Stanley's blog

This is the time for reflection, rather than deep analysis. With the cancellation by Beijing of the Lyon EU-PRC summit because “the Dalai Lama will be visiting several EU countries and will meet with heads of state and government as well as presidents of European institutions”, it would have been reasonable to assume that EU-China relations would be frozen for a period.

But Beijing made it clear that the “postponement” of the summit does not affect the ongoing meetings and discussions at all levels between
China and the EU.
Beijing is ‘punishing’ Sarkozy and not the EU.

This having been said, the relationship has lost a lot of its dynamism. Three factors might change this. First, the shortly to be held meeting of the High Level Economic & Trade Dialogue; second, following the High Level meeting, deep ongoing cooperation in facing the world financial and economic meltdown; and third, close cooperation over climate change.
The relationship cannot be considered without the
US dimension. Barack Obama’s policy, indeed attitude towards
China is still unknown.
What are the issues that could derail the bilateral, and indeed trilateral relationship?

The risk of protectionism has pride of place. Any active protectionist movement against China is likely to begin in the
US. The new president will be subjected from the outset to protectionist pressures. The new American administration, supported or indeed led by an all Democrat Congress, may well be commercially tougher than the Bush team.

The year has ended with a US trade panel approving the imposition of import duties on circular welded steel pipe from China in a case already being challenged by
Beijing at the World Trade Organization. This is one of several cases brought by
US industry since March 2007.

The Unions are likely to press the new administration for more sanctions against China to force
China to improve conditions for workers. During his presidential campaign, Obama criticized
China on currency and workers rights and promised to be tougher than President. Bush. ”
China
‘s human rights violations and failure to enforce labor, environment and meaningful product safety standards are unacceptable,” Obama told the Ohio Conference on Fair Trade.

The new administration well understands that Sino-American trade is interdependent and that protectionism will only exacerbate the situation. But this will not deter the unions or indeed public opinion – just as there have been foolish calls in
China for the boycott of French goods.

We can expect ongoing trade frictions, as these are an intrinsic part of any major trading relationship. Other possible frictions include:

·
Tibet·
Taiwan· Arms embargo· Market economy status· Partnership & Cooperation Agreement (PCA) negotiations.

2009 marks the 50th anniversary of the Dalai Lama’s flight from Tibet as well as the 20th anniversary of ‘
Tiananmen Square’. The negotiations between
Beijing and the Dalai Lama’s representatives have, unsurprisingly, made no progress. More anti-Beijing demonstrations can be expected and the problem over western leaders meeting the Dalai Lama will continue.

The thawing of relations between Beijing and Taipei since the change in régime in Taiwan should continue, despite the new
US arms sales to the island. But confrontation sparked off accidentally can never be ruled out.
Taiwan does not directly affect the EU-China relationship.

Beijing seems disinclined to maintain lifting the arms embargo as an issue – wise, considering that no progress is possible in the foreseeable future and the embargo is only symbolic and does not affect arms sales to
China.

Likewise,
Beijing no longer seems to be pushing hard for market economy status, which will be automatically received in or soon after 2015.

Despite the limited goal of an early harvest, progress in the PCA negotiations during 2008 has been limited. There could well have been agreement on 15 or so clauses at the
Lyon summit. Lack of real progress in 2009 could be damaging to the relationship.

Conclusion

As already stated, the lost dynamism of the relationship could be recovered through close economic and financial cooperation or working together effectively on climate change.

2009 is a messy year for the EU: Parliamentary elections, a new Commission on an unknown debate, a second Irish referendum on the Lisbon Treaty, and a shaking down of relations with Barack Obama. This will make the
Union even more difficult to deal with.

It is to be hoped that the experience of last year will persuade Beijing that it is in
China’s interests for there to be greater transparency in its activities and to overhaul the communications machines of both Party and State.

And that more resource is made available to think tanks and other interests in the private sector to promote mutual understanding and dispel misperceptions.

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