 100% tariffs on China are going to be imposed.
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So, I mean, I would argue that Europe has at times been too slow,
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but I think there's also an argument that policy has
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been more coherent than that of the US at times.
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I think Europe's aim has been to slowly dial up the pressure on,
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give Beijing a chance to change its behavior.
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I think the US has probably decided, or at least the Biden administration
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decided that that time had passed to give China a chance.
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But that said, I do think that we are going to see the EU take more aggressive
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measures over the coming year because I think its industry
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faces really an existential threat from China.
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And I think that's going to become more obvious in the months to come.
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>> Elizabeth Economy: Yeah, actually, I think that's a really important point
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about the care in some ways with which the European Union tries to
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think through its policy toward China and the tools that it uses.
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I really appreciated, for example, the,
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the nuance with which they approached their EV tariffs on China.
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Now, one could say that they did it in a nuanced way by tracking
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all the subsidies from the coal on to the actual manufacturing of the EVs.
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But in the end, you know, they ended up with what, 35 or 40% tariffs,
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which probably not enough to keep, you know, a flood of Chinese EVs to coming
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to come into the EU as opposed to the US where we just slapped on 100 tariff and
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you can't find practically a Chinese EV on US street.
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So I don't know which one is better, but I really do like sort of the.
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The intellectual seriousness with which Europe approaches how it.
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It, you know, tries to bring China more in line with international norms.
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So let's turn to the summit now.
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You had European Council President Antonio Costa and
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European Commission President Ursula von der Leyen traveled to Beijing,
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you know, for this summit.
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Before we talk about it, can you explain what the difference is in their jobs and
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whether or not the two of them are on the same page when it comes to China?
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Not sure. Many people really understand the nature
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of the EU and its various bodies.
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>> Noah Barkin: Yeah, it can get very confusing with all the different
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institutions in Brussels.
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But I think the easiest way to understand this is that
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the European Commission president is really the driver of EU policy.
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The Commission proposes new legislation,
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it is in control of trade policy, for example.
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The European Council president, on the other hand,
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Antonio Costa, is in the position now,
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is there really to represent the interests of the 27 member states.
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He oversees the quarterly European Council meeting, so
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meetings of European leaders, and in an ideal world, these two positions,
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European Commission president, European Council president, work as a team.
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I think that was the case in the past with, for example, Jean Claude Juncker,
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who was European Commission president before von der Leyen, and Donald Tusk,
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who was European Council president, now Prime Minister of Poland.
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Poland.
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It was definitely not the case in the last commission.
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Von der Leyen and Charles Michel, who had the European Council role,
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couldn't stand each other on a personal level.
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And they were at odds on policy, including on China,
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where Michel favored a much softer line.
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So I think it's early days for von der Leyen and
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Costa, but by all accounts, they get along.
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Of course, Costa was Portuguese Prime Minister before.
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Before he knew Funder Leyen well when he came into the job.
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And I think the way they coordinated messaging at the summit in Beijing,
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that went quite well, I think.
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>> Elizabeth Economy: Okay, so I remember maybe six months ago, there was a lot of
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anticipation about this summit, a sense that there was the opportunity
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to kind of give a little bit of a reset to the EU China relationship.
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But maybe starting two months ago, that seemed to be less and less the case.
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The summit itself seemed to shrink in terms of its duration.
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I think it lost a day.
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Correct me if I'm wrong on the front end.
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What were the expectations of both sides coming into this summit?
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What did they want?
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Did they think that anything was going to come?
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As Costa and
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von der Leyen were getting on the plane to go to Beijing what was in their heads.
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>> Noah Barkin: Yeah well I mean as you mentioned I think if you go back a few
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months ago to April there were expectations on both sides that
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the summit might produce something concrete if not a trade
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truce I think perhaps the beginnings of a sort of a pathway to
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to a to a trade truce Heading into the summit I think China's
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key demand was the removal of the EU's duties on on Chinese
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electric vehicles the EU had a very long list of demands
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the removal of China's retaliatory measures on brandy dairy and
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pork better market access assurances that Chinese FDI in
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Europe would add value would create jobs assurances that
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Chinese overcapacities would not be flooding into Europe and
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of course a commitment from Beijing to prevent the export of
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dual use goods to Russia these were the positions that the two sides were
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coming from I think China always likes to send a message of EU Chinese unity and
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I think as in the past the pictures of the leaders together can often be.
