2. EU-China Relations
2.4. China’s Foreign Policy towards the EU
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44 been reluctant in denouncing Beijing for similar actions that could also be deemed provocative, a steady build-up of missiles targeting Taiwan, or rhetorical war threats.
In summary, EU’s weak approach is visible on many fronts of EU-China relations.
The term unconditional engagement reflects in a perfect manner, how EU Member States are unable to coordinate their national policies towards a stronger EU-approach. Some states confront China political, other EU Member States criticize Chinese trade policies, and others ignore both. EU’s weak policy of unconditional engagement and its lake of leverage over China, hinders the EU to pursue its own goals towards China and
2.4. China’s Foreign Policy towards the EU
Looking from Beijing’s perspective, the EU is a very complex and very hard to deal with.
What makes it so difficult for the PRC is that the EU is composed of currently 27 Member States. Each member state has its specific national interest and tries to influence the EU’s policies one the one hand, but also interacts directly with Beijing. Furthermore as a supranational organization, the EU has many characteristics that are different from a sovereign state. For Beijing, it seems to be sometimes difficult to know whom to talk to.
For example, for economic and trade issues, compared to the European Parliament and the European Council, the European Commission plays often the most important role.
The arms embargo, however, is under the supervision of the Common Foreign and Security Policy (CFSP). As a result, the interactions between the EU and China are very complex and are happening in different multilayered levels simultaneously.
China’s foreign policy towards the EU is paradoxical. One the hand Beijing admires the EU’s power and influence. On the other hand, the in 2003 published “China’s
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45 EU Policy Paper”86 lists a series of strange demands on Taiwan, Tibet, human right and the lifting of the arms embargo. It is stated for example that “it is important” that the EU does not let Taiwanese political personalities participate in any activities, have no official contacts with Taiwan or sell weapons to Taipei. On the Tibet issue the tone is even bitterer. The policy states: The Chinese side requests the EU side not the have any outside contact with the “Tibetan government in exile” or provide any facilities to the separatist activities of the Dalai clique” The document ends with any explanation that “The EU should lift its ban on arms sales to China at an early date as to remove barriers to greater bilateral cooperation on defense industry and technologies”87.
Even the United States acknowledged that the EU system is very complicated and that the EU Member States are still more important to work with:
“Although the European Union will continue to play a greater role in shaping a common foreign and security policy among member states, implementation of any comprehensive policy, especially for China is complicated by the fact that while the EU has assumed significant responsibility for management of external trade relations, member states have retained final authority over security and foreign policy. While the EU is moving toward developing more common foreign and security policies, the most critical security-related decisions will be determined at the national level.”88
86 Ministry of Foreign Affairs of the People’s Republic of China, “China’s EU Policy Paper,“ (October 13 2003), accessed 1 July 2012, http://
wcm.fmprd.gov.cn/eng/zxxx/t27708.htm.
87 Ministry of Foreign Affairs of the People’s Republic of China, “China’s EU Policy Paper,“ (October 13 2003), accessed 1 July 2012, http:// wcm.fmprd.gov.cn/eng/zxxx/t27708.htm.
88 US China Economic and Security Commission, “US-Europe Paper Regarding China,” (January 19, 2005), http://www.freerepublic.com/focus/f-news/1330008/posts.
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46 Furthermore, China’s policy towards the EU remains essentially economic in nature.
Beijing seeks access to the European market and searches for technology transfers.89 At the same time, however, Beijing does not accept any inference in internal domestic issues and wants to restrain the EU from getting involved with Taiwan and the Dalai Lama.
While the EU implemented a rather weak foreign policy of unconditional Engagement, Beijing has carefully implemented a policy, well-adjusted to the special political system of the EU. First, Beijing uses the mismatch of its own centralized, strong authority and the EU- governance system based on compromises. With other words the Chinese government appreciates the barrier free European market, but at the same time effectively restricts its own market for European firms.90
The European Chamber of Commerce in China's report adds to growing Complaints that Beijing is violating its free-trade pledges while it tries to build up technology industries and global competitors. In its WTO application Beijing promised to treat foreign and domestic companies equally but Chinese companies in computers, green energy and other fields receive subsidies, preferential treatment in government purchasing and other favors.91 Beijing is trying to build up "national champions" in industries from banking to oil to shipping, prompting complaints the country is violating its promises made when it joined the WTO in 2001.
Another common part of China’s EU policy is that Beijing redirects EU’s criticism on certain issues, such as human rights, or trade imbalances, by agreeing on formal
89 May-Britt U Stumbaum, "Risky Business? The EU, China and Dual-Use Technology", Occasional Paper, EU Institute for Security Studies: Paris No.80 (October 2009).
90 Fredrik Erixon and Patrick Messerlin, “Containing Sino-European Protectionism,” Economic Affairs, Vol. 29, Issue 1, (2009), 83-85.
