Three years on: state of EU-China relations

When I posted my first blog exactly three years ago on 11 October 2007, not for one moment did I anticipate 500.  But I confess that I enjoy it – I hope a pleasure I share with you. 

Watching the US, in particular during the Obama election, it seemed obvious that political blogging would come to Europe, but at a much slower pace.  I decided to blog myself so as to understand more about it. 

Political players and observers face these days a frightening flood of information (through broadcasting, the written press and the Net), most of which not of interest, but must be looked at before discarding.

Blogging can help – if you find a reliable blog on the subjects you are following. 

Conversely, it is becoming more difficult to get one’s views published.  Academic journals take too long to publish, newspapers do not guarantee publication and several days may be lost.  Timing is critical if you want to influence the debate.  A blog post gets instant publication.  And, at a click of a mouse, 1 000 or so copies can be directly emailed. 

European decision-making lacks the underpinning of public policy debate and blogging can help rectify this. 

The beauty of using BLOGACTIV is that it takes three minutes to post the blog from Word to the site.  Formatting is automatic and technical backing available.

If one does blog, it must be regular, which eliminates valuable commentators and highly placed officials writing anonymously.  I believe that there should be launched a communal EU blog – BLOGACTIV’S EU BLOG.

Changes in three years

What changes have I seen in EU/China/US relations over the period I have blogged? These are revealed by the following posts:

Whither EU-China relations? 22/10/07
The EU-China relationship has entered a worrying period. Beijing needs to take seriously European concerns, particularly when expressed by the EU Trade Commissioner, Peter Mandelson, who has consistently resisted protectionist pressures and has been seen as friendly disposed towards Beijing.

The EU sells more goods to Switzerland than to China. The trade deficit between the EU and China is growing at about £10m every hour. Peter Mandelson wrote a frank letter to President Barroso on 17 October saying that the EU’s trade relationship with China is “deeply unequal” and suggesting that China took business in Europe for granted. The Commissioner argued that tariff barriers and Chinese interventions were limiting how much the EU sold to China, costing firms billions of euros. The letter added that the Chinese were “procedurally obstructive” where dialogue has been set up.

EU-China relations have deteriorated since the early 2000s.  Trade was central to this and Mandelson’s frustration is an important barometer. 

China-EU Summit rules OK 15/12/07
European officials breathed a collective sigh of relief when they returned to Brussels after the 10th China-EU Summit on 28 November. European expectations were low and many saw damage limitation as their top priority. Frustration had increased over the trade deficit, which is rising at the hourly rate of €15m; the fall in the value of the renminbi as result of the declining US dollar; EU exports to China still being less than those to Switzerland; and Chinese inward investment restrictions. Protectionist talk in Europe is growing.

China was apparently upset with Trade Commissioner Peter Mandelson’s tough words on the trade deficit and currency valuation; and more particularly at his linking product safety with counterfeiting. They also believe that some national EU attitudes towards Beijing have hardened, led by Angela Merkel. The Chinese are also disenchanted with the failure of the EU to speak with a cohesive voice (other than on trade policy).
This speaks for itself showing that relations were difficult but under control. 

China, EU & US: Holy Trinity or Ménage à Trois? 18/06/08
There has been a drifting apart of the EU and US since 2001, brought to ahead by, but not limited to the Bush factor.  

China and the EU are currently negotiating a long-term Partnership & Cooperation Agreement, the intention of which is to consolidate a relationship which is all-embracing, economically, politically and socially; and both bilaterally and globally..

Relations between China and the US are more complicated. After all, they saw themselves as enemies during the Cold War and remain wary of each other. The US both wants and fears a stable and developed China, but ‘containment’ is always on Washington’s mind. Until 9/11, China was increasingly seen as a suitable ‘new enemy’ by the White House.

There are still tensions within the US Administration over how to handle China’s rapid emergence: to some extent, the expression of differing views may relate to Washington keeping open its options or ‘hedging’. While both Europe and the US see China as an economic threat, many in Washington also see China as a future security threat, and indeed a possible strategic enemy. However, everyone recognises that we face common threats.

