Steering China in the right direction

Date: 28/04/05

The Washington-based Council on Foreign Relations recently held a seminar asking: 'Is China a Google or an Enron?' Since China's economic emergence in the early 1980s many western analysts have posed a similar question.

Some stand firmly in the 'Google' camp, talking up China's potential to overtake the US as the world's largest economy. Others have warned of the impending collapse of the banking sector, untrustworthy growth figures, energy droughts and an overvalued currency.

But as China's economic ascendancy starts to present real gains as well as real competition for Europe and the US, thoughts are turning to other aspects of China's remarkable rise. Increasingly EU policymakers are asking themselves a different question: what kind of power will China be?

China finds itself at a crossroads. Will it emerge as a new military-orientated pole in the balance of power system or as a partner within the multilateral system? In the nomenclature of Robert Cooper, the most senior adviser to Javier Solana - EU foreign affairs chief - will it be a 'post-modern state'?

For Europe the preferred answer is clear.

Beijing's rhetoric is promising, with the Chinese government repeatedly underlining its peaceful intent, encapsulated in its policy of 'peaceful ascendancy'. "There is neither reason nor possibility for us to threaten anyone," Jia Qinglin, a leading Communist Party member insisted this week. But to some, signs appear ominous.

The growth of the Chinese economy has allowed Beijing to grow as a military power, modernising the two million plus People's Liberation Army.

Officially the country has a military budget of $60 billion (€46bn) and the figure is growing at around 10% a year. This may be a fraction of what the US spends, but outsiders put the real figure much higher.

It is this military growth that has emerged as a key factor in the EU's strategic outlook towards China and its region. And despite the EU's soft-power image some are now warning that Brussels may be encouraging China to adopt an overly military approach.

In 2003, China signed up to the EU's Galileo satellite navigation project. Although European officials insist Galileo is for civilian use, defence experts say it has a significant military potential, enabling China to improve its precision and smart weapons capabilities.

Beijing could take a similar message from the EU's willingness to lift its arms embargo against China, making available hi-tech European weapons which cannot be bought from China's current suppliers in Russia and elsewhere.

Behind the EU's actions lies a policy of constructive engagement, in the hope of influencing China's actions as a friend.

During the previous European Commission term under Romano Prodi, the Union, flattered by China's decision to publish its first ever policy paper on the EU, sought to accelerate the Union's relations with China into a strategic partnership.

In Brussels and other European capitals the paper was welcomed for its talk of the EU as a global player and of China's further integration into the international system.

But leading EU policymakers are warning that in the rush to make friends with China the EU is helping to create a hammer, to which every problem appears to be a nail.

Already, needing to grease the wheels of its booming economy China has clashed with Japan over gas drilling rights in the western pacific. Whether China flexes its military muscles or puts faith in international treaties to secure energy supplies could provide a test of how it intends to conduct its foreign policy.

But for the US government, Taiwan provides a more immediate litmus test. The recent anti-secession law, authorising the use of force against Taipei is hardly reassuring.

Some are more optimistic. China's leaders appear to have heeded the example of imperial Japan and its ultimately disastrous use of economic advances for the pursuit of power politics and military ends.

And despite poor relations with Japan, China's relations with its neighbours have improved dramatically in recent years, most notably with Vietnam and India. Poor relations with Japan could say as much about the nationalist line taken by Prime Minister Junichiro Koizumi, which has also upset South Korea.

A major question remains: can a non-democratic regime create a responsible foreign policy in the long term?

Perhaps in the end China's rise will come down to two words, heping jueqi (peaceful ascendancy). It is, however, unclear whether for China's leaders this is a tactic to keep future options open or a long-term strategy.

Analysis feature in which the author speculates about the long-term development of China in economic, political and military terms and the European Union's role in this.