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More important for China than for Europe.
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Europe was very reluctant to go to China and
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send images into the world of EU leaders talking with Xi and
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working together with the Chinese leadership,
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but without real deliverables.
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So in the end, I think neither side got what it wanted.
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I think there were two main reasons for that.
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First, China emerged from the trade spat with the US
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emboldened to a certain extent.
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I think back in April.
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They were quite eager to work with Europe when they were under intense pressure,
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intense trade pressure from the U.S.
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tariffs, of course, were as high as 145% on the U.S. side.
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But after the Geneva meeting, the London meeting, I think they felt they
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had stared down the US and emerged intact, if not with the upper hand.
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So there was less incentive to make concessions to Europe.
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I think second, and this is related to the first issue,
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was the havoc that was wrecked by China's rare earth controls in Europe.
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Not only in Europe, but this also had a big impact in Europe.
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And this sort of poisoned the well, I think,
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in the months leading up to the summit.
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And it was another reason why Beijing was not really in a mood to compromise.
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It had Europe and other countries in a bit of a vice.
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And Europe was furious about these controls, which,
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of course, Europe was to a certain extent,
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collateral damage because they were aimed primarily at the us.
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But in their conversations with their Chinese counterparts,
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it was clear that this was not a complete accident.
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And China was demanding other things from Europe in the run up
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to the summit in exchange for loosening the rare earth control.
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So that really poisoned the well, and it left both sides.
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There was a bit of an escalatory dynamic in the run up to the summit.
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In the end, the summit was almost like a carbon copy of the summit,
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the last summit in December 2023, a standoff with no real deliverables.
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There was a joint statement on climate, which was fairly empty.
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There was a pledge to ramp up dialogue on export controls,
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code for the rare earth issue.
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But I don't think anybody expects that to produce anything concrete.
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I think most significantly, there was no indication that the EU and China
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are making any progress towards resolving their trade dispute over EV tariffs.
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I think that's here to stay.
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And the term that sort of came, you know,
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will remain in our memories after this summit was inflection point.
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Fonderlyen said that the relationship was at an inflection point,
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and I think that heralds a tougher EU line in the months and years ahead.
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>> Elizabeth Economy: Yeah, she's very good for
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coming up with the phrases of the task.
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You know, you and I have been at some of the same conferences with, you know,
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Americans and Europeans and Chinese over the past six months.
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And, you know, one of the things that has surprised me, you know,
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I have to say, you know, in a positive way, has been despite the sort of,
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you know, challenge that President Trump poses to Europe and
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sort of the chaotic nature of policymaking here.
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I think. Maybe both of us would agree that
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the Chinese saw an opportunity in that to try to wean Europeans away
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from the United States because of that.
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But that's not what has happened.
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And I'm wondering if you have a sense for
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how the Europeans are thinking about their space in between the US And China.
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Why, in fact, China hasn't been that successful in bring the Europeans along
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because certainly the Trump administration has, you know, not been kind to Europe.
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>> Noah Barkin: Yeah, yeah, yeah.
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I mean, I did.
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I did think a few months ago that Trump had
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the potential to push Europe and, and China together.
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Back in January, I think it was January 20th,
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the day Trump was reentering the White House.
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Also the day that Ursula von der Leyen appeared in
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Davos at the World Economic Forum.
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She gave a speech which was a bit of a rhetorical break from the past.
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She had become known as the sort of the main China hawk in Europe.
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And she talked about, in that speech about perhaps boosting trade and
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investment ties with China under certain conditions,
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which was a new message because she'd been talking about de.
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Risking and reducing trade and investment for the past couple years.
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So that sort of indicated that the Europeans were trying to, I think,
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leave the door open to China.
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But I think what I just described in the run up to the summit,
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sort of China being unwilling to make any substantive
21:58
move towards Europe, we did see some measures.
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We saw, for example,
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the removal of Chinese sanctions on members of the European Parliament.
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And we saw, for example, I think the head of Marix,
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Miko Huatari, just was in China a few weeks ago.
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He was also under sanctions.
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So China is signaling that it is taking some
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symbolic steps to reach out to Europe.
