Can the EU tame the dragon?

This year's EU-China summit, scheduled for 8-9 September in Helsinki, may well see a determined effort from the EU side to put the relationship on a new footing. Both Trade Commissioner Peter Mandelson and Benita Ferrero-Waldner, the external relations commissioner, have been conducting fundamental policy reviews which are likely to lead to a proposal to replace the 1985 agreement, which has hitherto governed relations between the two sides.

On the trade front, the EU is seeking the establishment of a permanent joint trade and investment committee, a high level financial forum linking the European Central Bank with the Chinese central bank and a high-level dialogue on industrial policy between the European Commission and the Chinese vice- premier responsible for industrial policy.

On the political front, the main objective is to tie China in more closely with multilateral agreements in many fields, which may have an attraction for an ultra-cautious Chinese leadership deeply alarmed by American unilateralism and anxious to counter fears that it sees itself becoming a hegemonic power in Asia.

In the past, the EU has punched below its weight in its dealings with China. Member states have concentrated on signing bi-lateral trade deals rather than maximising the leverage - by way of both carrots and sticks - which the EU could apply to the Chinese. The main carrot is the continuing Chinese appetite for access to western technology; the stick is the Chinese fear of isolation. As Stewart Fleming argued in European Voice (13-19 July), the results of the EU's softly-softly approach with regard to trade liberalisation have been deeply disappointing.

The same could be said of the regular human rights dialogue, which China now conducts not only with the EU, but also bilaterally with some 15 western countries, including Norway and Switzerland. The Chinese have greatly improved their ability to argue their case in discussions with foreign interlocutors, but the progress made on the ground has been spasmodic and limited, as is illustrated by the recent appalling revelations about the wholesale forced donation of human organs by Falun Gong prisoners.

The EU is currently struggling to secure Chinese co-operation in its bid to prevent Iran from enriching uranium. But China's widespread oil and gas interests in the Islamic Republic - worth more than €70 billion - have made it reluctant to consider imposing sanctions.

Chinese ambivalence over Iran is part of a wider trend of supporting problematic regimes documented by Amnesty International in the devastating report it has just issued on the arms trade.

Officially China is now the eighth largest arms exporter, though the published statistics probably greatly underestimate its actual sales. Many of these are by companies established by the People's Liberation Army (PLA) or the state police agency.

What is undeniable is that China is the only major arms exporting power that has not entered into any multilateral agreement which sets out criteria, including respect for human rights, for licensing decisions. It has continued to allow military equipment to be sent to Sudan despite well-documented and widespread killings, rapes and abductions by government-armed forces and allied military groups in Darfur.

Despite its status as a permanent member of the Security Council, it continued to supply small arms to Liberia in defiance of a UN embargo and other recent customers include countries with little regard for human rights such as Iran and Myanmar, as well as armed criminal groups in South Africa and Chad.

A year ago China made a big push to try to secure the lifting of the EU's own embargo and almost succeeded in its object. The EU should now make it abundantly clear that there can be no question of this happening unless China puts its own house in order and supports the demand for an international arms trade treaty which is to be debated by the UN Security Council in September.

The EU's record in its dealings with China has been underwhelming, but this new review of the EU's China policy provides member states with a chance to get serious about their relations with an emerging super-power. It is essential that the EU should use whatever influence - and pressure - it can, to tilt the balance in favour of those wishing to open up China, both externally and internally.

• Dick Leonard is the author of The Economist Guide to the European Union.

This year's EU-China summit, scheduled for 8-9 September in Helsinki, may well see a determined effort from the EU side to put the relationship on a new footing. Both Trade Commissioner Peter Mandelson and Benita Ferrero-Waldner, the external relations commissioner, have been conducting fundamental policy reviews which are likely to lead to a proposal to replace the 1985 agreement, which has hitherto governed relations between the two sides.