91 Joe McDonald, “China Discriminates Against Foreign Companies, Survey Says, China Discriminates Against Foreign Companies, Survey Says,” Huffington Post(May 25.2011), accessed 1 July 2012,
http://www.huffingtonpost.com/2011/05/25/china-is-discriminating-against-foreign-companies_n_866682.html
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dialogues and meetings concerning those issues.92 As many criticize, China then uses those dialogues and turns them into plain, ineffective talking shops.93 As Fox and Godement writes:“But for Beijing, these meetings are an end in themselves. Human rights dialogues deflect the European urge to adopt critical public resolutions; the high-level trade dialogue, which China has so far restricted to an annual meeting, helps to contain European pressure for trade restrictions triggered by the growing trade deficit. The EU’s foreign policy traditions lead it to rely on these dialogues and point to them as signs of progress, even when they lead nowhere.”94
Furthermore, China successfully exploits and even encourages the divisions between EU Member States. The Chinese government does so by singling out individual Member States with hard measures when Beijing sees its national interests at risk. This tactics is also called a divide and rule strategy, or “divide e impera” (“divide and rule”) and “using the barbarians to control the barbarians (yiyi zhiyi)”95 which as deep roots in ancient Chinese foreign politics.
China employs economic sticks or economic incentives to “punish” or “reward”
92 Examples are the EU-China Human Rights Dialogue, the EU-China Political Dialogue and the EU-China Economic and Financial Dialogue.
93 Human Rights Watch, “China/EU: Rights Dialogue Needs Clear Results,” (June 15. 2011) accessed July 1. 2012, http://www.hrw.org/news/2011/06/15/chinaeu-rights-dialogue-needs-clear-results, EU Business
“EU, China voice 'differences' on human rights,” (June 29.2011, accessed July 1.2012, http://www.eubusiness.com/news-eu/china-rights.5dg/.
94 John Fox and François Godement, “A Power Audit of EU-China Relations”, European Council on Foreign Relations, (April 1.2009): 34, accessed July 1. 2012,
http://ecfr.3cdn.net/532cd91d0b5c9699ad_ozm6b9bz4.pdf.
95 Margot Schüller, “The EU’s Policy towards China on Economic Issues: Between Disillusion and Dialogue”, in David Schambaugh and
Gudrun Wacker (ed), American and European Relations with China Advancing Common Agendas, (SWP Research Paper June 3.2008), 18, accessed: 1 July 2012,
http://www.swp-berlin.org/fileadmin/contents/products/research_papers/2008_RP03_shambaugh_wkr_ks.pdf.
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48 actions of individual European Member States. In the past China has not been above punishing those states that transgress its sovereignty issues: the Netherlands and Denmark, for example, over arms sales to Taiwan and criticism of human rights, respectively. France, on the other hand, has been rewarded with commercial contracts for opposing negative rulings on human rights issues.96 Another instrument of “punishment”
is to cancel planned visits of delegations or temporarily freezing the regular exchanges with a Member State In 2008, China even cancelled (postponed) the EU-China summit as a reaction to French President Sarkozy’s plan to meet the Dalai Lama. France had at this time the European presidency and the entire EU had to suffer from Paris’ actions.
Looking from the Chinese perspective, there are two problems in EU-China relations: The issue of Taiwan. Even though Chinese leaders it is an internal affair, it is nevertheless the most important problem in US-China relations. For the EU however, the case of Taiwan has been always neglected. Partly because the EU has no security interests in East Asia such as the US, but also because European Member States mostly adhere to the One- China principle demanded by Beijing. The official policy paper on China published by the European Commission in 2006 is the first document that has a whole section about the Taiwan issue. The EU policy includes:
• opposition to any measures which would amount to a unilateral change of the status quo;
• strong opposition to the use of force;
• encouragement for pragmatic solutions and confidence building measures;
• support for dialogue between all parties;
96 Philip Baker, “Human Rights, Europe and the People's Republic of China,” The China Quarterly, (Volume 169 2002 ): 47, Eberhard Sandschneider, “China’s diplomatic relations with the states of Europe”, China Quarterly (169 March 2002): 33–45.
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• continuing strong economic and trade links with Taiwan.97
The other issue is the Dalai Lama. The Chinese administration frequently threatens, in a more or less open manner, that meetings between EU Member States representatives and the Dalai Lama will be punished and trade relationships will suffer.
For example in 2009 the meeting between Dalai Lama and the Danish Prime Minister Lars Løkke Rasmussen lead to temporary rage in China.98 China punished Denmark by cancelling a number of official visits, and eventually succeeded in pressuring the Danish parliament to promise to actively oppose Tibetan independence. The organizers of this visit have made it clear that there will not be any political meetings during the Dalai Lama’s stay in Denmark. At the same time, China gives preferred treatment to states which are siding with the Chinese government. One good example of this dive and conquer tactic is the case of the Weapon embargo against the Chinese government by the European Union. In October 2003 Beijing published the “Policy Paper on the European Union” which is China’s their first official document concerning the European embargo.99 Since then China has started a campaign of pushing the EU to stop its arms embargo.100 The Congressional Research Service concludes in 2005 that the lifting of the embargo would be only a matter of time.101 And indeed the French president, Jacques Chirac,
97 Commission of the European Communities, “EU – China: Closer partners, growing responsibilities”
(October 24.2006):11, accessed: July 1.2012,
http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0631en01.pdf.
98 Peter Levring, “China angry with Denmark over Dalai Lama visit,” Reuters (May 30, 2009), accessed July 1.2012, http://in.reuters.com/article/2009/05/30/idINIndia-39985820090530.
99 Ministry of Foreign Affairs of the People’s Republic of China, “China’s EU Policy Paper,” (October 2003 13), accessed 1 July 2012 http://www.fmprc.gov.cn/eng/topics/ceupp/t27708.htm.
100 Kristin Archick and Richard F. Grimmett, Shirley Kan, “European Union’s Arms Embargo on China:
Implications and Options for U.S. Policy,” CRS Report for Congress (April 15, 2005), accessed July 1.2012, http://fpc.state.gov/documents/organization/45458.pdf.
101 Ibid.
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started calling for an end of the arms embargo in late 2003. When he visited China in October 2004, Sarkozy strongly advocated an end of embargo. His remarks were promptly awarded by the Chinese government and business deals worth 3-4 billion EUR were signed.
102Other EU Member States took notice Sarkozy’s fruitful business trip to China and followed French business-oriented approach. Noticeably German leader, Gerhard Schröder, was not too shy in on showing his efforts to praise the China. The German Chancellor also advocated for an end of the embargo. It was not surprising that the 42 German business leaders, who accompanied the Schröder, could sign 17 business deals worth over several 100 million Euros.
103China has learned to exploit the divisions among EU Member States. It treats its relationship with the EU as a game of chess, with 27 opponents crowding the other side of the board and squabbling about which piece to move. As irritating as Beijing finds this at times, there is no question about who is in a position to play the better game.
Europeans tend to treat China as a malleable polity to be shaped by European engagement. But the reality is that China is a skillful and pragmatic power that knows how to manage the EU. Its foreign policy is shaped primarily by domestic priorities – such as the need to sustain economic growth and to bolster political legitimacy in the absence of an electoral process.
To secure these goals, China has developed three basic tactics in its approach to the EU. First, it takes advantage of the mismatch between its own centrally controlled systems and the EU’s open market and government to exploit opportunities in Europe while protecting its own economy with industrial policies, restricted access and opaque procedures. Second, China channels EU pressure on specific102 Katinka Barysch and Charles Grant, et al, “Embracing the dragon The EU’s partnership with China,”
Center for European Reform (2005): 14.
103 Taipei Times, “China, Germany plan 17 trade pacts,”December 06.2004
accessed July 1.2012, http://www.taipeitimes.com/News/worldbiz/archives/2004/12/06/2003214019.
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51 issues by accepting formal dialogues and then turning them into inconclusive talking shops. Third, China exploits the divisions between Member States. The cancellation of its annual summit with the EU, evidently to punish Paris for inviting the Dalai Lama, was a typical attempt by the Chinese to trigger unrest within the EU.
While Europeans hope to win over China through the use of unconditional engagement, Beijing has carefully designed a strategy to manage the EU, using three tactics.104 First, China uses the advantage of its centralized authority over EU’s rules-based democratic system. This enables Beijing to fully exploit EU’s slow and inefficient governance. The mismatch is especially visible in the trade area: China can use of the openness of the EU market while restrict the access for European companies.
Furthermore, “China channels EU pressure on specific issues, such as human rights, by accepting formal dialogues about them – which the EU hails as a great victory – and then turning them into inconclusive talking shops.”105 China reassures the EU by using appeasing language about the advantages of multilateralism. The Human rights dialogues decrease the European eagerness to implement more critical policies.
Additionally, the high-level trade dialogue, which has been restricted by Beijing to only an annual meeting, contains pressure by the EU for more trade restrictions. The EU relies too much on these dialogues. EU leaders like to call them as signs of progress, even though no or only gradual progress has been made.
104 Fox, John and François Godement, “A Power Audit of EU-China Relations”, European Council on Foreign Relations, (April 1.2009), 33, accessed July 1. 2012,
http://ecfr.3cdn.net/532cd91d0b5c9699ad_ozm6b9bz4.pdf.