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But on the issues that Europe really cares about,
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which the trade relationship and China's support for
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Russia, it hasn't moved at all.
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And I think often in Europe, maybe in the west, we tend to think,
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China has a brilliant opportunity here to drive a wedge between.
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Between the US And Europe and reach out to Europe.
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But I'm not sure in Beijing they're thinking about this in the same way.
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I think they think they have a huge amount of leverage with Europe and
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they don't need to make concessions.
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And they can sit back and watch Trump drive a wedge between Europe and
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the US Rather than try to do that themselves by offering
23:24
concessions to Europe.
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So that's how I interpret it.
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I'm sure you have a view, Liz, but I think China is just not
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in the mood to make any concessions to Europe at the moment.
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And I think that was clear from the summit.
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>> Elizabeth Economy: Yeah, I think maybe my view goes back to a point that you made
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earlier, which is that Europe has its own agency.
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And so in that sense, Europe, as you say, has serious concerns about Chinese
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overcapacity and Europe being flooded, as the US has the same concerns,
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not only with solar panels and evs and batteries, but.
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But looking ahead to legacy semiconductors and new materials and
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everything else that's on that made in China 2025 list from back in 2015.
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So I think that's one.
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And then I think from, you know, from what I've understood again from the meetings,
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you know, that you and I have been in together, you know,
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the really that red line is Chinese continued support for Russia and
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Europeans simply cannot accept, you know, or cannot think about a real,
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you know, coming together of EU China relations when China is so
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actively supporting, you know, the main aggressor in Europe.
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And Europe has real fears, I think, of, you know, what might come next,
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you know, you know, in a sort of if, if Ukraine does not, you know,
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stand as a sovereign state after this.
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So I think, you know, to me that's really the heart of it,
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is just that Europe has its own issues with China now, and
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it's not about simply aligning with the United States or with what the US Wants.
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And Beijing has always had a hard time understanding or acknowledging sometimes.
25:10
I think some, some analysts in China do understand that Europe
25:14
does not simply agree with everything that the United States says and
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doesn't simply follow the US and it's just convenient for
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them to say that Europe is an agent of the US and it needs its strategic autonomy.
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But I think that's really probably, for me, in any case,
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that's really the sort of most salient point is that Europe,
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especially now with the Trump administration,
25:41
has carved out and will continue to carve out its own China policy.
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And that's, I think, you know, pretty essential for not only for
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China to appreciate, but probably for
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those of us in the United States to appreciate as well.
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So let me just talk and I'll ask you a little bit more about the China,
26:02
Russia dynamic and why you think that China has held on so
26:07
firmly to its support of Russia in the face of both, you know,
26:11
EU and US Condemnation as well.
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As, you know, there are certainly analysts within China that are critical
26:19
of Xi Jinping's decision to support Russia as opposed to align with the US as
26:24
you look at the two, meaning Russia and China, do you think there's
26:28
anything that might drive a kind of schism between the two of them?
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Or is this, you know, really, you know, the no limits partnership?
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>> Noah Barkin: Well, I'm not,
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I'm not an expert on China's relationship with Russia, but
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I think that more than three years into Russia's full scale war with Ukraine,
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we should stop speculating about a split between Beijing and Moscow.
26:54
It's not Happening.
26:56
On the contrary, Beijing is becoming increasingly defiant,
27:00
I think, about its support of Russia.
27:04
There was reporting from the South China Morning Post earlier
27:09
this month that Wang Yi, the Chinese Foreign minister,
27:14
made very clear during a meeting with the EU's top diplomat,
27:18
Kayakalis, in Brussels in early July that Beijing wants to keep
27:23
the US off balance and distracted with the war in Ukraine.
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>> Elizabeth Economy: That was an incredible statement, right?
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>> Noah Barkin: Incredible statement.
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>> Elizabeth Economy: That was just, I think, a very atypical moment for
27:37
Wang Yi where he really thought.
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>> Noah Barkin: Yeah. >> Elizabeth Economy: True thinking of
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China.
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Sorry.
27:43
>> Noah Barkin: Exactly, and she,
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according to the people in Brussels that I've talked to,
27:51
expressed some exasperation at the EU China summit
27:56
with the EU complaints about China's support for Russia.
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China has made very clear that it's going to retaliate against Europe for,
28:09
for its sanctioning of two regional banks for facilitating ban trade with Russia.
28:17
So I sense maybe a shift in the early years of the war.
28:23
China was sort of denying, deflecting.
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No, we don't support Russia.
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We don't like what Putin is doing.
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We just want peace.
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And that message is shifting a little bit.
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Certainly in the private conversations.
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I think there is more defiance from a European point of view.
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I don't think this is heading in a better direction.
28:51
Can one come up with scenarios in which, were Putin to move
28:57
into NATO territory, how would China react to that?
29:04
You know, if, if the US were to ramp up sanctions and
29:08
get serious about confronting Russia, which I'm still very
29:13
skeptical about despite some of the recent rhetoric from,
29:17
from Trump, you know, could that weaken Russia and could that.
29:23
I think China doesn't want Russia to fail, but I,
29:28
my, my sense is that we should not be counting on some
29:33
sort of split between China and Russia anytime soon.
29:38
China clearly has a strategic interest in supporting Russia,
29:43
working with Russia and distracting, I think, Europe and
29:48
the US from focusing on China, which is perhaps the bigger long term challenge.
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>> Elizabeth Economy: Right?
29:56
And to that end, what about the sort of larger Indo Pacific
30:00
security region and Europe's interest?
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You know, I think the Biden administration certainly worked hard to take what I think
30:11
was nascent interest in the EU in sort of Indo Pacific security.
30:17
I mean, they'd all long had an interest in the region for economic relations, for
30:22
trade and investment, but the security, I think, aspect of it was relatively new.
30:29
How is the EU looking at the Indo Pacific today?
30:31
Do you sense that sort of given continued Chinese military aggression in
30:36
the South China Sea, Taiwan, Japan,
30:39
that the EU is becoming sort of more interested in becoming more engaged,
30:44
or is it sort of like we've got enough going on now with Ukraine and
30:48
Russia, and we can't afford to have our attention diverted here to
30:53
be thinking about enhancing our role in Indo Pacific security.
30:58
>> Noah Barkin: Yeah.
30:59
I do think that Europe has a lot on its plate at the moment.
31:03
At the same time, I think that we have seen over the past
31:10
few years a greater acknowledgement that
31:15
the Indo Pacific is a vital interest for Europe.
31:21
So we've seen.
31:24
We've seen Germany last year sending a frigate through the Taiwan Strait,
31:29
the first time in over 20 years.
31:31
I think the Dutch did the same earlier in the year.
31:38
So these are really symbolic steps of course.
31:43
France is the only EU country that plays a real security
31:48
role in the Indo Pacific because of its overseas territories there.
31:56
So I think it will remain a priority.
31:58
I think one, one thing.
31:59
Thing beyond the security realm is that we've seen a ramping
32:04
up of engagement in the Indo Pacific at the diplomatic level.
32:11
You know, in Germany, for example,
32:15
Asia was China for many, many years.
32:21
I think Angela Merkel went to Japan two or three times in her 16 years.
32:27
Maybe I'm getting that wrong, but it's a very small number.
32:30
Whereas she was in China at least a dozen times.
32:35
That has shifted.
32:36
And we're seeing more European leaders travel to Japan,
32:41
travel to Korea, travel to India, travel to Southeast Asia.
32:46
So I think the engagement is increasing.
32:48
I am a bit skeptical about whether Europe can play any sort of major
32:53
role beyond a symbolic role in the Indo Pacific.
32:57
I think, I think it should continue to do this.
33:02
And we've had debates, I think, at some of the recent conferences we've been at
33:06
about this, because the message coming from the Trump administration,
33:11
at least certain figures, Elbridge Colby, people like that, is very much Europe
33:15
should focus on its home front and not get involved in the Indo Pacific.
33:19
I think it's important that Europe does remain engaged,
33:24
even if its security role in the region is likely
33:28
to be certainly a lot more limited than the United States.
33:34
>> Elizabeth Economy: Yeah, I think many people in the US in previous
33:38
administrations, including in Trump, one, would agree,
33:43
despite what Bridge has to say, that having a greater degree
33:48
of European security engagement in the Indo Pacific is,
33:53
frankly, all upside from the perspective of the US And
33:57
I think for the countries in the region as well.
34:01
So, Bridge's comment, I think, has been interpreted in many ways.
34:06
I think the most generous interpretation is simply that,
34:11
in fact, Europe, for the moment, because it does have a war
34:15
right in its home to address, should focus on that for now.
34:21
But yes, and so without a further explanation from Bridge,
34:25
we are left to just try to figure out what he might have meant.
34:29
But I can kind of take from the response of certain people who
34:35
were in the meeting that they were very taken aback at the time by his remarks.
34:43
Let me ask you another question about the EU.
34:47
And obviously you mentioned 27 member states,
34:50
and they don't all have the same approach to China, right?
34:55
How different, you know, is you, you've been sitting in Germany now for
34:59
a number of years, and German has traditionally been certainly
35:03
at the forefront of the economic relationship and an advocate for a strong,
35:08
you know, eu, China relationship.
35:10
You mentioned Angela Merkel and her intense, you know, interest and
35:15
leadership, really, I think, within the EU on the economic front,
35:19
driving for the comprehensive agreement on investment a number of years ago.
35:26
How, what do you see as sort of the range of views among the member states Today,
35:32
are we talking about a fairly narrow band or are we, you know,
35:36
are we 180 degrees apart from, you know, Hungary to a Lithuania?
35:42
>> Noah Barkin: Yeah, well, I mean, I think you have,
35:46
you could call them maybe opportunists in a country like Hungary.
35:53
Increasingly, Spain, I would say, falls into this,
35:57
this camp willing to sort of compromise on policies,
36:02
whether it's sort of electric vehicle duties or something else,
36:07
in order to ensure that Chinese companies make investments in Spain.
36:14
But my sense is that maybe we play up the role of
36:19
a country like Hungary a bit too much.
36:22
I think there is a growing consensus among the big states,
36:27
Germany, France, the Netherlands, that China poses a growing
36:32
threat both economically and from a security perspective.
36:38
I think if these countries are on the same wavelength,
36:43
then I am less worried about countries on the sort of
36:48
dovish fringe undermining EU policy as a whole.
36:52
I think in recent years, and you touched on this, the biggest problem
36:57
child when it comes to EU unity on China has not been Hungary, it's been Germany.
37:04
And under Olaf Scholz the past three years,
37:08
we saw Germany moving against the European consensus,
37:13
whether it was on EV duties, whether it was on 5G policy,
37:18
5G policy, whether it was on approving the state, Costco,
37:24
the Chinese shipping giant, taking a stake in the Hamburg port.
37:31
But we do have a new government in Germany and that could produce some changes.
37:37
>> Elizabeth Economy: Okay, so I always end with a couple of just quick questions.
37:43
So what article or book on China would you most recommend?
37:49
>> Noah Barkin: Well, I'm reading a lot of fiction lately to stay sane, Liz, but.
37:55
So I'm not going to give you a terribly original response here.
38:00
But I, I just started Apple in China, which I think is a book that all,
38:05
all people that are interested in China and
38:08
the West's relationship with China should be reading.
38:13
I saw in recent days that Apple is shutting its first store in China,
38:18
which is an interesting development.
38:22
So that's a timely peg, I think, for recommending this book.
38:27
>> Elizabeth Economy: And I was just Talking to Patrick McGee, the author,
38:30
last week.
38:32
I'm sure he would apprec.
38:34
Appreciate your plug, but I also have he doesn't actually
38:37
need it because that- >> Noah Barkin: He probably doesn't need
38:39
my plug, right?
38:40
>> Elizabeth Economy: It's selling through the roof.
38:42
So next time I want you to think about some poor author who's written a great
38:46
book but isn't getting quite the attention that that Apple and China is getting.
38:51
Well deserved attention, I have to say.
38:54
Okay.
38:55
And what do you think we don't know enough about when it comes to China,
38:59
Obviously there are 1,001, you know, China experts, and
39:02
there are an equal number of people who pretend to be experts.
39:06
But what do you think?
39:08
What do you think the average person just doesn't, or even the expert really doesn't
39:12
understand about China that you would like to know more about?
39:16
>> Noah Barkin: Well, I think a broader issue, and this will sound familiar
39:20
because my colleagues at Rhodium Group talk about this.
39:24
Dan, for example, Dan Rosen is just the, the, you know,
39:30
the, the economic, trustworthy economic data from China.
39:37
Now, this is not something that is gonna excite the, the layman on the street.
