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"Canada can, within a positive friendly atmosphere, ask the Chinese government to resolve the Tibetan situation."

China Pulls The Wool Over Europe's Eyes Once Again

October 19, 2010

The Gov Monitor
October 17, 2010

The European Union’s recent China-EU summit
followed hot on the heels of another successful
encounter with the South Korean government that
produced a free trade agreement.

Two decades ago Korea was the most closed of all
Asian tigers to foreign imports and financial
investment, but the trade agreement shows two
things: That cultural and political dogma can
change, and that when Europe moves forward with a
measure of coherence, it gets results.

After all, not even the United States has matched
the South Korean trade agreement.

Not so, or at least not yet, with China. Before
the summit Europe had just done two unprecedented
exercises, with a foreign affairs ministers
meeting, and the European Council itself, holding
extensive talks over the relationship with China and other emerging countries.

Yet, translating thinking into swift action is
not a strong point of European institutions, or
of coordination among the 27 member states.
Coherent leadership does not seem available –
perhaps is contested from within when it appears.

In any case, the summit has left us with the
pieces of a puzzle that does not make much sense by itself.

Here are the puzzle pieces:

* a one-page joint statement after the EU-China
summit that seems to break a record for
emptiness, even though it brought back reciprocity as a principle

* Strong and optimistic statements by the
Eurogroup before the Summit on China’s
willingness to cooperate inside the international monetary system

* a follow up, after the summit, by a furious
Chinese tirade, with Premier Wen Jiabao putting
Europeans on notice that re-evaluation of the
Chinese currency would spell disaster both for China and its global partners

There was also fairly strong language by Herman
Van Rompuy, who is gaining a reputation for not
mincing his words on neither the international
currency issue nor on human rights: Van Rompuy
reiterated a European position about the need for
China to ratify the United Nations covenant on civil and political rights.

Meanwhile, Chinese diplomacy was making good use
of its European trip, signing large investment deals in Greece and also Italy.

In both cases, harbours and transportation were
the targets of choice, opening up a major
Chinese-owned backdoors into the single market.

We should not be surprised if this is quickly
followed by deals on fast rail lines and perhaps
rolling stock. Rotterdam and Hamburg, beware.
Given the facts about sovereign debt along the
Mediterranean, cash-rich China is gaining a
reputation there for being something of a Father
Christmas, just as it has already become for many African nations.

These concrete developments on Europe’s southern
flank clearly overtaking the pace of events at
the European core only add to the puzzle. We
already had an inkling of this when in a
Bundestag speech Angela Merkel raised the issue
of a Polish motorway being built by a Chinese
firm and workers, with attractive financing but also European subsidies.

Quite correctly, she mused about the opportunity
to claim reciprocity from China and pry open its
own public procurement markets.

Wouldn’t this and other issues make a perfect
bargaining issue with China, as it tries to
obtain market economy status? Similarly, since
China wants the European arms embargo lifted,
wouldn’t the repetition of EU’s basic requests on human rights be in order?

Europe could also suggest that China heed
Europe’s core security interest in stopping
Iran’s acquisition of nuclear weapons.

Some of the larger European member states have
arrived at the conclusion that hardnosed
bargaining with China on issues of mutual
interest is the only way to move forward. But
they have difficulties in getting their point
across European institutions (and the knee-jerk
reactions of some member states) to any issue involving China.

Just how fragmented, if not divided, Europe
remains, was highlighted after the award of the
Nobel Peace Prize to Liu Xiaobo, now languishing
in a jail in China’s north-east.

With the experience of the Dalai-Lama still
fresh, one might have thought that Europeans
would make sure they coordinated the thrust of their response.

But in the event, either they wouldn’t or
couldn’t. At one end of the spectrum, Chancellor
Merkel not only commended Liu Xiaobo, but spoke
of his courage and urged his release.

So did the British foreign minister, William
Hague, albeit in less strong terms.

Near the other end of the scale, Jose-Manuel
Barroso extended his congratulations -- but
apparently forgot to ask for the release of the
new Nobel Laureate. As to the French reaction, it
can only be ascribed to post-traumatic shock
coming from the recent Tibet crisis in Sino-French relations.

Not only was Foreign Minister Bernard Kouchner’s
statement uncharacteristically terse and hurried.
But, quite simply, Nicolas Sarkozy and his prime
minister ignored the occasion, and even the
socialist opposition kept mostly silent.

Not all of them could claim the excuse that they
were going to chair the G20 summit. It seems that
after Tibet, France has concluded that the best
diplomatic strategy is simply to shut up.

None of the above stories are purely anecdotal.
China as a realist actor is carefully watching
moves by its partners. It is going to come out of
this series with the belief that it should play
to the needs of Europe’s weakest economies, while
banking on French fickleness and discounting
Germany’s currently solid diplomacy as
insufficient to forge a genuine European-wide China policy.

In the coming months, Europe’s High
Representative for Foreign Relations will have to
report back to the European Council on its
strategic partnerships. A new External Action
Service will come into being, with hopefully
better coordination, across the board – both with
member states and among the EU’s twelve DGs – or ministries.

It is a unique occasion to make up for the
hiccups of improvisation that have again marred the relationship with China.

And since Germany makes two-thirds of Europe’s
economic relationship with China, yet seems able
to express strong concerns reflecting European
interests and values, why not steal a page from Germany’s book for Europe?
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