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January 13, 2011

Dries Belet, European Commission, (7)

Sir,

The political economy of the arms embargo on China is clearly a key issue, and I thank for you this timely opportunity for discussion.

Ever since the PRC concluded its 'Strategic Partnership" with the EU, policymakers in Beijing have been clamouring for the embargo to be lifted. They have pointed out that the embargo is anachronistic (putting China on the same level as international pariahs like Zimbabwe or North Korea), and that China's human rights record has greatly improved since 1989.

Obviously things are not as simple. Lifting the embargo would give a crucial boost to the People's Liberation Army's capabilities in high-tech C4ISR systems (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance), thus disturbing the regional balance of power in East Asia. The US is greatly concerned about this possibility -- after all, the United States has significant military commitments to its allies in Asia (which, despite boasting of its strategic partnerships with countries like South Korea, the EU does not). Moreover, it would also deprive the EU of a critical source of leverage in its relations with China -- handing over such a lovely gift to China without getting anything concrete in return does not seem like shrewd negotiating to me.

Hence, despite intense lobbying by European defence companies (who long for the juicy Chinese market) and pressure by Chinese diplomats, in my opinon the embargo will not be lifted anytime soon. At the time of the EU's last attempt in 2005, the American backlash was sufficiently severe to divide Member States completely; a similar outcome can be envisaged were the issue to be brought up again -- even though the brand-new European External Action Service is supposed to result in a unified foreign policy.

However, if the EU succeeds in setting out a clear strategy on the embargo and on the triangular EU-China-US relationship, an eventual solution of this dilemma might be possible. In my opinion, a potential lifting should be accompanied by three preconditions in order to be succesful.

Firstly, the EU should demand that, as a quid pro quo, China ratifies the International Covenant on Civil and Political Rights (ICCPR). The adoption of this crucial human rights instrument would go a long way in demonstrating that China is serious about making progress in this field (in addition to softening the opposition from European NGOs).

Secondly, the EU should strengthen its code of conduct for arms exports. Once the code is sufficiently streamlined to make sure all destabilising sales of military equipment (and "dual-use" goods) to the PRC would be prevented, the arms embargo effectively becomes obsolete. In this way the embargo could be lifted as a symbol (hence improving EU-China relations) while in practice, arms exports would not increase.

Thirdly, European policymakers should act in close consulation with their counterparts across the Atlantic. At every step in the process of a potential lfiting, the EU should inform politicians in the White House and on Capitol Hill about its next moves (and be open for discussion). I do not advocate that Europe meekly follow the strong will of Uncle Sam, but rather that we try our utmost to assuage the Americans' concerns before moving forward with an indepedent strategy of our own.

Whether or not this proposed template is the right to follow, in any case the EU should get its act together and work on a coherent policy. If they want to avoid another 2005-style imbroglio over key strategic issues like the arms embargo, policymakers like Catherine Ashton and Herman van Rompuy can even learn a lot from the Chinese, who are masters of the timeless art of diplomacy.

China is outstandingly proficient in the field of 'economic statecraft' - the use of economic tools in the pursuit of wider, strategic goals. As suggested by the editiorial team, Beijing is prone to employing its commerical and financial assets towards the furthering of its geopolitical interests. The buying of European government bonds (over other options such as US treasuries) should surely be seen in this perspective: it provides China with increasing leverage over Europe's future in addition to making the Chinese less dependent upon the US. A myriad of other examples of the PRC's economic statecraft exist: trade agreements with Taiwan, long-term investments in key African countries, the buying of stakes in Western financial institutions during the financial crisis, and so forth. If the EU wants to remain a force to reckon with on the global stage, it had better heed China's example.

Yours sincerely,
Dries Belet
Trainee in the European External Action Service (but writing in a personal capacity)
dries.belet@gmail.com

January 13, 2011

Felix F. Seidler, Atlantische Initiative, Platinum Contributor (329)

I am not concerned whether the arms embargo is lifted or not. China will increase and modernize its military anyway. Recently, Beijing confirmed all the rumors that it is building an indigenous aircraft carrier. In addition, the new stealth fighter highlights what China can do on its own. Maybe China cannot buy certain Western products from. However, the stealth fighter´s design proofs that the PRC´s intelligence does a pretty good job. Therefore, China will be able to compensate possible gaps.

Far more worrying is, as more European countries depend on Beijing´s money, the less they will rise up their voices on human rights issues in case of China. Hence, financial dependency may convince European decision makers that it is better to keep their opinion for themselves. Hence, the right question is not about whether to sell military equipment or not. We Europeans should ask ourselves about accompanying political dependencies. Whenever the Euro´s crisis comes to an end, however, the Common Foreign and Security Policy will not have the freedom of action than it had in 2010.

January 14, 2011

Member deleted

Communist China has always believed that political powers come from guns - the military, that has never changed all through the years, very unlike the west where civilians rule and military assists and cooperates.

