Europe’s China-Play

PARIS: The air is again thick with speculation that during the December 8 summit, the European Union may lift the embargo against arms sales to China. While the confluence of international interests and European realpolitik appear to nudge the group in that direction, concern over Europe's limited leverage with China's future military role, as well as human rights, may still prove a stumbling block.

The embargo has been in place since the violent Chinese suppression of the democracy movement at Tiananmen Square. The arguments for lifting this 15-year-old embargo, which appears anachronistic against the backdrop of booming economic ties with China, are many. Fence-sitters, such as British foreign minister Jack Straw and Dutch foreign affairs minister Bernard Bot, have already announced that they are not opposed in principle to that decision, which is advocated by France's Chirac and Germany's Schroeder.

First, the original reasons for the embargo have dissipated - not because China has given satisfaction to Europe's human rights concerns, but because Europe and the United States have already de-emphasized that issue in their relationships with China. How else could former Secretary of State Colin Powell pronounce Sino-American relations to be "the best since 1972" (i.e., since the golden age of normalization under the Nixon administration)? Powell himself was only following European countries which shifted emphasis in 1997, when several chose not to condemn China at the yearly UN Geneva conference on human rights. Helped by the diffuse liberalization inside China's society, governments have indeed shifted their priorities. Boosting trade, protecting intellectual property, obtaining China's cooperation on the twin issues of proliferation and North Korea, getting a nod in the war against terrorism, and its quiescence over the occupation of Iraq, are now much more pressing issues.

Those who believe in the role of values in foreign policy will regret this trend, but the fact is that American Wilsonian idealism may have exhausted itself in the quest to remake the Middle East. Could Condi Rice, Donald Rumsfeld, and other neo-conservatives reverse the Powell course on China? That's very unlikely, given the international circumstances.

More importantly, the immediate interests of a majority of European countries - France, Germany, Spain, Italy, and some others (including the Czech Republic, where the heritage of President Vaclav Havel is disputed by a strong arms industry lobby) - are best served by large business contracts with a prosperous Middle Kingdom, mostly pushed at the government level. The pressure is not necessarily from the largest European weapon manufacturers - some of which stay mum on the issue, in fact, because they want to keep access to the Pentagon and its much larger procurement budget. Major civilian firms looking for a share of China's investment boom can only see a benefit from better political relations, with what is, to them, a cost-free gesture to China's leaders. The only exceptions are some Nordic countries who are ambivalent on the issue not only because of moral reasons, but also because their stake on the China market is perceived as less important. Reflecting the general public mood the European Parliament (by 572 votes against 72), and perhaps more importantly the German Bundestag, have voted against lifting the embargo. However, the European legislators, who have increased their power relative to the Commission, carry very little influence with the Council of ministers.

China is the first destination in the world for foreign direct investment (and therefore technology transfer), and the main actors in this relationship are American, Taiwanese, Japanese, and of course European. Israel, a close ally of the United States, has been a major seller of weapons to China in the past decade, although much to US displeasure. The huge "China play" - the investors' term for business opportunities in China - has become the real face of "constructive engagement," as the policy towards China was defined during the Clinton administration. The Bush administration, and especially its defense and strategic community, will not adopt the term, but huge business interests do practice that concept. The world's industrialized countries and multinational firms are scrambling to make China the biggest industrial center of the 21st century.

Europe should pause, of course, and contemplate the potential consequences of the free acquisition of modern weapons by a rich China. Even if China's diplomacy today emphasizes peace, stability, and integration, the scramble for military modernization and shopping list of purchases and in-house developments simply scream the word Taiwan. Europeans today are more impressed by the growing economic and human relationship between Taiwan and mainland China. The island's separatist urge is understood even less in Europe than in the United States. Yet the issue of a potential conflict in the Taiwan straits - and of unwitting participation by Europeans on both sides - should clearly deter Europe from any major military sales to China.

Beyond the risk of war in the Taiwan straits - a risk that is openly acknowledged, and even boasted about, by some quarters in China - the future balance of power in the Asia-Pacific is also cited by opponents to the lifting of the embargo. But Europeans see grassroots change in China, social and political transition, as well as regional integration with more optimism than many American strategists. To many Europeans, the Chinese case today is more reminiscent of the slow disappearance of South Europe's authoritarian regimes such as Spain or Greece in the 1970s, or even South East Asian national security states: It was not the Cold war, but integration into the European mainstream, or globalization, that changed the face of these regimes. Both American neo-conservatives and Jacksonian idealists still see China as a totalitarian country and do not like the arms door opened to China. Many Europeans, however, see China as an authoritarian, or even semi-authoritarian regime in transition. The European lesson is that it was best to engage rather than to punish these regimes.

Europeans, or at least many of them, also see the enormous needs of China's economic modernization as a second chance for them to gain influence in China, and have no qualms about an increased role of China that would be commensurate with its economic growth.

How are Europeans likely to come out on this debate? The European Union needs more debate with the United States - and much reassurance towards the more concerned among China's neighbours. To soften US opposition, Europe could continue drafting new criteria for arms exports to China. This will buy time, although it raises the fear, on the part of weapon manufacturers, that these criteria might be applied to other potential customers. Ironically, the lifting of the embargo would then result in a "moral policy" on weapons exports with power of decision kicked upwards at the level of the Union.

Some European leaders want more of a gesture towards China. The most probable outcome of the EU-China meeting on December 8 is a decision to lift the embargo at some future, but unspecified, date. That will give Europe's busy negotiators time to come up with a better code of conduct on future arms exports to China. It will also give China some diplomatic face, and it will avoid an immediate clash with a newly reinforced Bush administration.