China’s emergence as a major
economic force has fueled its rise as the dominant regional power in
Asia, as well as a global political power. Rightly or wrongly, some
have concluded that China may be even more important as a future
partner and competitor for the United States and the European Union
than either is for the other. Consequently, few nations will ignore
or
neglect China’s rise, or fail to pursue a strategic relationship
that extends well beyond trade and investment.
This is especially true for the
European Union and its “big three” members: Germany, France,
and the UK. Each of these three countries has its own foreign policy
and frequently competes with the others, potentially undercutting EU
cooperation and allowing China to take the “divide and rule” approach
that Russia and the United States are sometimes accused of pursuing
in their relations with the European Union.
In
Embracing the Dragon, Katinka Barysch and her co-authors offer a
brief, but wide-ranging survey of the current state of EU-Chinese relations,
which, they write, “have been, and continue to be, driven by
economics.” They emphasize the importance for the European Union
of moving beyond trade and
investment, “the backbone of EU-China relations,” toward
a comprehensive strategic partnership with Beijing
that will strengthen political ties and promote a closer working relationship
in global politics.
Such a partnership depends on the European Union and China moving
beyond a multitude of “dialogues” to conclude a new “framework
agreement.” That will involve long and arduous
negotiations covering all the most
potentially contentious issues.
A framework agreement, however, might exacerbate the very differences
in values that make it difficult to achieve
a genuine partnership. Although the
authors believe that China and the
European Union have much in common, there are striking differences:
the importance China places on its national sovereignty strongly contrasts
with the European Union’s hybrid supranational model; China remains
a one-party, autocratic state with serious human rights abuses; internationally,
China is reluctant to engage in humanitarian interventions or multilateral
activities that impinge on the internal affairs of other countries;
and China does less than it could to control the proliferation of
military technologies.
Nevertheless, the authors endorse the European Union’s embrace
of China and the Union’s two key objectives: to support “China’s
internal transition
towards market economics, the rule of law and democratic accountability” and “to
help China become a responsible and reliable global player that respects
international rules.” The European Union also hopes to promote
regional integration
in Asia, and Barysch and her co-authors believe “the EU should
wholeheartedly encourage China’s ambitions in this
regard.”
Barysch’s discussion of the impact
of China’s economic growth on the
European Union is interesting, but too brief given the importance that
she
attaches to economics as the driver of the relationship. Unlike the
earlier rise of Japan as an economic powerhouse, China’s development
has been open to foreign direct investment and depends on the exports
that are produced by
foreign companies there. China’s continued success and its political
and social stability are based on maintaining rapid GDP growth and
creating millions of new jobs every year. Thus, China’s stake
in the global economy is already high and will continue to grow. But
if China continues its rapid growth trajectory and integration into
the global market, its success may generate a backlash in the European
Union as it makes inroads into ever more complex industries.
From an American perspective,
numerous tensions already exist in the trade relationship with China,
including the size of the U.S. trade deficit and
the loss of manufacturing jobs, China’s failure to honor its
WTO commitments and its undervalued currency. While this has provoked
considerable debate in the United States about the challenge that China
poses, China has not yet generated the same level of concern in the
European Union.
The authors believe this is because (1) Europeans tend to be less aware
of the impact of China’s undervalued currency; (2) though not
insignificant, the EU trade deficit with China is much lower than the
U.S.-China trade deficit; (3) the Union’s deficit with China
is more than matched by the large
surpluses it runs with other countries (in 2004, the European Union’s
trade
surplus with the United States was £11 billion more than its
trade deficit with China); and (4) Europeans care more about their
national
trade balances than they do about the EU trade balance.
When the more immediate impact of EU enlargement to 25 members is taken
into account, it is not surprising that China does not currently loom
as large for Europe as for the United States. It may, however, be only
a matter of time before more Europeans start questioning whether they
continue to compete with China in the future.
The U.S. approach differs substantially from that of the European Union
and reflects a unique set of political and strategic interests. To
the extent that China’s rise is not accompanied by
domestic and foreign policy measures that defuse tensions, the United
States might, with some justification, see China as potentially upsetting
the geopolitical and military balance. After several years in which
U.S.-China relations have been relatively quiet, the Bush Administration
and Congress began to take a tougher line in 2005.