And it is apparent that communist China is probably practicing that belief on world stage as well, currently, and that's bad news.

With the US-EU alliance, communist China might probably convert eventually, albeit not any time soon, with Premier Wen suggesting higher moral grounds and revival of cultural values to communist leadership, but in vain, so far.

Weapons for investment is a very very bad idea.

January 15, 2011

Mike McCormack, Florida International University, Gold Contributor (88)

While I am sure that European arms exporters see a lot of opportunity in dealing with China, it also comes at a high price. The protection of intellectual property rights in China, particularly with regard to the development of defense systems, is rather poor. Europe would also risk entering the tit-for-tat fray with regards to selling arms to Taiwan that has been a major pain in US-China relations over the years. At this point it just might not be a fight worth fighting for European exporters, even with the enormous potential for profit.

January 17, 2011

Member deleted

China – A Middle Kingdom to Reckon With

Abstract : China, by its communist party ruling structure, may be categorized as a mid-sized kingdom that the west would/may have to deal with, as is, for now, knowing that there are numerous/countless local kingdoms within the kingdom.

To start, a few famous little stories published in communist China, hereinafter termed as China, maybe appropriate, and revealing, as well.

Mr. Li Peng, a former premier of China, as he wrote, was told repeatedly by his mother that he be “careful of dogs”, when visiting her at home.

Mr. Zhu Rongji, another former premier of China, when visiting a cross lake bridge in Hunan province, commented that the bridge was “too narrow, not tall enough – some boats could not make passage under, too expensive, and let’s forget about it.”.

While visiting a local community, which tried to put on a fake show of prosperity, he asked the local officials “why the same herd of cows were going around back and forth ?”.

And Mr. Wen, the current premier of China, when making suggestions to communist leadership for higher moral ground and revival of Chinese cultural values, only to meet with cold shoulders, and ignored by local kings, who may have no concept of these important matters, as it seems.

That’s problematic in that China central’s will may just stay in Beijing, perhaps due to its lack of legitimacy.

When visiting China in the last two decades or so, met some Chinese local officials and civilians, and in the talks with these people, none held any esteem for the communist party.

In addition, often confronted with questions such as “Do you know what the three representatives mean ? Just jokes.”, “Should China build aircraft carriers ?”, “The secretary-general does not know anything.”, “How much CN$ can be printed for a US dollar’s worth of gold ?”, “How much foreign exchange reserve should be in place for international trade ?”, and etc. Some answers given were termed as having a background of the imperialist United States.

Mr. Deng Xiaoping said that Chinese communist party has two factions in it for the balance of power, thus, China does not need two parties, a little idealistic and optimistic, which may be suitable at that time and stage, but it is a different era now.

China – On the Economic Front

It has been questioned by many, inside and outside of China, that the vast amount of foreign exchange reserves held did not seem to have benefited the Chinese people in general, except perhaps for a few privileged classes only.

That, the overheating economy, and the assets bubbles bursting, will probably bring China’s economy into trouble in short order, if not handled well. Let alone the international trade imbalances and currency revaluation problems, which compound the internal heat for serious reforms from local to central levels, no longer talks only to buy more time, and with the knowledge that Chinese central government is fastening its pace for reforms, but time is running out.

In short, China should pay a lot more attention to the benefits of its own people in general, instead of the old concept to let a few to get rich first, that has gone on for the last 20 years or so. It’s time to let all Chinese be well off now.

In that process, the problems of trade imbalances and currency revaluation will likely be resolved more smoothly than the perhaps intended shock therapy on China, which, Zhou Xiaochuan, the president of China’s central bank – People’s Bank of China, is very aware of and tried to prevent/avoid, but was criticized as a bureaucrat with “West” mind by communist party newspaper.

China – On the Military Front

The communist party has always believed in the concept that political powers come from guns – the military, and that perhaps has never changed. Which is very different from the west whereby civilians rule and the military assists and cooperates.

And if that Chinese concept is applied to the world stage, as China is perhaps advancing that might lead to a full sized kingdom beyond its boundary, namely an empire. That’s a very dangerous situation, obviously, which would probably encourage NATO type of concept and organization in east Asia and/or Asia to be consolidated and formed.

Recent reports showed that US Secretary of State and Secretary of Defense, the soft and hard US diplomatic arms, are on the same page, hoping China will go in the direction of civilians rule, and wanting to cooperate with China in that fashion, thus, normalizing US-China relations.

Now then, US and Chinese Presidents are to meet soon, hoping things will come out right for everyone’s sake, albeit not many fingers are crossed.

Footnote : A recent report on the Times of India (01/16/2011) online summarized its view on China’s political inclinations, namely China does not want to slide into North Korean style “Shogun” structure, and China does not want to destabilize the current system – which is viewed by some as a system of graft elites rule.

(As is published on Transpacific Think Tanks.)