Why the EU may be China’s best hope for global integration

Date: 31/05/01

Last weekend's Asia-Europe meeting in Beijing was the latest boost to EU-China relations. Siro Polo Padolecchia, a former European Commission director-general, says there is still room for improvement

THE European position towards China is indirectly benefiting from the current state of great power relations in the Asia Pacific.

The European Union can take advantage of opportunities that are created by China's traditional attitude and recently acquired economic dynamism, by American oscillations with Beijing, and by historical memories of Japanese domination of the region that still hinder an 'Asian-only' economic grouping.

In European and Chinese recent history, there are no experiences of antagonistic involvement, enmity and political frictions to be overcome. Union countries (with the minor exception of the UK towards Hong Kong) have no formal alliance commitment to any country in Asia-Pacific.

The EU is thus perceived as a prominent economic actor with some degree of influence on political developments in the region, being on good terms with China as well as virtually all local actors.

Union countries and China have developed, during the 1990s, closer economic links than in the past. European initiatives are now being undertaken along two parallel tracks - by each capital and by the institutions in Brussels - national governments have been left free to give their support to private firms.

Up until now, the two-track strategy has produced no friction between Brussels and individual countries, thus the current situation may be described as one of mutually reinforcing initiatives. The EU is apparently committed to providing a political framework that enhances predictability and reasonably stable expectations about Sino-European relations.

A major initiative that could mark a turning point is the recent document by the European Commission on long-term Sino-European ties. The report is based on the premise that the EU needs to establish a strong relationship with the world's fastest growing economy. The Union sets as its goal a partnership with China at a time when it is undergoing a rapid and not always coherent process of economic growth, socio-economic reform and a still very uncertain political setting.

This potential role requires a highly competitive attitude vis-à-vis the United States and Japan, although a deterioration in the political ties with either is not necessary. There is a sharing of interests between the Union and China for developing a relationship that goes beyond strictly commercial ties.

Europeans understand that an active presence in the emerging Asian markets requires the EU to take a stand on a number of issues of a political nature.

On the part of Beijing, there is an interest in reducing China's economic dependence on the US - as well as Japan - for both economic and political reasons.

The US is seeking to define a new role in its dealings with the Pacific Rim while reducing the burdens it inherited from the Cold War. At the same time, the members of the EU are showing renewed interest for a region, that until recently, they saw as distant, and now has the economic capability to establish a mutually beneficial relationship.

China is today of crucial importance from the Union perspective as the EU seeks to expand its economic reach in the global context and to develop an effective Common Foreign and Security Policy.

The notion is taking root that there is potential for bilateral ties with China that are independent of the Sino-American relationship. Since the early 1970s the Washington-Beijing axis has provided the framework for weak Sino-European links as long as Beijing was seen as an important strategic factor in the US-Soviet competition.

Under the current political and economic conditions in the region, the EU is a potential counterweight to the increasingly uncertain American role and to the Japanese effort to acquire an economically dominant position in the area.

The emerging regionalism of the Pacific Rim, with multilateral practices and mechanisms being slowly developed to cope with new economic challenges, may seem to limit the ability of the EU to penetrate such a competitive market also because of the distinctive economic features of the Union member states.

However, some of these factors may turn out to be useful assets, allowing Union firms to eventually overcome the obstacles imposed by the Cold War. A concerted action by EU countries can thus contribute to redress the already shifting balance of economic power in the region.

There are two other tendencies in the international setting that are especially relevant: one towards economic globalisation and another towards the reduction of the usefulness of military power when applied in isolation from other means of influence.

Stemming from the trends outlined, there is a growing awareness that the time may be ripe for boosting Asian-European ties.

The 1995 Brittan document (the EU Commission's project for a long-term policy on Sino-European relations) deals specifically with bilateral relations, and starts from the recognition that China is growing in military, political and economic power.

Interdependence with an actor such as the EU does not pose major risks for China, unlike the current economic overdependence on the US and Japan. This is largely due to historical reasons, but it is being bolstered by recent contacts between Chinese and European officials: EU countries are displaying caution and deliberate restraint in pressing Beijing on issues such as human rights and relations with Taiwan.

From a European perspective, the growth of Chinese influence in South East Asia can be viewed with some detachment as a natural phenomenon that reflects shifting capabilities and does not threaten European interests.

One important aspect of the European attitude is the support for China's early accession to the World Trade Organisation, which was opposed by Washington on the grounds of strict conditionality. EU countries have argued that the best way to affect Chinese behaviour is to make Beijing an active participant to the interplay between international institutions.

Therefore, the EU has attached fewer conditions to China's entry and adopted a policy of integration as an incentive to further openness. On the basis of this experience, one additional avenue of European influence on China in the future might be the notion that Europe provides a model of participation in international institutions and of security management.

In spite of China's reluctance to engage seriously in multilateral dialogues and institution-building efforts, the economic success of the EU is a reminder that cooperative efforts based on interdependence can produce a viable security system in which economies prosper.

The assumptions guiding European initiatives towards China can help gauge the type of relationship that it is likely to develop. Increasing economic interdependence is regarded as a powerful force of change in China, and the human rights issue is never seen in isolation from the overall transformation of Chinese politics and society.

Outside influence on the Beijing regime is expected to derive more from economic contacts than from the exercise of deliberate pressure at the highest political level. Drawing China into industrial, financial and trade contacts with European operators is probably the best hope for encouraging the Chinese to implement bold reforms.

However, major changes in the short term are not seen as a precondition for an economically successful European strategy, which primarily requires stability and some degree of predictability.

Siro Polo Padolecchia, a former industry director-general at the European Commission and UN envoy to China, is President of the Euro-China Marketing Advisory Service. He bears the title of Count of Cattaro and is a descendant of Marco Polo and Nicolo da Ponte, 87th Doge of Venice.

Major feature on the potential for EU-China relations. Author is a former European Commission director-general.