The Role of the European Union in Asia (The International Political Economy of New Regionalisms)

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Author: Bart Gaens | Juha Jokela | Eija Limnell

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The Role of the European Union in Asia

The International Political Economy of New Regionalisms Series The International Political Economy of New Regionalisms series presents innovative analyses of a range of novel regional relations and institutions. Going beyond established, formal, interstate economic organizations, this essential series provides informed interdisciplinary and international research and debate about myriad heterogeneous intermediate level interactions. Reflective of its cosmopolitan and creative orientation, this series is developed by an international editorial team of established and emerging scholars in both the South and North. It reinforces ongoing networks of analysts in both academia and think-tanks as well as international agencies concerned with micro-, meso- and macro-level regionalisms. Editorial Board Timothy M. Shaw, Institute of International Relations at The University of the West Indies, St Augustine, Trinidad & Tobago Isidro Morales, Tecnologico de Monterrey, Escuela de Graduados en Administracion (EGAP), Mexico Maria Nzomo, Permanent Mission of the Republic of Kenya to the United Nations Office in Geneva Nicola Phillips, University of Manchester, UK Johan Saravanamuttu, Institute of Southeast Asian Studies, Singapore Fredrik Söderbaum, School of Global Studies, Göteborg University, Sweden and UNU-CRIS, Belgium Recent titles in the series (continued at the back of the book) China and the Global Politics of Regionalization Edited by Emilian Kavalski Clash or Cooperation of Civilizations? Overlapping Integration and Identities Edited by Wolfgang Zank New Perspectives on Globalization and Antiglobalization Prospects for a New World Order? Edited by Henry Veltmeyer

The Role of the European Union in Asia China and India as Strategic Partners

Edited by Bart Gaens, Juha Jokela, Eija Limnell University of Helsinki, Finland

© Bart Gaens, Juha Jokela and Eija Limnell 2009 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Bart Gaens, Juha Jokela and Eija Limnell have asserted their right under the Copyright, Designs and Patents Act, 1988, to be identified as the editors of this work. Published by Ashgate Publishing Limited Ashgate Publishing Company Wey Court East Suite 420 Union Road 101 Cherry Street Farnham Burlington Surrey, GU9 7PT VT 05401-4405 England USA www.ashgate.com British Library Cataloguing in Publication Data The role of the European Union in Asia : China and India as strategic partners. -- (The international political economy of new regionalisms series) 1. European Union countries--Foreign relations--China. 2. European Union countries--Foreign relations--India. 3. China--Foreign relations--European Union countries. 4. India--Foreign relations--European Union countries. I. Series II. Gaens, Bart. III. Jokela, Juha. IV. Limnell, Eija. 327.4'05-dc22 Library of Congress Cataloging-in-Publication Data Gaens, Bart, 1967 The role of the European Union in Asia : China and India as strategic partners / by Bart Gaens, Juha Jokela and Eija Limnell. p. cm. -- (The international political economy of new regionalisms series) Includes bibliographical references and index. ISBN 978-0-7546-7790-1 (hardback) -- ISBN 978-0-7546-9536-3 (ebook) 1. European Union--China. 2. European Union--India. 3. European Union countries-Foreign relations--China. 4. European Union countries--Foreign relations--India. 5. China--Foreign relations--European Union countries. 6. India--Foreign relations--European Union countries. 7. China--Foreign relations--India. 8. India--Foreign relations--China. I. Jokela, Juha. II. Limnell, Eija. III. Title. JZ1570.A57.C649 2009 341.242'2--dc22 2009022180 ISBN 978 0 7546 7790 1 (hbk) ISBN.V)

Contents List of Graphs and Charts List of Tables Notes on Contributors Foreword Acknowledgements List of Abbreviations

Introduction Juha Jokela and Bart Gaens

1

The EU–India–China Strategic Partnership and the Impact of Regional Constructs Timo Kivimäki

2 3

The European Union as an International Actor: Europeanization and Institutional Changes in the Light of the EU’s Asia Policies Juha Jokela

The Development of the EU’s Asia Strategy with Special Reference to China and India: Driving Forces and New Directions Bart Gaens

4

EU–India Relations: An Expanded Interpretive Framework Stig Toft Madsen

5

Thinking Clearly on Political Strategy: The Formulation of a Common EU Policy Toward China Mikael Mattlin

6 Sino-European Relations: From the Height to the Width Zhang Tiejun 7

China’s Evolving Approach to Multilateralism and Global Governance: Implications for the European Union Bates Gill

vii ix xi xiii xv xvii 1

9

37

55 77

95 121

139


vi

8 Scrutinizing China’s Quest for Energy Security Abroad Linda Jakobson 9 Engaging the European Superpower: India and the European Union Rajendra K. Jain

155

173

10

The Ambiguities in the China–India Relationship Claudia Astarita

189

Conclusions and the Way Forward Eija Limnell

211

Bibliography Index

223 251

List of Graphs and Charts Graphs 1.1 1.2 1.3 1.4 1.5 1.6

Regional military expenditure in East Asia Regional military expenditure in South Asia Military expenditure and Central Asia: Regional actors Military expenditure and Central Asia: All actors The GDP of the three biggest economies in South Asia (PPP) The GDP of the East Asian powers

2.1

Key Asian actors in Commission and Council documents, 2001-2007 Key Asian actors in all Council documents and CFSP related subject matters, 2001-2007

2.2

12 12 13 14 15 15 43 43

Charts 5.1 A longitudinal analysis of the occurrence of operative words in the European Commission’s China policy papers 5.2 A longitudinal analysis of the occurrence of substantive words in the European Commission’s China policy papers 5.3 The EU member states’ trade balance with China, 2006

101 102 106

This page has been left blank intentionally

List of Tables 1.1 Oil and natural gas consumption and production

17

3.1 ASEM initiatives jointly launched and (co)supported by China 3.2 ASEM initiatives hosted by China

66 67

5.1

The use in Chinese diplomatic rhetoric of the concept “strategic partnership”

10.1 Major items of bilateral trade in 2006-2007

115 197


Notes on Contributors Claudia Astarita is a research fellow at the Centre of Asian Studies, University of Hong Kong. Her research focuses on the interactions between China and India as major emerging Asian powers. Dr Bart Gaens is a senior researcher at the University of Helsinki Network for European Studies, where he is coordinating a research project on the EU’s relations with Asia. His original field of specialization is Japanese Studies, and his post-doctoral studies have focused on Europe–Asian interregional cooperation. He also worked as an adviser to the Ministry for Foreign Affairs of Finland during the preparations for the Asia–Europe Meeting (ASEM) Summit in Helsinki. He has recently edited a volume on Europe–Asia interregional relations and the role of ASEM (Ashgate 2008). Dr Bates Gill is the Director of the Stockholm International Peace Research Institute SIPRI. He has a long record of research and publication on international and regional security issues, particularly regarding arms control, non-proliferation, strategic nuclear relations, peacekeeping, and military–technical development. In recent years this research has broadened to encompass other security-related trends in the post-Cold War world, including multilateral security organizations and the impact of domestic politics and development on the foreign and security policies of states. Dr Rajendra K. Jain is Professor of European Studies and Chairperson of the Centre for European Studies, School of International Studies, Jawaharlal Nehru University, New Delhi. He has been visiting professor at Leipzig, Freiburg and Tübingen universities, and at the Maison des Sciences de l’Homme in Paris. He is the author/editor of 30 books and has published 80 articles/book chapters. His most recent publication is India and the European Union: Building a Strategic Partnership (Radiant 2007) (editor). Dr Linda Jakobson was working as the Beijing-based senior researcher at the Finnish Institute of International Affairs (FIIA) at the time of writing her contribution to this volume. In March 2009 she took up the position of senior researcher at the Stockholm International Peace Research Institute (SIPRI). Her research focuses on societal development in China, China’s energy policy and the impact on its foreign policy, and its policies on climate change.

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Dr Juha Jokela is a senior researcher at the University of Helsinki Network for European Studies and a research fellow at the Ministry for Foreign Affairs of Finland. He has also worked as the Director of the Network for European Studies. His research focuses on Europeanization and foreign policy, and he is currently expanding these themes in the broader analytical frame of regional and global governance and the EU’s Asia relations. Dr Timo Kivimäki is a Docent, and a senior researcher at the Nordic Institute of Asian Studies NIAS (Copenhagen). His current research interests include conflict resolution, security needs, and regional cooperation in Asia. Eija Limnell is a Finnish diplomat who is currently a visiting researcher at the University of Helsinki Network for European Studies. Before that she held the post of Director for Policy Planning and Research at the Ministry for Foreign Affairs from 2005 to 2008. Her fields of interest include EU’s foreign and security policy, human rights, conflict resolution, and international mediation. Dr Stig Toft Madsen is currently a guest lecturer at the Centre for East and SouthEast Asian Studies at Lund University, and is also Assistant Director of SASNET (the Swedish South Asian Studies Network, Lund University). His research focuses on the political culture of India and South Asia. Dr Mikael Mattlin is University Lecturer in world politics at the Department of Political Science, University of Helsinki. His research interests include EU–China relations, informal political structures in Taiwan and Mainland China, Chinese strategic SOEs and political economy, Cross-Strait relations, Chinese political strategy and China’s roles in multilateral organizations. Dr Zhang Tiejun works as a senior researcher at the Shanghai Institute for International Studies. He obtained his PhD degree in Peace and Development Studies from Gothenburg University in Sweden. His research interests lie in the areas of China’s foreign policy, East Asian regionalism, Sino-European relations, and Chinese engagement with Africa. He has publications in both China and the West, including two books and a number of papers.

Foreword Given that there are almost no global problems that can be resolved without the active engagement of China and India, this volume is a most timely analysis of the EU’s relations with these two major emerging powers. The astonishing growth rates of “Chindia” over the past decade have propelled both countries to a leading role on the world stage, whether the issue is trade and development, energy and climate change, global governance or political and security affairs. In cultural and IT matters, China and India are also making their mark. The Beijing Olympics were a great success and the Shanghai Expo will probably be the greatest international exhibition of modern times. Cinema audiences around the world were fascinated by Slumdog Millionaire, the Oscar winning film that captured the chaotic, vibrant society of today’s India. Bangalore is a world center for IT and software. The world marveled as 700 million Indians took part in the world’s largest genuinely democratic elections in May 2009. The EU has struggled to develop its strategic partnership with China and India, and the lofty ambitions of 2003 have not been fully realized. This is partly because of disillusionment with the EU in Beijing and Delhi. Early on in the decade, China and India had high hopes of the EU. Both produced policy papers that painted a glowing picture of an expanding EU, a powerful economic and trade bloc with its own currency, and an increasing presence as a global actor. Each saw the EU as a counterweight to the unipolar world of George W. Bush. But the EU was split apart by the Iraq war, failed to agree on lifting the arms embargo on China, and struggled to come to terms with India’s status as a nuclear power. In addition, the EU faced a popular revolt by its own citizens. In 2005 the French and Dutch rejected the constitutional treaty in a referendum. Three years later, the Irish threw out the revised Lisbon treaty. It is hoped that the new treaty will provide the EU with more visibility, continuity and coherence in foreign policy. These are certainly much needed attributes in dealing with major powers such as China and India who, like the US and Russia, are highly skilful at playing divide and rule with EU member states. Over the past decade, the EU has paid increasing attention to Asia but too often its message fails because of divided noises from different European capitals. It should be obvious to all member states that they have very limited leverage in dealing with China and India on their own. Only a common policy, whether on trade or climate change, on Africa or Iran, is likely to have some impact on Beijing and Delhi. Another criticism is that its Asian policy is really a China policy. If one considers the very large number of EU politicians and officials visiting China, compared to Delhi (or Tokyo), then there is something in this criticism. But visits do not tell the

xiv


whole story. The EU shares more basic values with India (and Japan) compared to China. This volume brings out the efforts of the EU to influence China and India with its normative values. These efforts have not been particularly successful and it may be timely to consider how to change tactics. But it would be a major error for the EU to drop its values in an attempt to sell a few more cars or planes. This collection of essays is a very valuable contribution to the debate on the EU’s relations with Asia and its efforts to establish a more visible and effective global footprint. It provides a balanced and comprehensive survey of the main issues in the EU’s relations with China and India. It is also very timely as the EU is currently negotiating a new strategic partnership with China and a free trade agreement with India. The volume deserves a wide readership. Fraser Cameron Director of the EU–China Academic Network (ECAN)

Acknowledgements This book is the result of a research project on the European Union’s strategic partnerships with China and India, commissioned by the Ministry for Foreign Affairs of Finland. The project was carried out in close collaboration with three Northern European research institutes. The Stockholm Peace Research Institute (SIPRI), the Nordic Institute of Asian Studies (NIAS), and the University of Helsinki Network for European Studies (NES) were involved from the planning stages to the formulation of the key outcomes. We would like to express our gratitude to the Ministry for Foreign Affairs of Finland for the original initiative and resources to assess the strategy of the EU towards China and India, and to explore ways of promoting a stronger and more versatile role for the EU in Asia. In particular we are indebted to Professor Kari Möttölä and Ms Kati Bjennes from the Unit for Policy Planning and Research. They were closely involved in the planning of the project and in the brainstorming sessions on the key themes, and we are immensely thankful for their intellectual contribution as well as determination to keep this project on track. We are also most grateful for the close cooperation with the representatives of the project’s partner institutions, namely Dr Bates Gill of SIPRI, Dr Timo Kivimäki of NIAS, and Dr Henri Vogt of NES. They have all been an invaluable source of ideas and expertise. In particular we would like to note their contribution in the formulation of the practical policy recommendations for the EU. Several other scholars have participated in this project at different stages. We are indebted to Professor David Shambaugh, Professor Jin Canrong and Dr Fraser Cameron for their insightful comments and suggestions. We furthermore gratefully acknowledge the input provided by all the other scholars and civil servants who have participated in the lively discussions during the project’s brainstorming meetings and preparatory seminars. Special thanks also go to Professor Timothy Shaw for his advice and support, and to the staff of Ashgate Publishing for their assistance in preparing the manuscript. Last but not least, we express our gratitude to the contributors to this volume. Working with you has been intellectually stimulating and rewarding. Bart Gaens, Juha Jokela, and Eija Limnell University of Helsinki Network for European Studies


List of Abbreviations AFTA ASEAN Free Trade Area APEC Asia-Pacific Economic Cooperation APT ASEAN Plus Three ARF ASEAN Regional Forum ASEAN Association of Southeast Asian Nations ASEM Asia–Europe Meeting BJP Bharatiya Janata Party BRICs Brazil, Russia, India and China CBM Confidence-Building Measures CENTO Central Treaty Organization CFSP Common Foreign and Security Policy CIDA Canadian International Development Agency CNOOC China National Offshore Oil Corporation CNPC China National Petroleum Corporation COREPER Comité des Représentants Permanents (Committee of Permanent Representatives) CSCAP Council for Security Cooperation in the Asia Pacific CSE Centre for Science and Environment CSTO Collective Security Treaty Organization CTBT Comprehensive Test Ban Treaty DPRK Democratic People’s Republic of Korea EAS East Asia Summit EC European Community/Communities EEAS European External Action Service EEP Experts and Eminent Persons EES European Security Strategy EMM Economic Ministers’ Meeting ENP European Neighbourhood Policy ESDP (Common) European Security and Defence Policy EU European Union EURATOM European Atomic Energy Community FDI Foreign Direct Investment FinMM Finance Ministers’ Meeting FMM Foreign Ministers’ Meeting FTA Free Trade Agreement G7 Group of Seven G8 Group of Eight

xviii


G20 Group of Twenty GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GOI Government of India IAEA International Atomic Energy Agency IBSA India, Brazil and South Africa ICCPR International Covenant on Political and Civil Rights ICJ International Court of Justice IMF International Monetary Fund IPR Intellectual Property Rights ITER International Thermonuclear Experimental Reactor JCC Joint Co-operation Committee KEDO Korean Peninsula Energy Development Organization LNG Liquefied Natural Gas MES Market Economy Status MFN Most Favored Nation NAS New Asia Strategy NATO North Atlantic Treaty Organization NGO Non Governmental Organization NIEs Newly Industrializing Economies NOCs (Chinese) National Oil Companies NPT Non-Proliferation Treaty NTBs Non-Tariff Barriers NWS Nuclear Weapon State ODA Official Development Assistance OECD Organization for Economic Cooperation and Development ONGC Indian Oil and Natural Gas Corporation OSCE Organization for Security and Cooperation in Europe PCA (EU–China) Partnership and Cooperation Agreement PPP Purchasing Power Parity PRC People’s Republic of China ROC Republic of China (Taiwan) SAARC South Asian Association for Regional Cooperation SCO Shanghai Cooperation Organization SEATO Southeast Asia Treaty Organization SEPA Chinese State Environmental Protection Agency SEZs Special Economic Zones Sinopec China Petroleum and Chemical Corporation SMEs Small and Medium-sized Companies SOM Senior Officials’ Meeting SOMTI Senior Officials’ Meeting on Trade and Investment TAC Treaty of Amity and Cooperation UN United Nations UNHCR United Nations High Commission for Human Rights

List of Abbreviations

UNSC United Nations Security Council WB World Bank WTO World Trade Organization

xix


Introduction Juha Jokela and Bart Gaens

Background and Aims This book explores the interaction between Europe and Asia, focusing on the European Union’s (EU) strategic partnerships with China and India. In Europe, the EU is striving to become a more efficient, visible and coherent regional and global actor. In Asia, meanwhile, China’s leadership aspirations in the East Asian region and India’s growing involvement in the regional cooperation frameworks are further evidence of the global ramifications of regional dynamics and relations. The EU, China, and India are critical players in several key issues, such as financial markets and trade, security and climate change, poverty alleviation and energy supply, although their strategic interests may both converge and diverge. Europe’s “re-discovery” of Asia during the early 1990s was rooted in trade-based incentives following East and Southeast Asia’s economic rise, the awareness of growing interdependence due to the forces of globalization, and the increasingly strong role of the United States (US) in global governance. The EU’s initial strategy toward this vast and diverse area was largely based on region-toregion dialogue manifested in its New Asia Strategy paper published in 1994, and further institutionalized in the Asia–Europe Meeting (ASEM) set up in 1996. Since then the importance of Asia to the EU has only increased. In particular, the rapid growth of economies such as India’s, and the re-emergence of China as an economic and political world power have led some observers to identify an “irresistible shift of global power to the East” (Mahbubani 2008a). Accordingly, the EU has found it crucial to develop closer relations with these powers with their billion-plus populations, rapidly growing economies, significant military capabilities including nuclear weapons, regional status, and increasingly close ties with the US. The aim of the book is to assess the strategies of the EU toward China and India since the 1990s, and to explore the ways in which Europe could assume a stronger and more versatile role in Asia. Four sets of questions are addressed throughout the different chapters. •

Perceptions. How does the European Union perceive the rise of China and India in the context of global governance? Conversely, how do China and India view the emergence of the EU in conjunction with the impact and


•

•

•

future role of the US in Asia? How are these perceptions reflected in the strategies and policies of these actors? The EU’s role and action. What kind of role does the EU play on the ground in Asia? Apart from its economic influence, what are its prospects for making a political, security-related and cultural impact? Can the EU be a role model for the development and integration of Asia as a region? Global governance. What is the interplay of the EU with India and China in global governance, and in reforming and utilizing multilateralism, especially in the context of climate change and energy security? How do these three powers relate to the pre-eminence of the US and its global strategies? Moreover, how is the concept of multilateralism defined in the EU, China, and India? Which issue areas are dealt with in region-to-region contexts, and which in bilateral frameworks? Recommendations. What conclusions can be drawn from the analysis in view of the EU’s future strategy toward India and China? How could the EU pursue its interests in Asia and its objectives in global governance and multilateralism through partnerships with India and China, while retaining its special relationship with the United States?

Analytical Themes In order to make any assessment of EU’s strategic partnerships with China and India it is necessary, first of all, to clarify what kind of actors are involved. The EU, India and China are outwardly very different actors in world politics with their own distinct political and economic arrangements. Although China is moving toward a market economy, its economic system is qualitatively different from the European and Indian systems. On the other hand, there are significant differences between the two market economies of the EU and India, which have at times been reflected in their respective positions in global governance institutions. The political contexts also differ substantially, from (i) the communist one-party rule of mainland China to (ii) the quasi-federalist system of India, often labeled the world’s largest democracy, and (iii) the EU political system based on a mixture of supranational and intergovernmental governance. The differences among international actors have not, however, prevented scholars from comparing and contrasting their strategies and behavior. For instance, much of the rationale behind foreign policy analysis in the Cold War era was to explain the similarities (and to some extent differences) in strategic action between the two superpowers based on distinct political traditions and economic systems. While the similarities were largely seen as resulting from the external environment, differences were explained with reference to internal conditions and personal characteristics of the state officials. An analysis based on a careful consideration of both the external environment and internal conditions, is valuable in examining the EU’s strategic partnerships with China and India. However, the EU’s distinct characteristics as an international actor – the fact that

Introduction

it is not a state or traditional international organization – highlights some novel developments in global governance. Consequently, two analytical themes are central to this book. The first relates to the novel features of the EU’s international actorness and its formulation of foreign policies and strategic action plans, and the second to the significance of multilateralism and regionalism in the contemporary world. First, many of the authors contributing to this volume suggest that the deepening of European integration is indicative of post-modern European actorness and postsovereign politics. This does not, however, imply the erosion of national foreign policies, but rather highlights the complex interdependence and multilateral arrangements in Europe and beyond. On the other hand, the actorness of China and India is predominantly understood in terms of modern statehood within which sovereignty is essential. Therefore, the establishment of strategic partnerships between these distinct kinds of actors is an interesting but challenging exercise, and raises important questions. Do the bilateral arrangements and strategic actions mark a turn toward a modern statehood for the EU? Or does it, on the contrary, highlight an increasing interest in multilateral arrangements for China and India? In the light of these questions, the meaning of the term strategy assumes major importance in the analysis of the partnerships. Does it relate to narrowly defined national or EU interests and power politics in an increasingly multi-polar world? Or is it used in conjunction with increasing interdependence and multilateral arrangements both regionally and globally? Moreover, is a third way possible? Further to these questions, the distinctiveness of the EU as an international actor might yield novel insights into China and India as strategic actors. In accounting for the EU as an international actor scholars have underlined the unique history of European integration, institutional evolution, and, in particular, its foreign policy decision-making system. Consequently, the emergence of the EU on the international stage has led to the questioning of fixed or given state interests in world politics. It has called for a closer and context-specific evaluation of the formulation of these interests in an increasingly globalized world. It is suggested in this book that while it is crucial to specify what kind of actor the EU is, we should pay equal attention to the special characteristics of China and India, including the historical context(s) and tradition(s) that shape their foreign-policy institutions and decision-making systems. Accordingly, the aim here is to contribute to the growing body of literature on the (re-)emergence of China and India. Examples include analyses on the impact of these emerging powers on the global economy (Winters and Yusuf 2007; Enderwick 2007), their implications for the global political order and the mutual relationship between both countries (Meredith 2007; Smith 2007), and both countries’ engagement in Africa (Alden 2007; Broadman 2007). However, the existing empirical literature on the EU’s relations with these emerging powers is scarce and focuses mainly on relations with China. Second, post-war European developments underline the importance of the regional level in world politics. Regional politics and institutions such as the EU, the North Atlantic Treaty Organization (NATO), and the Council of Europe have played a major role for quite some time in European politics and foreign


policy, and more recently have extended their influence elsewhere partly, but not exclusively, due to EU support for regionalism. The EU’s role as a hub of a large number of region-to-region arrangements is often emphasized in the development of interregional relations. Moreover, it has openly supported regional institutionbuilding beyond Europe. In terms of the distinction between a post-modern EU and a modern Asia, the interregional dialogue forms a novel layer of governance closely related to advanced multilateralism, and for many the concept represents increasing interdependence and a departure from state sovereignty and strictly intergovernmental arrangements. However, the significance of interregional relations has been questioned due to the generally disappointing functional performance of the dialogues. This has been attributed to two interconnected factors, namely the structural weakness of the interregional institutions and the crisis of multilateralism (Rüland 2005: 50). On the one hand, the asymmetric regional institutional capacities have tended to result in the adoption of the institutional characteristics and cooperation frameworks of the weaker partner (i.e. loose, informal and intergovernmental). Moreover, the gradual shift in US foreign policy toward unilateralism and the decline of security and trade multilateralism have highlighted bilateral relations and the role of the individual states. Recently, this has been associated with the rise of so-called BRICs (Brazil, Russia, India and China). Whereas the regional level and regional institutions are highlighted in Europe, they are frequently downplayed in Asia. The different functions of the institutions and the premises of regional politics in Europe and Asia are also often emphasized. Europe has thus failed to promote its model for regional integration in, and to establish well-functioning interregional relations with Asia or its subregions such as East and Southeast Asia. The EU’s strategic partnerships with China and India could be seen as an attempt to engage these emerging regional and global powers in regional and global governance. After all, the establishment of the strategic partnerships was embraced in the European Security Strategy (ESS) promoting effective multilateralism (Council of the European Union 2003a). Thus the chapters that follow reflect the theoretical aspects of interregional relations and comparative regionalism in the study of global and regional governance, and contribute to a deepened understanding of the EU’s strategic action. The book represents a multi-faceted approach. It brings together scholars from China, India and Europe who have been working explicitly or implicitly on a number of key questions related to the strategic partnerships. Although focusing on the role of the EU in Asia both as reflected in the strategy papers and as perceivable in policy practice, the book also examines how the EU is viewed in China, and explores India’s regional and global strategies. It also addresses the tensions and competition between these two newly emerging powers. Secondly, the aim of the various chapters is to contextualize the defining issues of the partnerships within bilateral, regional, interregional and multilateral frameworks. Finally, the objective is to provide analyses that have direct policy relevance, to which end the different chapters provide concrete policy recommendations. Methodologically the authors

Introduction

largely draw on (foreign) policy and document analysis often combined with the institutional approaches that characterize the fields of international relations, European integration, and political science. The Structure of the Book The chapters in this volume analyze the underlying constructs of the EU’s strategic partnerships with China and India from four different angles: • • • •

the salience of the regional context; the prospects for a common EU policy toward Asia and important states in the region, such as China and India; the driving forces in the definition of China’s and India’s policies toward the EU; the relationship between China and India.

Timo Kivimäki analyzes regional constructs as essential tools in defining rational strategies for strategic partnerships with China and India. He examines how the EU, China, and India, but also the US, mobilize their strategies regionally, and how this affects their relations with the other actors. In particular, China’s position within the developing East Asian regionalism, and the country’s involvement in Central Asia, compel the EU to take into account the regional realities in its strategic partnership with China. The focus is on regional material, institutional and normative/constitutive/ideational tools of strategic partnerships, and Kivimäki singles out climate change and energy security as areas on which these regional constructs have particular bearing. He first points out the need for a pro-active strategy for energy cooperation, in Central Asia for example, as a counter-balance to the growing influence of China in this region. He argues that in the field of energy security Europe should recalibrate its energy- and environment-related development cooperation by making its voice heard through informal networks and institutionalized dialogue mechanisms, which are crucial to the national policy planning in China and India. The four following chapters concern the EU’s political strategies aimed at developing a common approach toward the Asian region and the major individual players in Asia. The second chapter, authored by Juha Jokela, explores the feasibility of the “single voice” approach by clarifying the EU’s disposition as an actor and examining how its external policies are formulated. Taking into account the impact of global developments such as the increasing influence of China and India, he elucidates the EU as an actor by focusing on the processes of Europeanization (i.e. the dynamic interplay between EU institutions and the member states). It should be taken into account that, in developing strategic partnerships with Asian countries, the aim of the EU is not to be an emergent superpower, but rather to become an active model-power. The interplay between


individual member states and the overarching EU level that is at the core of the processes of Europeanization, continues to define the EU’s foreign and security policies, and the role of the member states remains crucial in the formulation of its external actions. The chapter highlights the institutional changes outlined in the Lisbon Treaty as a double-edged sword. On the one hand the Treaty may foster a more visible, coherent and unitary EU external policy, which can transform the EU into a more active model-power. On the other hand, it is possible that influential member states will be increasingly able (and willing) to project their national and short-term interests in the EU level thus propelling superpower development. The same reciprocal relations between the EU level and the influential role of individual member states underlies Chapter 3 by Bart Gaens. He reflects on the development of EU–Asia relations since 1994, taking the EU’s common policy and strategy for “Asia” as his prime reference point. The EU’s desire to define itself as a global actor was at the root of the rapprochement with Asian countries during the first half of the 1990s, and resulted in the creation of the ASEM. However, the EU’s policy for Asia cannot be separated from the national policies implemented by individual member states. Constructive engagement and the creation of interregional dialogue mechanisms such as ASEM, defined as “Asian-style,” need to be placed within the context of internal processes of Europeanization. To date, relations with Asia have been marked by a bilateral and intergovernmental focus. The tension between the EU’s disposition as a region and its “natural” preference for region-to-region interaction on the one hand, and a predilection for intergovernmentalism resulting in the de facto attribution of a secondary and ancillary role to interregionalism in its relations with Asian countries on the other, significantly reduce the importance of an overarching Europe-Asia framework. Interregional constructions are yet to display their full potential in engaging countries such as China and India in a regional and multilateral context. Chapter 4, by Stig Toft Madsen, subsequently explores the EU’s relations with India. Emphasizing the importance their common past and shared institutions and values, Madsen first looks back on the origins of the EU–India strategic partnership, and then proposes seven different scenarios that portray varied permutations and conceptualize prospects for EU–India relations. He identifies key spokespersons for the various scenarios, and provides examples drawn from economics, science and technology, education, the environment, and politics. He draws attention to the increasing prevalence in both worlds of grand visionary statements combined with the emergence of a new audit culture. He points out the effects of increasing Indian (or Chinese) economic clout on global power realignment, and takes a critical stance toward potential processes of “endarkenment” in Europe and within the European Commission. Nevertheless, as the EU and India are both bureaucracies administrating civilizations democratically, their partnership builds on common ground. The next chapter, written by Mikael Mattlin, focuses on the EU’s China policy, and examines the extent to which the Union has been able to formulate a clear China strategy on paper and to implement it in practice. Mattlin’s analysis points out the

Introduction

main impediments to the implementation of a common EU policy toward China, placing them in the context of the EU’s institutional development, Europe’s valuebased agenda, and the pursuit of economic interests by individual EU member states. It is clear that one of the EU’s strategic aims, the endorsement of China as a responsible and engaged global player, has been accomplished relatively well, even if its impact is not entirely obvious. The EU faces the challenge of finding the right balance between developmental goals, rights-based goals, and economic and security interests in the creation of a new political strategy. Three elements will determine success or failure: direct security interests in East Asia, the EU’s internal institutional development, and a rights-based agenda in relations with China. In conclusion Mattlin suggests that the EU’s normative and rights-based foreign policy has been toned down in its relations with China, whereas the broad trend of its foreign policy appears to be moving in the opposite direction. The following four chapters approach strategic partnerships from the perspective of China’s and India’s policy vis-à-vis the EU. Zhang Tiejun analyzes the asymmetries, complexities and changing dynamics of Sino-European relations after the Cold War. He then identifies several key criteria on which to judge a strategic partnership before framing it in the particular context of Sino-European relations. He argues that the changing dynamics of the bilateral relations represents a transformation from an emphasis on one major ideational issue (world multipolarity) to a broad (more wide-ranging and practical in nature) basis. Furthermore, he uses two “dark areas” (from the Chinese perspective) in bilateral relations, i.e. the non-lifting of the arms embargo and the non-granting of a market economy status (MES), and Chinese and European engagement with Africa, to illustrate the challenges and opportunities for Europe following the reemergence of China. The chapter underlines the need for an acknowledgement of the differences between the two partners (confronting them rather than bypassing them), and of the shared interests and common responsibilities in promoting multilateralism and global governance. Chapter 7, written by Bates Gill, addresses the question of how China will exercise its power and influence in a world increasingly marked by transnational challenges calling for multilateral, global solutions. Gill’s analysis covers China’s evolving approach to multilateralism and global governance, starting with an overview of its past and current approach to these issues. In assessing this approach he addresses the question of how China’s deepening commitment to an effective, integrated, jointly-responsible, problem-solving approach to multilateralism and global governance will become visible. He considers China’s stance toward international institutions and public goods, regional hotspots, the peaceful resolution of territorial and sovereignty issues, and military affairs. The concluding section of the chapter provides some broad guidelines and recommendations on how the EU could strengthen China’s commitment to responsible and effective multilateralism. The ensuing chapter by Linda Jakobson focuses on what is sometimes referred to as China’s “energy diplomacy,” or the presence and activities of an increasing


number of Chinese actors in energy-rich countries, including Africa. Because of its effect on the global oil market, its repercussions for the environment, and the impact on international relations, this energy diplomacy is highly significant to the EU. Jakobson first identifies the actors behind China’s overseas energy security policy, pointing out the fragmented nature of the bureaucracy. The chapter then zooms in on the effect that China’s commercial interests in foreign countries – energy-related interests included – is having on its leaders’ stance toward Beijing’s long-standing principle of non-interference. Jakobson argues that national interests and practical considerations will increasingly take precedence, and noninterference, at least in practice, will become unsustainable. This will further necessitate dialogue and joint aid projects involving the EU, China, and African nations. In conclusion it is suggested that the creation of an organization of oilimporting countries will enhance cooperation between the European Union and China in energy-rich countries. Rajendra K. Jain examines how India is seeking to engage with “the European superpower.” After reviewing the evolution of the India–EU strategic partnership and what it entails for both players he focuses on attitudes toward global governance, multilateralism, multilateral trade negotiations, and Indian perceptions of the EU’s growing profile as a “norms entrepreneur.” India as an emerging power is actively seeking to increase its mark on global agendas, endorsing multilateralism but not relying on multilateral diplomacy with the United Nations at the core. It has become increasingly proactive in the WTO-based multilateral trade negotiations. Jain argues that the country has emerged during the post-Cold War era as a pragmatic power favoring realpolitik, and fundamentally wary of the EU’s missionary zeal to become an exporter of norms. Furthermore, the possibilities for the EU to provide a model for South Asian integration are limited, not least because of its regional characteristics. However, the EU also shies away from further interregional linkages because of the low level of meaningful cooperation within the South Asian region. Jain concludes the chapter with some concrete policy recommendations, emphasizing the need to focus on priorities that could strengthen the India–EU strategic partnership. The final chapter in the volume, authored by Claudia Astarita, addresses a fourth vital dimension of EU–China–India strategic partnerships, namely the mutual relations between the China and India. Astarita explores the scope of political cooperation and economic integration, and examines how both countries’ foreign policies are strategically shaped. She suggests that their behavior is rooted primarily in the pursuit of national interests, even though on the surface they are both committed to supporting a peaceful and respectful mutual relationship. Furthermore, she argues that the strategies they have chosen to adopt in the face of their internal challenges will have a significant impact on their bilateral relationship, and will affect the regional and international balance of power.

Chapter 1

The EU–India–China Strategic Partnership and the Impact of Regional Constructs Timo Kivimäki

Background The strategic game between the EU, India, China, and the US is, in part, being played through regional constructs. Europe rewards and punishes by using its regional development cooperation instruments, while East Asian leaders construct normative and constitutive realities of Asian values. The common threats from the three evils of separatism, fundamentalism, and terrorism are being confronted by China and its Central Asian allies in an effort to deal with the strategic setting collectively as a regional actor, the Shanghai Cooperation Organization (SCO). At the same time, the regions are tackling interregional relations by means of institutional arrangements within the Asia–Europe Meeting (ASEM), according to which issue areas of interregional importance are regulated, managed and coordinated. Trying to interpret the strategic game of the four actors – the EU, India, China, and the US – without acknowledging the regional realities and opportunities would lead to simplification and agent-atomism. Parts of the reality would remain unintelligible, and some of the strategic options of the EU would not be identified. This is why the regional elements of the strategic setting need to be analyzed in a study that focuses on the perceptions, objectives, strategies, roles, and relationship structures among these four players. Regional material, and institutional and normative/constitutive/ideational realities and tools of strategic partnership are important in general, and particularly so with regard to issues of climate change and energy security. Dimensions of Regionalism Given the material, institutional, normative, and constitutive/ideational realities, a study on how the regional context affects strategic partnerships has to treat regionalism as something more than a set of organizations. Nevertheless, regional organizations and institutions constitute one of the focuses of this chapter. Of particular concern are the institutionalization that has developed around ASEAN+3 and ASEAN+1, the institutions related to the South Asian Association for Regional

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Cooperation (SAARC), and the organizations based on the SCO. Their influence on China’s and India’s strategic behavior and their usefulness for the EU in its policies toward China and India are taken under close scrutiny. On the European side the focus is on the EU, and the relevant institutions of interregional interaction are ASEM and APEC (Asia–Pacific Economic Cooperation). Analyzing the material relevance of regions one also has to consider the regional military commitments, the regional arrangements for development cooperation, energy arrangements, and patterns of economic interaction. Power politics is ultimately based on military realities, which as well as more subtle diplomacy are often based on economic realities. One of the most fundamental of these is the availability of energy, which conditions economic development as well as military capability. Energy security is given special emphasis in this examination of the power-political material realities. However, material realities are not limited to partisan capabilities or power politics between states. They are also related to common interests that frame world politics in much less competitive terms. The common threat of climate change and the common fears related to material climatic environmental threats constitute another area of strategic partnership that is taken under scrutiny. Regional reality is also expressed in EU–India–China–US relations in terms of normative and constitutive orientations. The normative coherence of East Asian states built around the ideas of the Treaty of Amity and Cooperation, which were also expressed in the Sino-Indian five principles of international relations, is an important East Asian regional reality on which interregional interaction between Europe and East Asia is based. Furthermore, regional normative and identitive realities of Asian values occasionally need to be taken into account in analyses of China’s orientations in its relations with the EU and the USA. Finally, European partnership philosophy is based on many normative principles. Several EU documents define human rights, democracy, and the rule of law as essential elements of partnership, whilst good governance is often defined as a “fundamental element.” Regional realities may also be constitutive – regionally common interpretations of the world. The common interpretation of the threats – the three evils – that define the SCO exemplifies constitutive regional elements that are relevant to this study. The reality of a world threatened by terrorism, and the framing of the global politics of responsible nations in terms of a war on terror, has characterized the interregional partnerships between the US and Asia, and the US and Europe. This construction of the global threat could easily be challenged by another construction placing all global agents on one side fighting common environmental threats. Study Focus The focus of this study on regionalism is four-fold:

The EU–India–China Strategic Partnership

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1. What are the roles of India and China in their regional contexts, and how do these roles affect the regional strategies of other actors in the “game of four”? 2. What kind of relations and structures do China and India place in their regional contexts, and how do these relations and structures affect the strategic partnership with the EU? 3. To what extent and in which issue areas do the four actors mobilize their strategies regionally, and base their perceptions on common regional perceptions and constructions of the world? 4. To what extent and in which issue areas are the four actors able to mobilize their strategies toward each other through the regional constructs of the respective targets, and to what extent and in which issue areas could they interpret the positions of these targets as a reflection of their regional organization? In sum, this study considers politics from a strategic perspective. This implies a certain level of focus: the intention is not to look at independent operations or tactics, but rather to examine entire strategies in the game of EU relations with China and India. Secondly, with regard to the regional influence in Europe’s strategy, the analysis covers not only what is, but also what could be in terms of how Europe could optimally utilize its own regional realities and those of its strategic partners. Thus it is also strategic in that it aims at strategic prescription. The Material Realities of Regionalism and the EU’s Strategic Partnership with India and China Power Politics There are at least two ways of looking at material power realities and their relevance to the EU strategic partnership with India and China. On the one hand one could consider the role of India and China in their regions, which would enhance understanding of how much the regional context might influence their policies, and thus of the need for the EU to consider the regional realities in its dealings with these two countries. At the same time one could consider the relevance and compatibility of the regions vis-à-vis the EU. In terms of military realities, it would seem from their levels of military expenditures that both India and China are very important actors in their regions. China is way ahead of the two second biggest military spenders (see Graph 1.1).

All military expenditure figures were calculated from information provided in The World Factbook (Central Intelligence Agency 2008).

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China

Japan

Korea

Graph 1.1 Regional military expenditure in East Asia An analogous comparison seems to give a relatively similar outcome in South Asia (see Graph 1.2).

India Pakistan Bangladesh

Graph 1.2 Regional military expenditure in South Asia


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Even a shallow interpretation of the statistical evidence in the light of existing scholarship will change the picture of the regional military roles of China and India, however. The deterrence effect does equalize the military power balance between the two regional nuclear powers, Pakistan and India (Basrur 2008). In East Asia, China is militarily constrained by the US, especially in the archipelago: its naval capacity is limited and the power projection capability of the US is formidable (Ross 2006). The military might of the US is naturally also an important factor in South Asia. Furthermore, India, and China even more so, are prevented from using their military dominance by the inter-linkages between military and economic issue areas: an aggressive military posture would create a regional unwillingness to foster economic cooperation with China, and that would not be in the best economic (and strategic) interests of the country (Lampton 2001). While the military balance in South Asia is based on regional nuclear deterrence, and in East Asia on the power balance between one regional and one global actor, in Central Asia it is imposed externally (see Graph 1.3).

Russia Kazakhstan Kazhakhstan

China

Graph 1.3 Military expenditure and Central Asia: Regional actors

On the prediction of China’s aggression after managing to obtain a power position, see Mearsheimer (2006).

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Russia

Kazakhstan Kazhakhstan China US

Graph 1.4 Military expenditure and Central Asia: All actors Thus if one considers the global military spending of all the main powers maintaining a presence in Central Asia, it is clear that the area is dominated by forces from outside the region (see Graph 1.4). The same is also true of economic cooperation. The strongest regional body is the Shanghai Cooperation Organization (SCO), with Russian and Chinese dominance, but the American war on terror is still a significant factor, making the USA the third major military power in the region. China and Russia have close connections with Central Asian countries and conduct military exercises under the Shanghai Cooperation Organization. Russia even has a formal military alliance with many of the Central Asian states (Kazakhstan, Kyrgyzstan and Tajikistan as the active members) under the Collective Security Treaty Organization (CSTO), and major military bases in Azerbaijan, Kazakhstan, Kyrgyzstan, and Tajikistan. The American presence is also considerable with four major military bases in Afghanistan and one in Kyrgyistan (Lachowski 2007). The role of local military spending is minor compared to the might of the involved powers with capitals outside the region. The region’s own power base is built on norms of non-interference and sovereignty, on the nationalistic approaches of the various governments, and the capacity of the Central Asian economies to complement the regional and global powers, especially in the energy sector (Wohlforth 2004). Kazakhstan alone, for example, has the potential to cover almost one third of the Chinese oil deficit with its own production surplus. In terms of economic power, India is a dominant actor in its region, whereas the position of China is not comparable (see Graphs 1.5 and 1.6).


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India Pakistan Bangladesh

Graph 1.5 The GDP of the three biggest economies in South Asia (PPP)

China Japan Korea

Graph 1.6 The GDP of the East Asian powers As can be seen, the economic position of India is unchallenged in South Asia. In East Asia there is a greater challenge from Japan and Korea, and the Southeast Asian countries represent a bigger share of the regional economy than the smaller powers of South Asia. The influence of the US and the EU in both South and

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East Asia is considerable, even if it is declining. However, again in East Asia one should make a distinction between the continental and maritime areas. It seems that China’s dominance as the biggest trading partner is almost unchallenged among its continental neighbors (Ross 2006). More importantly, however, on the regional level it has a major influence on globalized production structures. Regional production requires Chinese inputs, which makes China influential as a necessary actor on this level. Yet, its regional economic position is not comparable to the dominance of India in South Asia (Hossain 2002), which has been strengthening due to the regional tendency to focus economic attention on Asia rather than the West. The differences in their economic positions have influenced the roles China and India have taken in their regional organizations. While the South Asian Association of Regional Cooperation is very much dominated by India, the East Asian Summit and the emerging East Asian Community are Southeast Asian creations, products of ASEAN’s agreements and dialogue forums with the three major East Asian powers, China, Japan and Korea. Power politics is considered to have been instrumental in shaping ASEAN’s institutional leadership, which seems to have emerged out of a stalemate created by the power struggle between the two biggest actors, China and Japan. Since neither can assume the role of regional leader without the acceptance of the other, it has been assigned to a sub-region whose prominence is accepted by both (Kivimäki 2008). It has even been suggested that they both seek relative power by trying to win over the regional states and collaborating closely with the existing organizations based on ASEAN, ASEAN Plus Three (APT) and the ASEAN Regional Forum (ARF) (Hund 2003: 383, 411). Since the availability of energy is a crucial source of material power in the military and economic spheres, the question of energy security must be considered in any analysis of the EU’s strategic partnership with India and China. Since oil and natural gas are the two major sources of energy for the EU, and since they will become more important for Asia too, aspects of compatibility and competition are well worth investigating. It is clear from Table 1.1 that the EU, the US, East Asia and South Asia all have an energy deficit that has to be balanced by oil and gas imports. The main challenge in the energy markets is thus on the supply side. While the SAARC, the EAC (East Asian Community), the EU and the US all are net importers – the US and the EU being the biggest – only the area covered by the Shanghai Cooperation Organization has the potential to ease the regional energy dilemma. Kazakhstan has ample supplies of oil and coal, while the Kyrgyz Republic and Tajikistan have huge potential for hydroelectric energy (Asian Development Bank n.d.). Most importantly, however, Russia is the world’s second largest producer of oil (with All oil and gas figures were calculated from information provided in The World Factbook (Central Intelligence Agency 2008). Even Indonesia has become a net importer of oil, making Malaysia and Brunei the only net exporters in East Asia.


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one eighth of global production), and the world’s largest producer of natural gas (with one fifth of global production). While the balance between the production and consumption of natural gas is less worrying for all except the EU (and the US), in the case of oil it is of general concern. The SCO area partly covers the oil-rich Caspian Sea region with almost one fifth of global oil production. Yet, the current rate of production in the SCO area covers less than one quarter of the needs of the EAC, the EU and the US, and about 80 percent of what the EU needs in addition to its own production. Table 1.1 Oil and natural gas consumption and production

India Pakistan Bangladesh China Japan Korea US EU Russia Kazakhstan Indonesia

Oil surplus (billions more barrels per day produced than consumed)

Gas surplus (billions more cubic meters produced than consumed)

-1,603,400 -276,780 -79,254 -3,200,000 -5,228,000 -2,112,950 -12,478,000 -9,712,000 6,954,000 1,104,000 30,000

6 0 0 3 -79 -33 -113 -281 46 8 37

According to the estimates of the International Energy Agency, China’s energy demand is growing by 5.1 percent per year, and India’s by 3.6 percent (International Energy Agency 2007a). Thus, China is aiming to secure its supply routes by diversifying them. Given its limited naval power, it cannot protect the sea routes that bring Middle Eastern oil and liquefied natural gas (LNG) through the Malacca Strait, and therefore needs to secure alternative land routes, should they be needed. To secure cheap access to energy to all parts of the country is the main aim of China’s energy policy (Tønnesson and Kolås 2006), and its regional institutional instruments in Central Asia could easily serve in achieving this objective. I will return to the question of institutional instruments in the next section in order to assess the potential relevance of China’s regional institutional contexts to the EU’s strategic partnership with the country. Global Politics With regard to energy, the main challenge facing the EU and its strategic partners over the next 25 years is not its availability. According to

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the International Energy Agency, the projected growth in demand until 2030 can be satisfied provided that sufficient investments are made (International Energy Agency 2007a: 5). Thus the main threat in terms of growing demand is related to prices and local rather than global availability (at all times to all parts of the EU). However, the main global threat related to the increasing energy consumption is environmental. The world’s energy demands in 2030 could be 50 percent higher than today, and up to 45 percent of this growth of demand could be attributable China’s and India’s needs. By 2030 half of world’s energy consumption will be in the developing world. If the current patterns continue, this will mean a decline in global energy efficiency and an increase in the proportion of sources (especially coal, but also oil) that are high in CO2 emission levels and thus threaten the earth’s climate and increase the risk of global warming (International Energy Agency 2007a: 4). The estimate is that fossil fuels will account for up to 84 percent of the growth in energy consumption, which will produce an increase in CO2 emissions of 57 percent between 2005 and 2030. It is possible to calculate from the statistics given in the BP Statistical Review of World Energy (2006) that currently 44 percent of Asia’s energy comes from coal, and up to 80 percent from coal and oil. South and East Asia are no exceptions: India and China account for 45 percent of the global use of coal. In 2007 China took the questionable honor from the USA of becoming the world’s biggest emitter of CO2 gas. On the regional level, it would seem that South Asia is not making much progress in terms of energy efficiency and the use of cleaner sources, while East Asia poses the biggest threat despite progress in some areas (Japan, Singapore, Malaysia, the Philippines). While Europe has no de facto allies for its environmental policies in South Asia, in East Asia the increased understanding has been balanced out by the magnitude of the problems. Yet, analyses comparing energy growth and consumption seem to suggest that both China and India are among the nations that have taken strong measures to limit the growth in consumption and have attempted to make the expanding production more energy efficient. Despite higher growth rates, the average increase in energy consumption in China is lower than the average in East Asia, and percentage growth in India is lower than the average in both East and South Asia. The ratio of growth to consumption is lower in both India and China than in their regional counterparts (Kang Wu and Fesharaki 2001). This has most likely been a consequence of China’s and India’s own pollution problems, rather than of their commitment to global environmental goals. Yet, given the increasing concerns, Europe could in the future find its strategic partners regional allies in its attempts to prevent climate change.


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Institutional Realities of Regionalism and the EU’s Strategic Partnership with India and China The main regional institutions that bind China to East Asia are the East Asian Summit and the ASEAN Plus Three and ASEAN Plus One arrangements, which are moving in the direction of an East Asian Community. In Central Asia, China, together with Russia, is a leading member of the Shanghai Cooperation Organization. While China has its bilateral ties with the European regional organization, the EU, as a strategic partner it is also tied to the inter-regional organization ASEM (Asia Europe Meeting). India is a leading light in the SAARC, and a strategic partner of the EU as well as a new member of ASEM. Furthermore, it is engaged in a dialogue with ASEAN, and is linked to its main code of conduct through contractual arrangements made under the Treaty of Amity and Cooperation. Most analyses of the institutional power of South and East Asian mechanisms have concluded, pessimistically, that institutionalization has not created much in terms of operative importance. Its relevance in South Asia is limited by the dominance of India: the structure of communication in SAARC is of a federalist nature, with India controlling all the interaction. Instead of developing a network of institutional contacts, SAARC operates within the power realities of India’s leading role, and this limits the emergence of a genuinely multilateral framework: multilateralism or regionalism give way to bilateralism (Gonsalves and Jetly 1999). Furthermore, regionalism is limited by the strategic competition between India and Pakistan, especially on security issues. Unlike in East Asia, where the competition between China and Japan has paved the way for ASEAN-led regionalization, South Asia has not had minor powers that have been strong enough to take over the development of the regional institutions. Bangladesh, the initiator of the SAARC, together with Nepal, Bhutan and Sri Lanka that were the first countries to endorse the idea, were not strong enough to develop their own organizations capable of co-opting regional institutional development in a similar manner as the Southeast Asian countries did in East Asia. Indeed, the most likely opportunity for South Asia will be related to the expansion of ASEANbased East Asian regionalism. The expansion of the Asian side of ASEM, together with the growing dialogue between India and ASEAN, points to this possibility. The fact that the ASEAN secretariat now manages and coordinates the Asian side, including India and Pakistan, in the ASEM cooperation also strongly indicates that it rather than SAARC will provide the institutional regional framework for them both. The expansion of the security dialogue within the ASEAN Regional Forum, ARF, also points in this direction. SAARC has its own institutional network, however, with a secretariat (which was established only three years after the establishment of the organization), directors and general service staff, and working divisions covering several policy areas. One of the seven technical committees is devoted to the environment and forestry, while there are high-level working groups in five policy areas, one being

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energy. Yet, the level of regional coordination on energy and environmental issues is very low. The organization has conducted a regional study on greenhouse effects and their impact on the region, but its main focus has been on disaster management rather than on the South Asian contribution to a global reduction in the greenhouse effect. SAARC has little regional institutional relevance behind the facade of its basic organizational structures. Yet, the debate going on within it could be taken seriously in the identification of the regional approaches and opportunities the EU might follow in South Asia. Management of the greenhouse effect is probably the most effective form of regional environmental action and activity to prevent climate change. The SAARC action plan for the environment is not really open to EU–SAARC cooperation in that its implementation was on the national level and the regional activity was limited to diagnosis. EU activity could rather focus on offering expertise in terms of planning what should be done to improve the regional environment, and specifically in managing the practical problems of flooding and preventing its recurrence. Perhaps some of the India–EU Environmental Forums could be utilized to facilitate the exchange of expertise, which would also serve regional needs and the needs identified in the SAARC Plan of Action on the Environment. This would require a focus on the greenhouse effect and on the management and prevention of the regional effects of global warming. The EU’s programs for clean development could be suitable institutional instruments for this type of regional cooperation with India in the context of SAARC. In terms of energy, the regional interest in countering the greenhouse effect could provide a basis for broader regional cooperation. While the exclusion of India and Pakistan from the Nuclear Non-Proliferation Treaty limits cooperation in nuclear-energy production (as an alternative to fossil-fuel-based production), the fact that India is the only regional representative in the ITER (International Thermonuclear Experimental Reactor) project limits the institutional options for EU–SAARC cooperation in research on fusion energy. Finally, India’s perception of Iran as its major future natural-gas supplier places constraints on any cooperation in finding alternatives to fossil fuels. Thus the development of regional expertise in energy efficiency, renewable energy production, and clean coal-conversion technologies remains the only institutional option in forging an EU–India strategic partnership in the energy and environment sectors. East Asian regionalism has been criticized for being mostly for “fairweather” cooperation that is limited to non-controversial issues and for the lack of implementation mechanisms and committed decision-making (Leifer 1999). According to Rüland (2000: 427), ASEAN-based regional integration “has hardly gone beyond […] ‘negative integration’ … [to] commonly agreed interventions in specific policy fields through the setting of rules and their subsequent implementation.” At the same time, there is extensive consensus-building, facilitation of information flow, and dialogue between the national authorities in several regionally interesting issue areas in East Asia. In terms of policy planning, the East Asian Community is already a reality. Even if national authority is not


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being challenged by complex mechanisms governing regional decision-making and implementation, cooperation in the preparation of policies does facilitate the development of regional institution-building. Even if national sovereignty is not compromised, the common preparation of policy lines does influence national decisions, especially in issue areas in which there is a genuine commitment to regionalism. This kind of regionalism involves not only policy communities but also academic communities, which, despite their lack of official decision-making power exercise a lot of knowledge power in the preparation of common approaches to policy issues. Enhanced communication and regional policy development also result in common normative and constitutive approaches, which are discussed below. On the security front, regionalism has proceeded despite conflict and competition between Japan and China. One of the main unofficial drivers of East Asian security institutionalization has been CSCAP, the Council for Security Cooperation in the Asia Pacific, which was a result of cooperation among strategic think tanks in Japan, Malaysia, Singapore, Thailand, and Australia. It was established as a reaction to the realization in 1992 that “a more structural regional process of a non-governmental nature” could “contribute to the efforts towards regional confidence building and enhancing regional security through dialogues, consultation and cooperation.” However, the cooperation had started much earlier, and was already influential in the latter half of the 1980s when discussions began on plans for the ARF. It is also interesting that the European CSCAP is an official member of the ARF. It could thus be an entry point – which has so far not been fully utilized – for Europe into a forum that has a great deal of influence in the development of ASEAN-based security institutionalization. The ASEAN institutional infrastructure for international cooperation started taking on a bigger regional role in the 1990s. Japan joined in the dialogue arrangement in 1990, South Korea in 1991, followed by China, Russia and India in 1996. Currently the list of partners is long and the coverage extensive: Australia, Canada, China, the Democratic People’s Republic of Korea, South Korea, the United States, India, Japan, New Zealand, Russia, Mongolia, and the EU. While the ASEAN forums do not allow the EU to influence East Asian “regional decisionmaking”, they would give access to the real agenda building and preparation of the broad policy approaches. Involved in the ASEAN dialogue are certain, more specific, lower-level forums that are more specialized arrangements and work on a more bipolar (country X & ASEAN) basis. The most important of these are the joint committees that ASEAN shares with its main partners. The Joint Cooperation Committee (JCC) between the EU and ASEAN was established under The author participated in such discussions at the Strategic and Defence Studies Centre, Australian National University as early as in 1987-88. At the time there was a forum, the Asia Forum, that could be considered an earlier phase of both the CSCAP and the ARF. For an excellent presentation on the role of Australasian academics in their creation, see Ball 2004: 37-40 and Kahler 1994.

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the EC-ASEAN Co-operation Agreement (1980) to “promote and keep under review the various co-operation activities envisaged … in the framework of the Agreement” (European Commission n.d. a). While the ASEAN Plus Three is less accessible to the EU as an institutional cooperation arrangement, it is nevertheless an influential forum for regional security dialogue. It reflects ASEAN’s cooperation with South Korea, Japan and China. When the ASEAN institution expanded its regional reach in the 1990s it also expanded its areas of interest. It was decided at the Singapore Summit in 1992 that “ASEAN shall move towards a higher plane of political and economic cooperation to secure regional peace and prosperity” (ASEAN n.d.). This objective was institutionalized by the respective foreign ministers working with their dialogue partners and culminated in the establishment of the ARF, which was decided upon at the 27th ASEAN Ministerial Meeting in 1994. The declared objective of the ARF was to promote confidence‑building among the participants, to develop preventive diplomacy, and to broaden its approach to conflicts. It has not exercised direct conflict resolution, which is why, according to some scholars and diplomats, it has not succeeded in moving from confidence-building measures (CBM) to conflict prevention. However, it has been influential in the build-up of an institutional network that has transformed the agent structure of the region so that conflicts are less probable. Given the extensive collaboration and the common tackling of regional political issues, ARF has the potential to build bridges, and even transnational alliances (related to tackling specific political problems) that will reduce the risk of souring relations between regional states. ARF is a state-level forum, and all the major dialogue partners are members. The EU is represented by its troika, the other members being Australia, Brunei, Canada, China, Indonesia, Japan, Laos, Malaysia, New Zealand, Papua New Guinea, the Philippines, the Republic of Korea, Russia, Singapore, Thailand, the USA and Vietnam. Together with the ASEAN ministerial dialogues and post ministerial conferences, which are less permanently institutionalized but broader in their membership base, the ARF is probably the most influential regional institutional instrument for security cooperation. Despite its state-centered nature, most of its inputs come from Track Two diplomacy initiatives. This is also why efficient work within the ARF would require sufficient (also financial) investment from the EU in terms of participation in the unofficial forums that feed into its processes. There are many ASEAN forums for security cooperation in addition to the ARF and the permanent institutions that are of a more ad hoc nature. The conflict in Cambodia and the management of the disputed territories in the South China Sea are just two examples of issues in which such forums have played an important role. In the case of the disputed territories, the so-called Jakarta Process under the leadership of Ambassador Hasyim Djalal and the Canadian Professor Ian Townsend Gould was the forum in which the principles of the code of conduct in the Spratly Islands were drafted and their acceptance was negotiated. It is significant that, despite the Indonesian leadership in this project, the initiator was an outsider to


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the region, namely Professor Townsend. For a decade the process was funded by CIDA, the Canadian International Development Cooperation Agency. When this funding ran out, the leadership looked to the Nordic countries. According to Ambassador Djalal, the reason for this was the Nordic experience with the management of the Baltic Sea, and because the Nordic countries were small enough to avoid accusations of using their own power politics to promote their own hidden agenda. Ambassador Djalal’s reasons for seeking assistance from the Nordic countries proves that there are opportunities for nations like Finland with an interest in the stability of Asia to play a part for the sake of world peace, without any power interests of their own to pursue. Finally, in order to deepen the Track Two approach the ARF decided to establish a register of so-called “Experts and Eminent Persons” (EEPs) under the ARF (2006). EEPs are retired statesmen and/or former high-ranking diplomats who are nominated and registered by their respective governments as advisers to the ARF. Following several years of drafting and deliberation as to whether they would primarily have a ‘research’ or an ‘operative’ function, “Guidelines for the Operation of the ARF EEPs” were adopted at the 11th ARF summit in June 2004. The Guidelines describe the role of the EEPs as being to support the ARF through the Chair by undertaking formative work on confidence-building, the development of preventive diplomacy, and elaboration of approaches to conflicts in the region. They are supposed to work in groups, but the process of formally activating them for a specific task is not yet underway. The EU and its member countries should explore ways of supporting and being involved in this process in the future. EEPs have been open to EU involvement, and in fact the first meeting of the group was sponsored by Denmark. In terms of energy and environmental cooperation, EU cooperation with China and Chinese regional cooperation with East Asia are institutionally rather advanced. The issue of climate change seems to be the focus in both environmental and energy cooperation. The EU and China established a Partnership on Climate Change in 2005, which now has a summit-level Memorandum of Understanding on transport and energy strategies for cooperation in energy regulation, renewable energy (including alternative transport fuels), energy efficiency, natural gas, clean coal technology (near-zero emissions), and other new technologies in the energy sector (European Commission 2005). Activity on energy efficiency and clean coal technology have been institutionalized through an action plan that has been accepted on the ministerial level. Furthermore, China and the EU are working within EURATOM on the peaceful use of nuclear energy. China, like India, is a Discussion between the author and Ambassador Djalal. Kivimäki assisted in the application process, but Ambassador Djalal aired his views on the understanding that they would be shared freely. For the same priorities, see the Task Force Report for Closer Economic Partnership (CEP) between Asia and Europe (presented to the ASEM V Summit in Hanoi, 8-9 October, 2004).

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member of ITER, a project promoting the development of fusion energy. With a view to facilitating cooperation, especially in environmentally sustainable energy policies, the European Commission and the Chinese State Environmental Protection Agency (SEPA) have established close ties. According to Axel Berkofsky (2008), the EU–China Partnership and Cooperation Agreement (PCA), which the Commission has been lauding for some time, will be the next big bang in bilateral relations, promoting cooperation on energy and environmental issues. However, none of these energy and environmental activities have been connected, on the level of basic documents, to China’s extensive regional ties in energy policies. East Asian energy ministers met in Manila, Philippines on 9 June 2004 (ASEAN 2004) and institutionalized energy cooperation on the ministerial and senior-official level. However, while EU–China cooperation mainly concerns on environmental issues, the Chinese focus, as is the case in Central Asia, is on securing its energy supply. Climate issues come into the picture in East Asian regional cooperation only in a commitment to collaborate in terms of investing in renewable energy sources and in natural-gas production, which is cleaner than coal and oil. Otherwise, the Chinese focus in East Asian energy cooperation seems to be on safeguarding Burmese, Brunei, and Malaysian oil and gas resources. It is the same in the narrower regional context of ASEAN + China, as the Framework Agreement On Comprehensive Economic Cooperation Between the Association Of South East Asian Nations and the People’s Republic of China shows (ASEAN and PRC 2003). While the issue of the environment and energy has been mentioned only as an additional rather than a prioritized matter for economic cooperation, the interest behind energy cooperation remains the same. The development of renewable energy sources therefore remains the main common interest in both East Asian and EU–China cooperation. However, according to the multi-annual indicative program for China (European Commission 2007c), at least the cooperation instrument supporting the development of a broader renewable basis for China’s energy needs is not adequately resourced. The four-year program (2007-10) has been allocated only 128 million euros. It is likely that national programs will contribute something more substantial, and because cooperation in the energy and environmental sectors is based on sectoral cooperation it is likely that the main resources will come from outside the development instruments. In any case, the EU’s region-to-region effort at development cooperation with East Asia in the prevention of climate change seems to be very limited in terms of common objectives and economic commitment. On the level of the highest inter-regional organization, ASEM, the issues of energy and the environment, also tend to focus on climate change rather energy security. Environmental questions assumed major importance in the ASEM political dialogue at the three Environment Ministers’ Meetings organized so far (Beijing 2002, Lecce 2003 and Copenhagen 2007). Furthermore, Japan, together with the European Commission, organized an ASEM Energy Seminar in Tokyo Whether this is the case on the level of actual cooperation is not known to the author.


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in January 2006, and the ASEM foreign ministers discussed the need for humancentered and sustainable development, specifically in the environment and energy security, at the 7th Foreign Ministers’ Meeting (FMM7) in Kyoto (Gaens 2008b). While the level of institutionalization within the Shanghai Cooperation Organization is not impressive, its underdeveloped institutional mechanisms still have relevance, especially in the energy sector. The material setting, with the Central Asian region possibly being the only one that could complement the energy profiles of the EU, India, China and the US, makes institutionalization in this region interesting in the light of EU energy policies. What has not been sufficiently realized is that the regional institutionalization of Central Asia driven by China and Russia has focused on energy security so as to satisfy the energy needs of the member countries, possibly at the expense of non-members. Within the political institutional framework of the SCO, China is investing heavily in the energy infrastructure in Central Asia, and is making exclusive agreements within the framework of the SCO, especially in Kazakhstan and Turkmenistan. The projects have often been implemented in collaboration with the Asian Development Bank, within the multilateral framework of the Central Asian Regional Economic Cooperation program. Given the growth in energy demand in China, there is a risk that the potential markets of Central Asia will become unavailable to the EU on account of the Chinese cooperation within the SCO. Article 2 of the China – Turkmenistan agreement on gas supplies, for example, stipulates that in case of the need for an increase in the volume of gas supply to China, Turkmenistan will provide the required extra amount at the expense of its other export markets. It has also been claimed that agreements between Turkmenistan and China manipulate energy prices to the detriment of Europe and to the benefit of China. Furthermore, A.T. Kearney (Laudicina 2005) even suggested that the SCO could offer material complementarity between China and Russia in order to persuade Russia to favor China in its oil and natural gas trade. In this context it would be possible for oil and gas currently targeted on EU markets to be redirected to China. Given that most countries in East Europe, including Finland, are very dependent on Russian natural gas, this would be worrying. It is impossible to estimate how realistic these scenarios are. Yet, the material setting of an extensive supply deficit, and regionalization that binds the EU’s major energy suppliers to China, a major regional net importer of energy, could be considered problematic for the EU. According to Bernard A. Gelb (2007) of the Congressional Research Service, the only strategy left for Europe is to diversify its energy supplies and to establish supply (pipelines) from Central Asia, through Russia. However, dependence on Russian supply and the fact that the pipelines go through Russia create an adverse power-political setting. Thus there are projects to channel Central

Finland’s dependence on Russian oil is almost total, 98 percent (Gelb 2007).

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Asian gas through pipes that do not traverse Russian territory (the Baku–Tbilisi– Ceyhan pipeline, for instance).10 The Normative/Constitutive Relevance of Regionalism in the EU’s Strategic Partnership with India and China East and South Asian normative and constitutive constructs are largely based on what is often referred to as the ASEAN Way: developmentalist state ideologies, the articulation of an Asian commonness, and a complicated state-centric, even elitist code of conduct in international relations. Yet the system allows for the input of informal private argumentation in state policies. It has been shown elsewhere that this construction has been highly successful in the reduction of violent conflict first among ASEAN members and later, after 1979, in all of East Asia (Kivimäki 2001, 2008). As a developmentalist orientation replaced the revolutionary approach, and as the East Asian nations started developing their own ways of handling disputes, the number of conflict casualties went down drastically. Average annual numbers in the ASEAN countries decreased to less than seven percent following membership of the Association, and no member country has been engaged in a conflict in which there were more than 25 casualties. This cannot be explained in terms of objective power-political changes or economic interdependence, but rather seems to be the result of a change in the normative and constitutive realm. The same normative approaches that characterize ASEAN were adopted by East Asia in general at the very end of the 1970s, and the results were the same. The average annual number of battle deaths after 1979 dropped to less than 3 percent of the numbers reported before 1979 and after the Second World War.11 Some scholars see the same pattern of developmentalism and the ASEAN Way emerging in South Asian political debate. Many date the change to the ASEAN Way in South Asia at the end of the 1970s and the beginning of the 1980s, while others see it emerging with the exposure to the ASEAN institutions after the turn of the millennium. In any case, while the evidence of South Asian success in conflict prevention is not yet as impressive as it is in East Asia, an association between the ASEAN Way and peacefulness is evident. Thus the normative approach has been very successful in the whole of Asia, possibly still with the exception of Central Asia. It is no wonder, therefore, that some of these approaches, such as the primacy of economic interests in the political development, are not negotiable in the East Asian political debate. This is probably the most important “regional normative reality” of the European strategic partnership with China and India. In terms of 10 The concept of mutual dependence – dependence on suppliers and on markets – has been suggested (Jakobson and Zha Daojiong 2006). 11 In neither sub-regions, Southeast Asia or Northeast Asia, is there any evident positive relationship between the strengthening of the ASEAN Way and the reduction in repressive violence (Kivimäki 2001, 2008; see also Johnston 2003a).


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environmental and energy cooperation, developmentalism and the valuation of sustainable growth could explain the relative differences in the European, and the Chinese and Indian approaches. As in the case of institutional development, China and India are still very much focused on energy security, and are not as concerned about environmental issues as Europe is. While the main characteristics of the ASEAN Way normative system already give us some idea of the normative/constitutive realities of strategic partnership, a deeper understanding would require more detailed analysis, especially concerning climate and energy issues. India, China, and the ASEAN Way12 The first element in the East Asian and South Asian norms for international relations is related to the recognition of common developmental interests. Developmentalism has increased the subjective evaluation of common economic interests in ASEAN. President Suharto had a personal commitment to development, and could always be persuaded with economic arguments, according to a general who was once very close to him.13 This subjective sensitivity toward common economic interests also has its institutional expression. “The economic integration in the region has brought interdependence and a shared destiny to the region” (Wanandi 1996: 31). ASEAN and all the subregional cooperative institutions within the area have concentrated their attention on issues of common economic interest rather than on those over which there is competition or conflict. The first sentence of The Bangkok Declaration, the founding document of ASEAN, emphasizes the importance of the common interests of the member countries. National achievements are often seen as parts of the collective ASEAN development in its publications. The emphasis on development-related interdependence has also led to transnational institution building in ASEAN, another feature of liberal pluralistic political systems. Development and stability have been explicitly linked in many of its documents, and this link has been seen as one of the rationales behind the cooperation (ASEAN 1976a: first paragraph). According to former President Fidel Ramos of the Philippines, ASEAN countries “try to build up something that unites us, and cope with all problems that separate us” (Djiwandono 1996: 49). This is also the case in the smaller inter-state and transnational institutions of cooperation, such as in the growth areas (Kurus 1997) and the institutions set up for the resolution of a particular dispute (1st Meeting 1993). As a result, disputes such as those related to territories that were fought over during the Malaysian Confrontation currently carry less subjective weight than the issues of common interest. The developmentalist principles set out in the Treaty of Amity and Cooperation and the Five Principles of Peaceful Coexistence have a broad official role in Asian cooperation, even though many of them were drawn up and adopted independently 12 The analysis in this section is based on Kivimäki, Sørensen and Østergaard (2006). 13 Interview with General Hasnan Habib, January 1991.

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of ASEAN. Developmentalist principles are explicitly affirmed in the bilateral, long-term framework agreements negotiated by China between February 1999 and December 2000 with Vietnam and Singapore (omitting the reference to the Treaty of Amity and Cooperation, TAC), Thailand, Brunei, Malaysia, the Philippines, Burma, Indonesia (five principles referred to as the Bandung Principles of the Non-Aligned Movement), Laos and Cambodia. These principles are not evident in older Indian and Chinese documents, but recently major Indian foreign-policy documents have also started to reflect developmentalist ideas. In a recent speech India’s foreign minister defined his country’s foreign-policy goals in the following manner (Menon 2007): The primary task of our foreign policy is to ensure an external environment that is conducive to India’s transformation and development. To oversimplify, what are the issues and what kind of foreign policy would enable us to eradicate poverty, grow at 8-10% and transform India into a moderately well off state where our people can realize their potential?

Analysts of later (post-Mao, post-1979) Chinese foreign-policy ideas have focused on the rise of developmentalism as the leading principle. According to Xia Liping (2003), for example, “developing economic exchanges, based on equality and mutual benefit, is the basis of regional security cooperation and an important part of CBMs.” Another cluster of normative East and South Asian principles is related to “self-determination, sovereign equality and non-interference in the internal affairs of nations” (ASEAN 1976a: Principle 8). While the EU is a post-modern, postWestphalian entity, East Asia and South Asia are still very much committed to modern Westphalian ideals of state-to-state cooperation in international relations, as Zhang Tiejun mentions in his chapter in this volume. The Westphalian normative principles of East and South Asia do not date from the times of the pacification of East Asia, but are older and were already prevalent during the times when the most deadly conflicts in the world were in the region. The contractual basis of ASEAN, and later of East and South Asian diplomatic relations, the Treaty of Amity and Cooperation from 1976, emphasizes them in the first three of its six principles: 1. Mutual respect for the independence, sovereignty, equality, territorial integrity and national identity of all nations; 2. The right of every state to lead its national existence free from external interference, subversion or coercion; 3. Non-interference in the internal affairs of one another (ASEAN 1976b). The fact that the same document endorses regional cooperation against insurgency and articulates the concept of “regional resilience” (ASEAN 1976b: second paragraph) against popular forces of instability reveals that national sovereignty and non-interference are privileges of the regime rather than the people. It is


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the regime that should not be exposed to external interference, while people challenging it can be combated against collectively. It is clear that at the time of the establishment of ASEAN, the leaders of the original ASEAN member states, Field Marshal Thanom Kittikachorn (Thailand’s military leader), Ferdinand Marcos (the authoritarian President of the Philippines), General Suharto (Indonesia’s military ruler), Lee Kuan Yew (Singapore’s authoritarian President) and Mohamad Mahathir (Malaysia’s Prime Minister) based at least some of their perceptions of their common interests on their common elitist interests vis-à-vis their people. Chinese and Indian principles of cooperation tend to emphasize the same elitist logic. Three of the Five Principles of Peaceful Coexistence from 195414 illustrate this: 1. Mutual respect for sovereignty and territorial integrity; 2. Mutual non-aggression; 3. Non-interference in each other’s internal affairs. The third normative element in East and South Asian international cooperation is related to the management of differences. The remaining three principles of the Treaty of Amity and Cooperation (TAC) are related to the distinctive East and Southeast Asian approach to conflict management. The ASEAN parties (and later China in the bilateral arrangements) agree to the: 1. Settlement of differences or disputes by peaceful means; 2. Renunciation of the threat or use of force; 3. Effective cooperation among themselves. The focus of this approach is to “try to build up something that unites us, and cope [note: not resolve but cope] with all problems that separate us.”15 Instead of focusing on the resolution of disputes, the emphasis is on constructing a social reality of harmony by expanding, in the minds of people, the common interests, the common identity and other features held in common, while smoothing over disputes and other things that divide people. More systematically, one could describe the Asian culture of consultation and consensus originating from ASEAN in the following manner. Conflict avoidance incorporates a preference for (a) lengthy negotiations; and (b) quiet; (c) non-legalistic; (d) personal; (e) confidence building aimed at the (f) gradual down-playing and prevention (or sometimes resolution) of disputes; (g) by means that can be accepted unanimously; (h) using

14 These principles were decided upon in the context of the Non-Aligned Movement. However, they are still very authoritative. For a relatively recent official analysis of them, see the publication issued by the PRC Embassy in India (2004). 15 President Fidel Ramos, quoted in Djiwandono’s article (1994: 49).

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the principle of the lowest common denominator.16 The focus on something that unites rather than on issues of conflict has left East Asia (and South Asia) with an underdeveloped normative code of dispute resolution. As a consequence, Asians have had to resort to mechanisms outside the region, such as the International Court of Justice (ICJ), when they have had a real need for a certain dispute to be settled. This culture of conflict avoidance exists despite the fact that there are explicit mechanisms of dispute resolution in the ASEAN system.17 The Indonesian President and the Malaysian Prime Minister, for example, agreed on October 6, 1996 on the principle of deferring the territorial issue of Pulau Sipadan and Pulau Ligitan to the ICJ. The formal written agreement to forward the issue to the ICJ was signed by the Foreign Ministers of the two countries on 31 May 1997 and was ratified by both countries during the same year (Amer and Kivimäki 2002). The Chinese principles of coping with disputes are similar to those of ASEAN. At times China has felt the need to prevent the discussion of disputed issues in multilateral forums. For example, it did not allow issues related to territorial disputes to be tackled during the Jakarta Process covering the South China Sea area,18 and it rudely rejected the Thai idea of discussing territorial disputes in the 2000 ARF meeting (Bangkok Post, 27 August 2000). The final two Chinese and Indian principles of the Five Principles of Peaceful Coexistence, later adopted by Southeast Asia, point to non-aggression and the build-up of mutual benefits as the foundation of peaceful relations (PRC Embassy in India 2004). Furthermore, some analysts close to the Chinese defense establishment go even further in defining the Chinese approach by highlighting several elements of conflict management and transformation,19 but leaving out the issue of resolving the disputes that motivate

16 On principle (a), see Snitwongse (1998: 184), Kurus (1995: 406) and Busse (1999: 467); on principle (b), see Busse (1999) and Soesastro (1995: iii-ix); on principle (c), see Soesastro (1995); on (d) and (e), see Simon (1998: 2-3), Amer (1998: 39), Soesastro (1995) and CaballeroAnthony (1998: 58); on (f) and (g), see Snitwongse (1998: 185) and Caballero-Anthony (1998: 60); Busse (1999); and on (h), see Snitwongse (1998: 184) and Kurus (1995). 17 The ASEAN Council may assume the role of mediator by recommending appropriate means of settlement to the parties to a dispute; i.e. good offices, mediation, inquiry or conciliation. The Council may also “constitute itself into a committee” of mediation, inquiry or conciliation (Amer and Kivimäki 2002). 18 Discussions by Kivimäki with Ambassador Hasyim Djalal, the coordinator of the Jakarta process. The Jakarta Process is a 1.5 track forum for the discussion of the management of the disputed waters in the South China Sea. 19 Conflict management here means coping with conflict and making it less violent, without trying to resolve the disputes behind it. Conflict transformation means the transformation of structures that make conflicts more likely. This approach also tackles the disputes, but only indirectly. Transforming the conflict structures may prevent violent disputes from arising, but conflict transformation does not, as such, focus on the dispute or resolve it. For more on conflict transformation see Auvinen and Kivimäki (2001).


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the conflicts. According to Zhu Majie,20 the preferred Chinese mechanism for regional security cooperation consists of the following five elements: 1. The mechanism must be based on the Five Peaceful Co-existence Principles, and no country should seek regional hegemony; 2. Disputes between countries must be solved peacefully and if an immediate solution is not available, relevant disputes could be shelved and normal exchanges between countries should be maintained; 3. Armament must be maintained at the level that is necessary for a country’s proper defence; 4. All the nuclear powers realize their responsibility and obligation not to use nuclear weapons first, and not to use or threaten to use nuclear weapons against non-nuclear countries; 5. Cooperation in economic, trading, scientific and technological fields must be enhanced, and the developed countries should help the developing countries (Zhu Majie 2003). The two older normative approaches – non-interference and hiding disagreement – have recently been challenged by the democratization of Asia. Transparency became part of China’s military thinking after its 1998 Defence White Paper (China’s National Defence in 1998: 6). The same thing had already happened in Thailand and the Philippines, and happened soon afterwards in Indonesia. It seems that the Asian principles of cooperation are being modified to include alternative solutions that will accommodate this contradiction. In particular, the institutionalization of the treatment of conflict issues on a Track Two level seems to offer some promising new ideas on how to deal with disputes (Job 2003). The fact that the ARF was able to organize its first high-level conference on security policies in China under Indonesian chairmanship at the end of 2004 proves that sensitive issues do find their way into the official forums of Asian interaction, and are not just left on the Track Two level. The role of Japanese intellectuals and officials has also been important here. However, the most recent of the main principles of East Asian and South Asian international relations, the idea of mobilizing foreign policies for development, has not been weakened or watered down. Regional Asian Norms and Constructions, and the EU Strategic Partnership with India and China on Energy and Climate Issues It has been suggested that Europe should adjust to the relatively stable regional normative realities of developmentalism in its relations with India and China. In terms of energy and environmental cooperation this would mean that in promoting its environmental 20 Vice President of the Shanghai Institute of International Studies (SIIS), which is often considered to be one of the four most important governmental think‑tanks in China. SIIS seems to be very close to the Defense Ministry and the military forces.

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interests it should not put the environment and development in opposition to one another. It would be wiser to try to construct arguments that balance European and developmentalist concerns. SAARC has expressed concern about the economic effects of the greenhouse phenomenon, which should be the European regional entry point into the climate debate in South Asia. As Claudia Astarita puts it in this volume, cooperative framing should treat pollution as an obstacle to development and competitiveness rather than considering environmental policies a compromise with regard to developmentalist policies. Energy security has been the main concern in East Asia due to developmentalist imperatives. Nevertheless, many areas and their economies have suffered from the direct and indirect effects of climate change. The promotion of energy efficiency could therefore trigger European cooperation and partnership. Furthermore, environmental concerns could be considered concerns “that unite rather than divide” the regional enclaves: they are common to all, and environmental success in one country benefits all the others. Thus environmental issues could assume further significance in the build-up of regional resilience and confidence: identification of the need to prevent climate change in the interests of the regions and their strategic partners could be part of the Asian way of building a sense of positive interdependence. Moreover, the approach in the common effort to prevent climate change should be harmonized with the principles of economic developmentalism. Collaboration in both regions should aim at making an impact rather than setting goals, as the developmentalist mind-set of both South and East Asia will lead the countries to focus on achieving measurable results, preferably in the economic sphere. The fact that Asia is not known for quick, binding political decisions does not make efficiency impossible. The normative orientations of the East and South Asian regions make it difficult for the EU to persuade China or India into formal binding agreements, the economic impact of which is difficult to measure in advance. It would be possible, however, to influence their energy agendas and their thinking in non-binding dialogue forums and meetings of policy-relevant experts. Energy and environmental security issues could also be promoted in the existing official security forums such as the ASEAN Regional Forum, and in unofficial expert forums such as CSCAP and the ARF EEP, in order to influence regional energy and environmental thinking and national energy and environmental laws and policies. The idea of a global war on terror was introduced and framed in exactly this kind of policy environment, and if the EU needs to refocus regional attention on the environmental threats, non-committing forums would be the right place in which to do so. Furthermore, mobilizing the development instruments could create economically attractive cooperation projects with technology-transfer components in both China and India, where the regional ideology of developmentalism has been dominant. For that, however, the EU should be more serious about allocating substantial resources. The unwillingness to tackle difficult issues head-on and the limitations related to the normative principles of non-interference in domestic affairs have indirect


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impacts on energy and environmental partnership with China and India. Their developmentalist concerns over energy security, together with the principle of non-interference, make them reluctant to cooperate with Europe on human-rights and democracy issues in Burma/Myanmar. Burma/Myanmar offers China access to natural-gas resources that could be useful for the Yunnan province. At the same time, it offers access to one or several of the Burmese ports, thus alleviating China’s helping problem of vulnerable sea routes for oil and LNG imports. A port in Myanmar would give it access to Middle Eastern oil without having to transport it through the volatile Strait of Malacca (Haacke 2006). The EU will be challenged in its bargaining about global environmental responsibilities by the Chinese and Indian constructions of a divide between developing and developed countries. This divide is highly relevant in the debate on environmental responsibilities, and is reinforced by the regional aspirations of all South Asian and most East Asian countries (all developing countries). It fuels the argument that developed countries cannot expect developing countries to carry as great a burden of responsibility for the prevention of climate change since they should also be allowed to grow in economic terms, as the developed countries were allowed to when they were on the road to prosperity. The formulation of this argument and the construction of Indian environmental policies is further analyzed in Rajendra K. Jain’s chapter in this volume: While European emissions can be characterized as life-style related, Indian emissions are seen as survival emissions. The above-mentioned divide also plays an important role in Chinese policies, even if recently it has lost some of its meaning due to China’s identity as a responsible regional superpower. As a developing country it is not expected to focus on its global responsibilities, but as a responsible great power it is assumed to do so (Zhang Tiejun 2003). The identity of India and China as populous nations is another factor that supports the regional constructions, and also affects the bargaining on global environmental responsibilities. While the West often compares responsibilities for environmental damage in terms of emissions per production unit, per produced value or by simply looking at total emissions, China and India often argue in terms of per-capita emissions. According to this logic, China, the greatest polluter, only contributes 40 percent of the per-capita emissions compared to the United States.21 Furthermore, East Asian normative constructions have emphasized the need to empower populous nations in international forums, including in the decisionmaking on global environmental problems. Abdurrahman Wahid, Indonesia’s former president, proposed the establishment of an Asian triangle between China, India and Indonesia, which could coordinate the global positions of these Asian population superpowers. Currently the population issue is prominent in Indonesian foreign policy as the country pursues its claim to be identified as a great power through its role as the world’s most populous Muslim nation. While the population 21 Calculated on the basis of data provided by the International Energy Agency: World Energy Outlook (2007a).

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argument has not been very prominent in the climate debate, it is likely to become so in the strategic partnership with India and China, the world’s two most populous nations. The growing focus on issues of global democracy will further strengthen its power, as Rajendra K. Jain mentions in his chapter in this volume. Finally, the normative and constitutive construction of Central Asia could also affect the EU’s strategic partnerships, especially with China, which is a prominent power in the region. The Asian emphasis on sovereignty and non-interference has structured Central Asia’s engagement with China within the Shanghai Cooperation Organization. China and Russia have not imposed intrusive conditions related to domestic politics on its political and economic ties with Central Asia. This is probably the reason why China has made such impressive institutional progress in Central Asia, while the EU has not managed to do as well. However, as mentioned in the section on regional institutional capabilities, the trend in Central Asia on the institutional level to separate the EU from its energy suppliers is dangerous as far as European energy security is concerned. In order to remedy the situation the EU could try to utilize the normative constructs of sovereignty and non-interference for its own benefit. The growing network of oil and natural gas pipelines from the SCO area to China is creating a material infrastructure that binds Central Asia to China in a way that could be perceived as problematic for the independence and sovereignty of the Central Asian countries. This could make these countries interested in diversifying their dependencies. Kazakhstan and Turkmenistan have already made major efforts to navigate between the influences of Russia, China and the US by setting each of the big powers against each other. If the EU took the threat to its energy security seriously it could possibly exploit the normative orientation for uncompromised sovereignty in Central Asia in negotiating arrangements that would guarantee its energy supplies from Central Asia in the event of competition between Chinese and European demand. Conclusions In order to define rational strategies for strategic partnership with India and China the EU needs to explore all the options. The utilization of regional institutions offers an opportunity that should not be overlooked in this respect. The dominant position of India in South Asia makes regional organization less relevant, and limits the usefulness of approaching the relationship with India from a regional perspective. In East Asia, however, regionalism is very real, and has substantially more potential in terms of influencing China’s policies than bilateral relations. The development of Chinese institutional power-projection capacity in Central Asia also makes it very relevant to consider the regional realities in the EU’s strategic partnership with China in Central Asia. Consideration of the material realities of regional environmental and energy policies reveals a few issues that require the EU’s attention. On the one hand, East Asia, South Asia and the EU are all growing increasingly dependent on energy


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imports. This adds an element of zero-sum interaction to the EU–India–China strategic partnership. Despite the opportunities for cooperation in increasing energy efficiency and exploring new sources, the fact is that the strategic partners are all competing for the same energy resources. For Europe this means, among other things, that the institutionalization that unites its strategic partners in an exclusive manner with its potential and current energy suppliers is a worrisome regional development. More precisely, while the Shanghai Cooperation Organization deserves EU support in many ways, Europe should not view energy cooperation as something it can afford to totally steer clear of. Given the nationalist sensitivities of the Central Asian countries, Europe could try to forge closer energy cooperation with them by offering them a way of balancing the growing influence of China in their areas. Since both East and South Asia are energy importers, their common interests in energy security are limited to a narrow area of cooperation in terms of energy efficiency, and environmentally sustainable production and consumption. The main focus in both of these regions is on the more common environmental concerns, and their foreign-policy approaches are dominated by concern for economic development. This makes bargaining over the burden of responsibility in the prevention of climate change difficult. Both India and China will use the division between developed countries, which can afford to carry the burden of protection, and developing countries that cannot as an argument against the EU. Thus, environmental issues will have to be dealt with in contexts that do not compromise economic growth, but which make it more durable and sustainable. Thus, in addressing both environmental and developmental concerns, Europe should make serious efforts to resource energy and environment-related development cooperation. Furthermore, in promoting environmental consciousness in South Asia and East Asia, Europe should utilize the institutional instruments offered by the informal networks and dialogue forums that are also crucial for national policy planning in China and India. Environmental imperatives can be made more pertinent in the East and South Asian political debate, but before the EU can pursue this it has to find a way into the debate.


Chapter 2

The European Union as an International Actor: Europeanization and Institutional Changes in the Light of the EU’s Asia Policies Juha Jokela

Introduction On the face of it, the EU, China and India seem to be very different kinds of actors in world politics, with their distinctive economic and political systems based on different historical experiences and traditions. On the other hand, there are significant similarities among them. All are regional actors occupying a vast territory, characterized by internal cultural, ethnic, and religious diversity. In addition, they all play an important role in the global economy, and have recognized their relevance and responsibilities for global security. Comparing and contrasting strategic action in the EU, China, and India is thus highly relevant. I suggest that in doing so it is imperative to clarify what kind of actors we are dealing with. The focus of this chapter is on the way in which the EU stands out among them: it is not a state. The rapid development of the EU’s external relations with states and international organizations suggests that it is not a traditional international organization either. This has given rise to a lively debate among scholars and policy makers on how to approach the EU as an international actor. For many it represents a novel turn in world politics, and therefore it deserves to be put under closer analytical scrutiny. Analysis of its international actorness has been based largely on its internal processes and policy formulation. More recently, observers have highlighted its international embeddedness and the impact of global developments on it. The aim of this chapter is to build a bridge between the two approaches. The focus is therefore on the EU as an international actor, the process of Europeanization and recent institutional developments in the light of topical global trends such as the increasing influence of China and India. The chapter is divided into three parts. The first one focuses on the EU as an international actor, the rise of China and India, and the increasing global competition. The EU’s actorness is elucidated by examining it as a novel type of model-power and a more traditional superpower. I argue that even if the data related to the EU’s practical policy-making highlights some superpower characteristics − such as short-term interests and relations with other major states −

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the EU is attempting to become a more active model-power by pursuing long-term systemic changes in world politics. The second part concentrates on the process of Europeanization, with a view to clarifying the role of the member states in EU policy-making. I suggest that the reciprocal character of the EU policy processes constitutes challenges that should be taken into account in its strategic partnerships. The concluding discussion concerns the institutional changes in the EU’s externalrelations decision-making in the light of the Lisbon Treaty reforms as a doubleedged sword. On the one hand the Treaty may foster a more visible, coherent and unitary EU external policy, which can transform the EU to a more active model-power. On the other hand, it is possible that influential member states will be increasingly able (and willing) to project their national and short-term interests in the EU level thus propelling superpower development. The EU as an International Actor: A Model-power or a Superpower? The EU occupies an increasingly pivotal position in contemporary discussions on world politics. For some it constitutes a model for, or a benchmark case of, the institution-building related to processes of regionalization and/or globalization. Others have granted it a sui generis status and emphasized its internal dynamics and distinct features in comparison to other regional and global organizations. Recently, its role and influence in world politics has attracted particular attention. Whereas its economic weight and trade power have been largely recognized, current debates are scrutinizing its increasing political and military capabilities in the formulation of common foreign, security and defense policies (Hill and Smith 2005). The analytical focus on the EU as an international actor has been largely twofold. On the one hand, scholars have been interested in charting its development in this respect, largely concentrating on the internal dynamics of European integration and EU policy processes such as the establishment of region-to-region relations and strategic partnerships with India and China. On the other hand, analysts have been increasingly occupied with evaluating the ways in which the EU is exercising power in world politics. In this context they have also stressed its international embeddedness in global developments such as the rise of Asia. I suggest in this chapter that, while it is important to understand the ways in which the EU produces international action, we should also focus on how the international dimension enters into EU policy-making and processes (Hill and Smith 2005: 3). Indeed, the very idea of the EU’s international actorness leans on the relationship between its internal and external foci. Hence, in order to understand the EU’s role in the world and its attempts to shape it through strategic action, we need to look into the internal dynamics of it in the context of global developments. In order to shed light on its role as an international actor a distinction is made here between the EU as (i) a model-power and (ii) a superpower. The idea of the EU as a superpower is not new, but has become more prominent as its role

The European Union as an International Actor

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in world politics has been recognized. Some policy makers have suggested that the EU should assume the role of a powerful state-like actor in order to balance other powers such as the US. As such the EU has economic, political, and security interests to defend, and it should use its influence and power accordingly. Here it is seen as a unitary actor that could easily be compared and contrasted to other major powers in world politics such as China, India, Russia, and the US. However, and as Tobiaz Lenz (2008) posits, the idea of the EU as a modelpower is perhaps more deeply rooted among European policy makers. As the EU has sought a more prominent role in world politics, policy makers have drawn on its internal achievements in order to legitimize stronger activism on the international level. They have emphasized the achievements of European integration in building a system of governance based on the values of freedom, human rights, the rule of law, and democracy, which have brought peace and prosperity to a region once devastated by wars between what are now EU member states (see also Vogt 2006: 8-9). It is suggested that these developments contain lessons that are important not only for Europe, but also for the wider world. The world should be inspired by the European experience and the EU itself should be proactive in promoting its model. These ideas are clearly reflected in EU statements and are supported in the member states. The UK foreign secretary David Milliband argued recently that the EU should not strive to become a superpower, but should rather develop into a model-power (cited in Lenz 2008: 2). Many academics seem to share this view. Debate about the EU as a “normative power” and a “civilian power” suggests that the EU model, i.e. its own internal experience, constitutes its most valuable resource when acting internationally (Lenz 2008: 2). As a model-power the EU has been described as both passive and active. As a passive actor it is shaping the world by simply existing. In other words, it is exerting influence through what it is rather than through what it does (Maull 2005: 778) by attracting others to emulate it. Behind this reasoning is the success of the EU in preventing conflicts in postwar Europe and providing prosperity for Europeans. The region’s diversity and prestigious global status in high and popular culture, science, and technological innovation has also seemed to encourage others to follow its model. This view resonates with idea of the EU exercising soft rather than hard power (Nye 2004). On the other hand, and reflecting its structural position in world politics, it has been noted that its internal market structure constitutes a strong incentive for others to engage in regionalism. This might also reflect power balancing in that states have realized that regional integration is imperative if they are to have any influence in contemporary world politics (Lenz 2008: 4-5). However, observers and EU policy makers have increasingly underlined the problems related to its passiveness as an international actor. The EU model has not been emulated without reservation elsewhere, as the emergence of the socalled Asian way to regionalism in the 1990s suggests. The EU’s ability to attract others is increasingly combined with its ever-increasing activism in world affairs − whether economic, political or military. For instance, it strongly promotes regional integration through its external relations. Here the Finnish foreign minister Alexander

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Stubb’s reasoning is illuminating. He argues that the EU needs to become more influential to be able to promote its model and effective multilateralism. To do that, it needs to increasingly formulate common policies towards the world (Stubb 2008). Another distinction that sheds light on the role of the EU relates to the degree of strategic action in its external relations. It has been suggested that EU action reflects routinized rather than strategic behavior. As a routinized actor it behaves in a rather premeditated manner mirroring its firm belief that Europe’s history is a lesson for everybody. It follows that under uncertain and challenging international conditions EU actors do what they know best, rather than what would be most favorable for the intended outcomes. In contrast, strategic behavior implies more explicit consideration of how policy goals are translated into effective action (Lenz 2008: 6). Although the EU obviously aims at deeper strategic thinking and behavior, there are plenty of exemplars of routinized behavior. It is suggested that the actual process of enlargement was driven by the regulation needs related to the single markets rather than the political preconditions related to democratic governance and fundamental rights. Similarly, the EU has been accused of narcissism and of a tendency to re-produce itself in its policy to foster regionalism abroad (Lenz 2008: 6). In terms of the EU’s increasing external action, the type of strategic action and its objectives are relevant to the model-power and superpower distinction. Is the EU’s behavior for the short-term and interests-based or is it an attempt to shape the system in which international actors operate in the longer run? Significantly, short-term interests and systemic objectives may be contradictory. In other words, bringing about systemic change might involve sacrificing short-term interests related to giving up power in international organizations, for instance. On the other hand, they could also be complementary. The Kyoto Protocol addressing climate change could be seen as an example of advancing longer-term systemic change rather than short-term economic interests. Nevertheless, its implementation might translate into economic benefits in terms of business opportunities related to new technologies, for instance. In contrast, the EU’s position in lowering trade barriers in the field of agriculture indicates short-term and interest-based action. The EU as a Strategic Actor and the Emergence of Asia The EU’s first ever security strategy, the European Security Strategy (EES), which was agreed in 2003, is perhaps the clearest indicator of what kind of international actor the EU is or intends to become, and of how it positions itself vis-à-vis other actors (Ojanen 2006: 19). Moreover, it is the clearest manifestation of its global security strategy. The EES states that, due to its population and economic power “the European Union is inevitably a global player” and that “Europe should be ready to share in the responsibility for global security and in building a better world” (Council of the European Union 2003a). The document highlights the political, societal and economic dimensions of security, and establishes a causal relationship between conflicts and insecurity on the one hand, and economic and social factors


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on the other. It deals with contemporary global security challenges such as the problem of weak states, pre-emptive engagement, and multilateralism. According to the document the EU has a wide range of instruments with which to address security challenges. It has developed military capabilities, designed mainly for crisis management, and runs a large number of development programs. It is increasingly developing its political and institutional capabilities to formulate common policies and positions, and will therefore be able to utilize its economic and political power more effectively in world affairs. It is working toward an international order based on effective multilateralism; its key objective is the development of a stronger international society, well functioning international institutions and a rule-based international order (Council of the European Union 2003a). In many ways the ESS reflects the idea of the EU as a model-power. It highlights the role of non-state actors, multilateral agreements and region-to-region relations. Moreover, security is approached broadly. On the other hand, the document includes several traditional foreign and security policy features. It emphasizes the role of the major states by referring to its strategic partnerships with the US, Russia, Japan, China, Canada, and India. Within the EU it calls for unitary diplomatic efforts as well as coherent development, trade, and environmental policies. Moreover, it stresses the EU’s power, capabilities, and intervention in world politics. The world is also reminded about the member states’ substantial military capabilities and ability to sustain several operations simultaneously (Council of the European Union 2003a: 11-13). Significantly, the EU does not merely have responsibilities, it also has interests to be promoted, secured, and ultimately defended (Council of the European Union 2003a: 1, 3, 6). The EU’s Asia strategies (European Commission 1994, 2001a), and the specific EU–China (European Commission 1995, 2006b) and EU–India (European Commission 2004, 2006c) strategies all reflect the strategic thinking laid out in the EES. They deal with a broad set of questions related to regional and global security, trade and investment, human rights, cultural dialogue, and development and environmental questions. In fact, the reasoning behind the regional and the country-specific strategies is related: whereas Asia is seen as an emerging region economically and politically, India and China are seen as increasingly important regional and global actors. It is in the interest of the EU to promote the development of the region as a whole, and to integrate its actors into global and regional governance structures and institutions. Accordingly, the documents highlight region-to-region relations such as those with ASEAN and ASEM, as well as bilateral strategic action with China and India. However, the development of the EU’s Asia strategy might point to other conclusions. In this volume Bart Gaens suggests that there is a discernible paradigm shift in the development of the EU’s Asia strategy in terms of the geographical focus, the topical scope of the policy orientation, and the new emphasis on bilateral relations (see Chapter 3). Although this reflects the EU’s internal developments, it may also be related to its external environment. The 1994 strategy is an important

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document in that it represented an attempt to bring together the economic and political objectives of the EU in the post-Maastricht environment (Palmujoki 2001). It connected the EU’s Asia policies to the recently established Common Foreign and Security Policy (CFSP). The 1994 strategy clearly prioritized regionto-region relations with Asia, and it could be seen as an exemplar of the EU pushing through a systemic change in the long run. However, it has been criticized for being too broad and lacking in concrete action plans. Attempts were made in subsequent documents to narrow it down and clarify the policies. In the process, the emphasis shifted somewhat to bilateral relations, in particular to the strategic partnerships with China and India. Significantly, the increased significance of bilateral arrangements and state actors in the EU’s relations with Asia is also related to the external environment. Although the EU has highlighted region-toregion relations with Asia through ASEM, the utterly intergovernmental features of ASEM’s institutional set-up have, in turn, shaped the EU (Tiilikainen 2008). EU member states have been given a significant role in ASEM, partly due to the Asian states’ insistence on member-state involvement. Consequently, the role of the Commission has been altered and the High Representative of the CFSP has been sidelined. The data collected from the Council of Ministers and the Commission documentation registers indicate that EU policy-making related to Asia has been dominated by economic and trade relations with China and India in the 2000s (Graph 2.1 and Graph 2.2). This is partly due to these countries’ increased importance in multilateral arrangements and organizations such as the World Trade Organization (WTO). For instance, WTO-related anti-dumping issues have been the major factors in the EU’s external relations decision-making with China and India. However, bilateral trade arrangements are also visible in the policy-making documentation. On the other hand, China and India have also been progressively addressed in the context of the CFSP. Politically volatile situations in some parts of Asia (i.e. Afghanistan, Pakistan, East-Timor, and Tibet) are also reflected in the data, as is the human-rights dialogue with Japan. The references to the ASEAN in the field of CFSP is largely resulting from Aceh Monitoring Mission and the EU–ASEAN Commemorative Summit in 2007. In the light of the EU’s strategy papers, the relevance of interregional forums and regional institutions in the documentation is, however, strikingly marginal.

The data was collected from the Council of Ministers and the Commission documentation registers. European Parliament documentation was also consulted. The method included searches with different key words − such as “China,” “India,” “ASEM,” “Central+Asia,” “Asia” − in all the documentation and relevant fields. The searches were limited to the document titles as they gave a clear indication of the topic and issue areas.


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800 700 600 500 Commission

400

Council

300 200 100 0 China

India

Russia

Japan

ASEM

ASEAN

Graph 2.1 Key Asian actors in Commission and Council documents, 2001-2007

800 700 600 500 400 300 200 100 0 China All

India

Japan

ASEM

ASEAN

SAARC

CFSP related working groups (CFSP, COASI, COHOM)

Graph 2.2 Key Asian actors in all Council documents and CFSP related subject matters, 2001-2007

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The background interviews with some EU and member-state officials gave similar indications. Although it is claimed that the EU is actively promoting its model, the practical policy-making with Asia is largely related to managing economic relations with the major states, in particular China and India, and to some extent ASEAN. As such, it potentially reflects routinized behavior and suggests that the EU is acting as a passive model-power. On the other hand, matters related to China and India have been progressively discussed in the context of the CFSP. Political issues − such as the environment and human rights − related to investment, trade and development might indicate strategic thinking and increasing activism in the promotion of the EU model. However, recent global developments could make this type of activism difficult and divert the EU’s and its member states’ attention to short-term interests. Indeed, the member states seem to be particularly active in promoting their interests and defending their “red lines” in different Council configurations. Turbulence in Globalization and the Return of Power Politics As suggested, the EU’s external relations are shaped by international developments. One of the current themes widely discussed among policy makers and scholars is the faith of globalization. The liberalization of financial markets and trade has highlighted liberal ideas of absolute gains and common interests. However, the recent setbacks in further liberalization − in particular with regard to trade − have sent shockwaves through globalist thinkers and policy makers. For many, relative gains and national interests increasingly dominate the global agenda, not least in the economic arena. The plenary address given by Kishore Mahbubani − a prominent Asian globalization author – at a major international conference on global and regional governance attended by leading scholars and some policy makers is illuminating. The organizers gave it the title “Can Asia Save Globalization?” According to Mahbubani it is not terrorism and fundamentalism, or developing countries trying to protect their markets, which represent a real and present danger to globalization, but the West. As the world has benefited tremendously from the globalization pushed forward by leading Western powers, recent developments suggest that the same powers are losing confidence in the whole process, largely These included officials in the Council of Ministers and the Commission, and representatives of the member states. Kishore Mahbubani is Dean and Professor in the Practice of Public Policy at the Lee Kuan Yew School of Public Policy at the National University of Singapore. He served for 33 years as a diplomat for Singapore and has written many articles on world affairs. The conference, Pathways to Legitimacy? The Future of Global and Regional Governance, was organized by the Centre for the Study of Globalisation and Regionalisation (CSGR) at Warwick University, in cooperation with GARNET, the EU-funded Network of Excellence on Global Governance, Regionalisation and Regulation.


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due to the increasing economic power of Asia and the Asian states. As a result, protectionism is again high on the US and EU agendas, and Western actors are refusing to reform key international organizations such as the UN Security Council, the International Monetary Fund (IMF), the World bank, and the G8 (the group of highly industrialized countries) to better reflect the world’s population and changed political and economic realities. Mahbubani goes even further in the Foreign Policy journal, suggesting that “there is a fundamental flaw in the West’s strategic thinking.” The West assumes that it is the source of the solutions to the world’s biggest problems, but it is also a major source of them. Unless key Western policy makers learn to understand and deal with the changed global realities, “the world is headed for an even more troubled phase” (Mahbubani 2008b). In the light of these global tendencies, the future development of the EU as an international actor is a highly topical issue, although difficult to comprehend. Will it retain the key characteristics of an active model-power or will it be transformed into a fully-fledged superpower? Whereas the other chapters in this book explicitly concern the importance of India and China to the EU, the focus in the remainder of this one is on the ongoing institutional developments in the Union. As suggested, the role of the member states is in many ways pivotal in clarifying the EU’s international actorness. Before turning to the changes proposed in the Lisbon Treaty, I will therefore discuss the Europeanization in the foreign policies of the member states. While the empirical merits of studies on Europeanization are highlighted for instance in Chapter 3 of this volume, the concept is used here to illustrate what kind of actor the EU is in world politics. The key objective is to clarify the relationship between the EU’s external relations and its member states. The EU’s External Relations: The Europeanization of its Member-state Policies The term Europeanization has been used mainly to describe and account for the economic and political change brought about by post-war European integration. As a widely used term it has acquired a wide set of meanings and has recently emerged as a key concept in analyses of European politics and foreign policy/ies. Most of the analysts have focused on the domestic impact of European integration, and as such, the concept has been used to account for (top-down) national adaptation to EU governance. On the other hand, foreign-policy scholars in particular have shown an interest in examining (bottom-up) Europeanization as the national projection of interests on the EU level. It is argued here that it is particularly useful in capturing the reciprocal features of the relationship between the EU and its member states. Thus the concept of Europeanization helps us to comprehend and account for the key dynamics and mechanisms of the EU’s external-relations decision-making.

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Top-down Europeanization: A National Adaptation Approach Europeanization studies acknowledge that European integration has reached a level at which it makes sense to focus on its impact on institutions and policy processes in EU member states. However, this does not indicate the eradication of the member states’ role and influence in the analysis of EU politics. On the contrary, scholars have attempted to bring domestic politics back into our understanding of European integration and explanations of EU politics (Börzel and Risse 2000; Radaelli 2004). The concept of Europeanization thus serves to illustrate the way in which the European dimension has become an embedded feature within European states, framing policy, politics, and polity. The question is no longer whether Europe matters, but how it matters, “to what degree, in what direction, at what pace, and at what point of time?” (Börzel and Risse 2000). A major innovation in studies on Europeanization is that its domestic impact is differential. Authors have demonstrated the importance of the national context in modifying, accommodating, internalizing and, perhaps, even neutralizing European pressures (Hix and Goetz 2000: 216). Hence, the processes of Europeanization do not replace or reject national administrative structures, cultures, rules, and norms (Jupille and Caporaso 1999). Europeanization has been defined as the process of convergence towards shared policy frameworks, and of structural change, variously affecting actors and institutions, ideas and interests. In order to elucidate the concept, scholars have turned to the literature on comparative politics and have formulated comparative frameworks. The research outcomes point not only to convergence, but also to divergence. In terms of the EU’s Asia policy, a degree of Europeanization is easily discernible in the member states. For instance, relations with Asia became a key feature of Finland’s EU Presidency in that ASEM6 was organized in Helsinki in 2007. Thus the national administration has been increasingly dealing with the EU’s Asia relations and the EU has therefore shaped Finnish policy in the EU and beyond. Moreover, there have been several institutional changes in many member states in the field of foreign policy, many of which were EU-related. There is, however, a relevant concern related to these assumptions. It may be that European institutions and policy-making mechanisms are considered so advanced that the shape and type of polity is less interesting than the variation in policy and politics (Christiansen et al. 2001: 1). Similarly, advocating a mechanical approach to studying Europeanization sidelines the crucial question of how member-state politics feed back into the integration. Bottom-up Europeanization: A National Protection Approach? Many foreign-policy analysts have approached Europeanization as a bottom-up process and have highlighted the national projection of interests and policies on the EU level. This could be a result of the relative weakness of EU competences and institutions in this policy field, as compared to many aspects of market regulation.


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According to Ruben Wong, the national projection school maintains that states are the primary actors in and agents of Europeanization (2005: 137). They are highly pro-active rather than passive in projecting their preferences, policy ideas and models to the European level. This conception of Europeanization shares many similarities with the intergovernmentalist thinking that highlights the centrality of the major states. The bottom-up approach has also attracted attention to the impact of the smaller states in EU-level policy-making. In this sense, Finland’s role in crisis management and recently also in Asian relations, has been noted in Brussels. The smaller member states may well play an important role in facilitating consensus among the big states. In addition, the expertise related to their role as mediators in disputes and conflicts might empower them within in the EU. Europeanization as Adaptation and Projection The amazingly rapid development in the EU’s external relations in the field of traditional foreign policy is another reason for investigating the top-down Europeanization of foreign policy. The reorientation of national foreign policies and various domestic institutional changes can be explicitly connected to the EU (Raunio and Tiilikainen 2003). On the other hand, the prevailing influence of the member states, especially in the formulation and construction of the CFSP and the European Security and Defense Policy (ESDP), may explain why the approaches developed by foreign-policy scholars have been, in a sense, wider than in some other fields. Focus on the mechanisms, and on state-driven and largely given interests in rationalist terms, has been complemented with approaches highlighting elite socialization and/or cognitive processes. Ben Tonra, for instance, describes Europeanization as a transformation in the ways in which national foreign policies are constructed and professional roles are defined and pursued, and in the consequent internalization of the norms and expectations arising from a complex system of collective European policy making (Tonra 2000: 229). M.E. Smith notes the increasing impact of EU processes on national foreign-policy cultures in terms of elite socialization, bureaucratic reorganization, constitutional change, and the growth in public support for the EU foreign policy. On the other hand, he argues that domestic procedures and cultures are conclusive to the forging of common positions at the EU level (Smith 2000: 617-628). Tonra arrives at similar conclusion, suggesting that the relationship between national- and European-level foreign policies has been, and continues to be, reciprocal (Tonra 2001: 279). Scholars have thus noted that European foreign policy clearly operates on different levels, most obviously those of the EU and the state, and suggest the need for an analytical approach in exploring the linkages between them (White 2004: 20). Although the member states are keen to project their interests onto the EU level, they are also engaged in a process that is increasingly shaping the environment in which such interests are formulated. The case of Finland is, again, illuminating. In order to be an influential player in Brussels, Finland makes strategic decisions concerning

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foreign-policy issue areas on which it will focus. Accordingly, Finnish strategic thinking is shaped by the EU context. In a similar way, the interest formation among the major EU states is increasingly being thus shaped. Evaluation by the permanent representations in Brussels of a particular international situation or issue area takes into account the opinions of the other member states and EU institutions. Few studies so far have addressed Europeanization in the context of relations with Asia. De Prado Yepes (2005) considered the impact of ASEM on the foreign policies of EU member states, arguing that its interregional process had had a far greater influence than hitherto acknowledged. He uses the cases of Spain and Sweden to illustrate the creation, adaptation, and modification of European partners’ overall strategies for Asia, with particular reference to ASEM as a tool for advancing their interests in the region. In addition, Ruben Wong (2006), taking France as a case study, found that French foreign policy towards East Asia was being increasingly contextualized in the larger European foreign-policy framework. Both studies suggest that the development of the relationship between the EU and its member states is crucial to EU’s external relations in the light of its strategic partnerships with other major actors. On the one hand, the increasing influence of the EU in world politics might increase its member states’ activities in its external-relations policy-making, but on the other hand, a shared policymaking framework is likely to promote convergence in member-states interest formations in the longer run. Moreover, the Lisbon Treaty reforms are likely to shape both the institutional set-up and mechanisms and the relationship between the EU and its member states in the near future. The EU’s External Relations and the Lisbon Treaty Reforms Institutional factors constrain and shape the EU’s international actorness and external-relations policy-making. In the opinion of many, the EU has lacked the institutional capability to formulate coherent external policies, while others suggest it rather lacks the political will to formulate common policies and positions. The institutional set up of its external-relations policy-making has been under constant review, particularly after the single-market process was finalized and the political union established in 1992. However, the basic institutional arrangement − laid out in the Maastricht Treaty’s pillar structure − has remained the same: the EU’s external-relations decision-making is shared between the Community and the intergovernmental pillars. Accordingly, external affairs related to the single markets, such as finance, investment, trade, and development aid, are decided upon within the Community pillar, the central institution in which is the Commission, and the policy formulation has followed the so-called Community method. The European Parliament has also been involved in the process. All other external affairs, such as the CFSP and ESDP, are decided within the intergovernmental pillar. The central institution in this case is the Council of Ministers, in which the member states and traditional diplomatic procedures dominate the policy-making process.


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It is widely agreed that the EU’s external relations suffer from the division between the Community and the intergovernmental pillars. As the integration process has deepened and expanded, the division has become increasingly difficult to sustain as the policy areas overlap. Moreover, the current institutional set-up and policy-making mechanisms are seen to result in fragmentation, incoherence and inefficiency, and it is argued that they do not provide enough leadership to overcome variation in member states’ interests in the enlarged EU. As such, the political will to formulate common policies in the field of external relations is not translated into common action. On the other hand, the EU is often seen as a difficult partner to negotiate with internationally. For one thing, its positions are often fixed, in other words there is very little room for maneuver on the EU side in that its common positions are resulting from diverse internal political debates or even struggles. Secondly, member states do not necessarily follow the agreed common positions. Indeed, the foreign-policy administrations of the 27 member states are not necessarily aware of all EU policies and positions, which might cause unintended incoherence. Proposed Changes in the Lisbon Treaty The Constitutional Treaty signed in Rome in 2006 represented an attempt to overcome the division related to the pillar structure. The aim was to streamline the decision-making and to strengthen the effectiveness and the visibility of the EU in world politics. Although the Treaty was rejected during the ratification process, support for the external-relations reforms has been substantial. Indeed, the sections dealing with the EU’s external relations were among the least contentious in the negotiations (Avery and Missiroli 2007: 6). This was also the case in the French and Dutch referendums that resulted in “no” votes and the end of the ratification process. Moreover, the established consensus largely prevailed in the negotiations for the Lisbon treaty in the field of external relations. The requested clarifications and subsequent changes made in it are said to be marginal (Avery and Missiroli 2007: 6). The suggested title for the EU’s external-relations chief has been changed from the “Union Minister for Foreign Affairs” to the “High Representative of the Union for Foreign Affairs and Security Policy.” Moreover, it is suggested that the added clarifications related to the CFSP and member states’ foreign policies are irrelevant in that they state the obvious and reiterate existing norms (Missiroli 2007: 18). The provisions in the Constitutional Treaty on the external relations of the EU have been substantially revised in the Lisbon Treaty, and new ones have been introduced. The Treaty gives the EU a single legal personality, the aim being to strengthen its negotiating power and thus to make it more effective on the world stage and a more visible partner for third countries and international organizations. It also establishes new actors and institutions and reformulates existing ones. First, it establishes a permanent President for the European Council, elected for a twoand-a-half-year period, and transforms the European Council into a fully-fledged

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EU institution. Secondly, it creates the post of High Representative for Foreign Affairs and Security Policy, combining the roles and functions of the current High Representative for CFSP and the Commissioner for External Relations. Thirdly, it sets up the European External Actions Service (EEAS) to support the new High Representative. The accorded international legal personality for the EU implies an end to the distinction between the European Community and the European Union, which is also reflected in the pillar structure. A single legal entity is better able to conclude international agreements and join international organizations. It is assumed that the EU will therefore be able to speak and to take action as a single entity in many fields of world politics. This could potentially include the political and security provisions of interregional arrangements such as ASEM, and relations with ASEAN and SAARC as well as bilateral relations such as strategic partnerships with India and China. Although it is usual for international organizations to have a legal personality – as the UN organizations and the World Bank have, for instance − in the field of foreign, security and defense policies it has largely been reserved for nation states. The consolidation of the European Council as a full institution with a President is also important in terms of the EU’s international presence and action. As the main task of the European Council is to “provide the Union with the necessary impetus for its development” and “define the general political directions and priorities thereof” (European Council 2007), the institution will therefore have a pivotal role in shaping the future directions of the integration process. With regard to the external action, the Treaty stipulates that the European Council will identify the strategic interests and objectives of the Union. In many ways this institution will be responsible for deciding what kind of model the EU will be in the future, and in what ways it will promote its model, interests, and values. It is also likely to decide wherein lie the boundaries of the EU and member-state competences in the field of external relations. The European Council also plays a key role in nominations for office. It proposes the President of the Commission to the European Parliament and appoints, in agreement with the President of the Commission, the High Representative. Decisions of the European Council are taken by consensus, except when otherwise stipulated in the Treaty. The role of the permanent President of the European Council is currently the subject of lively debate. The Treaty states that it will be to “ensure the external representation of the Union on issues concerning common foreign and security policy.” The practical implementation of the policies, however, is the responsibility of other institutions and actors, in particular the High Representative (European Council 2007). The President’s role may become significant in the event of an external or internal crisis, for instance, and when a consensus on EU action has to be sought in the European Council. She or he might also take on a substantial role in high-level international meetings as the representative of the EU and its member states. In theory, as the EU assumes a legal personality, the President could replace the heads of states and governments of the EU member states in


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ASEM, if so decided. This does not necessarily imply a more supranational EU. The European Council is essentially an intergovernmental institution, and its increasing role might highlight traditional features of international organization and consensus-building rather than (qualified) majority decision-making. The EU will therefore continue to be a difficult partner with which to negotiate. On the other hand, how this will develop depends largely on the roles of the new President and High Representative. The most important institutional innovation in the Lisbon Treaty, the aim of which is to overcome the pillar structure, is the new position of High Representative for Foreign Affairs and Security Policy and the creation of the EEAS. The EEAS will draw on the resources of the EU institutions and the member states to assist the High Representative. The main task of the jobholder will be to ensure the consistency of the EU’s external relations, which will entail the wearing of “two hats”. She or he will largely retain the current tasks of the High Representative for CFSP, and chair the new Foreign Affairs Council configuration in the Council of Ministers, and will also be one of the Vice-Presidents of the Commission virtually in charge of the external relations assigned to it. Consequently, the two distinct institutions – the Council of Ministers and the Commission – will be brought together in the field of external relations. One of the consequences of these reforms is that the role of the rotating presidency will be significantly reduced. Currently the member state holding the presidency is in charge of all EU affairs in the Council of Ministers, and takes a substantial role in representing the EU internationally. On the other hand, the role of the European Parliament may well increase in the fields of CFSP and ESDP. When the Community and the CFSP pillars become one, the distinction between economic and politico-military affairs may be even more difficult to draw, and the Parliament might see increasing potential for intervention in external relations. Although the legitimacy of the EU was one of the key issues in the process leading to the new Treaties, democratic accountability in external relations is still largely indirectly in the hands of the national parliaments rather than the European Parliament. The preparatory work done to establish the EASS suggests that the current civil-service staff dealing with external relations in the Commission, and with foreign, security and defense issues in the Council will largely form the new service led by the High Representative. The Commission now has more than 7,000 staff involved in external relations, who are based in Brussels and in more than 120 delegations covering over 150 countries and international organizations. In terms of representation outside of EU borders the Commission’s network ranks seventh if the consulates are included, and fourth if not, compared to the representations of the member states (Missiroli 2007: 9). In comparison, there are about 500 employees based in the Council of Ministers General Secretariat dealing with foreign, security and defense policies. This figure does not include the personnel − both military and civilian − working on the ground in ESDP operations, who are mostly seconded from the member states or contracted locally.

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Neither does it include the large number of member states’ diplomats participating in Council configurations, or different preparatory bodies, or working for the rotating presidency. The Lisbon Treaty contains very little about the precise set-up of the EASS and its relations with existing structures and bodies in the Council of Ministers and the Commission. However, it is now common knowledge in Brussels that had the Treaty come into force on 1 January 2009, the Commission delegations would have become EU delegations and the heads would have been called ambassadors. As their chief, the ambassadors would have had two “hats.” Although the Lisbon Treaty is not yet in force, the EU’s relations with the African Union reflect the long-awaited reform. The 2008 Action Plan states that the EU delegation will represent the EU in all areas of competency and activity within the African Union. The ending of the rotating presidency in the external relations and establishing “two-hatted” representatives could potentially solve most of the current fragmentation and incoherence problems. However, some new questions might arise. First, the Treaties reveal very little about the role of the President of the European Council in practice. She or he will most probably take some of the responsibilities − arguably also some resources and personnel − of the Council Secretariat and ensure some form of external representation in relation to the EU summits. Consequently, the High Representative will have to have a close working relationship with the President of the European Council. Moreover, it is unlikely that the Commission President will refrain from intervening in external relations. Indeed, the opposite might be an unintended result of the reforms in that the Commission is involved in so many areas of external policy. Interestingly, the current President of the Commission took back the role of chairing the group of Commissioners dealing with external policies − i.e. enlargement, trade, development aid, and external relations including European Neighborhood Policy (ENP) − in the view of the ongoing reforms (Missiroli 2007: 12). The demise of the rotating presidency might also prove difficult with regard to external relations as member states might be tempted to (re)gain some ground in this field, at least in terms of visibility. It should be noted that the country holding the rotating presidency will still chair all the other Council configurations, most importantly the General Affairs Council and the COREPER, unquestionably a major player in foreign-policy matters. Observers have pointed out that it will be very crowded indeed at the top of the EU (Missiroli 2007). The old formal troika of Presidency countries might be replaced with a new informal one including the European Council President, High Representative and the Commission President, while the new trio of successive Council Presidencies will linger on the sidelines. Had the Lisbon Treaty come into force as planned, the conduct of EU external relations would have change substantially with bringing together of two bureaucracies with distinct decision-making structures. Without a doubt the changes when they come about will have an impact on the EU as an international actor. Its legal personality and the visible EU foreign-policy posts served by staff in Brussels and representations around the globe will highlight the EU as an


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international actor. This indicates that it is increasingly seeing itself as a highly active model-power. The reforms have the potential to facilitate more strategic action. Significantly, it is possible to formulate clear objectives and priorities for all of the EU’s external-relations fields. However, the EEAS needs to adopt a culture of strategic thinking, and to avoid the pitfalls of routinized behavior that reflect the managerial ethos of many of the current external-relations institutions. The role of the member states role will be crucial in achieving the desired more strategic behavior. Indeed, the reforms highlight intergovernmentalism in external relations, which in many fields must be agreed among all 27 member states. Thus the EU should carefully consider in which external areas common action is feasible. Its external relations will need leadership in order to establish a common and widely agreed purpose and vision. Leadership is also necessary in order to prevent member states from using the EU purely to serve their national interests. Conclusion It was argued in this chapter that in order to elucidate the EU’s developing strategic partnerships with China and India we ought to clarify what kind of actor it is and how its external policies are formulated. It is suggested that the EU is aiming to become an active model-power, in other words that its internal development and historical experiences will continue to shape its international actorness. It is aiming at making systemic changes in the world’s economy and politics in the long run. However, global developments − such as the rise of Asia and the demise of globalization − might increasingly highlight the short-term economic interests of the EU and its member states. The interplay between the EU institutions on the one hand and the member states on the other, was discussed in the context of the Europeanization, which is a reality in the field of traditional foreign and security policies even if the role of the member states remains crucial in the process. This must be taken into account in any strategic action. Finally the focus moved to the ongoing institutional changes. It is suggested that the reforms might result in an EU that is more visible, coherent and unitary in world politics, although on the other hand they reflect increasing intergovernmental tendencies within the Union. As such they may also increase the influence of the member states in the formulation of the EU’s external relations given their proneness to project and defend national rather than EU interests in the various fields of EU policy-making. Herein lies the real danger that the EU’s external policies will increasingly reflect either the EU’s or its most influential member states’ short-term interests. The increasingly competitive and turbulent world economy and the potential return of power politics might provide the momentum for this kind of development. Accordingly, it might prove difficult to find political support for policies pushing through longer-term systemic changes. As a result the EU might increasingly act like a superpower.


Chapter 3

The Development of the EU’s Asia Strategy with Special Reference to China and India: Driving Forces and New Directions Bart Gaens

Introduction The EU’s relations with Asia enjoyed a renaissance in the early to mid-1990s. Europe’s “re-discovery” of Asia was propelled in the first place by commercial incentives following the rise of Southeast Asian economies (the so-called Tiger economies), but was also marked by a sense of urgency to engage more actively with the region as a political actor. The European Commission’s comprehensive Asia strategy of 1994 articulated this political will and prioritized enhanced relations in multiple fields with Asia as a region. The ensuing era has been marked by a three-fold development. The first of these is the process of “Europeanization,” or the increased ability of the EU to act not only as an economic power but also as a political actor and present itself as a global player. Secondly, there is a process of “Asianization” going on, underpinned primarily by the intensification of intra-regional trade and economic integration in Asia, but also highlighted by the configuration of a loose regional political grouping and the development of a burgeoning sense of an Asian identity. At the same time, this “rise of Asia” has coincided with the re-emergence of China as an economic and political power, and in more recent years, by the growing involvement of India in the regional structure. Thirdly, the process of “new interregionalism” has entailed the encounter of two regions as distinct and equal actors in a dialogue going beyond trade and the economy to include political, security-related, and cultural issues. This novel type of interregional relations emerged as a post-Cold War product following the end of the bipolar power structure, adding a new dimension to global governance and complementing bilateral and multilateral interaction. In the context of EU–Asian interaction this triple development was crystallized in the Asia–Europe Meeting (ASEM) in 1996, a forum that enabled institutionalized interaction between the EU and a grouping of Asian states, and aimed to create a “partnership in a spirit of equality.” The aim in this chapter is to reflect on the development of EU–Asia relations since 1994, taking the EU’s common policy and strategy for Asia as the prime reference point and focusing specifically on the perceived roles of India and

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China. Particular attention is given to dialogue and cooperation in the interregional context, and relations with both countries are analyzed in the context of the wider Asian region. I will begin by tracing the historical development of the EU’s Asia Strategy in order to give an insight into the changes occurring in the international environment as well as in perceptions toward China and India. It will also enhance understanding of how the European Union perceives itself as an international actor, and how the member-state level interrelates with the common EU approach. The second part of the chapter concerns the current role and future potential of “interregionalism.” The particular focus is on the Asia–Europe Meeting, which is an important forum in which to implement the EU’s Asia Strategy and to engage both China and India in a regional and multilateral context. The analysis also gives some insight into the EU’s internal state of affairs, which are marked by a delicate balance between the Union’s ambitions to speak with one voice and the pursuit of national interests by the member states. The EU’s Asia Strategies and the Positions of China and India “Towards a New Asia Strategy” (1994) The EU published its first comprehensive policy for the Asian region in the European Commission’s “Towards a New Asia Strategy” policy document of 1994. The strategy reflected an awareness and recognition in the dramatic increase of Asia’s global importance, and emphasized the need as well as the political will to engage more actively in the region. Four main objectives were listed: (1) to strengthen the EU’s economic presence in Asia; (2) to contribute to regional stability by promoting international cooperation and understanding; (3) to contribute to poverty alleviation and sustainable development, and (4) to contribute to the development and consolidation of democracy and the rule of law, and promote respect for human rights and fundamental freedoms. A geographical distinction was made between the eight countries of East Asia, the ten countries of Southeast Asia, and the eight countries of South Asia. However, the booming economies of Southeast Asia and the continuing economic strength of Japan carried considerable weight in the document, and references to China and India are scarce. While relations with China were largely normalized in 1992 (with the exception of the arms embargo), no bilateral political dialogue was established until June 1994. This was followed by the first Commission communication on long-term policy for the country in 1995. In the case of India, a joint political statement and a third-generation cooperation agreement were signed in December 1993. The China, Japan, North and South Korea, Mongolia, Taiwan, Hong Kong and Macao. Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Cambodia, Laos, Vietnam, and Burma. India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, the Maldives and Afghanistan.

The Development of the EU’s Asia Strategy

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Asia Strategy paper emphasizes the important role of European involvement in promoting reforms in the previously centrally managed economies of China and India. Both countries are furthermore referred to in the contexts of development aid, the fight against drugs, the low levels of energy efficiency combined with the relatively abundant supply of carbon-rich fossil fuels, and the large regional imbalance with regard to economic development and income distribution. A threefold change in perception lies at the root of this policy paper. First, the EU needed to take action in order to partake in Asia’s economic success. The impressive growth in Newly Industrialized Countries (NICs) such as South Korea, Taiwan, Hong Kong, and Singapore since the early 1980s, and the success of other so-called Tiger Economies in Southeast Asia (including ASEAN countries such as Malaysia, Thailand, Indonesia, and the Philippines) marked the shift from development cooperation to economic competition. The gradual increase in intraregional trade and investment in East Asia further intensified Asia’s economic growth in the 1980s, making it the most dynamic region in the world. In addition, the “sleeping giant,” China, started to emerge as a powerful regional player. In the early 1990s it revealed its interest in integrating into the world economy by expressing a desire to return to GATT and implementing a series of reforms. Bilateral trade continued to increase following the normalization of EC/EU–China relations in the early 1990s and China was the EU’s second most important trading partner by 1994 (Maull 1997: 174-5). Furthermore, there was awareness in the EU that including China in the multilateral trading system was essential for reasons related to market access, intellectual property rights and the reduction of distortions (Pelkmans 1997: 16). The main emphasis was therefore on the economic dimension: “The Union needs as a matter of urgency to strengthen its economic presence in Asia in order to maintain its leading role in the world economy.” The new economic cooperation with Asian countries was to focus (albeit not exclusively) on the newly emerging Asian markets, and the EU needed to take an active interest in integrating the countries that were engaged in structural economic reform (China, Vietnam and India) into the open, marketbased trading system. Recognition that “the USA was way ahead of Europe in exploring and exploiting the possibilities” offered by the dynamic Asian economies (European Parliament Committee on Foreign Affairs, Security and Defense Policy 1999) was a second key incentive to formulate a comprehensive strategic policy directed toward Asia. The New Asia Strategy (NAS), in particular, singled out the increasingly pragmatic and economy-focused attitude of the US in the Asian region. The US had disconnected trade and human rights in the aftermath of the Tiananmen events, extending the country’s Most Favored Nation (MFN) treatment concerning Chinese exports to the US, and seemingly prioritized the long-term goal of including China in world trade and economic relations. Thirdly, it was also foreseen that greater economic weight would have strong political ramifications. The European Union was therefore compelled to increase its role as a political actor in the region, in particular with regard to the promotion

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of stability in Asia, poverty alleviation, and the spread of democracy, the rule of law, and respect for human rights and fundamental freedoms. The 1994 Asia Strategy added a political dimension: “The European Union is entrusted with the task of developing a common foreign and security policy to enable it to protect its interests and values as well as playing a constructive role in world politics.” The emphasis on “European values” should be seen in the light of the growing awareness in Southeast Asian countries in particular that a distinct set of Asian values underpinned the development of these countries’ economic and political systems (Bridges 1999: 1). The EU’s Asia Strategy reflected the awareness that an Asian identity was gradually taking root, and that Southeast Asian countries in particular had acquired political confidence and no longer hesitated to question “our” moral values and social systems. It was accepted that ways of advocating human rights, for example, even if they were recognized as universal in Asia, might differ. The EU therefore needed to engage in an open and frank dialogue as a “necessary strand in the policy mix.” Increasing internal coordination among the EU member states was seen as a sine qua non in terms of achieving the objectives that Europe imposed on itself. EU cooperation in the region had to complement member-state activities. Furthermore, it was the proactive stance of one EU member state that “pushed” the EU toward Asia. Juha Jokela’s chapter in this volume elaborates on the twoway internal dynamics between member-state and EU-level institutions, i.e. the influence of national policies on the EU level, and conversely the impact of the EU component in national policies. Germany, a country without extensive former colonial links with the Asian region, pushed for the creation of an overarching Asia vision at the EU level, with an outspoken emphasis on commerce and trade. The Asienkonzept of 1993 served as a model for the EU’s New Asia Strategy of the following year. According to the Asienkonzept (Deutsche Bundesregierung 1993; Deutscher Bundestag 1993), the growth potential of the Asian markets and the excellent prospects of the Asia–Pacific region heralded the advent of a “Pacific Century.” German attention was focused primarily on Japan, with which it already enjoyed close relations, but also on China, especially because following the political crisis of 1989 Deng Xiao Ping had put the country back on a more liberal course, and normal bilateral relations had resumed. The German government was, in fact, one of the first to support the relaxing of sanctions after the Tiananmen massacre, implementing a mercantilist approach in order to secure contracts for German companies (Maull 1997: 471). Chancellor Kohl’s visit to five Asian states in early 1993 was both a symbol and the actual starting point of the creation of Germany’s Asia strategy, which was finalized in the fall of the same year. Placing top priority on a foreign policy targeting Asia, Germany pulled the EU along in aiming for the expansion of trade with and investment in Asia in order to ensure Europe’s competitiveness, and prompted the European Commission to propose its own EU strategy toward Asia (see International Herald Tribune, 23 September 1994). As a more recent German policy paper (Federal Foreign Office of Germany


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2002) explicitly mentions, “[Germany’s] policy towards the regions of East Asia influences the way the EU conducts its relations with this region.” “A Strategic Framework for Enhanced Partnerships” (2001) An updated version of the EU’s Asia Strategy, entitled “Europe and Asia: A Strategic Framework for Enhanced Partnerships” appeared in 2001. Like its forerunner seven years previously, the strategy paper was a very broad policy document. However, four elements set it apart from NAS 1994, marking a clear “paradigm shift” in the EU’s Asia policy. Geographical Scope and Focus The 2001 strategy was even more extensive in geographical scope than its predecessor. It included Australasia in the definition of Asia, and targeted “the countries stretching from Afghanistan in the west to Japan in the east, and from China in the north to New Zealand in the south, plus all points in between” (European Commission 2001a). Furthermore, while NAS 1994 was targeted towards Southeast Asia and Japan, the revised paper gave much more weight to the emergence of new powerful regional players, including China and (to a lesser extent) India. Both countries were now acknowledged to have grown into regional powers. The EU’s engagement with China occupied a central position, explicitly aiming to “support its integration into the world economy and transition to an open society” (European Commission 2001a). Since 1994 relations with China had certainly advanced, as evidenced in the establishment of annual summits, ministerial and expert meetings, and a human-rights dialogue (started in 1996). In 2001, however, there was still a need to “engage” China in the fields of sustainable development, political dialogue, human rights, the world economy, and WTO accession. China was seen to be exerting increasing economic and political influence in the region, and displaying a much more assertive attitude in the pursuit of its regional and global interests. Much more than its predecessor, the paper focused on India, in particular highlighting the “partnership between the world’s largest democracies” after the first summit of June 2000. It noted the economic reforms supporting a regular growth rate. Furthermore, the country’s conflict with Pakistan was one of the issues that illustrated the importance of political and security dialogue in South Asia. As with China, cooperation with India would increasingly have to cover global issues, such as the promotion of a global environmental agenda. However, despite the shared values, the shared respect for diversity, and a strong civil society, the EU’s relations with India lagged far behind those with China. A Greater Emphasis on Political and Security Dialogue and Increasing Awareness of the EU as a Political Actor Secondly, ensuring peace and security in Asia through wider EU engagement took a much more prominent position in the list of objectives. The need to defuse tensions on the Indian subcontinent, and the necessity to engage China further in the international community (by promoting

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reform, sustainable development, and good governance and rule of law) were at the core of this perspective. Developing trade and investment relations was listed only as the third objective, after the promotion of human rights, democracy, good governance and the rule of law. Whereas the original Asia Strategy was deeply rooted in economic and trade-related interests, the revised version reflected an increased awareness of the EU as a political actor, resulting in a stronger emphasis on political and security-related dialogue. The core objective for the EU therefore lay in “strengthening the EU’s political and economic presence across the region, and raising this to a level commensurate with the growing global weight of an enlarged EU.” This higher awareness of EU actorness is increasingly evident in national strategies for Asia, as member states adapt national policies to EU-centric arrangements, and aim to complement the promotion of national interests with a common European policy in order to achieve success in the region. It is clear that European integration has a bearing on domestic (foreign) policies through a process of adaptation, or top-down Europeanization. For some member states the EU has served as a vehicle enabling (re-)engagement with Asian countries, while offering economies of scale. Working through the EU facilitates trade negotiations, providing at the same time an instrument for promoting dialogue on political and security-related issues and, importantly, human rights. Furthermore, acting as a union could strengthen collaboration and regional integration among the Asian partners, which in turn could contribute to sustained stability in Asia (see, for example, the German (2002) and Danish (2007) strategy papers). A recent strategy document (entitled “Asia as a strategic challenge and opportunity for Germany and Europe,” dated 23 October 2007) released by the CDU/CSU parliamentary group further states that strengthening the European dimension is vital in order to survive in the new global world order: “We Europeans must formulate our shared interests and values clearly and be prepared to defend them.” Constructive Engagement Thirdly, the EU’s Common European Foreign Policy was to be based on constructive engagement and dialogue, multilateral cooperation, openness, and commitment to human rights (Patten 2000). This could be seen as the result of a Europeanization process of the German-French policy since the earlyto-mid-1990s advocating silent diplomacy and “constructive engagement” rather than confrontation and sanctions. This approach allowed Germany to substantially increase its trade with China in the first half of the 1990s, and led other EU states, primarily France, to copy the German model. It also influenced the EU’s 1995 paper for China, which propelled it into “a cornerstone in Europe’s external relations, both with Asia and globally” (European Commission 1995). Wong (2006) argued that the EU’s China policy was “Germanized,” i.e. it prioritized economic liberalization at the expense of human rights by rather adhering to “discreet diplomacy.” Germany’s approach to the July 1994 summit meeting of EU and ASEAN foreign ministers held in Karlsruhe serves as a concrete example of this emphasis. Even though the meeting failed in its aim to conclude a new


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EU–ASEAN cooperation agreement, the constructive and non-confrontational approach promoted by the German hosts was considered highly successful and the beginning of a new approach to Asia. From mid-1993 onwards France adopted a similar, more conciliatory stance on human rights, emphasizing economic exchange and implicitly acknowledging the validity of the cultural relativism thesis as put forward by the Asian countries (Wong 2006: 37). According to the French Foreign Minister Hubert Védrine, “the gist of French policy is to treat the question of human rights through dialogue and not through ineffective confrontations” (19 January 1998, quoted in Dorient 2002: 176). The approach of France, the staunchest supporter and even the cradle of human rights, but still showing no hesitation in concluding contracts with China, was a matter for discussion in other member states (see, for example, the debate in the Belgian Senate on 17 June 1998). The Belgian Foreign Minister Derycke, elaborating on the country’s 1996 policy paper for Asia, agreed that giving human rights top priority would signify a de facto absence from Asia. A “politics of presence,” on the other hand, would require the creation of appropriate mechanisms through which to conduct lasting constructive bilateral and multilateral dialogue with Asian countries. Other member states thus seem to have accepted this emphasis on a “discrete” policy: since the Asian region will not accept preaching, and certainly not from former colonizing powers, it is necessary to address the human-rights issue from a common EU perspective or via the UN, and to engage in a critical dialogue rather than to exert pressure through exclusion or isolation. Engagement and political dialogue rather than containment and sanctions have been at the core of the EU’s approach toward China since 1995. The 1995 EU–China policy paper called for China’s “constructive engagement” in order to promote a responsible and constructive Chinese role in the region though participation in regional fora and bilateral dialogue. The “constructive engagement” approach effectively signaled the start of human-rights dialogues rather than “critiques”: this became obvious in 1997 at the UN High Commission for Human Rights (UNHCR) when a group of EU states led by France and including Germany, Spain and Italy announced that they would no longer support the EU’s annual draft resolution against China, thereby blocking the formulation of a common position (Glen and Murgo 2007: 339-340). Bilateral Focus Fourth, the new Asia strategy placed more emphasis on bilateral and multilateral cooperation: specific measures aimed to “help improve relations, in a bilateral framework with each country, but as part of a larger Europe–Asia framework” (European Commission 2001b). It favored a “pragmatic approach, based on an individually tailored analysis of its relations with each country or groups of countries” (European Commission 2001b). The prime focus on bilateralism and pragmatism in engaging with Asian countries is also a feature in national policy papers of countries such as Belgium. Its most recent discussion paper on Asia defined China, India, and ASEAN (provided it could reach its integration goal) as the main regional engines of growth for the following decennia

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(Federal Public Service Foreign Affairs of Belgium 2006a). The paper emphasizes the need to “establish a more coherent and efficient strategic framework based on firm knowledge,” but suggests that Asia’s heterogeneity is a complicating factor in establishing a comprehensive policy. An Asia strategy should therefore be adapted to the specifics of each country or group of countries, to the characteristics of the national interests, colored by history and driven by momentary opportunities and prospects for cooperation. The paper calls for pragmatism and a diversified and “clever” policy, both of which should take into account and take advantage of the diversity within the Asian continent (Federal Public Service Foreign Affairs of Belgium 2006b). In sum, the 2001 Strategy placed higher emphasis on the EU as a political entity but failed to elaborate on a clear EU-wide approach. In addition, it advocated a pragmatic and bilateral approach, especially on economy-related issues, and neglected the wider regional context. The European Parliament deplored the absence of a common approach based on clear priorities for the region as a whole and for the sub-regions in particular: the strategy should express “a clearer common approach not least because the most recent developments require a specifically European voice” in the dialogue with Asian partners (European Parliament 2002). As argued by Camroux (2006: 24), “The turn of century objective of establishing a Common Foreign and Security Policy (CFSP) did not yet seem to cover Asia.” Of course the Asian strategy was only intended to describe the overarching, multilayered policy for the Asian region, and therefore should be read concomitantly with additional policy papers aimed at providing more detailed strategies and initiatives for interregional, sub-regional and country-specific relations. It may indeed be absurd to think of a monolithic EU–Asia relationship, and to attempt to implement a single policy or approach that is equally valid across the whole region (Patten 2002). Yet, the recognition of Asian difference and diversity is seen as complicating the establishment of a comprehensive strategy. The result is a bilateral focus, an explicit bias toward certain countries, and a policy based on pragmatism. As a consequence, the emergence of regional actors such as China has not been placed in a wider regional context, in a framework that extends beyond purely bilateral relations. This could be seen as the Commission Communication’s greatest flaw. As the European Parliament contended, “In the light of the increasing regional and international role of China the strategic relationship with the People’s Republic should go beyond the bilateral framework and take into cognizance her regional position” (European Parliament 2002). The Role and Potential of “Interregionalism”: The Case of the Asia–Europe Meeting (ASEM) This section turns to the field of policy practice and assesses the role and potential of “interregionalism,” both as a tool with which to implement the Asia Strategy and as an instrument to engage India and China. Interregionalism is often seen


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as resulting from the EU’s predilection to deal with regions as dialogue partners. Perceived as the EC/EU’s “natural answer” to managing global interdependence, and a result of the EC/EU’s “internal logic,” interregional group-to-group relations have been considered a new and important diplomatic tool in the emerging multipolar system, and have even been referred to as a “landmark on the way to a new world order” (H.D. Genscher, quoted in Regelsberger 1990: 13). In the context of EU–Asia relations, interregionalism was rooted in the EU–ASEAN region-toregion construction (the first ASEAN–EC9 ministerial conference took place in 1978, Regelsberger 1990: 5). In the early 1990s, however, the EU’s increased emphasis on the human rights agenda resulted in a failure to revise the 1980 EU–ASEAN Cooperation Agreement. One of the main underlying motivations for the creation of the Asia–Europe Meeting (ASEM) was to rekindle the troubled relationship between the EU and ASEAN. ASEM, originally a Singaporean initiative, was created in 1996 as a top-level yet informal dialogue forum aiming to advance interregional rapprochement between Europe and Asia in the political, economic and cultural fields. The inaugural summit in Bangkok, held in March 1996, signified for many the highly promising start of an interregional partnership between equals, based primarily on economic interests (Gaens 2008b: 29). The location of the first Summit, Bangkok, was highly symbolic as Thailand was one of the few Asian countries that had never been colonized (Bridges 1999: 183). Of the underlying motivations behind ASEM, engaging China and India in a multilateral and political framework was one of the EU’s prime yet less explicitly stated objectives. This broad policy objective, which was also included in the EU strategy papers, could be considered to have been rather successfully implemented given China’s involvement in ASEM, and India’s recent joining of the partnership. China in ASEM China’s display of a stronger commitment to a multilateral approach has been a marked feature of the country’s regional policy in recent years. It was less than enthusiastic about the ASEAN idea for an Asia–Europe dialogue forum in the mid-1990s, perhaps anxious to avoid being once again the target of international criticism (see Bridges 1999: 182; Camroux 2006: 7-8). Yet it has gradually and increasingly skillfully shown its dedication to multilateral and regional cooperation, not in the least in order to create a counterbalance to US unilateralism in the region. As argued by Michael Yahuda, China’s economic pre-eminence by the turn of the twenty-first century increasingly led the country to adopt a policy of “good neighbourliness,” avoiding antagonizing the other states in the region and enhancing its economic integration. Beijing also embraced multilateralism and regional engagement, visible in its participation in the consultative processes of regional associations such as the ARF and in cooperative arrangements such as ASEAN+3 (Yahuda 2004: 216, 234). China’s “embrace of multilateralism” is furthermore evident in its involvement in the East Asia Summit (EAS).


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China also used ASEM to show its commitment in the region, and its willingness to cooperate with Europe in creating a multipolar world. As stated in China’s EU policy paper (2003), “China and the EU should work together to make ASEM a role model for inter-continental cooperation on the basis of equality, a channel for exchange between the oriental and occidental civilizations and a driving force behind the establishment of a new international political and economic order.” The following are examples of China’s use of ASEM as a tool for diplomacy. • •

•

• •

• •

In 1996 it used the opportunity offered by the first ASEM summit to lobby for WTO membership. In 1998 it was praised by European leaders, including Jacques Chirac, for dodging the Asian financial crisis and resisting the temptation to devaluate its currency, and for presenting a more modern and open face to the world. While human rights were discussed at the EU–China summit in the sidelines of ASEM2, opinions among the member states were divided and the EU ended up not supporting a resolution at the UN Commission on Human Rights condemning China’s record. The German chair of the ASEM Financial Ministers’ Meeting in 1999 criticized China for imprisoning political dissidents for expressing their views, for its extensive use of the death penalty, and for its policies on Tibet. The Chinese accused Europe of interfering in Chinese domestic affairs, and of acting arrogantly by criticizing human-rights abuses in Asia while such abuse was rife in Yugoslavia. China persuaded the European Trade Commissioner to revive talks on China’s WTO accession during the ASEM Economic Ministers’ Meeting (EMM) in Berlin in 1999. At the Foreign Ministers’ Meeting in 2001 China called for a “new Silk Road” between Asia and Europe that would facilitate mutual respect and boost exchanges. Beijing argued that the ASEM ministers should focus on economic and social issues, and not turn it into a forum for political dispute. China showed its commitment to a multilateral approach to combating climate change by hosting the first ASEM Ministerial Meeting on the Environment in 2002. At the Foreign Ministers’ Meeting in 2002 China called for the international community to speak with one voice on the tense relations between India and Pakistan, which had deployed about a million troops along their common border, and to urge the two countries to engage in bilateral dialogue.


•

• • •

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China was able to show its commitment to the international coalition against terrorism at ASEM4 in Copenhagen (2002). At the same time, however, together with France it stressed the need for the US to avoid taking unilateral action. China teamed up with France in order to express respect for cultural diversity, organizing the Meeting of ASEM Culture Ministers (2004). At the Foreign Ministers’ Meeting in 2005 China lobbied the EU to withdraw the arms embargo imposed after the 1989 massacre of prodemocracy demonstrators. At the Financial Ministers’ Meeting in 2005 China launched the “Tianjin Initiative,” the aims of which was to establish a new dialogue mechanism for coordinating policy responses to crises in the wake of the devastating tsunami in Southeast Asia.

China has furthermore been the single most active ASEM partner, launching and (co)supporting 26 initiatives and hosting 39 events, meetings or workshops between 1996 and 2008 (see Tables 3.1 and 3.2). Especially during the last eight to 10 years the country has used ASEM initiatives in order to demonstrate its commitment to economic cooperation and to issues of global concern, including human rights, cultural diversity, energy security and anti-terrrorism. The change in its attitude toward the role of civil society in ASEM is also striking. The Informal ASEM Seminar on Human Rights (Beijing 1999), a favorable attitude toward the establishment of a social dimension within ASEM, and the organization of workshops and meetings on labor and employment are all examples of this change in policy. As Bersick (2004: 146) argues, “While China uses the ASEM process as a counterweight to the United States’ increasing unilateralism, Beijing becomes engaged in a democratization of the international system through the participation of civil society actors.” The involvement of civil society representatives in cooperation programs as part of a “socialization process” at grassroots level (Panebianco 2004: 145) could therefore be seen as one area in which the EU’s constructive engagement process has made some progress (see also Keva 2008). This, in turn, could strengthen ASEM’s role in fighting the root causes of terrorism.

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Table 3.1 ASEM initiatives jointly launched and (co)supported by China Year

Initiative launched/(co)supported

1997 1999 2000 2001

Study group on technological exchange and cooperation Science and technology ministerial meeting Anti-corruption initiative Science and technology cooperation on forestry conservation and sustainable development Symposium on law-enforcement organs’ cooperation on combating transnational crime Environment Ministers’ Meeting Seminar on water resources management Ministerial conference on cooperation for the management of migratory flows Cooperation on promoting awareness in the young generation of the drug problem Seminar on anti-terrorism High-level conference on agricultural cooperation Culture Ministers’ Meeting Workshop on the future of employment and the quality of labor Seminar on the management of public-health emergency Workshop on urban forestry Young political leaders’ forum Strengthening cyber-security Prosecutors-General Conference Trade and investment exposition Accounting issues workshop Seminar on international financial report standards (IFRS) Forum and exposition on tourist investment and cooperation Workshop on climate change and energy security Workshop on avian influenza control Small and medium-sized enterprises (SME) ministerial meeting Ministerial meeting on education and qualification

2001 2002 2002 2002 2002 2003 2003 2003 2003 2003 2004 2005 2005 2005 2005 2005 2006 2006 2006 2007 2007 2008


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Table 3.2 ASEM initiatives hosted by China Year

Hosted initiative

1996 1997 1999 1999 1999 2001 2001 2001

Customs DG Commissioners’ Meeting Study group on technological exchange and cooperation Informal Seminar on Human Rights S&T ministerial meeting Working group on sanitary and phyto-sanitary measures S&T cooperation on forestry conservation and sustainable development Foreign Ministers’ Meeting Symposium on law enforcement organs’ cooperation on combating transnational crime Promoting the welfare of children including combating child abuse Environment Ministers’ Meeting Seminar on water resources management Meeting on standards and conformity assessment (SCA) Seminar on Anti-terrorism Economic Ministers’ Meeting High-level conference on agricultural cooperation Culture Ministers’ Meeting Seminar on the management of public health emergency Informal seminar on human rights Workshop on urban forestry Senior Officials’ Meeting on Trade and Investment (SOMTI) Young political leaders’ forum Prosecutors-General Conference Finance Ministers’ Meeting Trade and investment exposition Accounting issues workshop Seminar on international Financial Report Standards (IFRSs) Forum and exposition on tourist investment and cooperation Workshop on climate change and energy security Meeting on eCommerce Workshop on avian influenza control SME ministerial meeting Interfaith Dialogue Forum on rural development ASEM7 Summit ASEP5 (Asia–Europe Parliamentary Partnership Meeting) Forum on trade and investment in marine fishery AEBF (Asia–Europe Business Forum) Roundtable meeting for investment promotion agencies Senior Officials’ Meeting

2001 2002 2002 2002 2003 2003 2003 2003 2003 2004 2004 2004 2005 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2008 2008 2008 2008 2008 2008 2008

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India in ASEM The decision taken at the Helsinki summit to enlarge ASEM to form a partnership of 45 members by including India, Pakistan, Mongolia and the ASEAN Secretariat was certainly the most striking outcome. India’s admission to the partnership has been interpreted as a sign of the forum’s declining relevance (Camroux 2006: 31). However, the 2006 decision was a clear indication of geopolitical change in East Asia. First of all, it underlined India’s “turn to the East” and illustrated the country’s ambitions to become more involved in processes of regionalism in East and Southeast Asia. Its economic integration endeavors with ASEAN since the early 1990s resulted in the signing of an FTA in 2003. In addition, India joined the ARF and became a member of the East Asia Summit in 2005. Its regional collaboration with Southeast and East Asia in particular has led to intensified bilateral economic relations, and has strengthened its image as a great power, even as a possible counterweight to China (Wagner 2006: 56-57). Furthermore, India’s joining of ASEM indicates China’s increased confidence and regional commitment, as mentioned above, and is also a sign of the enhanced relations between ASEAN and India. In particular, it marked the end of a long period of neglect and achieved the EU’s goal of having the country on board. The EU had supported the inclusion of India, with its Western democratic system, in ASEM since the forum’s inception. Its exclusion was repeatedly criticized in the European Parliament and also by the European Commission. China’s opposition was probably the main reason why India was kept out (Wagner 2006: 55). India itself heavily criticized the narrow definition of Asia promoted by the East Asian countries, which reduced the continent’s vast land mass to its “Confucian fringe” or “Chopsticks Asia” (Datta-Ray 1998). The Indian Foreign Minister Pranab Mukherjee sneered at the time that “Asia minus India is like Hamlet without the Prince of Denmark” (Datta-Ray 1998). Even in 2002 the former Commission President Jacques Santer expressed his frustration over China’s, Thailand’s, and Vietnam’s refusal to let India, Pakistan, and Bangladesh join ASEM (European Voice, 6 June 2002). It was not until the ASEAN Plus Three Foreign Ministers’ Meeting in Kuala Lumpur on 26 July 2006 that the Asian group agreed to the inclusion of India along with Pakistan and Mongolia. Interestingly, the new South Asian members also became part of the Northeast Asian coordinating mechanism, and the ASEAN Secretariat secured its prominent position in the Asian regionbuilding process by becoming a separate partner and casting itself in a role not dissimilar to the one played by the European Commission. From the EU’s perspective it is clear that the inclusion of India, one of the EU’s strategic partners, offers the chance to widen the existing dialogue. It will furthermore impel India to interact and coordinate policies with other Asian states, which could have a positive impact on regional stability. As India, the world’s largest democracy, shares common values such as “commitment to democracy, pluralism, human rights, the rule of law, and the independence of judiciaries and the media” (European Commission 2006c), ASEM offers the EU further opportunities


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to increase the weight of its projected soft power, such as in the area of nontraditional security and the promotion of regional stability. As far as cooperation in tackling climate change and ensuring energy security is concerned, the inclusion of South Asia is highly significant in that the support of India is vital in order to lower emission levels. Nevertheless, the country’s reticence to criticize the Myanmar military rulers, for example, may become a point of friction in its relations with the EU. Furthermore, the conflict between India and Pakistan over Kashmir, the noncompliance of both countries with the Treaty of the Non-Proliferation of Nuclear Weapons (NPT), and their refusal to accede to the Comprehensive Nuclear Test Ban Treaty (CTBT) could cause further fissures within the partnership. The EU in ASEM It was argued at the beginning of this chapter that the EU’s Asia strategies fail to sufficiently situate the emergence of the new regional powers within the regional context, and place the prime emphasis on a pragmatic approach and (asymmetric) bilateral relations. The lack of a common view on how to best develop and exploit the ASEM process also places question marks against the possibility of speaking with a “common voice” in relations with a wider Asian region. ASEM as a Bilateral, Interregional, and Multilateral Construction ASEM is the result of the Europeanization of a French-Singaporean initiative. It has institutionalized “regular cooperative contacts with China in a multilateral European framework which excluded the US (as well as Taiwan)” (Wong 2006: 85). The forum took an “Asian” informal and non-binding approach, for which France has taken the credit on the European side. The initially German and later French emphasis on problem-solving through dialogue (also on sensitive subjects) behind closed doors rather than confrontation and sanctions was adopted as part of the European Asia policy and as the basis for a new political partnership between Europe and Asia (République Française – Ministère des Affaires Étrangères 2005; cf. also Dorient 2002: 176). ASEM could therefore be seen as implementing the “non-confrontational dialogue of equals” as expounded in the 1994 New Asia Strategy. The EU’s approach to Burma within ASEM, for example, limiting sanctions and maintaining channels of communication with Burmese generals, reveals the French influence (Dorient 2002: 176). This method of constructive engagement prevails in that the EU allows Burma to participate (albeit at a lower level) in ASEM summits, despite the visa ban for the country’s ruling junta. The high-level yet informal approach has furthermore contributed to confidence-building, and has facilitated discussion of difficult and sensitive issues in the dialogue with China, for example. As such it fitted perfectly into the EU’s goal of “constructive engagement” with Beijing. ASEM’s informal and non-binding approach, often referred to as “Asian,” may therefore be in the EU’s best interest. It offers the best way to integrate the mixed interests of the different intra-EU levels, namely the European Commission representing the interests of

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the Union as a whole, and the Council embodying the different national interests in Asia, while still allowing sufficient autonomy to the individual member states (see Keva and Gaens 2008: 127). ASEM aims to strengthen multilateralism through interregionalism, but also has a strong bilateral (both region-to-state and state-to-state) dimension. This means that each partner state or region gains some benefit from the process, but at the same time imposes limitations on the achievements it can accomplish. ASEM’s greatest challenge, not least for the EU, is therefore that it is an intergovernmental multilateral forum in which all states take part on an equal footing, but that its workings are ingrained in region-to-region coordination machinery. The process assumes the existence of two distinct regions. The EU member states and the European Commission represent “Europe,” and membership of the EU should automatically lead to participation in the ASEM partnership. Furthermore, policy coordination takes place on a regional basis, and within Europe ASEM functions are closely integrated into the institutions and mechanisms of the European Union. Yet, in spite of this interregional basis, ASEM is predominantly an intergovernmental construction, with a strong independent role attributed to the member states. As the German policy paper for East Asia (Federal Foreign Office of Germany 2002) puts it, “ASEM is a special form of inter-regional cooperation, since it is not the European Union, but its member states and the European Commission which each take part independently.” Germany sees ASEM primarily as an intergovernmental process that allows all partners to debate freely, even if it is understood that EU member states should keep close to the CFSP. As far as the Irish (economy-oriented) Asia Strategy (Government of Ireland 2005: 5) is concerned, ASEM’s value lies primarily in the possibilities for bilateral (state-tostate) interaction: “[ASEM’s] biennial meetings at the level of Heads of State and Government, and annual meetings of Foreign, Economic and Finance Ministers, will continue to provide platforms for worthwhile bilateral opportunities and contacts with our Asian partners.” The ASEM process therefore places prime emphasis on a state-to-state approach, and intergovernmental initiatives form the core of the cooperation. This emphasis on intergovernmentalism seemingly contradicts the general (albeit non-linear) development of the EU as a legal personality. According to Teija Tiilikainen (2008), ASEM as one instrument in overall EU–Asia relations therefore assumes an increasingly rare position in the light of the EU’s continuous process of integration. Within ASEM the EU thus speaks with a coordinated voice but not with one voice. ASEM’s intergovernmental approach allows each member state to emphasize objectives and sponsor initiates according to its own national interests. This results in a wide discrepancy in ASEM involvement by EU member states, based on their national ambitions and existing involvement in Asia. Yet within ASEM as well as in the larger framework of relations with Asia even a coordinated EU voice has often been lacking, especially on issues related to regional security.


• •

•

•

•

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In 1996 France and the UK applied for individual membership, separate from the EU, of the ASEAN Regional Forum (ARF), citing their status as nuclear powers as justification (European Voice, 5 September 1996). Before the Seoul ASEM3 Summit in 2000, the UK and Germany decided to establish diplomatic links with North Korea, which was strongly criticized by France and the European Commission (European Report, 20 October 2000). The ASEM4 Summit in Copenhagen (2002) was marked by internal EU divisions over policies toward Iraq, with Spain, Italy and the UK strongly supporting the US policy line, unlike France and Belgium (European Report, 29 September 2002). The UK was leading calls to exclude Burma ahead of the ASEM5 Summit in Hanoi in 2004, whereas France argued that because Burma was part of ASEAN it would be difficult to exclude it. France found it difficult “to accept that the Union imposes obligations on its partners about their presence at summits” (European Voice, 2 September 2004). At the same ASEM5 Summit China lobbied to lift the EU’s ban on selling weapons to China. France and Germany supported a review of the ban, whereas Sweden, Denmark, the Netherlands, and the UK criticized the plan to end the embargo (European Report, 18 April 2005).

The Promotion of an Asian Identity It is widely accepted that the EU’s disposition has influenced on the degree of coordination in East Asia and the construction of a regional identity. Europe’s treatment of the region as a separate dialogue partner within ASEM has forced the Asian ASEM partners to consult internally, to coordinate on diverse and occasionally sensitive issues, and to build a consensus ahead of meetings with their European counterparts. The ASEAN+3 initiative, for example, arose after a regional grouping of East Asian states started interacting with the EU in ASEM. ASEM thus could be seen as a means of promoting a regional approach to problem-solving, and even of advocating a European way of “regionalizing” issues of common interest. The growing development of a structured East Asian region is obvious within ASEM in the increased coherence in Asian positions and solidarity, as exemplified in the Asian grouping’s attitude towards Burma/Myanmar. It seems undeniable that for groupings such as ASEAN the EU serves, if not as a model, then at least as an exemplar or reference point. On the occasion of ASEAN’s fortieth anniversary the grouping’s Foreign Ministers proposed that August 8 should be declared ASEAN Day, emulating the designation of 9 May as Europe Day (Financial Times, 3 August 2007). The EU provided assistance in the drafting of the ASEAN Charter in 2006 and 2007 to the ASEAN Eminent Persons Group and the High Level Task Force. The draft charter furthermore included a provision for the creation of a human-rights monitoring body for the region. The aim would be to promote and protect human rights, drawing inspiration from the “international law on human rights, universally recognized human rights, and


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regional and national laws, policies and practices consistent with international law” (Draft agreement on the establishment of the ASEAN Human Rights Commission). Moreover, in view of China’s involvement in the region and India’s “turn to the East,” it is clear that ASEAN has successfully profiled itself as the driving force behind regionalism in Asia through a number of organizations such as the East Asia Summit and ASEM. The inclusion of the “awakening giant” India alongside China, the other regional power on the rise, certainly involved the risk that ASEAN’s central role would weaken and that the interests of smaller Asian countries would be eclipsed. The ASEAN Secretariat consolidated the key position of the ASEAN grouping as the driving force in the ASEM process along with the EU. The Secretariat’s membership of ASEM and the inclusion of three new members to the Northeast Asian coordinating machinery de facto resulted in an “ASEAN Plus Three-Plus-Three” configuration. This greatly enhances the central position of ASEAN, placing it as a regional entity on a par with China and India (Camroux 2006: 33). In order to secure peace and stability in the region, the EU should attach higher importance to the promotion of ASEAN-driven regionalism by presenting itself as a source of “good ideas and best practices.” With regard to China and India, greater intra-regional coherence would enhance consensus-building and decision-making and could strengthen peer pressure in terms of keeping common commitments, ultimately boosting ASEM’s “policy-shaping” capacities. Possible Future Directions However, the EU fails to present a common view as to the best way to proceed with ASEM, in particular how to further engage China and India. Three lines of thinking have emerged. •

•

Keep the status-quo. With its emphasis on consultation and confidencebuilding, ASEM’s added-value lies in its informal, multidimensional, and complementary approach. It functions as a catalyst feeding into bilateral, subregional, regional, interregional, and multilateral processes. Develop the forum’s multilateral dimension. The first step towards institutionalization materialized in the creation of the ASEM Virtual Secretariat, a public website with an archive for ASEM-related documents and including a closed intranet system aimed at facilitating the day-to-day management. The project’s main sponsor was Japan, a country that prefers to avoid the institutionalization of a separate Asian grouping within ASEM. Further institutionalization could entail the creation of a real secretariat, which could facilitate the concrete realization of projects. Many Asian countries are in favor of institutionalization, and the European Parliament as well as separate member states have also supported ASEM’s development into an organization that is capable of acting collectively. This scenario could promote the formation of groups of countries rallying behind one initiative (based on so-called issue-based leadership). It could open the gate to Russian membership, and approach the common “Eurasian” space envisaged by the Asia–Europe Vision Group (1999).


•

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Develop the forum’s interregional component. In order to achieve more concrete results, the dialogue should be based more on a bloc-tobloc approach, without entirely doing away with the opportunities for intergovernmental contact on the sidelines. Collaborating on a region-toregion basis rather than just through country-to-country alliances would also allow ASEM to play a stronger role in promoting multilateralism (see Wanandi 2006). This would seem the “logical answer” given the nature of the EU. It would promote a common European policy, and could allow the EU to show itself as strong independent actor. This, in turn, would contribute much to the promotion of regionalism in Asia, exceeding the lip service currently paid to the idea. However, for three reasons the general tendency within the EU and its member states seems to be not to over-emphasize the region-to-region aspect. First, many of the national governments agree that the EU’s strong coordinating role (and possible future collective representation) should not eclipse the intergovernmental aspect and the vital role played by the member states. Secondly, blocbuilding on the Asian side should be avoided due to the specter of Chinese domination. Finally, the fear exists that this could weaken the EU’s bilateral relations with Asian countries, not least its economic relations with China.

On the one hand, ASEM’s ongoing expansion on the Asia side and the forum’s potential development toward a “Eurasian” partnership revolving around issuedriven projects may necessitate further institutionalization and may weaken the region-to-region aspect. On the other hand, from a European perspective there is a need to bring ASEM more in line with internal developments within the EU and its growing potential to display a “legal personality.” In Asia, India’s increased involvement in the region through ASEM and the central role taken on by the ASEAN secretariat as of 2006 points toward increased “regionness.” The EU could do more to promote the development of ASEAN from a solely administrative unit to an actor. As argued in the Danish Asia Strategy (Government of Denmark 2007: 8), the ASEAN countries “wish to integrate the surrounding Asian countries, including the great powers of China, Japan and India in binding multilateral cooperation. The alternative could be dominance through bilateral major power politics.” The EU has every interest in supporting this development. Even if it does not aspire to increase the region-to-region character of relations with Asia, it should at least take more account of the ongoing “regime-building” in East Asia, including within the ASEM context. Conclusions Economic incentives, a more pragmatic US regional policy, and a budding sense of political actorness on the part of the EU were at the root of Europe’s rediscovery of Asia during the first half of the 1990s, and led to the formulation of a “New Asia

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Strategy.” From the mid-to-late 1990s China and India’s ascendancy as economic and strategic powers, and both countries’ increased importance within the regional architecture, encouraged the EU to place higher emphasis on the Asian region. I have argued that a four-fold “paradigm shift” led to a revised EU-wide policy paper for the region: the EU’s own desire to manifest itself more as a political actor globally; an increased emphasis on security in Asia (not least through the engagement of China in the international community); an expanded geographical scope and a shift of attention toward China and, to a lesser extent, India; and an emphasis on bilateral relations in an overarching Europe–Asia framework. The EU’s new policy on Asia was to be guided by constructive engagement and dialogue, multilateral cooperation, openness to rule-based free trade in the WTO framework, and a commitment to human rights, good governance and the rule of law. The EU’s policy on Asia should furthermore be seen in the context of the internal processes of Europeanization: the member states’ policies for the region have an impact on the EU level and an EU component emerges in national policies. Economic ambitions for the Asian region based on a policy of engagement and non-confrontation emerged first from Germany. France adopted this “silent diplomacy” approach and connected it with its ambitions to create a multipolar world, leading to the creation of the Asia–Europe Meeting (ASEM) in 1996. At the EU level this offered opportunities to introduce an “Asian-style” approach in order to engage China, while promoting the notion of the European Union as a normative power. The national policy papers for Asia portray the EU as a tool complementing domestic policies, as an information multiplier, and as an instrument offering benefit in terms of its collective weight in trade, human-rights policies, and the promotion of regional cooperation. However, the insufficient focus on the EU’s common voice, and more importantly the failure to go beyond the bilateral framework and situate the rise of the new powers in the overarching Asian context, could be regarded as the main flaws in the strategy. ASEM has offered the EU an informal dialogue forum with a view to advancing interregional rapprochement between Europe and Asia in multiple fields. Since the establishment of the forum in 1996 the EU’s relations with Asia have come a long way. Trade with Asian ASEM countries has expanded substantially, growing 10 percent on average annually during 2002-2006, for example. Bilateral trade relations with China increased by almost 20 percent during the same period, and with India by over 13 percent. In addition, and contrary to the stagnation or even decline in its share in trade with Asian countries in general, the EU’s share of imports and exports to and from both new regional powers increased significantly. Furthermore, ASEM has successfully contributed to engaging China and India. China, an ASEM partner from the outset, has used the forum skillfully to demonstrate its multilateral commitment and its embrace of regional engagement. India was finally allowed to join the partnership in 2006, illustrating the country’s increased involvement in processes of regionalism in East and Southeast Asia.


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However, the perception of the EU as a credible geopolitical and strategic partner remains weak and vague among Asian policy makers. Many Asian countries still see it as a “geopolitical dwarf” (Mahbubani Kishore, Financial Times, 22 May 2008). The predilection for interregionalism is seen as the EU’s “natural” stance. However, it plays only a secondary and ancillary role to bilateral/intergovernmental interests in the strategy papers as well as in the field of policy practice. The EU currently takes a conscious bilateral approach in its Asia policy (ein bewusster Bilateralismus in der europäischen Asienpolitik, see Algieri 2006), but it could do much more to present itself as a regional entity and convert its bilateral policies into a coherent whole. ASEM in particular should be seen more as a regionalizing agent and an important tool for promoting a stronger role in Asia. It should also be used to further enhance collaboration with India and China and to promote effective multilateralism in the context of structured regional groupings. As Germany’s Asia-Pacific Conference of Ambassadors pointed out already in 1994 (Botschaftkonferenz Asien-Pazifik 1994: paragraph 9): “A strong European component is essential for an active Asia policy. Politically we will only be successful in Asia if we present them increasingly with joint European positions. As Europeans we will only be successful in economic terms if we show more consideration for one another. The European project therefore promptly has to find the means to avoid member states being played out against each other in a damaging way, when competing for Asian markets …”


Chapter 4

EU–India Relations: An Expanded Interpretive Framework Stig Toft Madsen India is rightly called a ‘status quo’ power as it has no ambitions to extend its reach beyond its territory … Visitors to India will come to know that the Indian giant is a friendly one who does not threaten others, but aims at peaceful coexistence. (Rothermund 2008: 244-5) A significant section of the Indian elite, that of the nouveaux riches, seemingly drunk with a sense of newly acquired power, does not bother to hide its disdain for a Europe seen as mired in its economic stagnation and content with the bourgeois comfort of elderly retirees … Explaining this in terms of the haughtiness of the new winners does not go far enough. India is seeking its revenge for its colonial past. (Jaffrelot 2006)

Emanating from Germany and France respectively, the two views above exemplify major contrasting readings of India’s role in world affairs and global governance. My aim in this chapter is to expand the discussion on this contrast by detailing seven scenarios that portray diverse permutations of the EU–India relationship. Some scenarios are presented in brief and others are described more illustratively in order to throw light on the key discursive nodes in the ongoing debate. In putting forward this enlarged framework I hinge my analysis on a simple pseudo-mathematical memotechnical device that may be of use in conceptualizing the emerging relationship between India and the EU. Representing the First World, the EU (or Europe) is termed 1, and India, representing the Third World, is termed 3. The meeting between the twain is termed 1+3. At stake is the “outcome” of the 1+3 equation. I consider the following outcomes: Scenario 1 Developmental optimism: 1+3 = 1 The First and the Third Worlds will converge upwards progressively unifying them into one world i.e. the world we already know as the First World. Progress prevails.

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Scenario 2 Evolution: 1+3 = 4 As time goes by both the First World and the Third World will disappear and an entirely New World will emerge. Evolution prevails. Scenario 3 Status quo: 1+3 = 1+3 While the First and the Third Worlds may both develop, the gap essentially remains. “Plus ça change, plus c’est la même chose.” Scenario 4 Radical developmental pessimism: 1+3 = 3 The First World and the Third World will converge downwards. The First World will be reabsorbed into the Third World, whence it once arose, making all of humanity (including possibly its Fourth World indigenous inhabitants) residents in the Third World. Regression prevails. Scenario 5 Annihilation: 1+3 = 0 The meeting of the First World and the Third World will result in disaster(s). Anarchy and collapse prevail. Scenario 6 Radical inversion: 1+3 = 3+1 In a process of simultaneous progression and regression, the First World will become the Third World, while the Third Word will take the place of the First World. Inversion prevails. Scenario 7 Something in between: 1+3 = 2 The First World will regress downwardly converging with the Third World’s progressive rise, making all of humanity (including possibly its Fourth World indigenous inhabitants) residents of a world conforming to the least common denominators of both. Hybrid pre- and post-modernity prevails. Scenario 7 appeals to the euroskeptic cynic in me. Nevertheless, as follows, I attempt to give all scenarios a fair hearing before concluding that Scenario 7 is, indeed, the one to watch out for.

See Sørensen (2008: 107-8) on national levels of “euroskepticism.” Danes, Swedes and Finns are among the most euroskeptic Europeans, but their patterns of skepticism vary.

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Scenario 1. Developmental optimism: 1+3 = 1 Scenario 1 will not cause much surprise to a modernist. This is a vision of a healthy, educated, sanitized and increasingly de-agriculturalized India taking its place among other developed nations through a long bourgeois revolution gradually moving millions of resource-starved tribals and dalits, farmers and workers out of backwardness and into the industrial and service sectors. Since independence, the average life expectancy has, indeed, increased considerably. More than half of the population now works outside agriculture, the contribution of which to the national economy has steadily decreased, as one would expect of any country engaged in what Kishore Mahbubani calls the March to Modernity (Mahbubani 2008a). The industrial revolution seems to have lost its bite and the political implications of the Great Transformation of the Indian economy are equally benign. In the comforting words of one of Europe’s longest-standing observers of India, Dietmar Rothermund: India is rightly called a ‘status quo’ power as it has no ambitions to extend its reach beyond its territory. Any future steps India takes will thus be devoted to the preservation of the status quo … Visitors to India will come to know that the Indian giant is a friendly one who does not threaten others, but aims at peaceful coexistence. (Rothermund 2008: 244, 245)

Rothermund’s assessment echoes the liberal ideologies that took root in India in the first half of the nineteenth century when British law, education, and free trade were established there. As T.B. Macaulay wrote then: It may be that the public mind of India may expand under our system till it has outgrown that system; that by good government we may educate our subjects into a capacity for better government; that, having become instructed in European knowledge, they may, in some future age, demand European institutions. Whether such a day will ever come I know not. But never will I attempt to avert or retard it. Whenever it comes, it will be the proudest day in English history. (Metcalfe 1994: 34)

The day Macaulay talked about in 1833 seems to have arrived. In January 2008, Gordon Brown talked at the Chamber of Commerce in Delhi. The British Prime Minster said: It is a privilege for me to be here in India today. India not only has so many ties of history with Britain, of which we are very proud, but now stands as a shining

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The Role of the European Union in Asia example to the world of our shared faith in free institutions, free markets and free societies. (Brown 2008)

Even more strikingly, the picture of Lord Swraj Paul sitting on the traditional woolsack chairing the UK House of Lords as deputy speaker in December 2008 illustrates the India that has come of age (The Hindu 2008). The picture confirms that since early modern times European relations with India have been forged largely through Great Britain, and to a smaller extent through Portugal, France, and Norway–Denmark. However, in the introductory chapters to his overview of the relations between the European Union and Asian countries, the well-versed author Georg Wiessala (2002) seems content to relegate the run-up to the present to oblivion. In my view this common past should not be dismissed as a parenthesis in history. The relationship between the EU and India has to build on what India and Europe share. More often than not, this includes the institutions and values brought about by a long colonial history and its post-colonial sequel. Scenario 2. Evolution: 1+3 = 4 While Scenario 1 may present the preferred outcome from a modernist point of view, Scenario 2 better catches the long-term evolutionary view according to which 1 plus 3 equals an emergent reality termed 4. This raises the question of how to envisage the relation between India and Europe over the longue durée. Have the twain shared the same historical fate or is their partnership comparatively new? Some readings of history, including the philological, do link Europe and India through commonality of language, but according to Christopher Chase-Dunn, Europe’s ebbs and flows are coeval with ebbs and flows in China rather than with those in South Asia. In their article “World Systems in the Biogeosphere: Urbanization, State Formation and Climate Change Since the Iron Age,” Chase-Dunn et al. consider the pulsations across the Afroeurasian expanse and show that a “remarkable synchrony” in terms of demographic trends, trade flows, and state formations has existed between East Asia and the West Asian and Mediterranean Regions without including South Asia. This synchrony may have been driven by climate change, epidemics, and trade cycles. An intervening factor, familiar to those who hold that states rise and fall due to events in the interior of a continent and not due to maritime factors, was the incursion of steppe nomads from the Central Asian heartland. These Mongols forcefully yoked together East and West. Several rulers of Hindustan, including the Great Mughals, also came from Central Asia, but in Chase-Dunn’s reading South Asia had its own relatively autonomous history beyond the Himalayan barrier (Chase-Dunn et al. 2007, Figure 3 and Figure 7).


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Insofar as Europe and South Asia have gradually become more closely linked, this is a relatively recent trend caused by sea-borne European colonial expansion and currently reinforced by bulk trade, mass migration, and Internet connectivity. The Internet circumvents the Himalayan barrier and eludes the Islamic world, which historically has imposed steep transaction costs on Eurasian trade. Although Indo–European connectivity has been weaker than the connection between Europe and the countries with which Europe shares latitude or propinquity, the world as a whole is moving towards integration. This long-term global trend is not only economic, it also fuels political integration. In his recent magnum opus, Strobe Talbott dares to argue that global governance is the destiny of humankind in that “humanity is learning to govern itself as a whole on those issues where it can do so to avert planetary disaster” (Talbott 2008: 6). From this perspective the EU–India Strategic Partnership acquires historical significance. Talbott is fully aware of the many confusing nodes and links that characterize the growth of the EU. He terms it the “Euromess” (Talbott 2008: 321). This confusing web of interrelationships is a sign that the EU is on the right track from an evolutionary perspective. Whereas in the Middle East, relationships are few and the region unstable, the EU–India Strategic Partnership is one among many that will foster global governance by creating a denser web of interaction and hence more Durkheimian organic solidarity. How did the current EU–India Strategic Partnership originate? According to Georg Wiessala’s study The European Union and Asian Countries, it emerged as a fresh effort to establish Eurasian relations on a post-colonial footing. In 1978 the relationship was anchored in ASEAN, which was chosen probably because it presented the most formalized and efficient organization in a region in which regional organizations were otherwise few or vacuous. The choice of ASEAN as the EU’s partner excluded India, which was not a member. With the end of the Cold War, the issues of democracy, human rights and good governance rose up in a “swell of universalism” (Madsen 1996: 186). Neo-liberalism, in turn gave rise to an Asian response highlighting Asian values and, in particular, Confucian values, thus setting the stage for a virtual clash of civilizations. The Asian financial crisis of the mid-1990s provided an interlude, but the debate picked up again after the economic recovery. This trajectory of events meant that human rights have remained central in the formation of the Asia–EU relationship. Clashes on this issue have concerned specific problems in member countries as well as divergent approaches to third countries, such as Burma/Myamar and Tibet. During the 1990s ASEM replaced ASEAN as the EU’s main strategic partner in Asia. The first ASEM meeting was held in 1996. Again India was not invited, a fact that did “raise eyebrows” (Wiessala 2002: 116): It may also have prompted India to put added stress on its own Look East policy, which was first formulated around 1992. India finally joined ASEM in 2007.

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The incorporation of India took place because it had emerged as a desirable partner in its own right after liberalization and globalization gradually restructured its economy from around 1991 onwards. Summit meetings took place between the EU and India in 2000, 2001, 2002, and 2003, and in 2004 the two forged a strategic partnership (European Commission 2004). This was followed in 2006 by a country strategy paper for the period 2007-13 (European Commission 2006c). Among the noteworthy initiatives was the inclusion of India in the GalileoEuropean Satellite Navigation System program (Bagla 2008). In his account of EU–Asia relations Wiessala incorrectly omits India from his list of Asian countries with a rooted Western-style democracy (Wiessala 2002: 7). In fact, India has nursed its democratic form of government almost continuously since 1947 although it has not gained much mileage from this stubborn and admirable commitment (Jaffrelot 2007). When India finally stood to gain from its democratic record after the disintegration of the Soviet Union, it was criticized for its brutal human-rights violations in Kashmir. Moreover, its own version of religious bigotry, referred to as Hindu Nationalism, was repeatedly exposed and widely condemned. India faced one more obstacle before it could emerge as a suitable partner. In May 1998, the government, led by the Bharatiya Janata Party, conducted a series of nuclear tests. Tit-for-tat, Pakistan responded by conducting a similar series of tests. Condemnation of India’s unilateral decision was widespread. The Australian Prime Minister expressed his outrage saying it was as if dirt had been kicked in his face. It was only after September 11, 2001 that the West shifted its blame to Pakistan, and even curtailed its sympathy for the Kashmiri demand for selfdetermination. The fight against terrorism has ensured more goodwill for India, now perceived as a longer-standing fellow victim of Islamic extremism. This shared perception – India and the West as fellow victims of Islamic extremism – is likely to endure. The process of rapprochement has been especially noteworthy in the case of the USA. According to Christophe Jaffrelot (2006), the USA has simply outmaneuvered the EU by initiating a close strategic dialogue with India and signing a series of agreements that effectively brings India closer to the USA militarily than ever before. Economically, too, India has developed its ties with the USA much faster than it has developed its ties with the EU. The degree to which it was willing to stake its future on its evolving relation to the USA became clear when the Prime Minister of this aspiring superpower had to garner parliamentary support for the nuclear deal with the USA. Coalitions had to be broken, ministerial berths had to be created, provincial statehoods had to be negotiated, jailed MPs had to be released, and bribes to the tune of tens of millions of rupees had to be distributed

India’s economic globalization actually started before 1991. For an early stocktaking of its economic relations with other Third World countries, see Dutt 1980. See Vicziany (1998) on the general tenor of reactions in lieu of a precise reference.


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among legislators to buy their vote for Manmohan Singh so that he could muster a majority on the floor of parliament on 22 July 2008 (Aiyar 2008). In short, the trajectory of the EU–India relationship has been characterized by twists and turns that have gradually coagulated into a denser shared Indo– European “mess.” Scenario 3. Status quo: 1+3 = 1+3 Scenario 3 is compatible with Scenario 1 insofar as the Third World may develop economically, but the gap between the First and the Third Worlds remains. There is evidence of this scenario in a report from the Norwegian Ministry of Foreign Affairs for example (Melchior et al. 2000): over the previous 33 years, inequality between the poorest 20 percent and the richest 20 percent countries had decreased because the poorest had moved upwards a little faster than the rich had become richer. However, the average income in rich countries was still 13 times higher than in poor countries where 33 years previously, it was 15 times. Thus 1+3 remained 1+3. Included in the scenario is a situation in which the pie gets bigger, thereby allowing the Third World to taste the fruits of modernity to an ever larger extent. A variation on this theme was used in a TV advertisement broadcast on the BBC’s Asia services in December 2007. It showed a young executive somewhere in the First World announcing a big profit margin to his audience. As he opened a box containing a cake symbolizing the fruits of his investments, he realized a slice was missing. The scene then shifted to India, where a three-generation extended family was happily sharing the slice taken from the executive’s cake courtesy of a timely investment in a particular scheme. Both are eating cake. The First World is not reduced to eating grass, but the advertisement played on the relative deprivation experienced by the Western executive upon realizing that part of the cake had vanished. The storyline of this scenario could be developed in many directions. For example, the notion of long-term relational stability between the First and the Third Worlds fuels the argument that since the First World has had a long-term lead the Third World should be allowed to follow its trajectory. This ideas was deftly developed by Anil Agarwal, the Indian environmentalist who compiled the first State of the Environment Report for India (Gadgil 2002). He also helped the Government of India (GOI) to develop its policy on global warming at a time when it was new to climate diplomacy. Agarwal noted that since the beginning of the industrial revolution people in the First World had used much more energy per capita than those in the Third World. He concluded that in order to combat global warming the First World, having long benefited from the industrial revolution, would have to limit its emissions, while the Third World, having an equal right to development, would not have to impose limits until the historical debt owed to them had somehow been paid (Jakobsen 1998). As long as 1+3 remains 1+3, these

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debts are not easily repaid. Anil Agarwal’s argument remains strong in the Centre for Science and Environment (CSE), the organization he founded. Its current director, Sunita Narain, is keen that India should not make formal commitments to control its emissions (Narain 2008). According to Greenpeace, however, the line of thinking that Anil Agarwal fashioned, and that the GOI adheres to, is not tenable. It amounts to the rich in India “hiding behind the poor” (Greenpeace 2007). Scenario 4. Radical developmental pessimism: 1+3 = 3 Scenario 4 may appear unrealistic in today’s Europe, but it is not impossible. It envisages the re-agriculturization of the First World. A pervasive long-term economic crisis and a drop in world trade and energy consumption would force the EU into the Third World with smallholders and townsmen eking out a meager subsistence in impoverished surroundings de-linked by high transaction costs and resource scarcities from urban centers. Re-agriculturization could involve a skewed gender relation. Young women in Denmark are vacating the countryside in favor of larger cities and suburbia (Orientering 2008), and in Denmark several thousand old farmhouses have already been left to decay. A reconfiguration of intergenerational, gender and ethnic relations may define the picture the emerging Europe: a countryside inhabited by poor, elderly and disempowered hard-drinking men amidst rural slums, and an urban world of indigenous women and long-distance immigrants driving the economy. Scenario 5. Annihilation: 1+3 = 0 India and China have both increased their military spending. Together with Saudi Arabia, their outlay increased more rapidly between 1996 and 2005 than that of any other major Third World power. China has dramatically upgraded its nuclear arsenal. Consequently, India faces both a militarily increasingly sophisticated China and a nuclear-armed China-aligned Pakistan adept in the art of deception (Levy and Scott-Clark 2007; Myers 2008). The region appears highly volatile. According to Martin Rees (2003), the risk of global annihilation by the end of

Compare e.g., Mahbubani 2008a: 188-9 and Jain in this volume on lifestyle emissions versus survival emissions. In the tribal area of Pakistan, cheap Chinese weapons have virtually out-competed the products of local weapon smiths (Amir Rana, personal communication, December 2007). On the other hand, as noted by Bates Gill, China has tried to prevent Chinese small arms from reaching conflict zones (Indian Express 2008).


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this century is 50 percent. Asia is playing an increasing role in such doomsday scenarios. In his book The Clash and Civilization and the Remaking of World Order Samuel Huntington enumerated potential alliances between various civilizations. One alliance of relevance to EU–India relations is the Confucian–Islamic connection. This, he speculated, was likely to gain strength as China sought to ensure continued access to fossil fuels. As Huntington (1996: 244) visualized it, India has responded by drawing closer militarily and otherwise to the West, including Australia and Israel. He referred to this as the rallying of kin countries. However, India had previously rallied with the Soviet Union, with which it did not share the kindred political value of democracy. Theirs was an instrumental alliance based on common interests. Whether the strengthening of relations between India and the West is based on shared values or shared interests, the perceived need for allies to face China and the Islamic world may grow. Scenario 6. Radical inversion: 1+3 = 3+1 Unlike Scenario 1, this scenario does not posit the merger of all rivers in the great ocean of modernity. Instead, it suggests a zero-sum game of concurrent rise and decline. The rise could be a sudden reversal of fortune or a secular trend. The scenario is likely to combine the vision of a bright future with the glorification of a past that is to be recovered or resurrected. Thus, in the case of China, it is often articulated as the “re-emergence” of Chinese power rather than simply as the “rise” of China. The intervening period is likely to be seen as a period of temporary decline, or more gravely, as a dark period during which a “historical wound” that needs to be avenged is inflicted upon the rising power. According to Huntington, rapidly industrializing powers tend to be assertive and aggressive whereas Mahbubani suggests that powers losing their relative advantages in a situation of power reversal tend to be grumpy and aggressive (Mahbubani 2008a; also Orientering 2008). Therefore, Scenario 6 is a volatile one with elements of succession and replacement. In economic terms, the scenario has been seen in terms of a competitive game in which emerging nations overtake stagnating nations at particular points in time within a certain timeframe. For example, the Goldman Sachs Group has produced very influential reports that extend up to the year 2050. Until the financial crisis hit the world in 2008, bankers advising clients on investment in Denmark would refer to the not-so-distant future when the BRIC countries (Brazil, Russia, India and China) would overtake the economies of rich countries such as Germany and Japan in terms of GDP. Similarly, a report released by a World Bank commission

See Knudsen (2008) for more on risk assessment and panic. “Historical wounds” are analyzed in Public Culture, 20(1), 2006.

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on 26 May 2008 calculated that India could catch up with the developed countries in 50 years (Iqbal 2008). The BRIC concept was coined in 2002, but there was a surge in the production of scenarios of reversal and inversion as the calendar approached the year 2000. Because these scenarios are still widely disseminated, I would like to expand on them through the case study below. In particular, I want to highlight the linkage between scenarios of radical inversions and new management theories. In India, Abdul Kalam has been one of those responsible for getting the nation into the “Vision and Mission Mode.” Until 2007 he was the President of the Republic of India. He is a Tamil-speaking Rautar Muslim from Rameshwaram, born into a family working in the fishing sector. Although a Muslim, he sat next to the son of the head priest of the great Hindu temple in Rameshwaram in the local school. Later he attended the Father Schwartz high school in a nearby town: Father Schwartz worked as a missionary for the Danish colony in Tranquebar in the eighteenth century. Kalam then joined the defense establishment as a scientist, where he worked on satellite-launch vehicles, the development of missile technology, and India’s nuclear-bomb program. Kalam’s vision is of an India taking its rightful place in the world by virtue of a combination of armed force, scientific and technological strength, economic development and a skilled and healthy population. Given self-respect and the right kind of teamwork, the sky is the limit. The research teams he led were huge, comprising 500 to 2,000 largely young scientists and technicians, each smaller unit having one older team leader. Abdul Kalam’s successes were within the public sector of defense. Therefore, he does not argue that government is by nature inefficient and that the public sector must submit to the logic of the private sector. On the contrary, he wants the whole country to work in the way his teams have done, whether in the private or public sector, and whether in hi-tech or low-tech fields. Kalam’s gurus in innovation and management include Abraham Maslow, Rudolf Steiner, Mahatma Gandhi, and JRD Tata (Kalam 2006: 172), but behind all this lies his belief that the ancient Indians already knew how to be innovative and creative teamworkers. This is what made him quote Patanjali: Let us recall the saying of Maharishi Patanchali in Yogasuthra: When you are inspired by some great purpose, some extraordinary project, all your thoughts break their bounds. Your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great, and wonderful world. Dormant forces, faculties, and talents come alive, and you discover yourself to be a greater person by far than you ever dreamt to be. (Kalam and Pillai 2004: 26-7; see also Kalam 2003: 136-7)

Patanjali lived around 2,000 years ago, but his words seem decidedly modern. In fact, this quotation occurs quite frequently in modern self-help literature on the Internet and in books. For example, it appears in Henry Balogun’s book for


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healthcare managers, Beyond Cut, Copy and Paste (Balogun 2003: 161), in a book from 2007 by Shlomo Maital and DVR Seshadri about innovation at Tata Steel entitled Innovation Management: Strategies, Concepts and Tools for Growth and Profit, and in Debashish Chatterjje’s Leading Consciously: A Pilgrimage Toward Self-Mastery from 1998. Chatterjje ascribes the words to Laurence G. Boldt, who published How to find the work you love in 1993. Like others, Boldt quotes Patanjali without due attribution. Thus, Boldt (1993: 84) is as far back I can trace a text dating back 2,000 years. Abdul Kalam clearly treats modern self-help literature in an “inclusivist” manner, in other words he tags contemporary ideas onto ancient Indian moulds. He is not a “regressive modernist,” however (Nanda 2002: 10-11). His worldview is scientistic and developmentalistic, not traditionalist or fundamentalist. In his vision, science may integrate with any society, anywhere and anytime, which implies that he is not concerned with social science at all. Like Margaret Thatcher he sees individuals and not societies. Moreover, he also does not look at history as a historian would. I would like to point out here that there is a “Missing Middle” in Kalam’s analysis. On the one hand he talks of timeless religion and philosophy, aspects of which may, on closer inspection, turn up in contemporary management or self-help literature. On the other hand, he talks of hard science. The Adam’s Bridge connecting the two via social science and history appears to be missing. Abdul Kalam’s deployment of Patanjali as a management guru makes sense in the Indian context in which it goes to show that Indian philosophy is equal, if not superior, to that of significant others. In this context the rise of scientism, developmentalism, and nationalism seems to be a function of the accelerated March of Modernity that India is experiencing. The emergence of a vision of a bright future rooted in the remembrance of a glorious past is not confined to India. Similar visions-cum-remembrances in China posit Confucianism as a model for the future. According to one quotation making the rounds, “If mankind is to survive it must go back 25 centuries in time to tap the wisdom of Confucius.” This statement is generally uttered as the conclusion reached by a group of Nobel Prize winners deliberating on the future of the planet in a meeting in Paris in 1988. According to Tong Shijun (2008), however, it stems from the Swedish physicist and Nobel laureate Hannes Alfven. Grand visions (sometimes condensed into canons) have flourished in Denmark, too, but they do not necessarily invoke the European equivalents of Confucius or Patanjali. These visions for the future are rather combined with detailed schemes for work supervision of the present. Such detailed regulation and Patanjali’s Yoga Sutra 1.18 has been translated as: “The void arising in these experiences is another Samādhi. Hidden impressions lie dormant, but spring up during moments of awareness, creating fluctuations and disturbing the purity of the consciousness” (Iyengar 1993: 66). This passage may lie at the root of the passage quoted by Abdul Kalam. The message, however, is very different. I thank Lauha Halonen for the reference. See Killingley (1990) on “inclusivism.”

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micro-management has increasingly entered state institutions such as schools and universities. The introduction of an Audit Culture in universities has coincided with the abolition of collegial governance and institutional autonomy. The Audit Culture was spearheaded by the Ministry of Finance, which in the early 1990s sought to decentralize decision-making while holding subordinate institutions responsible for the delivery of contractual obligations (Gjørup 2007; Madsen 2007; Shore and Wright 1999). Salary-wise, Indian public universities have moved upscale in that it is no longer farfetched to state that an Indian professor may earn more in real terms than a Danish lecturer (Ammitzbøll 2008). However, Indian public universities have not so far experienced a loss of autonomy similar to that suffered by Danish universities on their road “from idea to invoice,” as an official Danish slogan terms it. Yet, in both countries the visionary mode produces new leadership techniques that eclipse the social sciences and the humanities in favor of management sciences. Therefore, even autarchic visions of rise and resurrection carry a hybrid element of something in between the First and the Third Worlds – which brings us to my preferred scenario. Scenario 7. Something in between: 1+3 = 2 This scenario does not focus on invariances, linear developments or reversals, but on borrowing, exchange, diffusion, and to what post-modernists refer to as “hybridity.” It envisages a process of merger in which the difference between the First and the Third World is blurred. The First World is characterized by an informed literate citizenry with voting rights and the ability to derive security and predictability from the rule of law within a formalized “systemworld.” In contrast, the Third World is characterized by the existence of many poorly educated and poorly informed people tied as clients to powerful patrons adept in the art of rigging formal systems, whether in the private or the public sector, that forestall the rule of law and the rise of the democratic voice, thereby maintaining their ability to harvest rents arising from the fluidity of the “lifeworld.”10 Indigenous moves out of the iron cage of the systemworld are visible in several spheres within the EU. One crucial gray zone is corruption which in fact and folklore plays a large role both in daily life and in high politics in many countries. In Europe, Danish folk models assume that the Latin countries are more corrupt than the North European countries, but in the recent past some of the bigger cases of corruption have emerged from Germany. The biggest engineering company in Europe, Siemens, has been engaged in a “one billion dollar corruption case” (International Herald Tribune 2008). It was accused of providing funds to bribe clients to secure contracts in various part of the world. Another major case broke 10 The concepts of “systemworld” and “lifeworld” are associated with Jürgen Habermas.


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in Germany earlier in 2008. Each time it happens the Germans are outraged, and swear to take steps to ensure it will never happen again, only to find that it does (Baumann 2008). The black economy is probably also expanding in Denmark, but operators have not been able to hedge their bets by securing compliance from the police, judges and bureaucrats. Many Danes engage in tax evasion, but few are corrupt (Bjørn 2004) – yet. The rational step for those with large sums of black money is to secure it through corruption. If and when that happens Denmark will become part of the Third World and the Third World will have moved one step closer to Finland, which together with Denmark ranks among the least corrupt countries in the world.11 This is what I wrote in an earlier version of this chapter. Since then Denmark has produced a case exemplifying how several checks and balances in the private sector have been breached in such a way as to corrupt the system as a whole. The case involves a firm called IT Factory. In 2007 and 2008 this firm emerged as the best Danish IT company according to various prestigious rankings, but apparently its turnover derived from non-existent services moving in a “circular construction” of lease agreements willingly financed by leading banks that did not investigate its actual production before extending large sums in credit. The employees of the firm were paid handsomely and kept their knowledge to themselves. The board did likewise. Apart from dealing capably with the Danish business elite, the charismatic director of the firm, Stein Bagger, apparently relied on his Hells Angels security officer for an unknown range of transactions involving, possibly, blackmail. When the leasing circus became unsustainable, Stein Bagger decamped to Dubai and thence to California, where he gave himself up. The Danish media preferred to interpret Stein Bagger’s rise in cyclical terms as the product of the economic boom and, hence, as a phenomenon not likely to repeat itself in the near future. I prefer to see it as an early avatar of things to come when Scenario 7 extends further into the private sector and eventually into the public sector.12 Corruption – real or imagined – is one of the staples of daily life in India.13 It occurs within the formal sector of the economy, but also within the informal sector in which workers are almost unprotected and rarely unionized. Indian workers may be able to assert their power through the ballot or by deploying the weapons 11 Transparency International ranks India as 74th among 180 countries in terms of corruption (Financial Express 2008). 12 In May 2009, the Danish medical company Novo Nordisk admitted to have paid return commissions to the Iraqi regime under the oil-for-food program administered by the UN. The company agreed to pay a fine of $9 million to avoid further proceedings. The case involves the public sector outside of Denmark, but it may also involve the public sector within the country (Bendtsen et al. 2009). 13 See Widmalm 2008 and Sissener 2008 for recent Nordic studies of corruption in South Asia. The Dutch International Institute of Asian Studies has started a research project called “Illegal but licit” (IIAS n.d.).

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of the weak, but on a day-to-day basis most remain “drawers of water and hewers of wood” in their relationship with their employers. As the “systemworld” in the EU informalizes, European indigenous corruption will hybridize more freely with Indian patterns of corruption in both the private and the public sector. The IT sector has already shown the way: The IT Factory had a presence in India, and as the exposure in 2008 of the giant Indian IT company Satyam showed, the Indian regulatory framework was not impenetrable. There is another equally crucial gray zone of diffusion, i.e. the zone where science hybridizes with superstition. The introduction of genetically modified cotton in India is a case in point, which has both an Indian and a European angle. Bt Cotton is cotton made partly resistant to the American Bollworm pest by inserting a gene (which occurs naturally in soil bacteria) into cotton seed rendering the cotton toxic to the pest. When the multinational company Monsanto acquired permission to conduct trials with Bt Cotton in India in collaboration with an Indian company called Mahyco in the late 1990s, key Indian NGO leaders Vandana Shiva and Prof. Nanjundaswamy objected. They and others argued that Monsanto was causing farmers to commit suicide by forcing them to buy “Terminator Seed” made sterile in order to force them to purchase fresh seed every season. Monsanto did not market such “Terminator Seeds,” but the scare successfully mobilized many people in India and elsewhere. Subsequently, one employee left Mahyco apparently taking with him genetically modified cotton. He set up shop in Gujarat and started marketing his own brand of indigenously developed Bt Cotton clandestinely. When this came to light he was threatened with prosecution, but he was never brought to trial. Following his lead, many other entrepreneurs and farmers started producing illegal but licit desi Bt Cotton varieties and selling them in the ungovernable “anarcho-capitalist” Indian market. Since then, Bt Cotton has gained a large market share in India (Herring 2008; Madsen 2001). NGOs, however, continue to oppose what is seen as a highly toxic substance to humans and animals. According to the national coordinator of the Kisan Bachao Andolan (or Save the Farmer Movement), milk from farm animals eating Bt Cotton is deadly to their offspring. Such milk has also supposedly caused increased death rates and disease in humans. Similarly, in Andhra Pradesh local NGOs (with foreign funding) have reported sheep and cattle dying after eating Bt Cotton. The trouble with these reports is that they are not true. Trifling as it may seem, the story about Bt Cotton presents two faces of India. Shining India stands for Science-Technology-Innovation and Globalization, but the acronym S-T-I-G also stands for Superstition-Trash-Imitation and yet more Globalization. There is a European angle to the controversy. While Europeans are generally not adverse to the use of biotechnology in medical research, they have played a key role in promoting junk science by framing transgenic technologies in agriculture as risky, thereby encouraging people elsewhere to oppose genetic modification. According to Ronald Herring:


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Metropolitan elites in low-income countries adopted European framing through international networks opposing globalization. Complementarities of interests are apparent. INGOs [International Non-Governmental Organizations] needed authentic voices and faces of the ‘third world’ for their mobilization and funding, local activists needed resources. INGOs then became dependent on their local brokers for information, putting a premium on reports of extreme events that attract media attention and spread through internet connections. (Herring 2008: 461)

Herring concludes that European countries have been instrumental in framing the ideology that delayed the introduction of a useful technology that would benefit farmers in the Third World. Therefore, one could view Europe as a contemporary contributor to processes not only of Enlightenment but also of “DisEnlighthenment” and “Endarkenment.” According to David Colquhoun, European universities have started to offer subjects, such as homeopathic medicine, that have no scientific validity. He ascribes this to “the bureaucratisation and corporatisation of science and education,” which sidelines normal scientific procedures and makes researchers responsible not to their peers or to their consciences, but to their “line manager” (Colquhoun 2007). As for the students, in 2006 The Guardian revealed that approximately 30 percent of the students in the UK said they believed in creationism and intelligent design. Only 56 percent of the students sampled believed Darwin’s theory of evolution. Similar concerns about Endarkenment are expressed in the Naumann Report named after Klaus Naumann, former Chief of Staff of the Defence Staff in Germany. The report contains a chapter on the “Loss of the Rational.” The decline of nation states and national identities may, it argues, open up a space for the irrational and for religious extremism. Innocent “political frivolity” and “demagogy” may limit freedom of speech and other liberties, which will make rational decision-making more difficult.14 The main recommendation of the report is to form a directorate consisting of the EU, NATO and the USA in order to coordinate cooperation in the Transatlantic sphere from Finland to Alaska. Thus the report is squarely Western-oriented, but it does mention India, noting that the West is now dependent on the Indian software industry and other services, and that if India becomes unstable due to internal unrest or war, it will affect the West in a manner that few think of currently. In 2007, Estonia was subjected to a “cyber attack” that led NATO to think about its own cyber security (Naumann Report 2007: 44). Whoever attacked Estonia, indications that Islamic organizations in India, such as SIMI (Students Islamic Movement of India) are nursing the idea of a jihad among professionals, 14 See also Madsen (2008b). According to Graham Chapman, the brain is the product of two million years of evolution and is designed to assist the newborn to be able to deal with the world by the time he or she grows up. The complexity of today’s rapidly changing environment makes adaptation increasingly difficult (Chapman 2007).

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including IT professionals, are noteworthy in this context (Madsen 2008a). Hindu Nationalism is already embedded in many Hindu IT professionals in India and abroad. More interaction means globalization for all or many political cultures. The culture of dis-enlightened political fundamentalism may also adapt to sophisticated urban environments. Thus, Bourgeois Jihad may emerge among South Asian professionals far removed from traditional seedbeds of revolt such as the tribal agencies of Pakistan. If Scenario 7 is traceable in universities and in cotton fields, one might well ask whether comparable cultural hybridization has reached the European Commission. It has. I would like to discuss a sentence from the European Commission’s brochure about the EU–India Strategic Partnership, specifically the chapter dealing with dialogue between the two old, yet modern, dynamic cultures of Europe and India. Again the matter may seem trifling and quaint, but the devil is in the detail (cf. Nanda 2005). The European Commission writes: … in July 1987 Forbes Magazine published the result of scientific research, which concluded that: ‘Sanskrit is the mother of all European languages, [and] the most suitable language for computer software.’ (European Commission 2006c)

Sanskrit is not the “mother” of Finnish, Hungarian, Estonian or the Basque languages. Other European languages do share common roots with Sanskrit in the sense that they, too, derive from an Indo–European language that can be partly reconstructed. The notion that Sanskrit is the mother of all languages is widespread in Indian towns and villages. The wave of Hindu nationalism, which has engulfed the country since the 1980s, has not made this idea any less attractive. The oldest often being considered the best, many Indians also believe that Sanskrit is a more scientific language than others. The idea that it is more suitable than other languages for writing computer software dovetails with these beliefs. The European Commission cites Forbes Magazine as its source. However, neither of the two July 1987 issues contains anything about Sanskrit (Forbes Magazine, 13 and 27 July 1987). This raises the question of the origin of the citation. An Indian website called Death Ends Fun has proposed that the source may be a paper published by Rick Briggs in 1985 called “Knowledge Representation in Sanskrit and Artificial Intelligence.” This paper is not about computer software, but it does argue that Sanskrit is eminently suited for projects in Artificial Intelligence. The paper is available on a website called Rational Vedanta at <www.rationalvedanta.net/node/85> and on the related site <www. vedicsciences.net/articles/sanskrit-nasa.html>, which is devoted to Vedic Science. Both of these emanate from the International Society for Krishna Consciousness. In sum: A faulty statement wrongly attributed to a business magazine, and perhaps originating in a Hindu religious movement, has found its way into a European Commission publication. Thus, the hybrid pre-cum-post-modern world already


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exists not only on Internet platforms and not only among Indian farmers, but also within EU institutions. Were the Chinese government to write that Chinese was the mother of all Indian languages and the best language for software writing, riots might break out in India. In Europe, the “civility of indifference” (cf. Bailey 1996) – or blissful ignorance – allows one plus three to equal two. Parting Call I have sought in this chapter to orient the reader to seven scenarios, five of which I have elaborated in some detail, without claiming that the different ones should be taken to be mutually exclusive. While Scenarios 3, 4 and 5 are less often voiced, the world is currently getting a taste of Scenario 1’s narrative of modernization under the benign Raj of Globalization, and of Scenario 2’s evolutionary message. Simultaneously, it is being treated to Scenario 6, which posits long-term geopolitical inversion or reversal. This scenario might be phrased politely, with resignation, or as a veiled threat, but the substance remains the same.15 Taken to the extreme, the argument, as adumbrated by Jaffrelot, could entail a virtual repetition of history, with India seeking copy-cat revenge for its colonial past. A recent survey by India Today showed that the two most popular leaders among Internet-active Indians remain the freedom fighter (or terrorist) Bhagat Singh and Subhash Chandra Bose, the nationalist who allied his forces with the Axis Powers during World War II. This collective consciousness hardly supports Rothermund’s portrayal of India as a friendly giant. Several scenarios, including the sixth raise the question of the interplay of economics and politics. The supposition that “the flag follows trade” embraces the argument of economic determinism, which posits that political change follows from economic change. Thus, increasing Indian (or Chinese) economic clout would warrant a global power realignment. However, as noted above, if the current size of the Indian economy makes a difference with regard to admission to the club of superpowers, then why does it not matter with regard to CO2 emissions? In contrast, the supposition that “the person who wields the stick owns the buffaloes” (cf. the Hindi saying: Jiske lathi uske bhais) denies that political power necessarily flows from economic power. In other words, even if BRIC forecasts remain valid, power relations may endure as long as the military balance stays in place. “Those who pay the piper call the tune” is a third way to approach the relation between political and economic power. This saying may be taken to mean that neither wealth nor power alone entitles an agent to rewrite the rules unless such a claim is backed by financial commitment to bear the burdens of globalization and institutional maintenance. Scenario 7 suggested a double move in which the EU exits the iron cage of the “systemworld” while India enters it. It raises the specter of “Endarkenment,” 15 On US decline, see Zakaria 2008; on Denmark, see Lund and Møller 2007.

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but as a parting shot I would suggest that the state entities engaged in this double move are, in fact, already akin. The EU and the Government of India are both “states encompassing civilizations” (Rothermund 2008: 1), or bureaucracies administrating civilizations. While the EU bureaucracy is obsessively zweckrational or goal oriented, the more path-dependent Government of India often appears as a weak actor even though it commands a much greater share of the resources of its constituent states than the EU does. However, as close observers may readily admit, the EU, too, is short of governing capacity (Cameron 2007: 194). Thus, both are messy juggernauts. Fortunately, they share the luxury of being able to govern their respective wards within a democratic framework affording a high degree of political freedom. This bodes well for the future of their hybrid partnership.

Chapter 5

Thinking Clearly on Political Strategy: The Formulation of a Common EU Policy Toward China Mikael Mattlin

Strategy is a word frequently used by bureaucrats and diplomats these days. The EU is no exception. Strategies are launched on a regular basis on the most varied topics and with the most diverse objectives. In a national context, and with a clearly defined (sectoral) focus, the use of the word is reasonably intelligible, but what is actually meant when the European Commission talks about a China strategy? Or when a union of 27 member countries launches a strategic partnership with the world’s most populous country? It is safe to assume that what the Commission, or the leaders of the People’s Republic of China (PRC) and the EU governments have in mind is not the traditional connotation of the concept, which derives from military discourse. If we nonetheless take talk of strategy seriously, to the extent that it is more than merely vacuous political rhetoric, how are we to make sense of the EU’s China strategy? If we strive for as neutral a definition of the term as possible, devoid of all military undercurrents, we could simply refer to it as a long-term plan to achieve an objective. But can one say, even according to this most neutral of definitions, that the EU possesses a reasonably clear China strategy? Is such a strategy even possible given the partly divergent economic interests and the lack of a strong common foreign policy capacity – most likely predicated on a federal EU – with attendant hard-power capabilities? The EU is currently in the process of negotiating a new comprehensive framework agreement (Partnership and Cooperation Agreement, PCA) for its relationship with the PRC, with greatly enhanced political cooperation. Beijing increasingly also responds to the EU as a collective actor rather than just maintaining traditional bilateral relations. In 2003 it published its first-ever foreignpolicy paper on China–EU relations (China’s EU policy paper 2003). This chapter reviews the EU’s China policy in terms of the extent to which it has been able to EU documents first referred to China as a strategic partner in 2003 (European Commission 2003). The concept goes back to the Greek word stratēgos, deriving from the words for army and leading.

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formulate a reasonably clear strategy on paper and implement it in practice. The secondary objective is to identify the main impediments to formulating a common EU policy toward China. Strategy in the Context of Semi-competitive Political Relations A minimal requirement for any strategy is that one is better off with it than without it. The aim is to improve the outcome for the unit involved, whether a chess player, a football team, a corporation, or a nation-state. Inherent in the above definition are several further specifications. Namely, a strategy needs to have an objective (or a limited number of objectives) and some kind of plan for achieving it that is longterm in nature. It is ultimately about making choices concerning ways of achieving a desired outcome, which means that simply jotting down a long list of different possible options or goals cannot be considered a strategy. In the case of nation-states, not to mention a union of nation-states, the immediate problem with applying strategy jargon is that states very seldom end up in anything resembling a football tournament in which victory conditions are clearly delineated, or even a situation where an overarching objective can be clearly defined. The football tournament’s immediate “elimination” of losing teams has few equivalents in a state framework. Perhaps only a world war comes close to approximating the brutal “winner-takes-all” logic. Ironically, a small country under attack by a much larger one will find it easier to define an overarching objective, national survival. In normal times state relations are only semi-competitive. A slightly more apt approximation to competition between states is corporate competition, in which competitive dominance is a goal, although there is also occasional elimination (bankruptcy). This is especially true in the case of large multinational corporations that may engage in brutal competition in the marketplace, while at the same time maintaining extensive cooperation on other fronts (e.g., joint research projects, common technology platforms and standards, and intellectual property rights (IPR) cross-licensing). However, in times of peace the cooperative elements of the state framework are more pronounced than in the corporate framework. Therefore, developing a strategy in the former is necessarily a more complex endeavor. In the case of competition between states, strategy seldom aims for any clear-cut victory and thus the foreign-policy goals have to be more subtle. Without a clear-cut goal and victory conditions the strategy revolves around setting priorities, and choosing a path and the requisite tools to advance them. However, these priorities should be attainable, or at least able to guide concrete action, if the strategy is to be of any practical use. The pinnacle of complexity is reached when a large set of nation-states sets out to develop a common foreign-policy strategy. It is not a superfluous question to ask to what extent this is even possible in as far as the participating states’ concrete interests diverge. It is a question that is relevant in relations between the EU and China (strategic partnership), and among the EU countries (a common EU strategy

Thinking Clearly on Political Strategy

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or policy toward China). How can China and the EU develop a partnership with strategic objectives if the EU itself is not clear on its own strategic interests? How can the EU countries agree on a clear China strategy if they are competing with one another in the Chinese market? On the most general level, shared strategic objectives can be developed on two rather different bases, abstract values and concrete interests. Abstract values may provide very powerful, shared long-term objectives, as the long history of ideologically motivated political action testifies. However, developing shared values between different societies is inherently hard. Beyond the blandest expressions used, such as in the preamble to the UN Charter, there are significant value differences between the world’s societies (Inglehart and Baker 2000). Even in the context of the EU values are not completely shared, as the recent controversies over the position of religion in the continent’s heritage and over divorce procedures, testify. Nonetheless, in the EU context there is sufficient value commonality to allow talk of a broad value consensus, or a normative basis. Ian Manners identified five “core norms” for the EU based on the acquis communautaire and the acquis politique: peace, liberty, democracy, the rule of law, and human rights (Manners 2002: 242). There is currently no such value consensus between the EU and China, and neither is there a will on Beijing’s side to develop such common political values. Of these “EU values” only peace is largely uncontroversial in EU–China relations, while human rights causes the largest problems in practice. The EU is unable to drop its normative side, as it is a key component of the Union’s self-identity (Manners 2006: 81-82). The key question is to what extent it pursues an externally oriented, “offensive” rights-based foreign policy, as opposed to an inward-oriented, “defensive,” value-based foreign policy. According to Sjursen, the latter is mainly aimed at ensuring and protecting the sustainability of the community’s own identity, whereas the former also promotes these same values on the international stage (Sjursen 2006: 86). In Manner’s words, the core of the EU’s normative power lies in its ability to shape conceptions of what is “normal” in international relations (Manners 2002: 239). The European Commission, especially in its early policy papers on China, appears to assume the universality of political values cherished in the EU, and sets out to “assist” China in developing its society in a similar direction. Evaluating the EU’s China Policy In terms of formal foreign-policy tools, the EU’s CFSP has two main instruments at its disposal, common positions and joint actions. Common positions define the approach the EU takes on a certain matter, either thematic or geographical, and Acquis communautaire refers to the total body of accumulated EU law, acquis politique to the accumulated EU political practice.

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the general guidelines that member states must adhere to. Joint actions concern specific situations in which operational action by the EU is considered necessary, determining the objectives, scope and means to be made available and thereby committing the member states to action. However, these formal instruments are of no use in analyzing EU–China relations. A cursory examination of the EU’s track record shows that it mainly uses them with regard to conflict-prone, failed or weak states. For example, it has frequently used joint actions with regard to Bosnia-Herzegovina, Macedonia, Afghanistan, Kosovo, and Iraq, and common positions with regard to Myanmar, Zimbabwe, Belarus, Serbia, Angola, Sierra Leone, and Rwanda. With the exception of Nigeria, Iran, South Africa, and Indonesia, the Council of Ministers has abstained from using its formal foreign-policy instruments in its dealings with major countries. Therefore, these tools are of little use as a measure of the EU’s ability to formulate a common policy on China. Instead, I first examine the EU’s formulated policy on China, as established in official documents produced by the Commission and the Council. More specifically, I will analyze the five policy papers (communications) on China published by the European Commission since 1995, and the co-operation program strategy paper for 2007-2013; press releases on Council of Europe meetings, and presidency statements related to the policy-making cases examined in this paper (from 2003 onwards); the joint communiqués of the last three EU–China summits; the EU’s new East Asia policy paper (Council of the European Union 2007); the EU High Representative Javier Solana’s statements on China; statements issued by the Chinese Foreign Ministry on strategic partnerships; and news sources related to several issues concerning EU–China relations. These materials have different functions and therefore reflect different aspects. In terms of form, on a tight-loose scale one could say that the EU–China joint statements are generally the most form-bound in that both parties need to agree on the formulations; the Council declarations express a united EU position and tend to be formulated in concise diplomatic terms, while the press releases of Council meetings give a more extensive description of the discussions and common positions. The EU Commission policy papers, although they are communicated to the Council and Parliament, tend to be written in a relatively free form, explaining both the background and rationale of the policy objectives. Finally, the statements and writings of the EU High Representative are the least form-bound, and are anything from speeches to newspaper articles and interviews. High Representative

The author used the Eur-Lex database on 30 January 2009 to search for CFSP common positions and joint actions in which the target country was mentioned in the title. The 2006 Commission policy paper on China and a separate paper on economic and trade relations were welcomed by the Council, and their recommendations were broadly endorsed (Council meeting 2771: 6).


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statements thus offer the most scope for freely formulating policy positions and could be seen as the most important in foreign-policy terms. However, examination of published documents can only take us so far. Apart from being form-bound, they are often wide-ranging, and at times vague. I supplemented the approach by examining how the EU has, in practice, formulated and upheld a common policy position vis-à-vis China. My second approach was therefore to analyze five contentious issues in EU–China relations in order to gauge how the EU has performed in this regard in the face of conflicting interests. An Overview of the Evolvement of the European Commission’s China Policy To date the European Commission has issued five policy papers in the form of communications endorsed by the Council, which are supposed to form the basis of the EU’s China strategy (policy). Such communications were issued in 1995, 1998, 2001, 2003, and 2006. Although the Union’s common foreign and security policy (CFSP) has thus far been an intergovernmental matter, and the Commission papers cannot therefore be taken to be the only basis for its China policy-making, they are nonetheless the most comprehensive statements of the EU’s common China policy. Officially, CFSP strategies are set by the European Council, while the Council of Ministers decides on the concrete actions to be taken. Common policy still requires unanimity among EU member states, which may be difficult to achieve in sensitive foreign and security matters. The European Commission published its first policy paper on EU–China relations in 1995, entitled A long-term policy for China–Europe relations (European Commission 1995). It was preceded by the launch of a framework for bilateral political dialogue in June 1994. The main EU interests in China were identified as a shared concern about global and regional security, global economic stability, and other global issues, and maintaining EU competitiveness. The main objectives set forth in that paper were threefold: to encourage China to become fully integrated into the international community, to contribute to reform inside China, and to intensify ties between the EU and China. The first Commission policy paper put human rights squarely at the center of EU global policy (see, for example, European Commission 1995: 6). While the Commission was sensitive to the fact that the effectiveness of pushing human rights globally was not assured and that such a policy could backfire, it nonetheless put human rights at the heart of the Union’s global agenda and provided guidelines on how such a policy should be pursued in order to be effective. Indeed, the Commission argued that a detailed human-rights dialogue on all aspects of the issue should be pursued at every opportunity. No special mention was then made The author is grateful to Annikki Arponen for her clear explanation of the differences between the different documents that the EU produces on China. Discussion in Helsinki, 2 April 2008.

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of the fact that China was a potential superpower with a long and proud history, which makes it a very different target for EU human-rights-promotion efforts than a small, aid-dependent country. On the contrary, the Commission referred to China’s acceptance of the 1993 Vienna Declaration and Programme for Action at the World Conference on Human Rights as testifying to a shared commitment between China and the EU. By way of contrast, the most recent policy paper (2006) rather refrained from setting clear overall objectives. The closest to such a statement was the reiteration of the EU’s policy of engagement with China that would enable the two sides to work together in order to solve global problems. However, even this was tempered with sober remarks that indicated a growing frustration with China’s less-thancooperative attitude to many issues of EU concern: The EU’s fundamental approach to China must remain one of engagement and partnership. But with a closer strategic partnership, mutual responsibilities increase. The partnership should meet both sides’ interests and the EU and China need to work together as they assume more active and responsible international roles, supporting and contributing to a strong and effective multilateral system. The goal should be a situation where China and the EU can bring their respective strengths to bear to offer joint solutions to global problems. (European Commission 2006b: 2)

The 2006 policy paper breaks the EU’s goals down into sectoral areas and subareas, and identifies the main ones within each area. For example, under the heading of sustainable development the Commission lists five broad objectives: to ensure secure and sustainable energy supplies, to combat climate change and improve the environment, to improve exchanges on employment and social issues, to improve coordination on international development, and to maintain sustainable economic growth. Within each broader goal, several more specific key objectives are identified. The 2006 policy paper took the form of two separate documents, a general one and one covering economic and trade relations. This paper also differs from the previous ones in its substantive emphasis. This change in content was gauged through a longitudinal analysis of the occurrence of key words in Commission policy papers. Related operative words were grouped to form three comparable factors (see Chart 5.1). The “cooperation factor” comprises the words cooperation, cooperate, dialogue, partner, and partnership; the “reform factor” consists of the words reform(s), transition(al) and opening (up); and the “challenge factor” consists of the words challenge(s), challenging, competition and security. Occurrences referring to social security or the UN Security Council were discarded as irrelevant.

Operative words refer to keywords in a sentence that describe or are reflective of either the general state of EU–China relations or of Chinese society.


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Chart 5.1 A longitudinal analysis of the occurrence of operative words in the European Commission’s China policy papers Mentions of dialogue, cooperation and partnership were more prominent than usual in the 2003 policy paper, which appeared at the time when the EU was launching a strategic partnership with China. The number of mentions returned to the “normal” level in the 2006 policy paper. There has also been a gradual de-emphasis on reform and transition, while talk of competition and challenges, which was almost absent in the first papers, increased in the two most recent ones. It is too early to say whether or not this represents a broader trend. The same trends are evident with regard to the more specific issue areas. Chart 5.2 shows a similar calculation for words related to substantive issues in EU– China relations. In order to make the comparison meaningful, related substantive words were again grouped together to form three factors. The “IPR factor” is the sum of occurrences of the words IPR, intellectual property, and legal rights (of companies). The “fair trade factor,” in turn, is the sum of occurrences of the words (un)fair trade, competition, subsidy/subsidies, antidumping, and trade deficit (referring to EU–China trade). Finally, the “rights factor” comprises occurrences the word political rights and variations of it (human, civil, fundamental, basic, religious, and labor rights as well as the rights of ethnic minorities), as well as the word democracy and its derivatives. However, economic and social rights were omitted because they are less controversial in EU–China relations.

Substantive words refer to words, usually abstract nouns, which in their own right are important substantive issues in EU–China relations.


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Chart 5.2 A longitudinal analysis of the occurrence of substantive words in the European Commission’s China policy papers The contrast between the 2003 and 2006 policy papers is particularly illuminating when it comes to trade and IPR issues versus the “rights discourse.” Democracy has never been a major theme in Commission policy papers on China, but political and human rights have been standard. The 2003 paper marked a high point in the use of such words, with more than 50 references. In marked contrast, the 2006 policy paper makes scant mention of rights and democracy. However, there is a jump in the occurrence of words related to both fair-trade and IPR issues, which is probably a reflection of EU dissatisfaction with China’s progress in this regard. Since the first Commission policy paper appeared the broad strategic objective of the EU has been to assist China in its transition to becoming an increasingly open country integrated into the global politico-economic system. As stated in the executive summary of the latest co-operation strategy paper: “Europe has an important economic and political interest in supporting China’s sustainable development and successful transition to a stable, prosperous and open country” (European Commission 2007d). The emphasis in EU–China relations is still clearly on cooperation. However, the data in the charts seems to indicate that Europeans are increasingly beginning to see China through a similar lens as the Americans: less of a monumental developmental undertaking and more of a competitive challenge to EU governments and companies on the one hand, and an indispensable partner in resolving global issues (including an array of security challenges) on the other.


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The Achilles’ Heel in the Stated Goals of the EU Commission’s China Policy From a strategic perspective, there is a fundamental problem with the Commission’s China policy. The goals mostly revolve around supporting China to effect internal transformations in terms of social transition toward openness and pluralism, maintaining a sustainable environment, and moving toward a market economy. The underlying idea is that the EU countries will be best served by supporting China’s integration into the global community and its transition toward a society that resembles their own (European Commission 1995: 6-7). Many of the objectives expressed in the Commission’s policy papers could thus be prefixed with the word “development” because they read mainly as development-policy goals. While the logic was reasonable, particularly in the early phases of China’s economic and social reforms, the strategy is vulnerable in that it ultimately leaves success or failure largely in the hands of Chinese leaders. Great powers are not known to make internal changes to their own societies simply because other countries demand or hope for them. If they do eventually implement changes it is because they perceive them to be in their self-interest. The EU expects Chinese leaders ultimately to come to see that they should effect these changes in their own interests. What remains unclear is what happens if they do not agree with these goals, or even fundamentally disagree with them. In the case of China’s political development there is scant evidence that the EU and China agree on either the goals or the underlying social values. There appears to be a growing realization of this fundamental dilemma in the Commission. According to Chinese news sources, former EU Trade Commissioner Mandelson recently publicly acknowledged that the EU could not ‘dictate’ solutions to China on its internal issues (China Daily 2008). Furthermore, the very basis of the rights-based EU policy on China, enshrined in the 1995 policy paper, has recently been called into question. The Commission initially argued that efforts to internationalize China were not only entirely consistent with a strong position on human rights, they were also at the heart of a long-term strategy of engagement. It formulated this premise in the 1995 policy paper as follows: “EU policy is based on the well-founded belief that human rights tend to be better understood and better protected in societies open to the free flow of trade, investment, people, and ideas. As China continues its policy of opening up to the world, the EU will work to strengthen and encourage this trend.” The Commission saw signs of optimism that China was indeed changing in the direction it regarded as desirable (European Commission 1995: 6). However, in recent years there have been many signs that the basic premise of the Commission’s original strategy is not working quite as expected. Many well-educated Chinese urbanites are rejecting the EU-promoted political values that they scorn as Western “hegemonic” ideas. Progress in the EU–China human Baquan, or hegemony/hegemonic, is a term frequently used when talking pejoratively about efforts by Western governments to promote their values.

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rights dialogue has so far been very limited (Berkofsky 2006: 107). While the dialogue continues, it often does not appear to lead to much concrete action. Even the Commission now openly acknowledges that the EU’s expectations in this regard are not being met (European Commission 2006b: 4). Human rights are dramatically de-emphasized in the Commission’s latest China policy paper. While the 2003 paper mentioned human rights, political rights or democracy no less than 54 times, these words only received 10 mentions in the 2006 paper. The Chinese view of the 2006 policy paper, however, appears to be very different. According to a report quoting a Chinese EU expert, the Chinese see it as placing heavy demands on China, perhaps even inappropriately so given the strategic partnership (Berkofsky 2008). Ironically then, while the Commission perhaps saw talk of a strategic partnership as calling for more “frank discussion” on problems in the relationship, the Chinese expected that it would mean less. The trend toward the sectoralization of EU–China cooperation10 has clear benefits in terms of focusing it and making it more concrete. A consequence of this, intended or unintended, is that sectoral cooperation initiatives can be neatly isolated from the global political agenda of cooperative relations. Conversely, the human-rights discussion is then effectively compartmentalized in its own specific location. This solution is probably expedient both to Beijing and to some European capitals. As it is hard for the EU to entirely drop its rights agenda given the selfidentification of the EU (or at least of its elites) in its global role, this allows it to have its cake and to eat it. Of course, the human-rights dialogue will then easily become a minor but unavoidable nuisance, part of the necessary choreography of EU–China relations. While China has not come to share European political values, it has become a fully-fledged member of the international trading system, a key WTO member, and a more active and responsible actor in global crisis management, as evidenced in the six-party talks on North Korea and following the Asian tsunami. Overall, the Chinese integration into global multilateral structures and participation in world organizations has been remarkable in quantitative terms (Johnston 2003b). In some key areas Beijing has come to share similar concerns and emphases as the EU, notably with regard to the centrality of multilateralism in general, and the UN system in particular, in global governance and in environmental concerns. These two areas stand out in recent EU–China joint statements (especially from the 9th and the 10th EU–China summits) as areas in which the two parties have genuine common, even strategic, interests.

10 There are currently 22 separate institutionalized sectoral dialogues between the EU and China, in addition to the general political and human-rights dialogues initiated in 1996 and 1994 (EU Sectoral dialogues 2009).


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Strategy in Action: Formulating a Common EU Position on China Strategies are of no practical use if they have no bearing on actual policy-making. EU strategies concerning China also stand and fall on how they are implemented in practice. This section addresses a number of prominent and contentious issues in recent EU–China relations, and how they have been handled. The focus is on whether the EU has been able to effectively formulate a common position, and to uphold it in practice. As a guiding tool for systematically examining these cases I have used the convergence or divergence of interests between the EU and China, and among the EU countries, respectively. This gave four different theoretical possibilities: issues on which there is broad interest convergence both between the EU and China and within the EU; issues on which the member states’ interests converge but there are conflicting interests between the EU and China; issues on which there is no clear interest conflict between the EU and China, although the member states have conflicting interests; and finally issues on which the interests of neither the EU member states nor the EU and China converge. The specific policy issues reviewed below are market-economy status (MES) and antidumping, the IPR issue, Taiwan, the arms embargo, and Tibet. Following the case reviews is a brief evaluation of the issue based on the convergence/ divergence tool. The main sources used in gauging the formulation of a common EU foreign policy on these issues are publicly available Council of Europe documents, primarily press releases of Council meetings, and presidency statements as well as related news reporting. Case 1: MES and Antidumping Despite talk of a strategic partnership and a deepening political agenda with regard to EU–China cooperation, far-reaching economic and trade ties remain at the core of EU–China relations. However, partly as a consequence of a rapidly strengthening euro, the relationship has become very lopsided as far as the EU is concerned. Virtually no European country is able to sell significantly more than they buy from China nowadays. In 2006 only Austria had a large trade surplus with China, and Sweden had a slight surplus, and most of the other countries had a deficit of well over 50 percent of bilateral trade (Chart 5.3).


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100% 75% 50% 25% 0% -25% -50% -75% -100% AU T

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Chart 5.3 The EU member states’ trade balance with China, 2006 The picture is more complicated than this in practice, given that so many European companies operate from China (thus reducing EU exports to China and increasing “Chinese” exports to Europe) and greatly benefit from selling directly to Chinese customers from within the country. A case in point is the Netherlands with its dramatically lopsided trade balance with China. An in-depth study of the economic relationship between China and the Netherlands concluded that, despite this imbalance, the Dutch economy benefits in many ways, not least because a lot of Chinese goods enter the EU through the port of Rotterdam. This gives the Netherlands a pivotal role as a distribution center for Chinese goods. Trade with China has therefore had a generally positive effect (Suyker and de Groot 2006). However, most European countries do not enjoy the same benefits as the Netherlands. In an unusually blunt statement, former Trade Commissioner Peter Mandelson addressed the issue of the imbalance in EU–China trade in a letter he sent to Commission President Jose Manuel Barroso in the autumn of 2007. Mandelson expressed concern, suggesting that “the Chinese juggernaut is, to some extent, out of control.” He argued that Chinese trade barriers and interventions limited imports from the EU. The many EU–China sectoral dialogues were not always helpful either, as the Chinese side could be procedurally obstructive (BBC 2007). The political debate on EU–China economic and trade relations has culminated in the issue of market economy status (MES), which China has sought for a long time. In the WTO negotiations it accepted that it was a non-market economy in order to get an easier deal, a status it agreed to maintain for a period of at least 15 years. However, a few years after joining the WTO Beijing changed tack and began arguing for MES. The issue has taken on symbolic value as a mark of recognition with regard to China’s position in the global league (see, for example, Green 2004). Dozens of countries, including New Zealand11 and South Korea, 11 New Zealand became the first country to grant MES to China in April 2004.


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already recognize China it a market economy, but the major trade powers, the EU and the USA, do not. Apart from the symbolic aspects, the main rationale for seeking MES is to make it harder for other countries to bring anti-dumping cases. With 14 cases brought against China in the WTO, ten of them since February 2007, the issue has also assumed increasing importance in practical terms and is now high on Beijing’s political agenda (Rémond 2007). As long as China does not have MES status the US and the EU countries can determine a “fair market price” based on another (MES) country’s production costs, under the assumption that it would not be feasible to base fair-price calculations on Chinese prices. Given that the export-oriented sector in China effectively already operates in a market-economy environment, Stephen Green has argued that Beijing could have pursued a very different strategy. Instead of trying to gain MES status it could have challenged the whole framework on the grounds that it did not reflect the real circumstances in the Chinese economy (Green 2004). Until recently the United States was much more vocal than the EU in criticizing China’s economic and trade practices. To date it has brought trade complaints against China to the WTO dispute-settlement process no less than seven times, five of these since 2007.12 The issue of alleged unfair economic practices has also assumed more importance in the EU of late, given the rapid growth in EU–China trade. To date, the EU has brought two cases against China to the WTO, on auto parts in 2006 and on information services in 2008. China, for its part, has so far brought three cases against the USA (including steel safeguards in 2002 and coated free sheet paper in 2007), but none yet against the EU. In an initial assessment published in June 2004 a working group set up by the EU concluded that conditions were not right for granting China MES. The EU position has not substantially changed since then, although Chinese progress in some relevant areas is recognized. However, the EU has been somewhat more flexible than the USA in that the Commission’s description of China as an “economy in transition” allows determination of whether Chinese companies are operating in a market environment on a case-by-case basis (Green 2004). The practical effects of China’s lack of MES status were seen in 2005 in the context of Chinese textile and shoe imports to the EU. The sudden flood of cheap Chinese imports that followed the lifting of quota restrictions put EU countries at risk of severe dislocations in their textile industries. The impact varied in different countries. Italy, with an economy more oriented to light manufacture (including textiles and footwear) than most other EU countries, was particularly severely affected. An article on the dispute concluded that divergent interests among EU member states in the face of a flood of Chinese imports hampered a coherent 12 VAT on integrated circuits (2004), imports of auto parts (2006), measures granting refunds, reductions or exemptions for taxes and payments (2007), intellectual property rights (2007), audiovisual services (2007), financial-information services (2008), and grants, loans and other incentives in 2008 (WTO Dispute Settlement).


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EU response (Comino 2007). Nonetheless, although it was chiefly the southern European countries that were directly affected (Zhao 2007), the EU slapped an import duty on Chinese-made leather shoes in 2006 (Mandelson 2006), implicitly invoking China’s status as a non-market economy. The MES issue has been discussed in recent EU–China summits, and at the 2005 Beijing summit the two sides agreed to launch high-level talks (Joint statement 2005). Although some member countries, notably the UK, have been in favour of granting MES to China (Minder and Lau 2005), as mentioned the EU has not substantially budged on the issue since the Commission first formulated its position in 2004. Case 2: IPR Issues For years the IPR issue has been of utmost concern to European companies operating in China. It is also a political issue that has grown in importance, as indicated in Chart 5.2 above. Peter Mandelson has even been quoted thus: “Probably the most important issue in Europe’s economic relations with China is the protection and the enforcement of intellectual property rights” (EUBusiness.com 2006). On the official level, such as in the EU–China summit joint statements, the two sides tend to be in broad agreement. For example, the Helsinki joint statement stated: Leaders reiterated the importance of protecting intellectual property rights (IPR). In particular, both sides agreed on the need for appropriate deterrence against piracy and to the effective enforcement of IPR legislation. Both sides expressed their satisfaction over the communication and cooperation of the past year under the EU–China IPR Dialogue and the IPR working group and stood ready to further the exchanges and cooperation in this field. Both sides also reiterated that they would strengthen the cooperation and exchanges in the field of geographical indications. (Joint statement 2006)

However, in practice, there is much less agreement. The two sides set up a structured dialogue on IPR issues in October 2003, and an annual meeting has been held every year since 2004. Nonetheless, the dialogue has not substantially deflated the situation. If Beijing is frustrated with the lack of progress on MES, Brussels is equally frustrated with the lack of progress on IPR. There have even been indications that the EU Commission has subtly tried to link the two, making MES a carrot to prompt Beijing to move more aggressively on IPR protection. At the very least, the recent tendency has been to discuss the two issues in conjunction with each other (Mandelson 2007). Case 3: Taiwan The Taiwan issue has been a constant irritant in Beijing–Washington relations. However, European governments have generally taken a different view from the


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American government. For instance, no European government has any direct military interest in supporting Taiwan, and most do not even think that they have a tangible interest in the area’s security. Consequently, despite occasional pronouncements of support for Taiwan in the European Parliament, there is generally little conflict between the Chinese and the EU governments on the issue. The EU upholds a One China policy, and in recent years has appeared to be more critical of Taipei than of Beijing. The 10th EU–China summit held in Beijing incorporated the following passage into the joint statement: The EU reiterated its concern over the intended referendum on UN membership in the name of Taiwan as this could lead to a unilateral change on the status quo across the Taiwan straits [sic] to which the EU is opposed. In this context, the EU expressed its concern over the Taipei authorities’ intentions about the future status of the island. (Joint statement 2007)

The joint statement is well in line with Beijing’s position, even to the point of using the Chinese description of Taiwan’s government, the Taipei authorities, which is a translation of the Chinese Taibei dangju. In contrast, the 2005 statement did not mention a similar concern over the anti-secession law introduced by Beijing earlier that year (Joint statement 2005). EU statements and official documents have been quick to criticize the actions of Taiwanese politicians, in particular the former president Chen Shui-bian, seeing them as the main threat to the status quo. The EU Presidency and Javier Solana have expressed concern about Taiwan’s referenda, its application for UN membership, its president’s statements, and the decision to abolish the symbolic National Unification Council. On the other hand, in recent years the Presidency has only once made a semi-critical declaration regarding Beijing’s behavior in the long-running conflict, on the anti-secession law passed by China in the spring of 2005. However, that slight reproach was couched in general terms, concerning both parties. Rather than expressing direct concerns at Beijing’s action, the EU only ‘took note’ of the issue and reiterated its stance in the dispute (Council of the European Union 2005). The EU has also been largely silent about the Chinese missile deployment across the Strait (Berkofsky 2006: 108). The European Parliament has taken a different attitude toward the Taiwan issue all along, often expressing moral support for the island. However, without much say in the EU’s foreign and security policy, these expressions are largely irrelevant. More interestingly, whereas the first Commission policy paper made no mention of EU interests in the dispute, and the 2003 paper made only a passing general reference, the latest one (European Commission 2006b: 11) spells it out more clearly. It states that the EU has a significant stake in the maintenance of cross-Strait peace and stability, and formulates five points of EU policy that should be taken into account. These include opposition to any measure that would amount to a unilateral change of the status quo, and strong opposition to the use of force.

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This basic position was echoed in the recently adopted guidelines on the EU’s foreign and security policy in East Asia. Significantly, while the Council echoes its support for dialogue and peaceful resolution, it now also states that the EU considers its interests threatened when stability and peaceful dialogue is threatened, and links the Taiwan issue to the arms-embargo issue: The EU should also, in consultation with all partners, deepen its understanding of the military balance affecting the cross-strait situation; of the technologies and capabilities which, if transferred to the region, could disturb that balance; of the related risks to stability including the risk of miscalculation; and factor that assessment into the way that Member States apply the Code of Conduct in relation to their exports to the region of strategic and military items. (Council of the European Union 2007)

Despite the increasing weight given to the issue in Commission and Council papers and the more active promotion of cross-Strait peace, particularly following the change of governing party in Taiwan in the spring of 2008, Taiwan remains largely a non-issue in EU–China relations: at most it is an irritant rather than a source of leverage (e.g., Cabestan 2007). EU countries appear relatively comfortable with reiterating standard phrases, and are receptive to Beijing’s concerns. Case 4: The Arms Embargo The arms embargo constitutes one of the biggest tests of the EU’s ability to formulate a coherent policy toward China. The embargo was imposed on China following the 1989 Tiananmen incident. In 2003-04 pressure grew within the EU to lift it, given the long time that had passed and the irresistible lure of significant economic contracts. The Chinese side has long been pushing to have the embargo lifted. The issue gathered significant momentum when some EU leaders, particularly Germany’s Schröder and France’s Chirac, began lobbying for lifting the embargo (Sparaco and Wall 2004). French and German political leaders have often brought home massive commercial deals following state visits to China. Many other governments, including Italy’s, have also been sympathetic. The December 2003 European Council instructed the General Affairs and External Affairs Council to re-examine the question (Council meeting 2259: 8). The latter resolved to search for a solution that reflected the current situation in China, the close bilateral relations, and the EU’s intention to develop a strategic partnership, although urging more discussion on the matter before action was taken (Council meeting 2577: 10). A year later the General Affairs Council was ready to send a positive signal to China on the embargo issue, although it still indicated that human rights concerns remained and that the EU Code of Conduct on arms exports, introduced in 1998, needed strengthening (Council meeting 2622: 13). The EU reaffirmed its commitment to working toward lifting the embargo both in the 7th EU–China


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Summit and in the December 2004 European Council meeting (Council meeting 2631: 14). It was expected that the decision would be announced in conjunction with the June 2005 European Council meeting. Although the momentum was growing for some kind of change there were also still considerable doubts in some EU countries, chiefly the UK and some smaller nations. However, the most significant pressure came from Washington. American concerns were both military and political (Archik et al. 2005: 18, 26-28). The American government took a relatively hard line, even suggesting implications for US–EU security cooperation if the EU forged ahead with its plan. The embargo issue was seen by American observers as a kind of litmus test of the ability of the EU and China to develop genuine strategic relations, and conversely of the EU’s commitment to the transatlantic security relationship. An unintended side-effect was the establishment of EU–US and EU–Japan dialogues on East Asian security (Berkofsky 2006: 110). As so often in world politics, events intervened. In early 2005 Beijing felt an urgent need to rein in the Taiwanese government, which was considering seeking a kind of soft declaration of independence through referenda on Taiwan’s international status. An anti-secession law prohibiting any area of the fatherland from seceding from it was passed. This provided a convenient excuse for EU leaders to extricate themselves from the conflicting commitments to China and the USA they had burdened themselves with. Not surprisingly, some leading EU diplomats, harboring doubts on the embargo lifting, were quick to seize on the anti-secession law as a reason to postpone the decision. Others, notably some leading French politicians, initially continued to push for lifting the ban, and even expressed support for the anti-secession law (Deutsche Welle 2005). The issue has essentially been stuck in limbo since 2005, the EU reiterating its willingness to work toward lifting the embargo in the joint communiqués and on other occasions (e.g., Council meeting 2771: 9), but with little concrete progress. It appears for the time being to have opted for what is in effect a non-decision in the face of the lack of agreement between the member states. Chinese pressure is likely to continue. The lack of progress has already made Beijing somewhat bemused by the EU’s behavior. The EU’s willingness to describe China as a strategic partner initially created expectations in Beijing and fears in Washington that this would lead to a lifting of the embargo. China may even have perceived a quid pro quo situation in which it would be part and parcel of the elevation of relations to a new level (Berkofsky 2006: 105, 109), and likely regards the issue as primarily symbolic. In the short term the EU is unlikely to allow significantly higher sales of advanced weaponry to China, given US and internal opposition. Case 5: Tibet The Tibet issue had not until recently, received a lot of attention in the EU. It had been taken up annually as one human-rights issue among others in Council

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meetings (e.g., Council meetings 2532: 9 and 2700: 24). Only rarely did the Council express particular concern about Tibet, but it has issued declarations expressing support for talks between the Dalai Lama and the Chinese government. However, the violent unrest in Tibet in March 2008 prompted the EU to issue a relatively strongly worded (by diplomatic standards) declaration (Council of the European Union 2008b). This seemed to set it up for yet another juggling act between European commercial interests in China and the member states’ political values. However, events again intervened. The tragic earthquake in Sichuan, coupled with very tight Chinese restrictions on access to Western China, quickly pushed the Tibet issue almost completely out of the media spotlight, and therefore also down the political agenda. A number of recent actions on Tibet within the EU have upset China. First there was German Chancellor Angela Merkel’s hosting of the Dalai Lama in Berlin in September 2007, despite Beijing’s objections and the cancellation of a number of Sino-German events. Following the spring 2008 events in Tibet, some EU leaders considered boycotting the Beijing Olympics opening ceremony. The EU High Representative also commented on the situation in an address to the Foreign Affairs Committee of the European Parliament, but advised caution with regard to boycotting the ceremony (Council of the European Union 2008c). The European Parliament, for its part, issued a sharply worded resolution on Tibet, even calling for a discussion on a possible EU boycott of the Olympics. The issue was also brought up in the 25th EU–China human-rights dialogue in Slovenia on 15 May 2008 (Berkofsky 2008). Finally, in June 2008 the EU and the US issued a joint statement on Tibet after their summit, urging “results-oriented” talks with the Dalai Lama’s representatives. Talk of a boycott and the perceived lack of respect in the West for the Han Chinese victims of the Tibet unrest caused a furious, nationalistic response in China. Popular nationalism – as opposed to officially sanctioned nationalism – has been developing in China since the early 1990s. Its enthusiasts are increasingly convinced of the ill intentions of the West, and in particular the US, toward China (Chen 2005: 50-51). Outbursts of nationalism have erupted every few years, the last time against Japan in 2005, and before that against the US in 2001 (the Hainan spy plane incident) and 1999 (the bombing of the Chinese embassy in Belgrade). A recent study of Chinese attitudes toward the EU suggested cultural estrangement and the widespread feeling that as far as the Western media are concerned, whatever China does is wrong (Lisbonne-de Vergeron 2007: 40). Symptomatic of this attitude is a poem published on the web by “A Silent, Silent Chinese” after the Tibet and Olympic torch incidents, entitled A Poem Dedicated to the Last 150 Years of this Planet. The main theme of the poem is that seemingly whatever China does is wrong; it voiced the widely felt Chinese frustration with the West, and was quickly copied to a number of other websites. This frustration needed an outlet. In Europe a set of coincidences focused the anger on France and the supermarket chain Carrefour.


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This was rather ironic in that France had perhaps been the strongest voice in the EU deflecting attention from human rights and emphasizing cooperation with China also in the military sphere. This approach was initiated by Chirac, with the support of Schröder and Berlusconi. France had been the strongest voice in favor of lifting the arms embargo, and in 2004 it became the second EU country to conclude a bilateral strategic partnership with China. The French and Chinese even held joint military exercises in 2005. In short, French–Chinese relations were cosy, and France was the most popular foreign country in China. Chinese concern about the foreign-policy direction of the new French President Sarkozy, set out in his talk of a “new course” (la rupture), was initially laid to rest after Sarkozy’s first state visit to China in November 2007. It was a huge commercial success for France, and politically satisfying for Beijing. The delegation carried with it a portfolio of deals worth no less than 20 billion euros. French commercial pragmatism seemed to carry the day, as Paris not only toed the line on Taiwan and Tibet, but also reiterated its earlier stance that the arms embargo should be lifted (Bordonaro 2007). However, a year later Sarkozy met with the Dalai Lama just before the annual EU–China summit, which was held in Lyon on account of the French EU presidency (the UK prime minister had met him in May 2008). Sarkozy’s decision caused Beijing to postpone the summit at short notice, which was unprecedented, and to warn of the serious consequences for French commercial interests in China. At the time of writing it seems that the united front of key EU leaders on not allowing Beijing to determine whom they can receive is working this time. Whereas Beijing initially tried to isolate both Germany and France, it has eventually been forced to come around. In the context of the current global economic crisis it seems to be unwilling to gamble its crucial relations with the EU, and has therefore signalled that it is ready to mend fences. Strategy in Action: Intermediate Observations The five cases briefly analyzed above differ in terms of whether they are mainly interest-based or rights-based. Broadly speaking, the IPR issue is the most interest-based, whereas the Tibet issue is the most rights-based. The other three fall somewhere in between. The EU countries have solidly converged interests on IPR issues, it being in all member states’ interest to ensure their proper protection. Beijing also agrees in principle, but has so far been unable to satisfy EU concerns. It may be that China is not so keen on pushing the issue very hard yet because it is still on the receiving end globally with regard to key technologies. Thus EU and Chinese interests are somewhat divergent. China and the EU also have partly divergent interests with regard to the MES issue, although here EU interests are increasingly convergent. Almost all EU countries have a strong imbalance in trade with China, albeit some of it is due to European manufacturers exporting from China to Europe. While Chinese imports

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in specific product categories have very different effects on member countries, broadly speaking there is a common political interest in balancing the trade picture. The EU has so far been able to withhold its support for China’s MES relatively easily by arguing that Beijing must address EU economic concerns first. Taiwan could be regarded as an issue on which the interests of the EU governments and Beijing converge somewhat, or at least do not directly conflict, given the prevalent understanding in the EU capitals. The European Parliament takes a different stand. Nevertheless, both the Council and the Commission have recently given more attention to the issue and have more explicitly identified an EU interest in peace and stability in the Taiwan Strait (e.g., European Commission 2006b: 11). The embargo question is one of the trickiest issues for the EU in terms of building a common position on China. There is an underlying divergence in thinking in the different capitals, and real economic interests are involved. For the time being it is latent, political momentum having been lost following the passage of the anti-secession law and the change of leaders in key European capitals. However, it is likely to come up again, and to create similar problems in terms of reaching a common position. Until recently Tibet was almost a non-issue for the EU, except for the European Parliament. However, the confluence of new leaders in key European capitals, Tibetan unrest and perceived Chinese reticence on human rights have given it more prominence, and in the spring of 2008 it became somewhat of a test of the EU’s human-rights commitment in its China relations. Although, the EU has no direct economic or security interests involved, it does test the extent to which it is able to maintain a common position on an issue that is very unpopular in Beijing, in which there are no direct interests involved, and on which the EU governments differ widely. The Tibet question is in many ways the most interesting test of the EU’s ability to make good on its long-term strategic goal – assisting China in its transition to becoming an increasingly open society and a responsible global actor. It is a Union-level goal that is not necessarily equally strongly shared in all EU capitals, and it is easy to put concrete commercial interests ahead of more abstract rightsbased goals. Recent indications are that the EU has been able to “hold the line” surprisingly well on Tibet. Beijing’s attempts to isolate Merkel’s government in Germany and then Sarkozy’s in France have not succeeded too well. If this pattern holds it would indicate a strengthened resolve among EU members not to succumb to divide et impera tactics. Common EU policy on China is often rendered ineffective by the different approaches adopted by the member states toward China, differences that Beijing skillfully exploits. A recent report identified four broad attitudes: accommodating mercantilists, ideological free-traders, European followers, and assertive industrialists (Fox and Godement 2009: 4). Interestingly, a paper on the EU’s China policy argued that Germany and France are in contention with regard to which is the most important partner for China in Europe: France being politically


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more important but emphasizing the economic relationship, while it is the other way round with Germany (Weske 2007: 8-9). One could postulate that if a tacit agreement could be maintained between Germany and France regarding the most divisive EU–China issues, then the divergence would mainly be between the EU and China rather than intra-EU. EU Strategy Formulation and the EU–China Strategic Partnership The origin of the concept “strategic partnership” in current diplomatic usage lies in the Chinese political sphere. China has favored the idea since the late 1990s and has entered into such partnerships with a number of countries and regions (Table 5.1). The EU–China relationship is by no means unique in this sense, although China has “concluded” many such partnerships in Europe. The rhetorical practice was started during Jiang Zemin’s time in power. The concept was proposed by Beijing and tentatively accepted by the Clinton administration, which at the time was eager to improve ties with China. However, from the start the American government was not totally comfortable with the concept,13 and during Clinton’s state visit to China in 1998 the two sides merely agreed to work toward a constructive strategic partnership. Table 5.1 The use in Chinese diplomatic rhetoric of the concept “strategic partnership” Region

Partnership (year)

Europe

Great Britain (1997*), EU (2003), Germany (2003**), France (2004), Italy (2004), Spain (2005), Portugal (2005), Greece (2006) Asia Russia (1998), Asean (2003), India (2005), Pakistan (2005), Indonesia (geographical) (2005), Kazakhstan (2005), Arab countries (2007), South Korea (2008), Vietnam (2008) Americas Brazil (1993*), Venezuela (2001), Mexico (2003), Argentina (2004), Canada (2005) Africa Egypt (1999), South Africa (2004), Nigeria (2006), Africa (2006), Congo (2006) Note: * The concept seems to have been applied only later to describe the relationship concluded at the time; ** Use of the concept seems to have diminished after Schröder stepped down.

The concept quickly fell out of usage in US–China relations following Chinese displeasure at perceived unfairness in the WTO negotiations and the US bombing of the Chinese Embassy in Belgrade. It was buried when George W. Bush described China as a competitor, not a partner. Meanwhile, Beijing had declared a 13 David Shambaugh at the Finnish Foreign Ministry, Helsinki, 1 February 2008.

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strategic partnership with Russia in 1998, with a stated goal to counter American and European military and economic influence. The great number of rhetorical strategic partnerships that China maintains today begs the question of what is meant by the term. Perhaps the most explicit account of how it is understood by Chinese leaders was given by Premier Wen Jiabao in a speech in Brussels on 7 May 2004 when he explained the meaning of the phrase “comprehensive strategic partnership,” used to describe EU–China relations. Premier Wen stressed that cooperation in a strategic partnership should be long-term and stable, transcending both differences in ideology and social systems and the impact of individual events. Furthermore, it should take place on an equal footing and be mutually beneficial (People’s Daily 2004). At present, China has yet to conclude strategic partnerships with Japan, Australia, New Zealand, Turkey and Singapore (separately from the ASEAN– China partnership), not to mention the more obvious absences of Taiwan, Saudi Arabia and Israel. Almost all of these are among China’s top trading partners. It thus seems that strong economic ties alone do not explain Beijing’s desire to enter into strategic partnerships. It may or may not be a coincidence that these “absent friends” have also been traditional American security allies. If this is a factor in the Chinese political calculations, it would be reasonable to assume that Beijing was not in a rush to conclude strategic partnerships with countries or regions with which there would be the potential for strategic conflicts of interest. Such conflicts of interest could arise, for example, if the potential partner was opposed to China’s aspirations to Asian leadership, was anxious to balance China’s increasing military strength, or recognized the PRC’s diplomatic competitor, the ROC (Taiwan). Fortunately for EU–China relations, there are practically no strategic conflicts between the two parties (Geeraerts 2006: 30), at least as long as Sino-American relations do not turn sour, in which case Washington may well demand that the EU takes its side in any potential conflict situation. In Chinese political rhetoric both the overall EU–China partnership and the separate strategic partnerships concluded with some EU members are consistently qualified with the adjective “comprehensive,” i.e., comprehensive strategic partnership. To complicate matters further, Brussels insists that the very word strategic itself should in this context be understood as meaning comprehensive and not taken as implying a counterbalance to US global influence (Berkofsky 2006: 104-105). In this context, it is interesting to note the terms used to describe the SinoIndonesian strategic partnership, to which the concepts non-aligned and nondiscriminatory have been applied (Xinhua News 2005). Together with the lack of partnerships with many “obvious” candidates that happen to be traditional security allies of the United States suggest that Beijing may, at least to some extent, view the strategic partnerships they are so busy forging as almost the antithesis of the actual meaning of the term. It is thus possible that concluding a strategic partnership with China may, from the Chinese perspective, imply an indirect pledge of support for a world without permanent exclusive military alliances or security blocs. This suggests


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a form of bilateral cooperation that is very different from traditional alliances, such as NATO. A strategic partnership could even be considered the opposite to a traditional alliance. Preferring a fluid and flexible strategic position would be well in line with the traditional Chinese strategic concept quanbian, implying “absolute flexibility,” identified by Alastair Iain Johnston (Johnston 1995: 102).14 There is widespread doubt about the prospects of genuine strategic partnership between the EU and China, which is not helped by the seeming inability of the Commission to clearly explain to concerned allies what is so strategic about the relationship (e.g., Berkofsky 2006: 104-105). One recent study concluded that, in spite of the rapid and extensive expansion of political and economic relations between the EU and China, there is no evidence of any balancing against the US in strategic areas (Narramore 2008). In other words, when push comes to shove, as with the arms embargo, the EU still tends to side with the US. Another recent study examining the interactions among the EU, China and India in Central Asia argued that it is their patterns of rivalry rather than cooperation that are likely to structure their global agency (Kavalski 2007). The most feasible path to a genuine strategic partnership appears to be finding common ground on issues over which both sides’ interests merge, or when the same goal furthers their separate interests. An example of such an issue would be the global alternative reserve currency status of the euro. It is naturally in the EU’s interest to cement the euro’s global position as a currency of exchange and invoicing, and a repository of value, although as far as China is concerned it is probably a short-to-medium-term interest. The EU is already China’s biggest export market and China has been looking to diversify its foreign-reserve holdings away from the dollar. There are also a number of more specific issues in which the EU and China have a common interest, such as controlling terrorism and organized crime. Related to this is the need to mediate and control potential foreign-policy crises from North Korea to Iran. However, this is trickier, given the presence of both common and conflicting interests. It is easy to find common political ground on the overall premise that the EU accepts and encourages the emergence of China on the global stage, as China accepts and encourages the emergence of the EU – a classic example of “I’ll scratch your back, if you scratch mine.” The EU’s High Representative Javier Solana was quoted thus on his first meeting with Chinese leaders: “Chinese leaders are willing to see how Europe is becoming a strategic international actor” (Council of the European Union 2003b). The theme of joint emergence as world powers recurred later in Solana’s speeches and comments. The most obvious area in which some measure of genuine common political ground exists between the EU and China (at least in the short-to-medium term) is in support for multilateralism and the UN. This broad objective is perhaps the most 14 Johnston was mainly referring to absolute flexibility as a high level of flexibility regarding offensive and defensive postures, based on an assessment of capabilities and circumstances.

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promising in terms of realizing a genuine strategic partnership. It is both long-term and broad, with numerous concrete policy implications. It is also a genuine choice, given that China could opt to go it alone, as the US attempted to do during the Bush administration. In an article penned for the People’s Daily, Solana explained to a Chinese audience the thinking behind the security strategy he had drawn up for the EU. He put the EU’s main security concerns – terrorism, nuclear proliferation, arms control, and organized crime – firmly in the UN context (Solana 2004). The code word “effective multilateralism” has been inserted into the EU–China jargon to refer to this presumed common ground, without much concrete action to back it up, however. There are also doubts as to whether Brussels and Beijing really share a common approach to multilateralism, as China still tends either to go it alone or to opt for bilateral solutions on really critical issues (Berkofsky 2006: 111-112). One recent article argued that although Brussels and Beijing use the same words, they often mean different things (Stumbaum 2007). China prefers a multipolar world to a unipolar one, at least for the time being, the EU being accorded one “pole” as part of a tacit bargain giving Beijing another. With its thoroughly Realist capabilities-based outlook on global affairs, Beijing perceives that in order to form a pole one needs a strong and comprehensive15 power base that encompasses economic, military and technological strengths (Geeraerts 2004: 13-16; Zhang 2005: 249). The EU’s China Policy at the Crossroads The EU approach to China has, until recently, been very different from the one adopted by the United States. With no perceived direct security interests in the region, the EU has largely contented itself with supporting China’s transitions and global integration, and looking after its own economic and trade interests. In effect, it has been trying to coax China into becoming “more like us.” One fundamental difference from the American view concerns the strategic implications of China’s rise and its developing hard power capabilities. While in the US China’s rise is set in a national security framework, the dominant EU perspective focuses on its domestic situation (Shambaugh 2004: 14-15). Given the almost impossible task of reconciling the foreign policies of 27 diverse countries with partly divergent interests, the EU has not done so badly, even if maintaining a unified position and avoiding taking a clear stance have been made easier by events in the cases of the arms embargo and Tibet. The broad strategic interest of the EU, identified here as assisting China in becoming an integrated part of global affairs – a stakeholder – has worked reasonably well, 15 A few years ago, Chinese commentators on international relations appeared obsessed with the concept zonghe guoli, denoting the comprehensive, all-round power capabilities of a country.


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although the influence of the Union and the member states on this development is difficult to quantify. China today is a major global player, which is acting in an increasingly responsible manner on global issues, from arms proliferation to the environment. The key question now is how to reorient the strategy, in particular how to set up the mix between developmental goals, rights-based goals, and economic and security interests. Rather ironically, given the frequent European criticism of Washington for trying to impose its cultural preferences on other countries, when it comes to China it is often the EU that appears to be more rights-oriented, although coercive measures have been avoided. Concrete EU interests, where they can be identified, have tended to revolve around the economy and trade rather than security. The Union’s CFSP faces its biggest challenges when confronted with other world powers with a unitary state structure. It would be a small miracle if the EU foreign policy in its current form could produce as clear priorities, objectives and strategies as, say, Russia or China. As China’s economic transition has progressed and its global integration is largely complete, the EU’s China policy has come to a crossroads. There has been increasing mutual dissatisfaction between the EU and China at the very time when the two sides are in the process of negotiating the PCA. The “help you to help yourself” policy the EU has practiced with regard to China has largely outlived itself and a new emphasis is needed, but it is still unclear what kind of political strategy, if any, the EU will pursue in the coming years. In the long term there are three potentially decisive factors that will determine whether or not the EU will be able to effectively pursue a common political strategy toward China: • • •

the emergence of direct common security interests in East Asia as a consequence of deep economic commitments; the development of the EU’s institutional and material capabilities to back up its policy statements; the future of the ‘rights-based agenda’ in EU–China relations.

There are some indications that the EU is now developing security-related interests in East Asia, of which the East Asia Guidelines, made public by the Council in 2007, is perhaps the clearest indication. Previously, the EU’s treatment of the Taiwan issue has been regarded as perhaps the clearest indication of the fact that it has neither direct security interests, nor any military capability in East Asia. The Guidelines and the latest Commission policy paper, although allowing for only very soft means with which to influence the issue, nonetheless clearly formulate EU interests.16 However, there is only so much that can be done on 16 Among the regional hot spots, Taiwan and the Korean Peninsula are singled out in the Guidelines.

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paper. Eventually, pursing strong interests requires stronger means, and it is by no means clear that the EU can muster the collective will to acquire them. As is often the case with the EU’s CFSP, the key questions revolve around the institutional development of its foreign-policy capacity. In the short-to-medium term the EU can either continue to muddle through with its current institutional structure for foreign-policy making, with divergent interests and frequent minor conflicts between member states and between rights-based and interest-based foreign-policy objectives, or it can further tone down its value-based “voice” in order to pursue a more Realist policy. The documents and cases reviewed for this paper suggest that the EU has been toning down its rights-based voice in policy papers, while insisting more adamantly that Beijing cannot expect its demands to be automatically met in Europe when they conflict with EU values: EU leaders insist on deciding who they meet on their home turf. In other words, the EU’s normative foreign policy has taken a more defensive turn in EU–China relations. Ironically, the broad trend of EU foreign policy appears to be in the opposite direction, with the more active promotion of a normative foreign-policy agenda. This may indicate that, in practice, the EU is more clearly adopting different approaches toward norm-promotion with regard to other great powers versus smaller nations; recognizing that while all nation-states are formally equal, some are more equal than others.

Chapter 6

Sino-European Relations: From the Height to the Width Zhang Tiejun

Introduction The European Union is the most successful example so far of regional integration, and pursues a variety of foreign policies: supporting neighboring areas, developing cooperation with other organized/semi-organized regions, and building strategic partnerships with major global powers. With regard to the last of these, it is currently forging a strategic partnership with China, which involves a complicated process of initiating, bargaining, compromising, and initiating again. China, being the largest re-emerging power, is experiencing fast economic growth, reaching ever more extensively to regions beyond its own borders, and having a stronger influence in a variety of areas of multilateralism/global governance. The focus in this chapter is on the complexities and changing dynamics of Sino-European relations after the Cold War. I will first discuss their asymmetry and complexity, in the context of post-modern Europe and modern China, as well Chinese duality and European diversity. Secondly, given the lack of a definition of what constitutes a genuine strategic partnership, I will attempt to identify several key criteria on which such a partnership could be based, taking into account the relevant interests, values and other attributes in the particular context of SinoEuropean relations. Thirdly, I will analyze the changing dynamics of these bilateral relations from the height (multipolarity in this case) to the width (a concern with a broadening range of issues). Fourthly, I will discuss the rise of China as both a challenge and an opportunity for Europe, with specific reference to the two “dark areas” (from a Chinese perspective), the non-lifting of the arms embargo and the non-granting of market economy status (MES), and to Chinese and European engagement with Africa. In conclusion, I will argue that in constructing the strategic partnership there needs to be an acknowledgement of the differences between the two sides (to confront them rather than bypass them), and of the shared interests and common responsibilities in promoting multilateralism and global governance. One of the essential prerequisites is to realize that win-win outcomes are achieved Stating that “China was a world leader (although without global reach) from 500 to 1500,” Joseph Nye argues that “The ‘rise of China’ is a misnomer: ‘re-emergence’ is more accurate” (Nye 1997: 66).

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on the basis of perceived need and openness to cooperation in different issues areas, even those that would normally be considered more in terms of competition, such as energy. Asymmetry and Complexity in Sino-European Relations Post-modern Europe and Modern China In an article published in 2002 (Cooper 2002), Robert Cooper, assistant to Javier Solana, identified three types of nation states in today’s world: pre-modern, modern and post-modern. Pre-modern states exist in a climate of “war of everyone against everyone else”, and countries such as the Taliban’s Afghanistan, Somalia and Myanmar belong to this category. Modern states, which include countries such as China and India, firmly believe in the centrality of national interests, and for them “internationalism is but one modus operandi serving the national interests and only national interests” (Holslag 2007: 7). For post-modern states (EU members fall into this category) the boundary between domestic and international affairs is blurred, and the use and threat of force are no longer options for resolving differences and disputes. While not referring specifically to the post-modern Europe and modern China dichotomy (but it is nonetheless certainly related to it), Zhou Hong, director of the Institute of European Studies at the Chinese Academy of Social Sciences (CASS), identifies three areas of asymmetry between China and Europe: economic development, political and social systems, and their history and culture (Zhou 2004: 271-292). With regard to the first of these she refers to the huge gaps between China and EU members in terms of GDP per capita, technology, and infrastructure, for example. These gaps, while constituting complementarity between the two (and thus providing opportunities for cooperation), “can also increase interest disparity” (Zhou 2004: 276). The second area concerns not only the different political systems but also the complexity of the EU as an institution, and the challenges China faces in dealing with it. The third and the most relevant area in this context is the asymmetry in historical and cultural traditions, between the European self-identified “strong culture” and the Chinese self-criticized “weak culture” whenever the two cultures encountered each other following the Opium War of the mid-nineteenth century (Zhou 2004: 277). In my opinion, facing the imposition of European political and social systems, as well as its cultural norms, since the Opium War, China has been through a process not only of self-criticism, but also of resistance and adaptation. Throughout the modern era, there have been those who, humiliated by its technological backwardness, believed that China needed to detach itself from its ancient past and undergo complete Westernization if it were to survive. At the other extreme were Nonetheless, these are all reactive in nature.

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those who wanted to exclude all foreign influences and to seek national salvation through self-reliance. However, the most prevalent view throughout the modern era has been to seek a compromise between these two extreme positions: openness to the advanced science and technology (and in some cases even economic and political systems) of the West, but a determination to preserve the major elements of Chinese culture (such as Confucianism) from contamination by foreign influences. This mainstream position in the Chinese modernization process implies a policy of compromise between international cooperation and self-reliance. In the context of China’s relations with Europe, this compromise has several implications. First, while there is an essential need for cooperation in economic, political, security and cultural matters, there are limits in terms of extent and scope. Secondly, there is the issue of sovereignty. While European integration is “all about interference in each other’s affairs” (Berkofsky and Stumbaum 2009: 17), China emphasizes noninterference in international cooperation, although there is some relaxation in this regard at present (see the relevant discussion below). Thirdly, generally speaking it would be difficult to imagine that modern China could meet the expectations and demands of a post-modern Europe in areas such as development aid (to a third party such as Africa), climate change, market openness and financial-system reforms, precisely because they live in different “worlds” and have different world views. Related to the post-modern and modern dichotomy is that of Chinese duality and European diversity, which makes Sino-European relations even more complicated. Chinese Duality and European Diversity Accompanying the re-emergence of China is the increasing divide in its foreign relations. The basis of all the gaps defined below is the dual identity of the present China as both a developing country and a potential world power (Zhang Tiejun 2004: 289-296). This identity is not only a constructed “reality” in China, but, it is to a certain extent, also acknowledged by the outside world, and Europe in particular. It immediately implies a gap in China’s foreign relations between developing-country reality and world-power aspiration. This gap implies that China should be responsive not only to developing countries, as the champion of the developing world (or as the Chinese leaders repeatedly say in more modest terms, the largest developing country in the world), but also to the developed world as a global force. The most frequently cited statement in this regard was made by Zhang Zhidong, a representative of the late nineteenth-century “foreign matter movement” (yangwu yundong). He created the formula of “Chinese learning as the essence and Western learning for utility.” This has appealed to Chinese intellectuals ever since, especially exemplified in Deng Xiaoping’s famous proposition of constructing “socialism with Chinese characteristics.”

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Parallel to this is the second gap in China’s foreign relations, namely that between its increasing need for international cooperation and its sovereign concerns. Chinese engagement with Africa is a case in point. Thirdly, on a deeper level, there is a gap between national interests and foreign-policy principles, the most hotly debated of which is non-interference in domestic affairs (a direct link to the concern with sovereignty). The fourth gap is between China’s issue-oriented national interests (such as energy needs) and its relational national interests (such as Sino-European relations). In many cases the two are in conflict, Chinese engagement with Africa again being a case in point. Finally, and this is related to the dual identity and all the other gaps referred above, the gap that concerns Sino-European relations the most is that between the increasing external expectations and the Chinese capacity to fulfill them. Back in China, we call these increasing demands or expectations from outside (especially from developed countries but also from the developing world) the “thesis of responsibility” (zherenlun). Commenting on this thesis, Cheng Siwei, vice chairman of the Chinese People’s Congress (China’s parliament), stated: People outside China discussed about the ‘thesis of China collapse’ five-to-ten years ago, because they did not believe that China had the chance to develop … They argued for the ‘thesis of the China threat’ three-to-five years ago, indicating that they acknowledged the achievement of China’s development but were fearful of the consequences. And now they talk about the ‘thesis of China responsibility’. Friends have affection towards China and hope that the country will be more influential. Developed countries want China to take more responsibilities that are beyond the capacity of the country. (Cheng 2007)

China feels an almost equal amount of pressure as under the “thesis of China threat,” although from a different and more positive direction. The peaceful rise doctrine was a delayed response to the thesis, but what will come out as a response to the thesis of responsibility? In the years to come, we will see a gradually more responsive Chinese posture in different issue areas. This may not be to the full satisfaction of Western powers, but nonetheless it will take Western concerns seriously.

Many other Chinese civilian and military commentators have also commented on the thesis. Song Xiaojun, a famous military critic and editor of the influential military magazine Jiancun Zhishi (Ship Review), argued: “The reason that the US imposes responsibilities on China is for maintaining an Americanized international order” (Song 2006: 6). As Lin Limin, editor-in-chief of Xiandai Guoji Guanxi (Contemporary International Relations), argued: “The thesis of responsibility is a double-edged sword. When dealing with the thesis, China needs to uphold the principle of self-reliance, and make decisions based on Chinese national interests and moral standard” (Lin 2006: 8).


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As it is now, Europe has increasing expectations and demands with regard to China. There are frequent and distinct signals, some reflecting China as a developing country and others more as a developed one. This suggests that the dual identity is not only a constructed “reality” of China, but is also to a certain extent, acknowledged by the outside world, Europe in particular. While the EU member states share some basic visions and interests in areas such as human rights and sustainable development in their dealings with China, they diverge in many other areas. Generally speaking, different European countries have different stakes in their relations. The more influential states, especially Germany, France and the UK, are very cautious about the impact of China’s re-emergence on Europe, while the smaller EU members (the Nordic countries and Ireland, for instance) tend to be more relaxed. There are three reasons for this difference in attitude. First, the stronger European countries tend to have greater political stakes in terms of a global shift in decision-making power. Secondly, they often feel greater concern about Chinese engagement in other parts of the world, such as Africa, simply because they feel that they have greater international responsibility and more extensive political and economic investments there. Last but not least, these countries tend to have a more comprehensive industrial structure, some parts of which (sunset industries) are facing increasing challenges related to imports from China. In terms of China’s political relations with the three big EU powers (Germany, France and the UK), relations with the UK used to be the most remote, due especially to the close relations between the UK and the US, and those with France the closest, while Germany was in between. China–UK relations are currently on a rather stable course, while there are conflicts in relations with both France and, especially, Germany (over the Tibetan issue, for example). China once again is playing a balancing game between these EU members, most recently between France and Germany, when Merkel met the Dalai Lama in Autumn and Sarkozy visited China at the end of November 2007. In terms of Sino-European relations it could be argued that duality in China would very likely make the country act internationally in a dualistic manner, sometimes closer to European expectations, and at other times far from that. A diversified Europe would, on the one hand, hinder progress toward the possible “Europeanization of China” policy, and on the other hand would make China confused about which Europe to deal with. When the Chinese and EU policy makers formulated their so-called strategic partnership several years ago, they must have been aware of these dualities and diversities, and thus of the difficulties involved in the process of building up the partnership.

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China and Europe: Whither Strategic Partnership Criteria China and the EU both claim to be forming a strategic partnership, and both expect a lot from each other, but neither defines what form it should take or what the criteria are. A partner is “one who shares,” and partnership denotes “a relationship usually involving close cooperation between parties having specified and joint rights and responsibilities” (Webster’s Ninth New Collegiate Dictionary 1987: 859). “Strategic,” in turn, signifies high importance. The EU official line on the strategic partnership is thus: “The EU, as a global player on the international stage, shares China’s concerns for a more balanced international order based on effective multilateralism, and wants to engage China as a responsible power in the management of global issues” (European Commission 2003). On the other hand, in his speech on “Vigorously developing a comprehensive strategic partnership between China and the European Union” which he gave on 6 May 2004, the Chinese Premier Wen Jiabao explained that “‘comprehensive’ … meant that co-operation between both sides is all-round, wide-ranging and multi-level,” and that a “partnership” required the co-operation to be based on “equality, mutual benefit and win-win results … on the basis of mutual respect and mutual trust” (China Daily, 7 May 2004). A “strategic” partnership was thus one in which the “bilateral co-operation is of an overall, longterm and stable nature, transcends the differences in ideology and social system and is free from the interference of a single event that occurs in a certain period of time.” The question is whether differences in ideology and social systems can be transcended in order to implement a genuine strategic partnership (Berkofsky and Stumbaum 2009: 20). How could win-win results be achieved in the face of competition in the areas of energy and (Chinese and European engagement with) Africa for instance? Several years after “announcing the EU–China ‘strategic partnership’, it has become clear that political rhetoric on the scope and nature of EU–China relations has yet to catch up with political reality” (Berkofsky 2006: 104). What is more, contrary to China’s earlier expectations that Europe would be a counterbalance to the US, there has been increasing convergence between the two sides of the Atlantic concerning the re-emergence of China. François Godement, director of the Asian Center in Paris, even goes as far as to argue that in Sino-European strategic partnership “the term ‘strategic’ refers more to the absence of divisive issues than to a joint strategy in the traditional sense” (Godement 2006: 63). A genuine strategic partnership should certainly entail more than that. In order to analyze this strategic partnership in the making it is necessary at least to give a brief outline of the criteria for such a relationship. Firstly, the two parties need to have a sufficient number of shared interests, which should outweigh the divergent interests, otherwise the partnership would break up.


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Secondly, a true strategic partnership should be distinguishable from either an alliance or normal inter-state relationship. This narrows the range of this kind of special relationship. What distinguishes it from normal inter-state relations is that it inherently carries critical implications, albeit of a mutually beneficial and cooperative nature, both for the constituent parties and for the wider world. It is different from an alliance in that it does not necessarily target a third party, and if it does, certainly not in the form of an alliance. Thirdly, strategic implies a long-term orientation, the potential being as important as the current reality. Fourthly, a strategic partnership is based on the premise that the constituent parties share at least the core values concerning how the domestic society and the international community should be organized and governed. Lastly, a true partnership is built on the basis of mutual trust and equality, and there should be no political or any other form of discrimination. The Sino-European Strategic Partnership: A Vision far from Reality Of the above criteria, China–Europe relations meet the first two. This relationship is critical for both parties, and its evolution will have a significant impact on the current world, which is why David Shambaugh of George Washington University referred to current China–Europe relations as an emerging axis in world affairs. The importance of this relationship lies not only in the present, but also (and arguably more) in its future potential. China is still not strong enough to be a fullyfledged global player, and Europe is still not sufficiently united to be one either. Thus it is only natural that both lay great emphasis on the future potential of each other, and seek a long-term partnership (the third criterion). China and Europe do share some basic values concerning how the world should be organized, especially in terms of opposing unilateralism and promoting multilateralism, although they may have different visions and interests with regard to multilateralism. It is partly because China has become more and more confident in terms of regional multilateral cooperation, and is increasingly appreciative of multilateralism in international relations, and both parties wish to play a larger role on the world stage. However, we should be careful not to exaggerate the extent to which China and Europe share basic values. In fact, it has to be admitted that they do not have the same worldviews, in that Europe has more or less settled in a post-Westphalian world and China is virtually still in the Westphalian world, as far as sovereign issues are concerned. Moreover, there is strong divergence of values on how Gudrun Wacker, senior researcher in the Asian Group of the German Institute of International and Security Studies (SWP), argues that in the Sino-European strategic partnership, “the strategic element comes in because it is clear that the global challenges (such as climate change and non-proliferation) can only be tackled with in a cooperative way” (Wacker 2008).

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domestic society should be organized: Europe believes that both the international and domestic societies should be democratized, while for the time being China only accepts the desirability of the former (the fourth criterion). Although the leaders on both sides claim they are basing bilateral relations on mutual equality, there is still insufficiency here, specifically with regard to the arms embargo. This also has a lot to do with the divergent views on human rights and sovereignty. Of the five criteria, therefore, China–Europe relations are a long way short of the fourth, and are far from satisfactory with regard to the fifth. Sino-European Relations: From the Height to the Width The focus in this section is on the dynamics of Sino-European relations since the Cold War. In its immediate aftermath and throughout the 1990s China had very high expectations of Europe, hoping that it would constitute one of the poles in the Chinese conception of an emerging multipolar world. In Chinese eyes the United States was always in the background and at the same time the biggest target. When he visited European capitals the then Chinese President Jiang Zemin repeatedly asserted that China and Europe should see their relations from the “strategic height,” the most significant message clearly being his vision of world multipolarity. He received some applause from certain European leaders such as Chirac, but only a few. Time has passed but the United States remains the only superpower, and the world is still not multipolar. What is more, the greatest background figure and biggest target (the United States) is not sitting idly. It is acting proactively to In the 1990s Chinese experts conceived of the stage of international relations at the time as an era leading towards multipolarity, in line with the official view. It should be noted, however, that the official and the academic views varied between the period before the Kosovo war and the one following it. Before the war and NATO’s bombing of the Chinese embassy in Belgrade, former president Jiang Zemin, claimed in a speech delivered in Moscow in 1994 that, “After the Cold War was over, the bipolar structure has no longer existed, … and multipolarization is evolving with increasing speed” (Jiang 1994). After the Kosovo war, in August 1999, he admitted, “the process towards multipolarization would be marked by zigzags and be complicated,” while at the same time claiming that the trend was irreversible (Jiang 1999). The official position on multipolarization was further elaborated by the Chinese Ministry of Foreign Affairs in 2000 as follows: “Currently, the international situation is undergoing complex and deep transformation, but the trend towards multipolarization has not been changed. … The process towards multipolarity might be marked by zigzags, be very long and full of struggles, it is, however, a historical trend unchangeable with anyone’s will. It fits the common will and benefits of most countries and is beneficial to world peace and security” (MFA 2000). Kay Moeller, a researcher from the influential German think tank (The German Institute of International and Security Studies), even went as far as to argue thus: “In view


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prevent its European allies from getting too close to China, exemplified in particular in its lobbying activities in European capitals to persuade European countries not to lift the arms embargo against China. The Chinese, after all, are pragmatic. Given its futile efforts to create a multipolar world, its increasing national needs and its growing economy, China is making a tactical change away from the promotion of world multipolarity to concentrate on more tangible issues and needs. Its new engagement with Africa and its outsourcing of natural resources are two cases in point. This time it is the turn of Europe to have higher expectations of China on a wide range of issues, seen from the Chinese perspective. Commenting on the 6th EU policy paper on China issued in 2006, Hu Dawei, deputy director of EU Studies at the China Institute for International Studies (CIIS), said that it … reflected the rising anxiety of the EU toward China. Meanwhile, people from some EU member states had also shown increasing disappointment with the Sino-European strategic partnership. Politically they thought that the dialogues with China had not led to concessions on so-called human rights, the rule of law and democracy, and they did not see the changes in China that Europe had wished for. They believed that China had gained a great deal in economic terms from joining the WTO, but had not lived up to the promises it made when it joined, and the EU had not gained enough benefits from trade with China. This kind of feeling had made them request the EU to reconsider its approach towards China on dialogues and coordination. (Hu 2007: 16)

Similarly, the EU Project Group (EPG) from the China Institute of Contemporary International Studies (CICIR) reported that in recent years with the increasing trade imbalance between China and the EU, “though there are different views within the EU concerning the rise of China, in general, there are growing worries about the competition coming from China, even including Germany, a country that often promotes free trade” (Oumeng Ketizhu 2007: 32). Meanwhile, after the French and Dutch referenda rejecting the EU constitution, the Chinese media and academic press frequently painted a gloomy picture of the future of European integration, at least in the short and medium term. The of diverging capabilities and ambitions, the multipolar world does not actually exist in reality, China, the European Union, and others have chosen instead the makeshift solution of ‘strategic partnerships,’ where the partners may be dissatisfied in theory with the unipolar world but draw no immediate consequences from this dissatisfaction, apart from symbolic debates such as the one over the lifting of the EU arms embargo of 1989” (Moeller 2006: 69). The EPG argued that “after the constitutional crisis, the EU has encountered a serious setback in integration and had to experience the period of ‘re-contemplating’” (Oumeng Ketizhu 2007: 27). Yan Xuetong, director of the Institute of International Studies at Qinghua University, referred instead to the “setback” of EU integration as far as the close

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Europeans expected China to show more sustainable and responsible behavior in Africa, and on environmental and energy issues, for example. The rationale was that, given the rapid progress in China the country should be treated as more of an equal, and equality brings with it more responsibilities. From the Chinese perspective, however, some of the expectations could only be met by a developed country. The EPG argued that although the demands from the EU on energy, climate change and labor standards were “problems that China needed to deal with in the process of development, the EU’s consistent questioning of China’s status as a developing country and requesting China to shoulder unrealistic responsibilities will not be conducive to the stable development of Sino-European relations” (Oumeng Ketizhu 2007: 45). In my view, to some extent, the Europeans expect China to shoulder its responsibilities as if it were living in the same “post-modern” world as they are. With the re-emergence of China there are increasing areas of common concern, as well as more domains in which China and Europe have differences, or even disputes. Europe is becoming more assertive and demanding. In terms of its economic policy towards China, it has been changing its stance from the defensive (protecting the European market) to the offensive (urging the further opening of the Chinese market). In terms of their political and security policies the EU and many of its member states have begun seriously to contemplate the kinds and degrees of challenges (or even threats) that China poses to Europe. China’s Re-emergence as a Challenge and an Opportunity for Europe The re-emergence of China in the form of challenges and opportunities for Europe is a multifaceted phenomenon and touches on areas such as bilateral economic relations, China’s role in East Asia, and engagement with regions beyond East Asia - particularly Africa where Europe has had decades of substantial economic and political investments. As far as bilateral economic relations are concerned, many European experts acknowledge the presence of both threats and opportunities. John Humphrey, head of the globalization program of the Institute of Development Studies (IDS) at the University of Sussex and Dirk Messner, director of the German Development Institute (DIE), for instance, argue that with respect to the European goal of maintaining and increasing economic prosperity, the growing Chinese economy poses “simultaneously competitive threats and market opportunities” (Humphrey and Messner 2008: 2). Bilateral economic relations were and remain the single most important and substantive dimension of China–EU relations and many officials and researchers on both sides describe them as the basis of the SinoEuropean strategic partnership. Nevertheless, there are increasing frictions and relations between the Central and Eastern European members with the US were concerned, and their “choice of helping the US to slow down the EU integration” (Yan 2006: 16).


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controversies, exemplified in the increasing trade imbalance between China and Europe and the consequent EU trade protectionism. Several years ago, although realizing that the Sino-European trade disputes were costly, a prominent Chinese researcher on European affairs argued that they were not all entirely negative, for they kept China and Europe in communication with each other (Song 2004). At present, for good or bad, there are certainly many more matters drawing China and Europe into engagement with each other. In the last few years, from the perspective of Chinese foreign policy, there have been two “dark areas” in Sino-European relations: the EU’s non-granting of market-economy status (MES) and the non-lifting of the arms embargo. Apart from these old and as yet resolved problems, issues such as trilateral relations among Africa, China and Europe, climate change, energy, and RMB exchange rates are increasingly moving up the EU’s agenda. This is also why Humphrey and Messner argue that not only does the growing Chinese economy represent “simultaneously competitive threats and market opportunities”; but the country’s re-emergence also affects “Europe’s stance towards global governance and multilateralism,” since the Chinese are “both contributors to the problems that global governance needs to solve and essential contributors to viable solutions to these problems” (Humphrey and Messner 2008: 2-4). Many issues are relevant here, but due to the limited space I will focus mainly on the two “dark areas” in the bilateral relations, and on the Chinese and European engagement with Africa. The Two Dark Areas in Sino-European Relations The EU’s refusal to grant MES and to lift the arms embargo have long been the subjects of the most heated debate in Sino-European relations, especially since the two sides announced that they would form a strategic partnership. In the context of the EU’s foreign-trade policy MES is usually connected to anti-dumping. For example, if the EU granted China full MES, the domestic price of certain goods and the relevant cost calculations provided by Chinese enterprises would be applicable in anti-dumping cases, otherwise the prices and costs of the same goods in a third country such as Japan or the US would apply. In the latter case Chinese enterprises would be in a disadvantageous position. China has repeatedly argued that it should be given MES on the grounds that it has been carrying out market economic reforms for decades (and with remarkable success), and that most Chinese goods exported to Europe originate from private companies and companies with foreign shareholders. The non-granting of MES is frequently attributed (on the Chinese side) to the EU’s attempt to maintain and strengthen trade protectionism against China. While China is continuously urging the EU to grant it MES, the EU is emphasizing the need for China to focus on domestic economic development and the relaxation of RMB exchange rates, especially in view of the fact that Chinese exports to the US are on a stable course (partly as a result of the devaluation of the USD), and exports to the EU are still on the increase. However, given China’s

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dual economy (a relatively advanced coastal and urban economy vs. a backward inland and rural economy) and the fact that many people (although the numbers have reduced substantially in recent years) still live in or near to poverty, the country’s capacity to create an ever-increasing domestic market is limited. This, in turn, would suggest that if it wishes to sustain its high economic growth (which has enormous domestic social and political implications), its economy would still need to be substantially dependant on overseas markets, including the European market. In the years to come, therefore, we will no doubt observe even harsher negotiation processes between China and Europe on the subject of opening up the market further (China asks for MES and Europe requests a more comprehensive package in the areas indicated above). The refusal of the EU to lift the arms embargo against China is no less controversial as far as recent bilateral relations are concerned. The former German Chancellor Schroeder and the former French President Chirac strongly supported the lifting of the embargo at one time, which was the most convincing evidence of the so-called Sino-European “honeymoon.” Since 2005, however, the tide has been turning. At the moment, although China is still urging Europe to lift the embargo, it knows very well that this will not happen in the near future, and in practice, both China and Europe know that the issue has been virtually shelved. From the European point of view several factors have contributed to this reversal. The most significant of which is the US factor. As Gudrun Wacker argues, “(from the US point of view) the US and EU embargoes are complementary, and the Europeans should not break out of the common front with the US on this issue” (Wacker 2005: 31). As the prospect of armed conflict over Taiwan involving the US (an ally of many EU members) is still not ruled out, the US emphasizes that it is extremely unwilling to see weapons and military technology from its NATO allies being used against the US army. The second factor is the insistence on the EU side that China needs to have more military transparency if it is to get the embargo lifted. Finally, there is the development of the security situation in the Taiwan Straits. Europeans often argue that China’s “Anti-Secession Law” in early 2005 came at a wrong time, when the Europeans were seriously considering the possibility of lifting the embargo, and led to a situation in which a giant non-democracy was threatening a little democracy. From the Chinese perspective, the two last factors are just excuses for not lifting the embargo, or part of a constant process of raising the price for doing so. Since China believes that it can do little to change the situation,10 it has made no substantial efforts in this regard since 2005. Instead, in its dealings with Europe it focuses more on bilateral relations of an economic nature and on other more tangible issues such as Chinese and European engagement with Africa.

10 Many Chinese experts believe that were China to meet these demands, which in any case would be difficult, the EU would raise the price again.


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Chinese and European Engagement with Africa: Effective Governance vs. Good Governance In order to enhance understanding of the current trilateral relations among Africa, China and Europe, it would be useful to make a comparison with the relationship between China, Europe and the US. First, the three sides of the latter triangle have distinct characteristics. The US is the only remaining superpower and intends to prolong its “unipolar moment”, and it is the strongest power among the three as far as the influences of its foreign policy are concerned. Meanwhile, China, as the largest re-emerging global power, is increasingly making its presence felt as both a reactor to the existing system and a shaper of it.11 Finally, the EU, the biggest economy in the world, is struggling between enlargement and deeper integration, while at the same time trying to form a common foreign and security policy (CFSP), and striving to become a more prominent global player. Secondly, there is clearly asymmetry in these trilateral relations. The relationship with Washington is much more significant to both China and Europe than the relationship between the two of them, while Washington, at least in the Bush era, has frequently adopted a unilateral approach in dealing with both China and Europe in order to promote its own agenda. China and Europe both have comprehensive relationships with the US. On the other hand, although a comprehensive relationship is emerging between Beijing and Brussels, for various reasons,12 Europe still plays a minor role in crucial issues such as Taiwan, which China considers as one of its core national interests, while Washington plays an indispensable role.13 China is still not strong enough to be a fully-fledged global player, and Europe is still not sufficiently united to be one either. Thus it is only natural that both lay great emphasis on the future potential of the other, and seek a long-term partnership. In this case, both parties’ engagement with Africa, making them competitors in a sense, could constitute an opportunity for the two to coordinate. In the Africa–China–Europe triangle, on the other hand, Africa is the weakest of the three parties. There are major differences between China and Europe on how to engage Africa, the Chinese approach being more pragmatic, and the 11 Although it may not be intentional, China’s new engagement with Africa which challenges the traditional Western sphere of influence certainly constitutes part of China’s role as a shaper of the global order. 12 The reasons are at least twofold: European foreign policy is focused more on its neighboring areas than on more remote lands, and Europe, unlike the US, does not have direct military strategic interests in East Asia. 13 Although China considers the Taiwan issue a domestic affair and, in principle, rejects external intervention, in recent years, it has gradually accepted a US role, and often appreciates American pressure on the former Taiwanese president Chen Shui-bien against his push for independence. No equivalent European role has been accepted by China.

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European approach being more value-laden. Europe clearly makes frequent use of soft power tactics (especially in its development-aid programs), while, in recent years, China has been taking both hard and soft lines in its regional and global strategies, including in its African policy. It is worthy of note that there is a perception of soft power: for the African countries that appreciate it, China’s emphasis on non-interference is an exhibition of its soft power,14 although from the European perspective, it is probably considered “soft weakness.” By the same token, European engagement with its conditions and interference is usually perceived, at least in Europe, as a form of soft power, but many in Africa have a different view. The significance and changing dynamics of the Africa–China–Europe triangle have never been as clear as at present. For the first time since the Opium War of the mid-nineteenth century Europe is taking China seriously, for China’s own sake, given its re-emergence and increasing influence in a variety of issue areas, not least in its engagement with Africa. Late in the Cold-War era Europe took China relatively seriously, mainly for third-party reasons such as the Soviet threat and the so-called US–USSR–China strategic triangle. In those circumstances the China– Europe relationship was secondary in nature, but the rise of China is changing this.15 At the same time, for the first time in its history Africa is so significant for China for China’s own sake: toward the end of the Cold war Chinese engagement with Africa was more of a form of competition with the Soviet Union. David Shambaugh claimed in an article for the International Herald Tribune and on several other occasions, that the China–EU “honeymoon” was over, and that the relationship was showing signs of tension.16 If there is a marriage between China and Europe, what is its nature? Is it based on affection, or is it merely a marriage of convenience? Are China and Africa on “honeymoon”? Are they now settled in the early stages of marriage? I do not believe there was a “honeymoon” (nor a marriage) between China and Europe as a whole. Chirac’s France/Schroeder’s Germany and the Chinese government did have a sort of “honeymoon” period, but it was based on self-interest rather than affection, and was thus a marriage of convenience. As the individual interests have been changing, problems have arisen, most evidently in Sino-German relations. 14 China uses other tools in addition to its non-interference foreign policy principle to enhance its soft power in Africa. In an article in the International Herald Tribune, Jim Yardley (2007) commented on China’s launching of a satellite for Nigeria in May 2007, arguing that the launching service provided “a tidy case study of how space has become another arena where China is trying to exert its soft power.” 15 For an excellent account of the history of Sino-European relations and the current transformation of the bilateral relationships, see Yahuda 2008: 13-32. 16 As Shambaugh (2007) argued: “for Europe, the ‘China honeymoon’ is over. As the 10th European Union-China summit meeting convenes in Beijing this week and after 15 years of rapidly and dramatically developing ties, there are numerous indications of new strains emerging in the relationship.”


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China’s relations with some African countries are different in that there are shared basic values concerning how international and domestic society should be organized. These African countries are in favor of the so-called Beijing Consensus promoting domestic authoritarianism and, most importantly, appreciate China’s foreign-policy principle of “non-interference.” As such, if there is a “marriage” between China and Africa it is based more on affection than the EU–China partnership on account of the value-sharing factor. However, the Chinese government appears to be relaxing its stand on “non-interference”, and is showing signs of experimenting with “persuasive intervention” (or what officials from the Chinese foreign ministry have referred to as “constructive engagement”) in its foreign policy. This is evident in the Chinese approach to the Darfur issue and its more general active participation in UN peace-keeping activities, for example. A paper published in Survival in 2005 described China’s new engagement in Africa and warned that it had been “little noticed in the West” (Alden 2005). Since then, however, there have been increasing research efforts and policy analyses on the subject in the West and particularly in Europe. Are China’s increasing activities in Africa a major challenge to the European countries that have long been engaged in the continent? How competitive are the Chinese and the Europeans on this matter? Here there is a need to distinguish between “good governance” and “effective governance.” The former is a value-based and sometimes idealized judgment, more a question of imposing the democratic governance of Western democracies on all other countries. The foreign-aid policies of Europe in Africa generally reflect this approach. Effective governance is end-oriented, a case in point being Chinese engagement in Africa. In my view the differences between effective governance and good governance are as follows. Effective governance, in principle, denotes the functioning of an efficient governing system. Good governance in the conventional sense, on the other hand, is always connected to Western rules and norms, and is associated with the Western democratic political system: in the Western context this is effective. Effective governance, on the other hand, does not presuppose a democratic system. It is not value laden, but is pragmatic in orientation. Its major objectives are to ensure political stability and to maintain a suitable environment for economic development. The governing system of Singapore is an example. What, then, are the main reasons why China seeks to promote effective governance in Africa? I suggest the following three reasons. First, China cannot be expected to promote Western value-based good governance practices in Africa because it does not subscribe to such practices domestically. Secondly, without effective governance, there may be a certain amount of anarchy or chaos in society, which would certainly be harmful to Chinese business and other interests in Africa. Yang Fuchang, former Chinese vice foreign minister, commenting on the recent kidnapping of Chinese workers in Ethiopia and Nigeria, indicated that insecurity would not be good for Sino-African economic cooperation because many Chinese companies would not choose to invest in Africa (2007: 8). Lastly, one of

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the prerequisites for a sound investment environment is an efficient governing system. Zhou Xiaochuan, head of China’s central bank, spoke of the Afro–Asian cooperative partnership at the press conference following the Annual Conference of the African Development Bank in Shanghai in May 2007, and proposed three key ways of promoting it. One of these was to foster an investment environment that required “enhancing governmental governance.”17 The Western media often paint a mercantilist picture of Chinese policy in Africa, according to which the only concerns are with resource extraction and profit, and the socio-political conditions are ignored. I would argue that this is increasingly not the case, for reasons given earlier and due to the fact that China is actively assisting African countries to reach UN Millennium Goals and in training people for public administration. China’s promotion of African effective governance has been limited due its non-interference foreign-policy principle. Given deeper engagement in Africa and a gradual relaxation of the non-interference policy, China will certainly have greater interest and better leverage in its efforts to promote more effective governance in the countries concerned. As mentioned above, there appears to be substantial differences between the Chinese and European approaches to Africa, but they are not totally irreconcilable. The European approach emphasizes good governance and seeks to build a better governance framework on the continent, while China stresses effective governance and seeks to strengthen the economic basis for political governance. In my view, both are needed, and they are not as sharply contradictory as they seem on the surface. There should be more dialogues between China and Europe on various levels, and policy and activity coordination of various kinds are necessary. China is still very inexperienced in its new engagement with Africa. Learning from European successes and failures in this regard would be a great advantage, and a potentially valuable incentive for cooperation. In order to promote dialogue and coordination, both sides should realize, first of all, that Chinese and European engagement in Africa is not and should not be a zero-sum game for either party. Secondly, coordination between the two sides should start from relatively simple issues, such as minimizing the duplication in the respective infrastructure projects, and then move on to more difficult areas such as establishing donor associations and the like. Conclusion: Future Prospects of Sino-European Relations As Humphrey and Messner stated, Europeans in general see the re-emergence of China in terms of both opportunities and challenges. Gudrun Wacker, for instance writes: “In all of Europe, the rise of China is seen as a challenge AND an opportunity, with a shift towards ‘challenge’ over the last three years” (2008). While clearly not everyone in Europe sees it in this light, the degrees 17 .


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of opportunity and challenge vary among different EU member states, for the reasons spelt out above. On the other hand, for many in China’s international relations circles and among the political leadership, the refusal of the EU to lift the arms embargo and the convergence between Europe and the US on the rise of China, together with the ever closer (and at the same time more controversial) economic relations, are indicative of the ambiguity with regard to the future direction of Sino-European relations. China has much to worry about in this respect, especially in view of the US engagement-plus-hedging (if not engagement-plus-containment) policy. China’s concerns are most evident in its nervousness about trans-Atlantic dialogue on its re-emergence. A genuine strategic partnership requires recognition of the major differences between the two parties in terms of values, key issue areas such as trade, engagement with Africa, and traditional security affairs. It also requires acknowledgement of the common responsibilities involved in developing better and more effective global governance. Differences in values cannot be ignored. The issue must be confronted, and there is a need for continuous dialogue. In my view, China will become more democratic, although it will be a gradual process. Internationally, while China is still sticking to the principle of “non-interference,” there is a slow process of relaxation underway, as discussed earlier. Very often post-modern Europe expects China to act in a post-modernist way, especially in areas concerning sovereignty and interference/non-interference. China, on the other hand, at least in the 1990s, expected Europe to act in a modernist way, constituting one pole in the Chinese view of a multipolar world, against US efforts to “prolong the unipolar moment.” The two parties should thus understand each other better and respect to a certain extent the differences, so that each would have lower expectations of the other. In other words, if they are to construct a genuine strategic partnership, post-modern Europe needs to go some way toward meeting modern China half-way so that the two would be better able to deal with issues of mutual concern. As in many other modernist countries such as India, the foreign policy in China could be described as focused on national interests. In this case China needs to achieve a balance between its issue-related national interests such as its energy needs, and its relational interests such as the forging links with European countries. With specific regard to its engagement in Africa, China should, to some extent, accommodate European and other interests in its policy formulation and execution. It should also have a thorough understanding of the differences between African countries and should deal with them separately.18 As far as Europe is concerned, 18 On the subject of diversity in Africa, Zhang Tiejun commented thus: “There are big differences in Africa with regard to political systems, economic development levels and culture … The African Union is a loose organization. And African countries cannot deal with emerging powers like China as a coherent group, nor can they speak with one voice

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China could use its increasing influence, especially in resource extraction in Africa, and European concerns about Chinese engagement with “failed” resourcerich African states as leverage to persuade European countries to collaborate with China on energy matters – a consumers’ petroleum cartel would be an option. At the same time, China needs to further exploit its powers of persuasive intervention to promote political stability in Africa, as it has been doing (in a limited way) on the Darfur issue. Generally speaking, the construction of the strategic partnership has been considered a matter of “high politics.” It nevertheless requires the mobilization of different levels and sectors of both societies, from the political leadership, the business elite and academia to the grass roots. It is equally important to realize that win-win outcomes are achieved on the basis of perceived need and the likelihood of developing cooperation in different issue areas, even those that would normally be considered in a more competitive light, such as energy.

when coping with Europe. In fact, there are no common African policies towards China and the EU, and there are only the policies towards the two of different African countries” (Zhang Tiejun 2009: 18).

Chapter 7

China’s Evolving Approach to Multilateralism and Global Governance: Implications for the European Union Bates Gill

Background and Salience It is obvious and well-understood that as China re-emerges as a major regional and world power, it will be critical to assess how it will employ its growing resources and influence on the international stage. However, two other key factors make its growing role all the more important. First, its re-emergence comes at a time of (and is in part driven by) the fluid dynamics of globalization, which in turn requires more innovative, diverse, and multilateral solutions to the complex, transnational challenges faced by the global community. Secondly, virtually none of these complex transnational challenges can be addressed – growing the global economy, alleviating poverty, meeting resource shortages, mitigating climate change, stemming proliferation, controlling infectious diseases – without China as an active and constructive participant at the negotiating table. Hence, beyond acknowledging China’s growing role in world affairs, we should ask how it will exercise its power and influence in a world increasingly marked by transnational challenges that call for multilateral, global solutions. This is an especially important question for the European Union (EU), itself a multilateral institution devoted to realizing “effective multilateralism” internally and externally, and a body committed to strengthening the role of multilateral institutions to address the fundamental issues of stability and peace, development and prosperity, growth and sustainability. The EU’s own experience with multilateralism, and Europe’s broader success in employing multilateral mechanisms in addressing both internal and external challenges, only reinforces its central role in multilateralism to the continent’s overall approach to world affairs in the past several decades. As Europe and China deepen their engagement and seek to build a “strategic partnership,” China’s views on multilateralism and global governance likewise must be of strategic interest to European policymakers. This chapter illuminates some of these issues by examining China’s evolving approach to multilateralism and global governance. It begins with an overview of China’s past and current positions on these issues, then turns to the question of how the world will know when China is ready to deepen its commitment to adopting

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an effective, integrated, jointly-responsible, problem-solving approach to these matters. The chapter concludes with some broad guidelines and recommendations on how the European Union could strengthen China’s commitment to responsible and effective multilateralism. China’s Past Approach: Understandable Suspicion and Ambivalence In reviewing China’s historical experience with security partnerships and other multilateral institutions – both as a partner in and a target of them – it is easy to understand the country’s traditional ambivalence and suspicion. For most of its post-war history as the People’s Republic, China has eschewed the entanglements of alliance relationships and other multilateral arrangements, and maintained as much freedom of action as possible in managing its bilateral relationships with powers great and small around its periphery. It is difficult to identify a major alliance, quasi-alliance, or other multilateral arrangement in which China participated during the first 70 to 80 years of the twentieth century that ended well for the country. It was one of 27 countries gathered to help build the post-World War I international system at the Paris Peace Conference of 1919, but could only look on helplessly as, in order to ensure Japanese participation in the League of Nations, the conference acceded to Tokyo’s demands for Japanese authority over the former German holdings on China’s Shandong peninsula, in blatant disregard of Chinese sovereignty. The international community was later powerless to respond to Chinese calls to invoke the Nine Power Pact of 1922 or the Kellogg-Briand Pact of 1928 (China was a signatory to both) as a means with which to resist Japanese aggression in China. Moreover, China’s status as a founding member of the League of Nations made no difference in terms of repelling the encroachments of Japan, first in Manchuria and then in all-out war in the late 1930s. The most successful alliance for China in the twentieth century was in concert with the United States and other powers in opposition to the Axis Powers in World War II, and in particular in defeating imperial Japan. Even this experience proved bitter for the communists who came to lead mainland China in 1949, however. Following World War II the United States ultimately threw its support behind Chiang Kaishek and the Chinese Nationalists, did not accept Chinese communist claims to legitimately represent China internationally, and even wound up establishing an alliance with Japan, This overview of China’s past and current approaches to multilateralism is drawn in part from Gill (2007), especially Chapter 2. The Nine Power Pact, signed as part of the Washington Naval Conference of 1921-1922 by Belgium, China, France. Japan, Italy, the Netherlands, Portugal, the United Kingdom, and the United States, affirmed China’s sovereignty, independence, and territorial integrity. The Kellogg-Briand Pact, a US initiative, sought to renounce war as an instrument of national policy. China and some 61 other nations were party to this treaty.

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China’s avowed World War II enemy, that was designed in part to contain and roll back Chinese communism. The only two post-World War II alliances China formally established were with the Soviet Union and North Korea, neither of which went well, particularly the former. As for the latter, China eventually recognized Pyongyang’s rival, Seoul, in 1992, and while it continues to provide considerable material and financial support to sustain the economically-faltering regime in the North, the alliance tainted by blood and joint sacrifice that was formed in the early 1950s had, by the early 2000s, turned into a close relationship for many of the wrong reasons as far as Beijing was concerned: China’s North Korean ally became a potentially disastrous burden rather than a positive military asset. China’s support for Vietnam in the 1960s and early 1970s – with as many as 170,000 troops fighting alongside their Vietnamese comrades during Vietnam’s war against the United States – had collapsed into hostility and war by the end of the 1970s. Even China’s short-lived strategic alignment with the United States in the late 1970s and into the mid 1980s – involving intelligence-sharing, US arms sales to China, and close cooperation to defeat the Soviet Union in Afghanistan and the Vietnamese in Cambodia – was a fleeting and ultimately fragile expediency that collapsed entirely with the Tiananmen Square crisis of 1989 and the fall of the Soviet Union in 1991. The other relationship that comes close to – but still falls short of – a formal alliance for China is its ongoing set of political and military-related ties with Pakistan. Nevertheless, these close connections with and military assistance to Pakistan came back to haunt Beijing in the late 1990s as India–Pakistan rivalry escalated to new heights with the testing of nuclear weapons by both countries. Then, partly as a result of its long-standing quasi-alliance with Islamabad, including significant support of Pakistan’s nuclear weapons and ballistic program, Beijing faced a destabilizing nuclear-weapons build-up on its borders with South Asia. It watched from the sidelines as US-Pakistan political and military ties were steadily revitalized as a result. In recent years, as concerns have increased about the stability of Pakistan, China’s role becomes all the more important. Perhaps most tellingly, even China’s earliest and most well-known “multilateral” arrangement – the post-colonial partnership with developing world states, and particularly with India and Indonesia under the umbrella of the 1955 Bandung Conference – soon fell apart as border clashes erupted with India in 1962, and Indonesia under Suharto violently curbed Chinese influence in his country in the mid-1960s. Not only has China’s experience within various arrangements been bitter and troubled, the country also often found itself the target of various multilateral arrangements. At the very outset of the twentieth century, during the Boxer Rebellion of 1900, China declared war on and was in return assailed by a loose coalition of foreign powers seeking to expand their influence over the decaying Qing dynasty. The Qing government was forced to pay an indemnity of 450 million ounces of silver, equivalent to nearly twice the government’s yearly revenues, to be paid over several decades. Later in the century, before the newly-established

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People’s Republic was a year old, Beijing found itself the target of United Nations forces on the Korean peninsula, and later of American bilateral and multilateral alliances around its periphery: Japan (1954), the Republic of Korea (1953), the Republic of China (Taiwan) (1954), the Philippines (1951), Australia (1951), New Zealand (1951), Thailand (1954), the Southeast Asia Treaty Organization (SEATO) (1954), and the Central Treaty Organization (CENTO). China’s Contemporary Approach: Gradual Acceptance, Appreciation, and Action In the mid-to-late 1990s China altered its approach and began to appreciate, take part in, and even help foster and create an expanding range of multilateral ties. A watershed in this regard was its joining of the Asia Pacific Economic Cooperation (APEC) forum in 1991. A more important step was its decision to join the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF). Prior to joining, China harbored two principal concerns. The first of these was that the ARF might be utilized by major powers in the region (such as the United States and Japan) to promote the notion of a looming “China threat” in order to “contain” the country, and the second was that it would seek to bring sensitive security and territorial issues on to its agenda – such as settling claims in the South China Sea and taking on the dispute across the Taiwan Strait. Beijing came to recognize that the potential benefits of participation far outweighed the possible drawbacks, and China joined the ARF as a founding member in 1994. Another important step in the evolution of China’s more positive approach to multilateralism came in the wake of the Asian financial crisis of 1997-98. China recognized the value of working closely with its Southeast Asian partners, particularly Indonesia and Thailand, by lending capital and resolving not to depreciate the renminbi, and thereby built up considerable goodwill in the region. The regional response to the crisis also helped strengthen the formation of the “ASEAN+3” process, joining the 10 nations of ASEAN with China, Japan and South Korea. Chinese leaders and strategists now look upon the ASEAN+3 process as the preferred vehicle for developing free trade areas in the region, and for fostering a broader and deeper “East Asian Community” over the longer term. An annual “ASEAN+China” summit takes place under the ASEAN + 3 umbrella. The most significant agreement to come out of the November 2002 China–ASEAN summit was the “Declaration on the Conduct of Parties in the South China Sea.” This statement is intended to govern the activities of claimants to various parts of the South China Sea, and to reduce the potential for tension and conflict in the disputed areas. Critically, the parties expressed a commitment to “resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force … in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea,” and “to exercise self-restraint in the conduct of activities that would complicate or


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escalate disputes and affect peace and stability” (China–ASEAN Summit 2002). In order to achieve these objectives they agreed to set up consultations addressing the disputed claims, provide voluntary notice of military exercises in the area, and engage in joint cooperation in marine science, environmental protection, searchand-rescue, and crime prevention. The South China Sea agreement with ASEAN was a critical step forward from previous Chinese positions. Prior to 2002, China had insisted that the South China Sea disputes were to be dealt with strictly on a bilateral basis, and that outside parties should not be involved. Beginning in the mid 1990s, and accelerating into the early 2000s, China not only decided to join regional multilateral institutions, but also chose to form and lead such institutions. For example, while initially reluctant to take an active role in resolving tensions on the Korean peninsula, Beijing agreed to take part in and host the four-party process on Korean peninsula security (joining with the United States, South Korea, and North Korea) between August 1997 and December 1998. It took on an even greater role as the host and leading player in the three-party talks (China, the United States, and North Korea) that began in April 2003, and expanded into the Six-Party Talks on Korean peninsula security (with Japan and Russia joining the other four). This resulted in a series of critically important meetings starting in mid 2003. An even better example of China’s increasing proactivity is its role in organizing and leading the “Shanghai Five” process in the early to mid 1990s (with Russia, Kazakhstan, Kyrgyzstan, and Tajikistan), which later in 2001 became a formal multilateral body, the Shanghai Cooperation Organization (the original five plus Uzbekistan). This process began as a vehicle for resolving outstanding border disputes among the parties, but in the ensuing years has become an active and increasingly institutionalized multilateral body, carrying out a range of joint discussions and activities across a full range of political-, economic-, and securityrelated issues, including joint military exercises. Most recently, China has taken a more active role in the development and initiation of the newly-established “East Asia Summit” (EAS). Its role has been somewhat controversial. It preferred to keep the EAS centered on the ASEAN+3 grouping, a view shared by Malaysia, but others – such as Japan, Singapore, and Indonesia – favored an expansion to include neighbors such as Australia, India, and New Zealand. In April 2005 ASEAN announced three criteria for EAS membership: having close relations with ASEAN, being full-dialogue partners with ASEAN, and being signatories of the ASEAN Treaty of Amity and Cooperation (TAC). Because Australia, India, and New Zealand fulfilled these requirements they were invited to join the EAS in July 2005. The United States has not signed the TAC, which excludes it from membership. It is too early to know the direction and contributions of the EAS to regional development, but it is another example of China’s changed approach: seeing the value of multilateral activities in support of its foreign-policy goals. Beyond its regional activities, China has also become far more proactive since the mid-1990s and has been engaged multilaterally on the global level. It

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is fully engaged across the United Nations system, including being a permanent member of the Security Council, and joined the WTO in 1999. On arms control and nonproliferation matters, China has joined and is a member in good standing in all the major treaties in this field, and takes part in a range of other non-treaty-based initiatives such as the Nuclear Suppliers Group and the Container Security Initiative. It is quietly active in contributing to the resolution of a range of difficult questions around the world, including those related to Sudan, Iran, and Burma. Over the past 10 years it has initiated new multilateral dialogue mechanisms, such as the Forum on China–Africa Cooperation and the China–Arab Summit. It has furthermore held dialogues with the North Atlantic Treaty Organization and has taken part in the Asia–Europe Meeting (ASEM) since its inception in 1996. China has also become a far more active contributor to United Nations peacekeeping activity. On the official policy level China strongly supports the United Nations, and calls for its “central” role in international affairs. In this, the European Union and China officially share common ground, both declaring the need to enhance the role of the United Nations and other multilateral approaches to global challenges (China–EU Summit 2007). In the words of one of the most prominent Chinese specialists on foreign affairs, “From the early 1990s to the early 2000s China’s attitude toward regionalism evolved from passivity to proactivity, and its multilateral behavior moved from participation to creation.” What has motivated this far more proactive and deepening approach to regional and global multilateralism and governance? It is driven by the three key national interests that motivate China’s diplomacy more broadly. First, by proactively embracing multilateral security mechanisms Chinese leaders hope to dampen tensions in its external security environment so they can focus on domestic economic, political, and social reform. Secondly, active engagement in multilateral security mechanisms helps China extend its influence and power, but in a way that reassures its neighbors of the country’s “peaceful rise” and “peaceful development.” Thirdly, its active involvement in multilateral security mechanisms contributes to countering, co-opting, or circumventing US (and other countries’) influence and “hegemony” around the Chinese periphery, while avoiding overt confrontation with the United States. Assessing China’s Approach It is clear that China is currently far more active as a participant and even a leader of various multilateral organizations. It is fair now to assess not just the “quantity” of its commitments to multilateralism, but also their “quality.” How will we know that China is increasing its commitment to effective multilateralism, moving from mere cooperation in order to serve its own narrow national interests toward a shared These arguments are spelled out at length in Gill (2007).


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sense of integration, joint responsibility, and “stakeholdership” in upholding and sustaining regional and international order? The following pages identify a number of challenges to the international system, and briefly examine China’s approach to them. Considering these key issues as indicators gives some sense of how to “measure” China’s ongoing approach to multilateralism. International Institutions and Public Goods One way of measuring this, as noted above, is to track Chinese behavior in institutions such as ASEAN, ASEAN+3, ARF, APEC, SCO, EAS, and the Six Party talks. However, the focus in evaluating China’s progress should not be on the institutions per se, it should be on its functional work, such as its contributions to the development of a capable and security-oriented ARF. Getting the regional and global strategic architecture right will require Chinese engagement and presence (just as it will require US engagement and reinforcement from its alliance structures), and Chinese absence, likewise, will be noticeable and significant. China’s position as a permanent member of the United Nations Security Council (UNSC) gives it international prestige. Its willingness to follow the UNSC line on challenges such as Sudan, Iran, and Burma, similar to its approach to the DPRK, will provide a key indicator of its future direction and trajectory within the international community, whether it is a China truly engaged with upholding international order or only interested in its own position, power, and influence. Likewise, China’s orientation toward UNSC reform and enlargement debates will provide an indication of its comfort levels with its own international position, and its recognition of the truly interdependent nature of today’s globalized world. A China that recognizes the need to draw in and work alongside other key stakeholders such as India and Japan, even at potential cost to its own direct shortterm interests, will be a China that has internalized the lessons on what it takes to be a responsible great power and to be supportive of more effective multilateralism. The China of the twentieth and the initial years of the twenty-first centuries has been, despite its great power aspirations, a net taker of public goods, be it navigation and maritime rights, international humanitarian response or development assistance. A China that adopts a functional, problem-solving orientation toward the maintenance of the regional and global order will be a China that starts to contribute to and provide public good, both in its region and on a global scale, commensurate with its growing power, riches, and capabilities. Global Health Health issues in particular might provide good indicators of China’s willingness to act as an upholder of the public good. China’s willingness in May 2009 to let Taiwan join the World Health Assembly as an observer is a good sign. A greater commitment is needed for China to become a net contributor to the global The following discussion draws in part from Gill and Schiffer (2008).

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fight against emerging and re-emerging infectious diseases – such as HIV/AIDS, tuberculosis, malaria, and the highly-pathogenic avian influenza. This will shed light on a China that is intent on achieving genuine human security for all. Likewise, taking a more responsible and open approach at home to the potential emergence of infectious diseases, would be another key indicator. China’s initial cover-up of the emergence of Severe Acute Respiratory Syndrome (SARS) led to its further deadly spread. The country currently accounts for some ten percent of the world’s cases of extremely drug-resistant tuberculosis (XDR-TB), and is a perennial source of widespread outbreaks of avian influenza. Given its integration into a globalizing world, outbreaks of infectious disease within the country could quickly spread far beyond its borders. As such, how China chooses to address these problems within its own borders will suggest its appreciation of its role as a responsible power willing to protect the international system from which it has so greatly benefited. Humanitarian Assistance and Developmental Aid Another indicator of China’s support for effective multilateralism will be the extent to which it contributes its increasing resources to humanitarian-assistance and development-aid programs through cooperative and coordinated measures. It has traditionally been a major benefactor of countries in the developing world, providing assistance particularly in the form of education and training, the deployment of doctors and other publichealth officials for longer-term stints in Asian and African countries, and in the provision of public buildings and other basic infrastructure. Its work in this area appears to be expanding, increasingly encompassing the provision of low-cost or interest-free loans and other grants. During the 2006 Forum on China–Africa Cooperation in Beijing, for example, China offered, among other things, to send 100 senior Chinese experts on agriculture to Africa and to set up 10 agricultural demonstration sites on the continent; to set up a China–Africa Development Fund eventually amounting to five billion USD to support “well-established and reputable” Chinese firms investing in Africa; to provide three billion USD of preferential loans and two billion USD in preferential export credit to African countries; to train 15,000 professionals from African countries between 2006 and 2009; to establish 100 rural schools and double the number of scholarships for African students to 4,000; to set up 10 hospitals and 30 anti-malaria clinics, while providing RMB 300 billion (approximately $37.5 million) for the purchase of anti-malarial drugs; and to double development assistance to Africa by 2009. These are all encouraging steps and mark China’s increasing effort to make a responsible contribution to global development commensurate with its growing resources and capacities. In the future its international donor partners will also look to Beijing to be more transparent in terms of amounts and methods in its donor policy, to consider and take on board emergent “best practices” within the international donor community, and to coordinate more closely with other donors to leverage resources more effectively, avoid redundancy and waste, and exchange lessons and ideas.


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Peacekeeping China has dramatically expanded its contributions to United Nations peacekeeping activities since the turn of the millennium. Up until the late 1990s it had typically contributed approximately 50 observers to UN missions such as in the Golan Heights and on the Iraq–Kuwait border, but as of mid-2009 it had more than 2,000 soldiers, observers and police working in UN peacekeeping missions. China is most active as a participant in African missions, including its most recent contribution to the deployment in the Darfur region of Sudan. China could take a number of steps that might indicate its interest in strengthening the current approach to peacekeeping activities. One simple indicator would be continuing expansion in the number of persons it contributes to UN missions. Another step would be to increase its commitments to the UN Standby Arrangements System. So far it has made a “Level 1,” or lowest-level, commitment, which means providing a basic list of capabilities it could contribute; it is one of about 80 UN member states to make such a commitment. According to the Chinese defense white paper of 2002, this “Level 1” commitment means it is “ready to provide the UN peacekeeping operations with engineering, medical, transportation and other logistical support teams at appropriate times,” and “is able to provide these operations with 1 UN standard engineering battalion, 1 UN standard medical team and 2 UN standard transportation companies” (China’s National Defense in 2002 2002: 35). Yet another indicator would be for Beijing to show greater flexibility over peacekeeping when the Taiwan issue is involved. For example, China has used its Security Council veto on peacekeeping activities to protest at the establishment of diplomatic ties between member states and Taiwan. Moreover, when Haiti invited Taiwan’s vice-president to its presidential inauguration in 1996 China held up a subsequent peacekeeping operation in the country for several weeks. When Guatemala recognized Taiwan in 1997 China vetoed a proposed UN peacekeeping mission to the area, although it subsequently reversed this decision. Macedonia established diplomatic relations with Taiwan during the Kosovo crisis in January 1999, and China subsequently vetoed a proposed resolution to extend the UN force (UNPREDEP) then safeguarding Macedonia’s borders. However, in 2004, in a striking reversal of past practice, China chose to dispatch a civilian police officer to the UN Stabilization Mission in Haiti (MINUSTAH), even though Haiti had official diplomatic relations with Taiwan. China dispatched the first 95 of 125 additional civilian police to Haiti in November 2004. In the future observers should also monitor how willing China is to send UN forces, including its own soldiers, into more dangerous and destabilized situations. Nonproliferation and Arms Control China has taken an increasingly constructive approach to nonproliferation since the early-to-mid 1990s. It has steadily reduced its exports of conventional and unconventional weapons, put in place a more effective domestic export-control system, and joined and complied with nearly

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all the major global nonproliferation treaties and many of the supply-side exportcontrol regimes. It has also entered into a number of bilateral agreements with the United States – such as stopping further nuclear cooperation with Iran – which goes beyond its international commitments. Some indicators for the future might include the further reduction of its sensitive exports to countries such as Iran, Pakistan, and North Korea. In particular, China could bring greater pressure to bear on Iran to fully comply with the demands of the international community regarding its nuclear capabilities and intentions. Furthermore, it could show greater concern over the situation with its longstanding ally, Pakistan, and for the safety and security of its nuclear programs and materials. A new window of opportunity for arms control may be opening in the coming two or three years, and it will be important for China to demonstrate its willingness to actively contribute rather than standing on the sidelines. This would include working to ensure a successful Nuclear Nonproliferation Treaty review conference in 2010, supporting for the idea of a fully safeguarded multilateral enrichment facility, and taking demonstrable steps to further reduce the salience of its nuclear forces. Climate Change Given that China will in all probability be the world’s largest carbon emitter by mid-century, unless it is fully engaged nationally and internationally, including taking within-governance actions on greenhouse-gas emissions, then it will be impossible for the world to deal effectively with climate change. In fact, capping greenhouse-gas emissions (in recognition of development and growth trade-off) could be the acid test of China’s new global role. International debate largely hinges on how China addresses the demands and needs of its own people. Divisions between the rich and the poor, the need to maintain economic development, and the need to either license or develop clean energy and efficiency technologies are tough issues for Beijing to deal with. How China chooses to structure these difficult trade-offs will be indicators of how it looks to multilateralism for solutions. Regional Hotspots As China’s global influence and national capacity grow, so too should its responsibility to utilize its expanding role and resources to help shape cooperative, multilaterally-achieved outcomes in regional hotspots that promote stability, development, and human security. It is in the Asia–Pacific region that a shift in China’s foreign policy would be most immediately and acutely felt; indeed, its shift from a traditionally inward-directed to an engaged power is already being seen in its deployment of its economic and diplomatic influences. However, its approach to developments further afield – such as in Sudan and Iran – will also indicate how prepared Beijing will be to engage effectively and responsibly within the international system.


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The Korean Peninsula China’s role in serving as host and facilitator for the Six Party Talks, in helping hammer out the September 2005 joint agreement among the parties, and in bringing North Korea back to the negotiating table following the DPRK’s nuclear test in October 2006 stand out as the kinds of actions one could expect from an engaged and responsible nation. Its active role in pursuing the shared agenda of a nuclear-free Korean Peninsula is a positive leading indicator of a China that accepts, internalizes and upholds international norms on the prevention of the spread of weapons of mass destruction, while also realizing its own important national security interests. With North Korea’s missile tests, and its second nuclear detonation in 2009, China’s role as a partner in keeping the peace in Northeast Asia only increases. In addition, its approach to developments on the Korean peninsula more generally will also be crucial indicators of its deepening commitment to effective multilateralism. It will be important to watch Beijing’s ongoing relationship with South Korea, including its approach to Seoul’s alliance with the United States and toward the reunification dynamic between North and South Korea. Moreover, if China takes an active and constructive approach to the development of a future North East Asian Peace and Security Mechanism, it would be a very good example of a China seeking to contribute to the maintenance of regional and international order. Burma China’s choices regarding Burma will also indicate to the outside world how and whether it intends to play a more proactively responsible role in securing a more peaceful, prosperous and stable future for the Burmese people. Indicators of such an approach will include stepped-up efforts to bring differing parties within Burma together for constructive dialogue, working with other partners such as ASEAN and India to encourage more positive outcomes in Burma, and increased but still gentle pressure and inducement to encourage the Burmese leadership to be more compliant with the will of its neighbors and the international community to see the lives and livelihoods of the Burmese people improved. Sudan China has yet to engage in a similarly proactive way in some of the other major challenges on the international agenda, including the situations in Sudan and Iran. How China orients itself on these issues in the years ahead will be crucial. It has invested heavily in Sudan, for example, in part to safeguard the security and diversity of its energy supply. Moreover, despite Sudan’s record as a state sponsor of terrorism and the genocide in Darfur, China continues to serve as a major source of armaments for the country. It has taken some positive steps in recent years – such as encouraging Khartoum to accept a hybrid UN–African National Union peace-keeping force in Darfur. Nevertheless, much more can and should be done by Beijing in its relations with Sudan to promote more effective UN and African Union action rather than seeing it stalled, and to show responsible and genuine concern for the security, prosperity, and dignity of the people of Darfur. Iran China’s interests in and relations with Iran are complex, and involve more than simple access to energy. