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European Affairs
COVER STORY: EU-China Relations
EU's Links with China Pose New Threat to Transatlantic Relations
By Frank Umbach
As the European Union seeks to play a greater economic and political role in world affairs, it is paying particular attention to developing its strategic relations with China, independently from its links with the United States. Although both Europeans and Americans share many common objectives in coping with China's growing power, in some important areas their interests differ, and there has as yet been no serious attempt to coordinate EU and U.S. approaches toward Beijing.
At a time when the two sides of the Atlantic are still seeking to overcome the consequences of serious political rifts over Iraq, there is a growing risk that differing strategies toward China will create new conflicts in the Transatlantic relationship.
Contrary to many of its official declarations and those of its member states, the European Union's attempts to develop a strategic approach toward China lag far behind those of the United States, and have so far mainly been in the fields of trade and economics. The European Union is manifestly unable to bring the same military and diplomatic weight to bear in its relations with Beijing as the United States.
Nevertheless, partly as a result of its enlargement in May 2004 and the higher value of the euro against the dollar, the European Union may for the first time become China's largest trading partnerin 2005. The EU trade deficit with China in 2003 was less than half that of the United States. These growing economic ties and interdependency will have strategic consequences for the political relationship between the European Union and China. As a result, Europe and the United States will in future have to address more potentially divisive transnational and regional issues beyond Europe's borders, including Europe's relations with Asia and China.
While China is still hoping for the kind of “multipolar world” also frequently advocated by France, the Europeans are implementing step by step their Common Foreign and Security Policy (CFSP) as well as their European Security and Defense Policy (ESDP). Both policies are intended to give the European Union a stronger voice of its own on the world stage. As the European Security Strategy released in December 2003 indicates, the European Union is slowly defining its first global security concept, which will identify Europe's security interests worldwide, including in Asia, for the years to come.
Whether or not the United States welcomes these strategic trends, and a stronger EU political role in Asia (which seems disputed in the United States), Washington will hardly be able to prevent the emergence of stronger economic and political ties between Europe and Asia. As a union of 25 states with more than 450 million people, producing a quarter of the world's economic output, and with a wide spectrum of international policy instruments at its disposal, the European Union is inevitably becoming a global player.
These strategic trends, however, are complicated by the fact that the European Union is not only becoming generally more united, but also sometimes more fractured ˇ a phenomenon that may hamper its goal of stronger security integration. Despite its new Security Strategy, for instance, the European Union's main member states (Britain, France and Germany) still define their China policies largely in the light of their own trade and economic interests. Consequently, they often overlook the European Union's long-term security interests in the Asia-Pacific region, as outlined in numerous EU and national foreign policy documents on China.
Against this background, the French and German proposal to lift the 15-yearold EU arms embargo on Beijing, imposed after the 1989 Tiananmen Square massacre, has provoked harsh criticism in the United States, which maintains a ban on military sales to Beijing. Washington disagrees with the European Union about the severity of human rights violations in China and is particularly concerned that China may accelerate its impressive military modernization over the last ten years with European technological support. Such a development, according to U.S. officials, could undermine stability in the Asia-Pacific region in general and in the Taiwan Strait in particular.
As a result, Washington is now becoming more interested in the European Union's China policies, which hitherto it has tended to overlook, if not dismiss as irrelevant. So far, however, very few joint Transatlantic study groups have analyzed the differences and commonalities of EU and U.S. China policies or tried to enhance understanding of American and European views on China's future regional and international role. If both sides continue to neglect the differences in their China strategies and interests, a serious new Transatlantic conflict may be only a matter of time. In both Europe and the United States, arrogance and a tendency to adopt unilateral strategies are sowing the seeds of future discord.
These strategic trends also reflect the increasing “globalization of security policies” in Europe and China, as well as in the United States. Despite many positive developments in its strategy, however, the European Union is still having difficulty finding the right balance between its economic and security interests in its China policy.
The European Union's efforts to forge a coherent, long-term approach to China date from the publication of its guidelines for a “Comprehensive Partnership with China” in June 1998. The aim was both to develop a balanced China policy that reflected China's growing international economic and political weight and to further the development of the European Union's fledgling CFSP.
