The growing rapprochement of Spain with China and the tensions it causes in the European Union

The growing closeness of Spain to China and the tensions it causes in the European Union - Author, Katya Adler - Author's Title, Europa Publisher - Publication Date - Reading time: 10 min In the streets of Barcelona, red and gold dragons (probably with sweaty people inside the costumes) danced among enchanted crowds, while Chinese acrobats provoked exclamations of amazement by spinning, throwing, and tossing spherical lanterns into the air, keeping the candle inside them in a vertical position at all times. Shanghai made history in September by becoming the first Asian metropolis invited to La Mercè, the name known for the popular festivals of Barcelona. The city's large-scale street celebrations aim to celebrate centuries-old Catalan traditions. The vice-mayor of Shanghai, Lu Shan, traveled to Barcelona to participate in the inauguration ceremony of La Mercè. The official assured that Chinese and Catalan cultural traditions differ in their form but share a "common spirit". All this could be a reflection of the moment of mutual appreciation that runs through Spain and China. But that feeling of cordiality is far from being shared throughout the EU. The Spanish government president, Pedro Sánchez, has visited the Chinese president Xi Jinping four times in a few years. Since Donald Trump's re-election two years ago, Sánchez has urged the EU as a whole to improve its relations with China. Sánchez's rapprochement with the Beijing government has caused resentment and disapproval among several European partners of Spain, who see China as a strategic rival and a possible geopolitical threat to the EU. In private, they wonder if Madrid's favorable stance towards Chinese companies is allowing Beijing to also become the enemy (economic) within the bloc. Pedro Sánchez is not the only EU leader who deviates from the established path. Global volatility makes other EU countries feel pressured and vulnerable, and they doubt the ability to trust the United States under Trump's presidency. Trump's policy on trade and defense is perceived as unpredictable and, at times, aggressive. Therefore, the EU member states are selecting strategic partners that, in their judgment, fit their national needs, although this may generate rejection or irritation among the other countries. Do these new alliances carry the risk of a permanent rupture of unity in the EU or even NATO? Spain, accused of acting in its own self-interest Germany and France, the largest powers of the EU, have joined forces to adopt a more aggressive stance towards China. They seek to give Brussels the capacity to exclude subsidized Chinese competitors from the EU market in order to address the growing trade imbalances with Beijing, which according to the European Commission have reached 100 billion euros daily (about US$1.125 billion). Other EU countries are concerned about China's close relationship with Russia. Beijing has denied having helped Moscow in its war effort in Ukraine, but defense experts point to China's technological and economic support, which they claim has allowed Russia to maintain its military offensive. That is why, while Spain enthusiastically courted Beijing, it is accused of safeguarding its own interests rather than those of Europe in general. "It is a bit like the chicken and the egg dilemma. Did Spain distance itself from its European allies or did they distance themselves from us?", asks Víctor Cortizo, a lawyer and academic specializing in Sino-Spanish relations. "I think it is more about us. It is Spain. But it is legitimate. 'Realpolitik' exists. If I approach China because it attracts Chinese investment and strengthens my economy, then that is strategically more attractive than supporting allies who are also only concerned with themselves," says Cortizo. Cortizo and I were surrounded by shipping containers while talking at the end of the world's longest freight rail line. It covers more than 13,000 km between Yiwu, in eastern China, and Madrid. It mainly transports car parts and electrical goods to Spain, and gourmet products like serrano ham and red wine back to China. This line is a symbol of the flourishing relations between both countries. "Our government president has decided to prioritize national benefit over relations with the EU," Cortizo told me. "Chinese investment in Spain has doubled in just the last year." Growing Chinese investment According to ICEX, the Spanish government's foreign trade institute, Chinese investments in Spain are increasing considerably, driven in particular by investments in new battery gigafactories and automotive plants. Cortizo believes that Spain could become China's preferred European country to invest in now that Hungary is no longer governed by Viktor Orbán, under whose mandate his country was nicknamed "China's gateway to Europe". "US investment is decreasing and Chinese investment is gaining relevance here," Cortizo told me. The United States remains the largest foreign investor in Spain, but net investment has reduced to around 100 billion euros (about US$1.125 billion), according to the Spanish Ministry of Economy. Spanish society now maintains a much more favorable attitude towards China than towards the United States, its traditional ally. According to a Pew Research Center survey published this summer, 54% of Spaniards stated they have a favorable opinion of China, compared to 30% who had a favorable opinion of the United States. China facilitates trade, Cortizo said, while the United States (with Trump's tariffs and the effects of the war in Iran) has made it enormously difficult. Meanwhile, Spaniards have seen how the US president threatened their head of government with economic sanctions when he did not accede to his demands to increase defense spending to 5% of GDP or allow US bases in Spain to be used in attacks against Iran. That is why many in Spain consider China more reliable than the United States. And when the important