The China-US, China-Europe and US-Europe relationships are arguably the three most important geopolitical and economic relationships in the world.. The successful development of China is in the global interest. A failed China would have frightening consequences. It is essential, therefore, that there be a strong trilateral relationship, reinforced by three strong bilateral relationships.

This reflects that all three relationships have uneasy elements, but close trilateral cooperation is essential.   

EU-China: reflections & recommendations 30/11/09  
After more than two weeks in China, and a third visit in two months, the EU-China relationship is best characterised as: “Europe, we still love you.  We’ll love you even more if you get your act together externally – as a counterweight the Americans.”

Trading With China: Win-Win Or Zero Sum Game? 21/01/10
A casual reader of the European and American media might be forgiven for thinking that many people see the West losing out to China over trade. It is understandable that many, including of course those who have lost their jobs to China, see a rising trade deficit (EU €169 billion and US $268 billion in 2008) and draw this conclusion. But this is only part of the story.

The full story is complex and debatable, but the public still need a better explanation.

China vs America: fight of the century 15.04.10

The world’s two great powers are growing dangerously hostile to one another. Could this be worse than the cold war?

Previous posts have raised the increasing conflict between China and the US.  President Hu Jintao’s attendance at the nuclear disarmament conference and his meeting with President Barack Obama indicate a desire to cool down the increasingly hostile rhetoric.  However, the danger of conflict cannot be controlled by government alone.

There appears to be a domestic battle in China  between those who still adhere to Deng Xaoping’s advice and the assertive protagonists.  The Chinese understandably believe, as Ian Bremmer points out, “that their country’s resilience in the face of America’s meltdown has vindicated a Chinese model of development, one that rejects US-style free markets in favour of a ‘state capitalist’ system.”

“Put bluntly, the Chinese leadership no longer believes that American power is as indispensable as it once was for either China’s economic expansion or the Communist party’s political survival. Nor does it accept that access to US capital or commercial know-how is quite so important for the next stage of China’s development—or that its growth depends on the spending habits of American consumers.”

Here we have very worrying signs of increasingly intensive negative attitudes. 

China and US: good sense prevails 06/04/10
I have expressed growing concern over the dangers of the deterioration of US-China relations – the Obama visit, Taiwan arms sales, Dalai Lama, Google, cyber-security and the trade deficit, with the likelihood of China being branded a ‘currency manipulator’ by the US Treasury on 15 April.

The leaders on both sides have realized these dangers and that it is not in their interests to have such tensions: there is a sudden thaw in relations. Zhang Yesui, the new Chinese ambassador to the US was warmly received last week in Washington by President Obama.  The US Treasury has postponed the currency report.  Hu Jintao will be in Washington on 12 & 13 April for the nuclear proliferation summit.  A state visit by President Hu to the US in June is under discussion.  China has agreed to “engage in negotiations” over a UNSC sanctions resolution against Iran.   

Concerns about China-US relations increase.

EU-China relations: a Chinese perspective 04/05/10
Feng Zhongping, a politically influential scholar, gave an interesting perspective on the EU-China relationship.
He insisted that Europe was important to China.   However, it came third behind the US, and the neighbourhood countries of Russia and Japan.  The EU is China’s number 1 trade partner and a valuable supplier of technology.  But the EU’s political value is limited, with France and the UK more important than the Union.

At the end of the nineties and the beginning of the present century, the EU appeared important politically and strategically, with the euro, CFSP, enlargement and disagreement with the US over Iraq.  It looked as if it would become a soft superpower.  From 2003, the focus was on a strategic partnership.

Today, trade and economics apart, the need for political cooperation on global issues is increasingly recognized by both sides, beyond bilateral cooperation.  China and Europe should work together to lead.
But EU policy towards China has changed in recent years.  The EU wants more than trade – broader cooperation on global issues.  China’s perception of Europe is changing.  China has not previously appreciated the importance of soft power.

His perceptive analysis gives a clear picture of Chinese attitudes. 

