Europe’s rocky relations with China are an opportunity for Australia

Missed by many amid Russia’s war on Ukraine, Australia’s federal election and China’s inroads into the Pacific was the European Union’s strategic compass, launched in March after almost two years of development. As Deputy Prime Minister and Defence Minister Richard Marles announces a visit to France, we should understand its importance—and its significance for Australia—and encourage its implementation.

Much happened in the past two years, including Covid-19, a deterioration in EU–China relations and Russia’s invasion of Ukraine. In this context, the strategic compass is a potential game-changer or, in the words of EU High Representative for Foreign Affairs and Security Policy Josep Borrell, a ‘turning point’. It’s the first time the 27 EU members have come together to focus on defence and security rather than just trade. France considers it a significant achievement of its role as chair of the EU Council.

The strategic compass, which the EU Council describes as ‘an ambitious plan of action for strengthening the EU’s security and defence policy by 2030’, launched in a ‘more hostile security environment’. It is aimed not only at empowering the bloc’s strategic autonomy, but also at fostering its cooperation with security partners. It coincides with NATO’s launch of its 2022 strategic concept, which in an unprecedented way refers to China as a challenge.

This shift in Europe comes at a time when Australia is resetting its relations with France following the cancellation of the Attack-class submarine project and with the EU after years of misalignment on climate policy. Australia’s national security and regional stability require both resets to happen, so the government should embrace the compass as an opportunity to proactively encourage the EU’s strategic shift, notwithstanding its focus on Russia.

The EU has for many years approached its relationship with China hoping an engagement strategy that was relatively silent on malicious activity would result in both EU economic prosperity and increased liberalisation in China. The result has been some economic prosperity but more dependence and interference, with greater opportunities for attempted coercion by Beijing.

While the EU’s 2021 Indo-Pacific strategy referred to China as a systemic rival, it also called it a partner. This is true for almost all countries by virtue of China’s trading relationships, but the inconsistency and ambiguity were always a short-term tactic rather than a long-term strategy.

The strategic compass needs to be that long-term security strategy. A lasting problem is that some EU members view the US with cynicism. The clear emphasis of the compass on EU security autonomy is in part born out of an aim to quell limited but loud public discontent about the union being too reliant on the US. Ensuring the US is held accountable for its actions is vital, but EU members’ hesitancy to consistently hold Beijing to the same standards has hurt Australia, because it feeds into regional fears of Beijing’s coercive power and reinforces a false narrative that strategic competition is limited to the US and China.

On the other hand, EU countries collectively have more influence and trust than they may realise in Southeast Asia and the Pacific. Australia should work with the EU to turn this position of trust into a position of positive influence. The strategic compass must be part of this, with Australia able to emphasise the strategy’s focus on strengthening security partnerships with both the EU and individual member states. This is vital for foreign and defence policy, to ensure EU members know that groups like AUKUS and the Quad don’t rule out broader security partnerships.

The EU’s experience with China should be a key lesson for our region, which would benefit from EU members being upfront about the challenges they have faced. The Chinese government has tried to use its economic heft to bully and coerce individual EU members like Lithuania and the union as a whole. By itself, the Baltic country would not have stood a chance, but the EU showed its collective strength and how to counter coercion from a major power. This is something that single member states too often forget.

The response required EU members to be willing to forgo short-term economic gain and impose costs—both reputational and economic—on Beijing, a combination that has in the past often proven to be an insurmountable obstacle for collective action. It stymied China’s attempt to embed itself in Europe through the 17+1 trade grouping and other initiatives—thinking it could rely on those in Europe who thought the easiest way out of economic crisis was through Beijing’s largesse. The 17+1, now effectively 14+1 after Lithuania and, more recently, Estonia and Latvia left, is on the verge of collapsing because of China’s malicious activities, in particular economic coercion and failure to deliver promised results.

While the EU–China relationship shouldn’t have become as entangled as it did, the Lithuania case was the catalyst for refocusing on individual and regional sovereignty. The EU has finally found some momentum to look after its unity and integrity.

Why does this matter to Australia? Apart from the principle of supporting all partners subject to coercion, the similarities with the Pacific are clear—China is picking off those small nations keen on quick financial support and making inroads through what it sees as weak links.

Hoping, or even expecting, a Lithuania-style own goal from Beijing in the Pacific is not a strategy. Australia now has a chance to become the leading partner for the EU in the region, especially with its renewed focus on climate policy that matches the Pacific’s top priority, as well as the EU’s. Combine that with Australia’s efforts to reset with France and expect to see a Pacific program as part of reinvigorated relations.

Active Australia–EU collaboration, along with partners such as the US and Japan, can ensure we are not just relying on China’s own goals but scoring plenty of our own.