Chinese car manufacturer Chery Automobile chose Spain for its first European manufacturing and operations center two years ago, it gave life back to the then-disappeared Spanish brand Ebro. "Chinese companies are investing in car manufacturing in Spain, filling the gaps we had," Cortizo affirms. However, critics are worried that Chinese factories on Spanish soil will weaken the EU's single market. Chery's factory in Barcelona is not the only one. The Chinese battery and stationary energy storage company Hithium plans to invest in Navarre, in northern Spain, and the battery manufacturer CATL is participating in the construction of a lithium iron phosphate battery gigafactory in Zaragoza, 320 kilometers west of Barcelona. Critics fear that these projects are part of Chinese companies' efforts to locate production in the EU to evade tariffs on Chinese electric vehicles. The question of security However, Miguel Otero, a China specialist at the Real Instituto ElCano in Madrid, accuses the European allies of Spain of being condescending and hypocritical. "France, Italy, Germany, all have their own strategic relationship with China," he tells me. "Spain does not go much further. It is simply catching up to them." In fact, he asserts, now that Europe can no longer rely entirely on the United States, Spain's priority is to diversify. It wants to do business not only with China but also with Canada, Brazil, India, and Africa. Spain is not obsessed with China, he clarifies. But there is also the question of security. In his last trip to Beijing in April, President Sánchez met with the founder of the Chinese wind turbine manufacturer Ming Yang, whose plans to open the largest wind turbine manufacturing plant in the UK had just been blocked for national security reasons. This occurred after the uproar caused in the EU after the Spanish Ministry of the Interior awarded the Chinese technology giant Huawei a contract worth 12.3 million euros last year to store and manage confidential telephone wiretaps. Eurodeputates from various political groups of the European Parliament stated that Spain's contract could endanger the EU as a whole. "When a high-risk supplier is introduced... we not only risk a localized data leak, but we also risk poisoning the source of European intelligence exchange," declared Markéta Gregorová, a Czech MEP from the Pirate Party, belonging to the Green group, in February last month. Juan Ignacio Zoido Álvarez, a member of the Popular Party, the main opposition party in Spain, stated that the decision "risks the entire EU". The Spanish Ministry of Defense continues to deny any risk exists, but the former US ambassador to NATO, Julianne Smith, co-founder of the geo-strategic consultancy Clarion Strategies, warns that this episode could seriously erode European cohesion. "While EU countries are looking for ways to protect themselves against what some consider unpredictable and unreliable US, they must be careful not to rush towards alternatives that could weaken the collective position of the EU," she tells me. "Some of these relationships on the rise, like the one Canada maintains with the rapidly expanding EU, could generate real benefits," she added. "But others, like Spain's decision to strengthen its ties with China, could further undermine the EU's ability to speak with a single voice and create greater security vulnerabilities for both Spain and the rest of Europe." Emerging Alliances Spain is not by any means the only country in the EU that has forged controversial alliances. Finland shares a huge land border of 1,300 km with Russia. This has made it feel vulnerable since Russia's large-scale invasion of Ukraine and in 2022 decided to abandon its traditional strategic neutrality and rushed to join NATO. However, there is fear that Washington will not respect the mutual defense clause of the alliance in the event of an attack on a member country. Finland, which no longer trusts that the United States will come to the rescue in times of need, has turned to Israel to acquire advanced defense equipment, including the air defense system known as the David's Hawk and the anti-tank missiles Spike, despite the fact that, like other Europeans, the Finnish government had raised reservations about Israel's activities in the occupied Palestinian territories and the actions of the Israeli army in Gaza. Greece also feels threatened by a much larger and more immediate neighbor. It considers Turkey a "constant and important danger to its national security and sovereignty," Nick Malkoutzis, co-founder of the political analysis website MacroPolis, tells me. In the past, the United States mediated disputes between both countries. Both are members of NATO. But under Donald Trump's presidency, internal sources in NATO claim that the United States is increasingly perceived as absent in political and diplomatic spheres, with Washington's attention focused on other matters. At the end of August, Greece and Israel signed one of the largest defense export agreements in the history of both countries. The "Achilles' Shield" agreement provides Athens with Israeli technology intended to protect Greece against various threats, including drones, aircraft, and missiles. In Greece there is a long tradition of public sympathy for the Palestinian cause, and many have shown skepticism towards the growing rapprochement with Israel, but that has not prevented the major agreement with the Israeli government. Since Israel is a close ally of Washington, Greece expects that "buying Israeli products" will also help maintain good relations with the United States, even in these turbulent times. But it is a delicate balance, because both Greece and Finland wish to be seen as "good Europeans" and contribute to the European community, according to Malkoutzis. According to him, the fact that EU countries are "scattered in all directions" makes it difficult for everyone to agree and speak with a single voice on defense and security, which is the opposite of what Brussels and NATO want.