Xi Bearing Gifts Presents Challenge for Europe

(Bloomberg) --

Xi Jinping arrives in Italy today, where he will liberally sprinkle investment and talk about China’s commitment to globalization. Then he’ll do the same in France. But his visit is about much more than money.

Europe has reached a point where it needs to work out what it wants from Xi, and where China — with the world’s second-biggest economy and growing strategic heft — fits in the global pecking order.

President Donald Trump’s repeated attacks on his allies make it harder for Europe to look to the U.S. as a counterpoint. Even so, the broader question of how Europe navigates between China and the U.S. will remain long after Trump is gone.

As Beijing seeks to expand relations to European companies, governments must manage what’s attached in terms of China’s security interests. Xi, who spoke of his “dear Italian friends” in a paper, listed the sectors China is interested in, and it’s illuminating: telecoms, shipping, aeronautics, aerospace and pharmaceuticals. Europe’s no longer just about ports and roads.

The region largely welcomed China’s investment in infrastructure. Now Europe needs China’s advanced technology and deep pockets. For some nations at least, it is a relationship of uneasy necessity.

Global Headlines

Brexit gamble | Theresa May took her Brexit brinkmanship to another level, pushing the European Union to accept a three-month delay and then lashing out at members of Parliament for refusing to back her divorce deal. The standoff is pushing the U.K. to the edge of crashing out of the bloc and into legal and economic limbo. The outrage among lawmakers indicates the prime minister's strategy to pressure them into ratifying the deal may have already backfired.

• Click here for the top six issues keeping European leaders up at night

Liberal dreams | Still angered by Trump's presidential victory despite losing the popular vote, some liberal Democratic candidates in the 2020 race say the U.S. should jettison the electoral college system that gives state delegates the power to choose the winner. While that and other ideas like expanding the Supreme Court stand little chance of success, the debate highlights the ideological and generational divides within the party.

Weapons ban | New Zealand has banned military-style semi-automatics and assault rifles just days after a terrorist attack on two mosques that killed 50 people. The swift move by Prime Minister Jacinda Ardern stands in sharp contrast with the U.S., where a string of gun massacres has failed to spur political action.

Parting ways | Hungarian Prime Minister Viktor Orban emerged bruised, but not beaten, after Europe's biggest political family froze the membership of his Fidesz party for eroding democratic standards. At home, Orban's pro-government propaganda machine portrayed the suspension as voluntary and a victory over factions that wanted him expelled, rather than humiliation. That gives him the option of either repairing ties or joining forces with like-minded nationalists after May's European Parliament elections.

Isolated kingdom | Crown Prince Mohammed Bin Salman rode a wave of international enthusiasm for his promises of reform in Saudi Arabia. That all changed after October’s murder of columnist Jamal Khashoggi in the Saudi consulate in Istanbul and complaints over human rights violations in the Yemen war. With Saudi rulers more isolated in the U.S. than at any time since the Sept. 11 attacks, Glen Carey charts the kingdom's path from the red carpet to pariah.

What to Watch

-- Special Counsel Robert Mueller is expected to release his report on Russian meddling in the 2016 U.S. presidential elections in the coming days, a document that may answer the question of whether officials in Trump's orbit conspired with Russia to help him defeat Hillary Clinton.

-- Thailand’s junta leader and avid song-writer Prayuth Chan-Ocha is looking to keep his job as prime minister after Sunday's election, the first since a 2014 coup, where he's up against parties backed by former premier Thaksin Shinawatra who've won every contest since 2001.

-- Trump said U.S.-backed forces are set to liberate the village of Baghouz, which would mark the end of a long battle to retake Islamic State's last outpost in eastern Syria, though not the militant group's demise as its fighters in the region threaten a continuing insurgency.

And finally… A former cop in China who created a dating app for gay men called Blued is now helping them to have children using overseas surrogacy services. Geng Le launched Bluedbaby after navigating the surrogacy process to have his son in California. While homosexuality is not illegal in China, offering surrogacy services is a politically complex business. Still, Geng expects the first Bluedbaby birth next month.

--With assistance from Michael Winfrey, Ruth Pollard, Karl Maier and Caroline Alexander.

To contact the editor responsible for this story: Anthony Halpin at thalpin5@bloomberg.net

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