39:42
But I, I think, you know, we have seen Chinese
39:48
economic data become more and more murky,
39:54
and we, we've seen certain data not being published in.
40:01
Anymore and all that.
40:02
So I think we, we still have struggle to understand
40:07
what is really going on in the Chinese economy.
40:12
And that is such a big, a big question, not just for China, but
40:17
for the globe, because of China's importance.
40:22
So I would say that is something that we, we all need to understand much better.
40:29
>> Elizabeth Economy: I think that's an excellent point because it also underpins
40:33
so much of how we understand China and the challenge that it poses, right?
40:37
It's one thing if China's economy is struggling, it's another if it's booming.
40:43
It's another if it's half and half and just having a sense for where its economy
40:47
is at and what that means for its sort of foreign policy ambitions.
40:52
Its ability to realize all of the different strategic
40:56
objectives that Xi Jinping has set out,
40:59
I think is maybe at the heart of what we need to know better.
41:04
Okay, and last question,
41:05
what do you think the EU should be doing differently in its approach to China?
41:10
You've talked about a pretty significant evolution in policy over the past
41:14
nine to 10 years, beginning in 2016.
41:18
Does the EU have it about right right now, or
41:21
is there something more that you think it should be doing?
41:25
>> Noah Barkin: The EU has been moving in the right direction.
41:28
I don't think anybody would call the EU naive about China anymore.
41:34
I think largely thanks to Ursula von der Leyen and
41:38
the European Commission, we've seen over the past
41:43
couple years a real ramping up of economic responses to China,
41:49
development of new tools, the use of these tools.
41:56
I think the big challenge really going forward is the big
42:00
member states sort of assuming leadership on China and
42:05
taking some of the burden off of the European Commission.
42:10
I think that's been impossible because I think Germany was not in the right place.
42:15
But my hope is that, as I mentioned before, that Germany,
42:21
France, Poland, Poland, the Netherlands, and some Nordic countries,
42:27
maybe Italy, can increasingly drive the agenda a bit more.
42:33
Because a lot of what the Commission is proposing,
42:37
it can't do without the agreement of the member states.
42:40
For example, on connected vehicles, the Biden administration introduced rules.
42:45
The Trump administration is likely to develop these further.
42:52
The Commission can come out with recommendations on this, but
42:54
this is really something that is in the hands of the member states.
42:58
So why not have Germany, France and a few other countries come together,
43:04
reach a consensus, and drive a certain approach to this
43:09
conditioning of Chinese FDI is another issue.
43:15
So I would like to see the member states assume more of the burden.
43:20
I think the Commission has done a very good job, but
43:24
it's limited in how far it can push things and
43:28
we do have a change of government in Germany, so there is an opportunity here.
43:34
Merits has taken a much more, I think, Europe first approach as opposed
43:38
to a Germany first approach when it comes to foreign policy.
43:42
So far it's still early days.
43:44
He's been in office less than three months.
43:46
But this would be my, my, my big wish for
43:49
the coming year because I think Europe has a window.
43:53
The politics in Europe is very difficult.
43:56
You know, we saw the Dutch government fall apart just a few months ago.
44:01
So there's a window here before elections in France, for example, in,
44:05
in a couple years.
44:06
Time for Europe to really move forward.
44:09
And I think it's the big member states that need to drive that.
44:13
>> Elizabeth Economy: A great point and it's great to hear you be so optimistic,
44:16
you know, because I know cautiously optimistic, I know that,
44:20
that you tend to see a little bit of the, the darker side of things.
44:24
So if you're being optimistic, then I take that as a really positive, positive note.
44:29
So let me thank you, Noah, for sharing your expertise with us and
44:32
particularly for doing so while you are on vacation.
44:36
Let me also commend to our viewers and
44:38
listeners your Watching China in Europe monthly newsletter in It's a terrific way
44:43
to keep up to date on all the happenings in that relationship.
44:47
>> Noah Barkin: Thanks for inviting me, Liz.
44:49
Great to chat and look forward to seeing you at a China conference soon.
44:54
>> Elizabeth Economy: If you enjoyed this podcast and want to hear more reasoned
44:57
discourse and debate on China, I encourage you to subscribe to China Considered
45:00
via The Hoover Institution YouTube channel or podcast platform of your choice.