105 Ibid. 34.
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3. The Impact of the United States on EU-China relations
This chapter will discuss the role of the United States in EU-China relations and examine how the US is influencing aforementioned relations and make an effective, independent EU policy towards Beijing impossible. The case of the weapon embargo will be used to give a showcase of the Washington’s influence.
One of the main obstacles for a comprehensive foreign policy towards China is the majority of the EU Member States continue to see the USA more as a close strategic partner, who shares the same political values. Furthermore the inclusion of the Eastern European Nation Czech Republic, Hungary, Poland, Slovakia, Slovenia and the three Baltic states, who are all new members of the North Atlantic Treaty Organization (NATO), strengthened the EU’s relations to the United States. Because the Eastern European States often lean towards Washington any attempt to transform into a more independent international actor outside the US-influence even more difficult.
Even though most of the political and economic sanctions, which were imposed on China as a reaction to the 1989 crackdown, were already lifted in 1992, the arms embargo still remained. The embargo prohibits sales of military equipment; sales through special licenses are the exception. Because the embargo is not legally binding and only includes lethal weapons, some European states have exploited the loophole and have sold defense-related technologies to the PRC.106 The embargo has been criticized by the PRC several times and the CCP tried to push the member states to vote for a lifting. However,
106 David Shambaugh, “Lifting the EU Arms Embargo on China: An American Perspective,” in: China’s Rise: Diverging U.S.–EU Perceptions and Approaches, Stiftung Wissenschaf und Politik (August 2005), 23.
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53 within the EU, the embargo remains highly political and the majority of the European states oppose change to policy.
However, the EU embargo on China has not stopped several EU Members States from selling weapons to China. The United Kingdom and France interpreted the arms embargo as only applicable to lethal items and major weapons platforms. The United Kingdom sold Searchwater radar and the French government provided AS-365n Dauphin-2 helicopters.107 Further, SIPRI found that, between 1989 and 2004, France alone was responsible for 73.2% of total EU arms sales to China, surpassing other EU member states in ignoring the embargo.108 France is, alongside Ukraine, after Russia, the second supplier of weapons for the PRC.109 Until now, France has proved to be eager in maintaining good trading relationships with China and even risks to be criticized. As already mentioned above, after EU Member States, especially France and Germany, who greatly benefited by siding with the Chinese government, pushed at the end of 2003 for a lifting of the embargo and a debate within the EU started, whether or not an end of the ban would be reasonable.
However, the US, which still has great influence and strong relations to the EU and its Member States, are worried about a transfer of dual-sue weapon technologies. The US, which is still the strongest military power in the East Asia, has close bilateral ties and
107 Rachel Stohl, “Wrangling Over Arms Sales to China, Foreign Policy in Focus,” Foreign Policy in Focus, (November 21.2006), accessed 1 July.2012,
http://www.fpif.org/articles/wrangling_over_arms_sales_to_china#_ftn2.
108 Raul Caruso, To Lift or not to Lift? A Few Notes on the
Lifting of the European Arms Embargo on China, Crossroads, (Vol. 5, n. 1), accessed 1 July 2012, http://works.bepress.com/cgi/viewcontent.cgi?article=1013&context=raul_caruso
109 Rachel Stohl, “Wrangling Over Arms Sales to China,” (November 21, 2006), accessed 1 July 2012, http://www.fpif.org/articles/wrangling_over_arms_sales_to_china, Mark Bromley and Paul Holtom et. al.
“Recent Trends in the Arms Trade,” SIPRI Background Paper, (April 2009), accessed 1 July 2012, http://books.sipri.org/files/misc/SIPRIBP0904a.pdf.
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54 military with several East Asian is worried about a strengthening of the People’s Liberation Army and a gradual power transition towards the Middle Kingdom.
While the State Department and the White House showed some understanding of the European position, the Pentagon refused to even discuss the topic with its European allies. When Washington requests the allegiance of its European allies they like to split the European Union, single out states and threaten their economic interests: The US Congress pushed for sanctions against companies from countries who do business with China and have branches in the States. The threats were especially pointed at Washington’s closed ally, the UK. Especially British companies saw its interests at danger, since at least two big British companies, the BAE Systems and Rolls-Royce, have huge investments in the US market.110 The Congress also sent warning signals to European Countries to implement stricter rules on military transfer. Those punishments would also hit the British defense industry the most. Beginning of 2005 the Unites States put this issue into a loyalty test of Brussels-Washington relations.
This shift in EU policy and the final end of discussion was influenced by American interference. The EU’s discussion on lifting the embargo revealed how the difference of opinions made the EU ineffective and much more important, how easily the
This shift in EU policy and the final end of discussion was influenced by American interference. The EU’s discussion on lifting the embargo revealed how the difference of opinions made the EU ineffective and much more important, how easily the