Although China has not always been an easy partner, both sides have significantly increased their bilateral relationship during the last decade. Since 2000, EU aid programs to Beijing have included help with China's accession to the World Trade Organization, the fight against illegal migration and trafficking in human beings, social security reform, telecommunications and information technology, the environment, energy and human resource development.
In contrast to the European Commission's first China strategy paper of July 1995, in which bilateral economic interests still dominated the agenda, the 1998 guidelines sought to develop a political dialogue with China at a regional and global level. According to a further Asia Strategy paper of September 2001, Europe intends to engage more actively in the Asia-Pacific region, “commensurate with the growing global weight of an enlarged European Union.”
As the spread of international terrorism has irrefutably shown, the globalization of economics and security has drastically shortened the geographical and psychological distance between Asia and Europe. The proliferation of weapons of mass destruction and ballistic missiles, and the existence of secret interregional proliferation networks, has made Europe increasingly vulnerable to religious fundamentalism, international terrorism, political crises and military conflicts originating outside its own continent.
The European Union has now recognized these new security threats, not only in its Security Strategy, but also in its Strategy against the Proliferation of Weapons of Mass Destruction, also approved in December 2003, bringing European security concerns broadly in line with those of the United States. European identification of the proliferation of weapons of mass destruction weapons as a key threat to Europe was also reflected in a joint U.S.-EU statement in June 2003.
It is in this wider context that the European Union, as an increasingly ambitious global actor, is seeking the systematic integration of China into the international community and China's transformation into a country that respects the rule of law and international human rights. The European Union wants to engage Beijing because it sees China as one of the most important power brokers in world politics, whose cooperation is needed to secure important European economic and political interests.
Moreover, the divergent policies of EU member states toward China are increasingly considered to be disadvantageous for European political integration and the long-term interests of the member states. Leading EU officials have repeatedly stated that the CFSP must be forcefully developed as a further tier of European integration and identity, strengthening the European Union's potential role as a participant in discussions of Asian security.
The European Union's growing political ties to Asia already include security cooperation. The European Union is a member of the ASEAN Regional Forum (ARF) and also of the European Committee of the Council for Security and Cooperation in Asia-Pacific (CSCAP). The European Commission is a participant in the Korean Peninsula Energy Development Organization (KEDO). More broadly, since 1996, regular Ministerial gatherings in the so called Asia-Europe Meeting (ASEM) have greatly strengthened high-level political and economic ties between Europe and China and the rest of Asia.
The future of EU-China relations, however, will increasingly be affected by global policy issues arising outside China and Europe. The European Union and China will thus have to assume more responsibilities for global political and economic stability, including a substantial engagement in regional security in the Middle East and Central Asia. Such moves could be complicated by differences in national interests, given that, with their growing energy demands, both China and the European Union are becoming increasingly economically dependent on these highly politically sensitive regions. It cannot be totally excluded that China and Europe may see each other in the future as "strategic competitors," leading to strategic rivalry in the Asia-Pacific region, the Middle East and Central Asia.
On the other hand, their common dependence on the energy resources of the Middle East and Central Asia makes both China and the European Union interested in the maintenance of political stability in these regions. Apart from their increasing ties in trade and investments, the growing energy interdependence between Europe and China, on the one hand, and the Middle East/Central Asia, on the other, argues in favor of common EU-China strategies toward this increasingly fragile "arc of instability."
In its latest policy paper, A Maturing Partnership ˇ Shared Interests and Challenges in EU-China Relations, published in September 2003, the Commission states that “the European Union and China have an ever-greater interest in working together as strategic partners to safeguard and promote sustainable development, peace and stability.” The paper proposes a comprehensive list of short and medium term actions in five priority areas:
Surprisingly perhaps, the paper includes strengthened EU relations with Taiwan in its priorities for political dialogue with Beijing. After stressing the European Union's insistence on a resolution of the Taiwan issue through peaceful dialogue, and the importance of growing economic ties for an improvement in the political climate, the paper underlines "EU interest in closer links with Taiwan in non-political fields, including in multilateral contexts, in line with the European Union's 'One-China' policy."