Two particularly important issues for the United States are the recent
efforts by European governments to
lift the EU arms embargo on China,
imposed in 1989 after the Tiananmen Square crackdown, and Taiwan. Both
issues highlight key differences in the U.S. and European approaches
to China and could, if not resolved, cause serious rifts in the Transatlantic
alliance. At present, there is no high level dialogue between the United
States and the
European Union on China that might promote either common positions
or
a greater understanding of U.S.-EU differences.
The arms embargo is considered an impediment by the French, Germans,
and some other EU members to the
development of a strategic partnership with China indeed Beijing
has
demanded the embargo’s removal as a condition for agreeing to
such a relationship. Barysch suggests a more cynical motivation by
the French and Germans: they “probably hoped to gain big non-military
contracts by promising China their support on this key issue.” The
United States is unyielding in its opposition to ending the EU embargo,
citing China’s unacceptable human rights record and the possible
destabilization
of the East Asian balance of power,
especially with respect to Taiwan.
Notwithstanding U.S. opposition, the European Union appeared ready
to lift the arms embargo during 2005. A hardening of the U.S. position
in early 2005 was evident in bipartisan support in Congress for sanctions
against
European companies doing business with China, and stricter rules on
the transfer of U.S. technology to Europe, if the embargo were lifted.
Barysch argues that Washington
imposed a loyalty test that effectively split the European Union. Such
a test may or may not have been sufficient
to achieve U.S. aims. In March 2005,
Beijing effectively scuttled any prospect of lifting the embargo by
passing a new Taiwan “anti-secession” law stating that
China may use “non-peaceful means and other necessary measures
to protect China’s sovereignty and territorial
integrity.” It appears that the moment for ending the arms embargo
has, at least temporarily, passed.
The authors argue that, “in the long run,” the embargo
should be lifted as
relations are normalized, in a way that ensures that the East Asian
balance of power is not disrupted, that the United States is not “alarmed,” and
that human rights, non-proliferation and other EU objectives are advanced.
If China had set out to drive a wedge between the United States and
the European Union over lifting the arms embargo, its timing on the
Taiwan anti-secession measure could not have been worse.
Nevertheless, the United States and the European Union are still heading
down different paths in their approach to China. If they are unable
to coordinate their China policies, Barysch argues that “the
risk is that China could exploit these Transatlantic differences to
its
advantage and to the mutual detriment of the U.S. and Europe.” The
arms
embargo will probably continue to be a divisive aspect of U.S.-EU relations
as long as Taiwan remains the central issue in U.S.-China relations.
The EU has generally taken a low-key, hands-off approach to the question
of Taiwan, although it called for a “peaceful resolution of the
Taiwan issue” in 2003. In March 2005, it expressed concern over
the anti-secession law.
Unlike the United States, the European Union has no defense agreements
with Taiwan and is not, in principle, committed to defending Taiwan
in the event of
a Chinese attack on the island. Never-theless, Barysch and her co-authors
believe that “in a showdown over
Taiwan, the Europeans might have to sacrifice their relationship with
China in order to stand by their American allies
in a conflict over which they had no
control.”
Unlike the European Union, which is not a Pacific power, China and
the United States both tend to view their
relations with each other through the prism of Taiwan, as well as broader
regional interests. Thus, the stakes are high for the United States
and China, and it is understandable that both would press the European
Union and its member states to support their respective
positions. The authors believe that “the EU cannot and should
not try to rival America’s role in the region.” At the
same time the EU is developing an independent China strategy that differs
from the American strategy. Whether they are complementary may depend
upon a
successful U.S.-EU dialogue on China.
One of the strengths of
Embracing the Dragon is its recognition of
the value of helping China become a successful global partner while
at the same time, admitting that the European Union “risks squandering
its potential unless it starts thinking about China more strategically.” Such
an approach would prioritize objectives and attempt to ensure that
the short-term commercial goals of member states do not undermine the
European Union’s long-term aims. The book is optimistic about
the European Union’s opportunity to effect positive change as
China develops, and is realistic about the need for the European Union
to insist on linkages that provide an
incentive for Chinese cooperation in areas as diverse as human rights,
the
environment, export controls and illegal immigration.
Given China’s size and importance, Europe will almost certainly
try to
pursue a strategy that helps make China’s rise as smooth and
steady as possible. The authors of this book encourage the Europeans
to take more responsibility for, and to think more about, regional
security in Asia. Their advice may be wise in terms of dealing with
China and also for avoiding misunderstandings with the United States.
Neither the European Union nor the United States can afford a Chinese
catastrophe.
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