(Bloomberg) — Xi Jinping had been on a winning streak of late, successfully rebuffing US attempts to portray China as a threat to the global order. Then an envoy in France instantly revived all those fears.
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China has moved swiftly to extinguish a firestorm in Europe caused by Ambassador Lu Shaye, who questioned the independence of ex-Soviet states during an interview with a local broadcaster.
In a statement Monday night, the Chinese embassy in Paris said that Lu gave “an expression of personal points of view” that shouldn’t be “over-interpreted.” It explicitly reaffirmed respect for the sovereignty of ex-Soviet states, adding that its position is “consistent and clear.”
Still, the damage was done. The remarks effectively echoed Russian leader Vladimir Putin’s view of Ukraine and other countries that once formed the Soviet Union, undermining Xi’s efforts to portray China as a neutral party to help end the war that began in February 2022.
Lithuania’s Foreign Minister Gabrielius Landsbergis cited Lu’s comments in a tweet to explain “why the Baltic states don’t trust China to ‘broker peace in Ukraine.’” Estonia and Latvia — nations that also suffered for decades under the harsh rule of the Soviet Union — summoned Chinese diplomats in their capitals to explain.
“Lu’s remarks and the strong reactions they sparked across Europe are a bit of an own goal,” said Ja Ian Chong, an associate professor of political science at the National University of Singapore.
“The incident is revealing of the tensions in” Chinese foreign policy, said Chong. “They want to present an image of being both open and forceful.”
The incident has added to recent investor concern over geopolitical risks given that Chinese stock traders were already worried about China-US ties. The MSCI China Index lost as much as 2.6% on Tuesday, heading for a sixth day of declines, which would be the longest slide since October.
The market is facing “a raft of negative geopolitical noises,” including Lu’s comments and President Joe Biden’s apparent plans for an executive order restricting American investments in some areas of China’s economy, said Vey-Sern Ling, managing director at Union Bancaire Privee.
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For Xi, Lu’s errant remarks appeared to mark yet another setback as he looks to revamp China’s image on the global stage after three years of isolation due to the outbreak of Covid-19.
In March, shortly after Xi unveiled a vague blueprint for peace in Ukraine and met with Putin in Moscow, his government brokered a deal for Iran and Saudi Arabia to restore diplomatic ties. That lent credibility to Beijing’s role as a potential mediator in conflicts far beyond its shores.
Then Xi hosted the leaders of France and Brazil, both of whom made comments that upset the US. Brazilian President Luiz Inacio Lula da Silva called for closer economic ties with China and a diminished role of the dollar in trade, while French President Emmanuel Macron said that Europe must forge its own path independent of the US.
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Following Lu’s comments, Macron reiterated his solidarity with the countries in question, and the European Union’s top diplomat, Josep Borrell, called the comments “unacceptable.”
The episode in part shows China’s struggle to balance more assertive diplomacy with the need to project soft power, particularly as the nation’s reputation has fallen. A Pew Research Center poll last year found four-fifths of respondents in the US, Japan, South Korea, Australia and Sweden had unfavorable opinions of China.
While China has appeared to recognize the problem, and sought to play nicer of late, outbursts from diplomats still occur fairly regularly. Lu has created controversy in the past, accusing Canada of “white supremacy” during the saga over the detention of a Huawei Technologies Co. executive.
At the same time, the episode is unlikely to hurt China more broadly among the so-called Global South, a broad term referring to developing nations across parts of Asia, Africa, the Middle East and Latin America.
Last year, China kicked off a conversation about BRICS expansion when it was chair of the bloc, part of a wider effort to present an alternative to US leadership. Since then, 19 countries expressed an interest in joining just before the bloc holds an annual summit in South Africa in June, said Anil Sooklal, South Africa’s ambassador to BRICS.
The incident may also blow over quickly in some smaller nations in Europe, said Neil Thomas, a fellow at the Asia Society Policy Institute’s Center for China Analysis.
“Many European leaders…
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