The reference to stronger relations with Taiwan is probably due to repeated criticisms in the European Parliament of official and unofficial EU policies toward Taiwan and Tibet. In 2002, the Parliament stated that it “cannot accept President Jiang Zemin's recent remarks that China reserves the right to use military force in its disputes with Taiwan,” and insisted that a peaceful resolution of the Taiwan question was crucial for greater political and economic stability in the region.
The European Parliament has also expressed its concern that, in its defense White Paper of October 2000, China identified the United States as its principal threat and "has supported regional groupings which exclude the United States, rather than pan-Pacific ones, even setting up its own version of [the] Davos [World Economic Forum] at Bao on Hainan Island, to which no Americans were invited."
In the Parliament's frequently stated view, the Commission does not pay enough attention to Beijing's continuing violations of human and minority rights. And while the Parliament's current influence on EU foreign policy is limited, it is likely to grow in future, increasing the likelihood of a hostile reaction to its criticisms in Beijing. The growing influence of non-governmental organizations and more critical media coverage of China are likely to have the same effect.
China for its part has yet to give a clear answer to the question of what role it wants the European Union to play in its future global strategy. Although Beijing has repeatedly declared its dislike for a unipolar world dominated by an American “hyperpower,” China's foreign and security policies toward the European Union are not free of contradictions.
Thus the Chinese government, for instance, seems ambivalent about the European Union's membership in the ASEAN Regional Forum and, more broadly, about the prospect of a politically united Europe becoming more involved in regional conflict resolution, not only in the Korean peninsula but also in the South China Sea or even in the Taiwan Strait. China has repeatedly stressed that the two latter issues are bilateral problems, in which neither the United States nor the European Union, nor any other foreign power, has the right to intervene.
Officially, Beijing favors a stronger European Union on the world stage, including in the Asia-Pacific region, in line with its support for "multipolarity." In October 2003, China for the first time published an official strategy paper on EU-China relations. That was in itself interesting because Beijing has not released a similar paper on its relationship with ASEAN, the United States or any other regional grouping or major state.
“There is no fundamental conflict of interest between China and the European Union, and neither side poses a threat to the other,” the paper says. “However, given their differences in historical background, cultural heritage, political systems and economic development levels, it is natural that the two sides have different views or even disagree on some issues. Nevertheless, China-EU relations of mutual trust and mutual benefit cannot and will not be affected if the two sides address their disagreements in a spirit of equality and mutual respect.”
The paper outlines major principles guiding bilateral relations with the European Union, particularly concerning the "One-China" policy with regard to Taiwan. It draws a series of "red lines" for future EU-China relations by demanding that the European Union:
Besides these differences and potential conflicts, China calls for closer political cooperation to “uphold the UN's authority” and to support UN reforms, as well as to advance cooperation in the ASEM “on the basis of equality.” Beijing also says it favors closer cooperation in fighting terrorism and safeguarding international arms control regimes and efforts. These include the “prevention of the weaponization of, and an arms race in, outer space,” by which it means U.S. plans for missile defense.
China also wants to strengthen military- to-military exchanges and progressively develop a “strategic security consultation mechanism,” grouping security and defense experts. Beijing thus seems to be offering a much more intense dialogue on global security issues, not least to play off Europe against the United States.
That motive is particularly evident in China's most immediately controversial demand, which is that the European Union lift its ban on arms exports to China “at an early date” ˇ so as to “remove barriers to greater cooperation on defense industry and technologies.” The issue is particularly important to China, which now has probably the world's third largest defense budget, after the United States and Russia, but lacks sources of weapons supplies.
China's defense spending is increasing faster than both its GDP and its annual state budget. It has become the world's largest arms importer since 2000. But it is heavily dependent on purchasesof Russian high-tech weaponry, owing to the inadequate output of its own arms industry and the Western arms embargo. President Vladimir Putin, however, has put additional constraints on Russia's weapon exports and technology transfers to China. In contrast to Russia's growing military technology cooperation with India, Moscow has been unwilling to develop new weapons with Beijing or to let China have nuclear bombers or missiles with a range of more than 300km to 500km.
Within the European Union, France has taken the lead in pushing for the lifting of the EU embargo. On March 16, 2004, France even held joint naval exercises with China for the first time, just four days before Taiwan's presidential elections, which Beijing called “the most comprehensive military exercise ever held between China and a foreign country.”
French policy reflects not only the shared enthusiasm of Paris and Beijing for a “multipolar world,” but also hopes that the French and European arms industries will be able to sell more weapons systems to China, particularly dual-use technologies. In the same vein, French President Jacques Chirac recently joined Chinese President Hu Jintao in officially condemning Taiwan's controversial referendum on the threat it sees from China in March 2004 as “irresponsible” and a threat to Asia ˇ although Mr. Chirac's policy of rapprochement toward Beijing has been highly controversial in French public opinion. France has also recently sought out China's support in the UN Security Council in negotiations with the United States over Iraq.
Both Mr. Chirac and German Chancellor Gerhard Schroeder have argued that China has made sufficient progress in political and economic reform since 1989 for the arms embargo to be lifted. Moreover, the European arms industry (including groups such as EADS) has begun to shift its business strategies toward the Asian, and particularly the Chinese market. Although would-be arms exporters often overestimate China's willingness and ability to buy large quantities of high-tech weapons, Beijing is certainly very interested in acquiring specific niche technologies and minor weapons systems such as radar, air-to-air missiles, sonar equipment, torpedoes and other important force multipliers to increase the fighting capabilities of both its old and new weapons systems.
German and EU officials have denied that the lifting of the embargo would lead to a significant increase in transfers of high-tech weaponry to China because arms exports would still be barred under a separate EU Code of Conduct aimed at preventing sales to repressive states or unstable areas. Germany's national regulations on arms exports are also stricter than those of France and Britain.
Unlike the embargo, however, the Code is not legally binding, and its political restraints have become insufficient, as the present debate on the EU arms embargo is itself demonstrating. With speculation in London that Britain may join France and Germany in supporting an end to the embargo, there is now talk of strengthening the Code to include a requirement that weapons sold to China must not be used “for external aggression or internal repression.”
The EU member states, however, have not really addressed the question of whether the Code can effectively prevent the export not only of major weaponry but also of increasingly important dual use technologies. These dual-use technologies often do not meet the criteria of being “lethal” for the purposes of export prevention. They nonetheless significantly augment China's military modernization and its ability to project power. Unlike in the past, there is no major high-tech weapons system today that is composed of exclusively military technologies. In this respect, the EU Code is rather liberal and does not really address the critical gray area of dual-use technologies.
The arms embargo is not the only specific issue on which Brussels has had its differences with Washington. The European Union has invited China to take part in its $3.25 billion Galileo GPS observation satellite project, which has both civilian and military uses. Beijing has not only happily accepted the offer, and pledged $230 million to help develop the project (a similar accord exists between the European Union and India), but has also put pressure on the European Union to gain access to Galileo's sensitive military data and technologies. After a difficult discussion with the United States, the European Union has declined that request.
It should not be forgotten, however, that the European arms industry has already supported China's military modernization in recently years by delivering dual-use technologies (mostly from Britain) that are being used in military aircraft, attack helicopters and submarines. The background to these sales is the emergence of a global “buyer's market” for arms during the 1990s. Since the end of the Cold War, overall defense spending has declined and arms manufacturers have been left with considerable over-capacity in a shrinking global arms market. This has allowed weapons purchasing countries to shop around for the best deals and play off one supplier against another. It has put enormous pressure on the U.S., Russian and European arms industries to sell even the most modern high-tech weaponry, and transfer sensitive technologies, to countries with which they might once have been reluctant to conduct such business.
The U.S. government, however, remains strongly opposed to the lifting of the EU arms embargo against China and has been campaigning hard against the proposal since the beginning of 2004.One reason for Washington's opposition is that an end to the EU embargo would make it harder for the United States to retain its own ban, also imposed in 1989.
U.S. officials argue that although the human-rights situation in China has undeniably improved since 1989, China's record is still very questionable. The Bush administration, for instance, has recently sponsored a resolution at the UN Commission on Human Rights in Geneva criticizing Beijing's human rights record for the first time in three years. In Washington's view, China has not fulfilled commitments it made in 2002, for example to grant the International Committee of the Red Cross access to its prisons ˇ a promise initially made on the eve of President's Bill Clinton's first meeting with Chinese President Jiang Zemin more than ten years ago. In response, China has suspended its human rights dialogue with the United States.
