Running Rings Around the E.U.



Op-Ed Contributor


Published: April 21, 2009

LONDON — China’s performance at the recent G-20 summit meeting once again showed its skill at running diplomatic rings around Europe. Its audacious eve-of-summit call for a new global reserve currency to replace the dollar, the plaudits it won for a modest contribution to the International Monetary Fund, and President Hu Jintao’s occupancy of the center-stage in the leaders’ photo-call — added up to a great public relations triumph.

But while China edges toward the top-table, Europe’s leaders remain disunited and unsure of how to deal with the rising giant.

As European capitals prepare for the E.U.-China summit next month — rescheduled from last autumn after China canceled the meeting in retaliation for President Nicolas Sarkozy’s visit with the Dalai Lama — they must realize that the current E.U. strategy of “engagement” at any price leaves Beijing in control.

The E.U.’s heroic ambition for the last 20 years has been to act as a catalyst for change in China — as if it is still a developing country that can be molded. As a result, China now treats the E.U. with diplomatic contempt. It sees the relationship as a game of chess, with 27 opponents crowding the other side of the board and squabbling about which piece to move. As the Chinese academic Pan Wei puts it, the “E.U. is weak, politically divided and militarily non-influential. Economically, it’s a giant, but we no longer fear it because we know that the E.U. needs China more than China needs the E.U.”

Time and again, France, Germany and Britain have lobbied to become China’s partner of choice in Europe — even though Beijing only grants preferred status temporarily to the most pliant bidder. Despite the punishments meted out to Mr. Sarkozy and Chancellor Angela Merkel of Germany for meeting the Dalai Lama, Europe’s heavyweight leaders have capitalized on one another’s misfortune.

This jockeying for position is not working. Britain, despite its militant advocacy for open European markets for Chinese goods, has failed to persuade China to open up its financial-services sector. France, despite its commercial diplomacy, has seen its trade deficit with China explode. And even Germany, which has benefited the most from strong manufacturing exports, finds its trade deficit growing as Chinese exports move up the value chain.

European companies continue to face far more barriers than Chinese companies face in the E.U. And China has long proved unwilling to join Western efforts on pressing problems like the repressive regime in Burma. Beijing does occasionally modify its position in ways that suit the West — like its belated support for a U.N. peacekeeping force in Sudan and ending arms sales to Zimbabwe. But more often than not, these changes reflect direct Chinese interests rather than a desire to please the West.

The global economic crisis may yet persuade Beijing to cooperate for the sake of financial stability. But it might also offer cash-rich China an opportunity to improve its position while doing little to participate in international rescue plans.

The E.U. has no choice but to engage China as a global partner and to accept its historic rise. But it should drive hard bargains. Awarding China market economy status (which would put to rest China’s fear of a European trend toward protectionism) should be traded for genuine concessions by China on its own one-sided barriers to trade and investment. Access to European firms and technologies should also be reciprocated with a new opening by China.

Beijing must respond to European concern about issues like nuclear proliferation. Were China to contribute to successful sanctions on Iran, for example, the Europeans might lift their arms embargo.

Though the E.U.’s leverage on China’s human rights situation is limited, E.U. leaders must not deny one another support in order to curry favor with Beijing. They would be well advised to remind China that there is no restriction of their right to meet political and religious figures — including the Dalai Lama.

Any attempt to strengthen the European position must start with an acknowledgment that no member state is big enough to sway China on its own. But collectively, Europe is China’s biggest trade partner. Whenever China has shifted its position as a result of European pressure, as it has on the possibility of U.N. sanctions against nuclear proliferation, this followed a coordinated Western effort, strongly backed by the E.U. as a whole.

President Obama’s inauguration has signaled a new chapter in U.S.-China relations. To avoid being sidelined, the E.U. will have to offer more than a cacophonous chorus of competing voices.

John Fox is a former British diplomat who served in Beijing. François Godement is a senior French foreign policy analyst. Both men are senior fellows at the European Council on Foreign Relations.