A worrying American view of China 16/06/10
The presentation, “Responding to China’s Rise: Balancing Hard and Soft Power”, by Gary Schmitt of the American Enterprise Institute in Brussels on 15 June was very disturbing.  Although The AEI is ‘neocon’ in philosophy, I fear that much of what he said expresses the views of a large number of Americans.

His starting point is that history teaches us that countries when they become very powerful, eventually use that power through military aggression.  He was careful not to assert this with China but the concept was implicit. The development of China’s military capabilities was motivated by its ambition to be a great power and couldn’t be explained adequately by defensive intent, as in the of other great powers in history.

His assessment of China was US-centric.  China needs the US and in some areas the US needs China.  The Chinese are different from us, rather than we are different from each other.  China has not made the progress we expected. He also believes that China is driven by ambitions, not just interests -when a country’s capabilities grow, so does the scale of its ambitions and its conception of its interests.   China is surely driven by one main aim – maintaining economic growth which is essential for social and political stability and the maintenance in power of the Communist Party.

This is an increasingly prevalent attitude in the US. 

BLOG China South Sea boiling up 11/08/10
Problems relating to the South China Sea have been bubbling below the surface for a long time.  However, the public entry of the United States into the arena has brought these problems to the surface.

The South China Sea is now being spoken about in China as a “core interest” of its sovereignty: hitherto the term was confined to Taiwan and Tibet.  (It remains unclear whether this is a position that the government will formally adopt).  US Secretary of State Hillary Clinton said in July that, “The United States has a national interest in freedom of navigation, open access to Asia’s maritime commons and respect for international law in the South China Sea.”

This has inevitably made the South China Sea an issue of major tension between the US and China.  Underlying this is the fact that the two powers are geopolitical, and increasingly military, rivals.

This graphically explains a dangerous and provocative environment which is not fully understood.

US-China relations: storm clouds gathering 10/09/10

President Hu Jintao’s long-planned visit to the United States is not likely to take place soon, as Beijing has postponed the preparatory talks as tensions mount between the two countries. Their relationship has global reach and influences the stability and prosperity of the Asia-Pacific region.

We are witnessing at the same time a deterioration in Sino-American political, military and trade relations. This is reflected in unusually vociferous public rhetoric with some aggression being detected on both sides. Deng Xiaoping’s axiom “Keep a cool head and maintain a low profile. Never take the lead – but aim to do something big”, is no longer the rule.

There is a serious danger of growing protectionism which would be an all-round disaster. The unprecedented decline in US self confidence can have negative consequences. Due to the financial and economic crisis, China has been catapulted unexpectedly early into a global leadership role, for which it is not yet fully prepared. Chinese leadership sometimes seems to be overconfident and sometimes unsure of itself.

In the past, Washington has kept firmly to the sidelines of tensions in the South China Sea. This has now changed. Washington has declared it a ”national interest” and Beijing a “core interest”, Thus bringing them head to head on the issue of sovereignty.

There is a risk of an intensifying cycle of recrimination, which could take on a life of its own, and become uncontainable. Hopefully both governments appreciate the need to tone down the rhetoric and narrow their differences. In fact, underlying US policy has not changed, merely its public advocacy.

This does not suggest that armed clashes are likely or that there will be an early crisis, but the circumstances are such that there are several flashpoints that can result in accidental miscalculation. There is a balance of power game, with the US seeking to prevent China becoming the hegemon of much of the eastern hemisphere.

The current leadership ends in 2012. The major policy decisions governing foreign policy and China’s international role will be determined by the fifth and sixth generations of leadership. The sixth generation leaders will come from a generation not scarred in the same way as the present ones by the Mao epoque and the Cultural Revolution. They are much more likely to have travelled abroad, even studied abroad, and be able to speak a foreign language. These factors will substantially influence their thinking, but it is premature to forecast in what way. It is hoped that they will be more internationalist and comfortable with the West. And both countries need each other.

China-US relations continue to deteriorate. 

EU-China relations: EU strategy towards China 19/09/10
The EU High Representative for Foreign & Security Policy/Commission Vice President (HR), Cathy Ashton is convinced that there are few more vital EU tasks than to decide the right strategy and set the right direction for the EU’s strategic partnership with China.

U-China cooperate on many interlinked issues. They work together in the G20 on macroeconomic issues and the future financial structure. Concrete projects have been launched on green growth and low carbon technology. They have started to work together on maritime security.

The HR emphasizes the need to face up to the shortcomings in substance and process. The EU still lacks coherence and consistency on substance. Summits must be prepared more carefully, priorities more clearly identified.   The relationship must be seen in a more comprehensive way.

Strong coordination on process is needed, with a structure ensuring consistency and regular political discussions to review the state of play. A comprehensive look at the relationship is needed, including the economic and the political aspects, and a joint narrative developed underpinning the more than 50 EU-China dialogues.

Cathy Ashton sees three issues with persistent differences that seem out of balance with the strategic nature of the relationship. Market Economy Status and the arms embargo were raised at every level in her recent trip.  EU concerns over human rights are legitimate but the human rights dialogue has not been are not the most effective.

We know what the problems are but do not know how to solve them.  And part of the problem is the absence in the EU of a strategic way of thinking.  The EU has never agreed its core objectives.   Little will happen until 2012 when the fifth generation of leadership takes over.  Even then, the leaders will have been through the Cultural Revolution and with little international exposure.  We really have to prepare for the next generation and at least 2017.  The long term strategy of China will only then become clearer.

The EU is currently in a weak negotiating position with China as we appear to have no real short term leverage.  China wants from Europe:
• the lifting of the arms embargo
• market economy status
• the benefit of EU experience and advice in a wide number of fields
• support for China’s international status.

What are or should be the EU’s core objectives?  First, to achieve a level playing field for trading and investing in China.  Second, to act as a responsible stakeholder internationally.  Third, for China to be a strategic partner in the true sense of both words.  This can only be achieved when there is greater mutual understanding and when their working methods are drastically changed.

It is essential in any negotiations to understand the other’s point of view and the context in which the problem is seen.  Political, economic, social and cultural differences make this mutual understanding more difficult.   An intensive programme to promote mutual understanding, remove misperceptions, reduce negative public opinion and improve communication, should be introduced.  Longer term youth exchanges can be launched during 2011 China-Youth Year. 

Underpinning the relationship should be the Confucian and Monnet principle of mutuality. 

In the short term, the institutional structure of the relationship must be revisited so as to make the process more strategic and ensure rigorous follow-ups of decisions taken.  A joint body should produce a report for each summit, addressing the commitments made at the previous summit and their implementation.  The Summit Declaration should be mainly confined to the key issues discussed at the Summit and not contain a ‘shopping list’.

The EU badly needs a stratey towards China

EU-China: role of culture 07/10/10
“Politicians come and go but culture lives on” said Chinese Premier Wen Jiabao, when opening the “EU-China High Level Cultural Forum”, which was held in Brussels on 6-7 October.

The successful development of EU-China relations needs increased mutual understanding.  A first step towards mutual understanding is cultural engagement (culture in its broadest sense).

Within this perspective, the forum was important and hopefully will become an annual event.  Wen Jiabao proposed the idea at the Nanjing Summit last year.  In any case, President announced that 2012 will be “EU-China Year of Intercultural Dialogue”. 2011 will be “EU-China Youth Year” in which culture will play an important part.

This focus is very welcome.  President Barroso and Commissioner Vassiliou (responsible for culture, education and youth) are committed.

The programmes need to embrace culture at all levels and EU-China activities must be interactive. 
The promotion of culture helps mutual understanding, which is critically important to build a successful relationship.

Conclusion
Relations between the EU and China have deteriorated over the last three years.  The deterioration in China-US relations has been greater and is more dangerous.  The EU still has no strategy towards China.  At least the importance of increasing mutual understanding and the promotion of culture, to help enable, this are recognized by both sides.