Washington also argues that any increase in China's military capabilities would increase the political influence of the Chinese armed forces, and that weapons exports, and particularly technology transfers, heighten the risks of proliferation. China's accelerating economic and political reforms have weakened state control over the country's already inefficient export-control system,although Beijing has recently adopted new measures to strengthen it. Washington could well act to prevent any European country that sells arms to China from having access to U.S. military technology.
Beijing intensified pressure on the European Union to lift the embargo before EU enlargement in May 2004, fearing that the new EU member countries in Central and Eastern Europe would be more sympathetic to the U.S. position. The European Union, however, has not yet made a final decision.
Meanwhile, the European Union has made reciprocal demands on China to take more concrete steps to improve human rights, such as ratifying the International Covenant on Civil and Political Rights, which China signed in 1998. In Germany, the Green Party, the junior member of the government coalition, wants to maintain the embargo because of China's continuing human rights violations,while the European Parliament has passed a resolution by an overwhelming majority demanding that the embargo be maintained.
The Parliament shares the view that China has not made enough progress in improving its human rights record. It also believes that now is the wrong time to lift the embargo, in view of Beijing's military threats against Taiwan and its unwillingness to dismantle the 500 missiles it has aimed at the island. The decision is now likely to be put off until the next EU-China summit meeting scheduled for October.
If the decision were to go in favor of lifting the embargo, the European Union would risk a severe reaction from Washington. For while the United States and the European Union often share similaroverall visions about how to deal with the rise of China, both are sometimes guided by different strategies and varying priorities in pursuit of their policy goals.
The European Union itself often has difficulty reaching a consensus because its larger and smaller members have different historical, economic and political ties to China and the rest of Asia. Even the main European trading partners of China still have problems finding the right mix between their economic and political interests in their policies toward Beijing.
In the words of Kay Moeller, an expert at the German Institute for International and Security Affairs (SWP) in Berlin, “Any China policy will be a mix of three major elements: economic considerations, world order considerations, and considerations of regional (Asian) order and security. Unsurprisingly, the European Union has been strongest on the economy, weakest on the region, and wavering on world order, which is a clear contrast with the attempts made by successive U.S. administrations somehow to balance all three.”
“Both sides of the Atlantic have to choose whether to adopt increasingly unilateral strategies or define a common approach to the rise of China.” Nevertheless, EU security cooperation with Asia is not only continuing, but also widening and deepening. As it adopts an increasingly global outlook, the European Union's strategic interest in stability and security challenges in the Asia-Pacific region will inevitably continue to grow.
The United States and the European Union still tend to overestimate their own power and influence and underestimate the many strategic challenges with which they will have to cope in the coming years. More than ever before, they need to cooperate and to develop common strategies to deal successfully with the numerous new security challenges around the world.
Whatever the European Union decides on the arms embargo in the coming months, it has been short-sighted not to have consulted more closely with Washington, given that the American and European bans on arms sales to China are complementary and were imposed for the same reasons. The European Union also needs to establish clear criteria for future sales of military equipment, and particularly transfers of dual-use technologies, not just because of China.
The United States, on the other hand, should recognize that the European Union's economic and political interests in China and Asia will continue to grow, and so will its security interests. Both sides of the Atlantic have to choose whether they will adopt increasingly unilateral strategies or whether they have the political will to define a common approach to deal with the regional and global rise of China. A Transatlantic dialogue on China and Asia is long overdue. The dispute over the arms embargo is just one indicator of the need for Europe and the United States to work much more closely together on this fundamental and complex strategic challenge.
Frank Umbach is Resident Fellow and Head of the Asia-Pacific Program at the Research Institute of the German Council on Foreign Relations (DGAP). He is also Co-Chair of the European Committee of the Council for Security Cooperation in Asia-Pacific, the most important regional “tract two-Diplomacy” institution for security policies in Asia-Pacific. This analysis stems from an ongoing research project, funded by the Fritz Thyssen Foundation, on future relations between the European Union and China at the Research Institute.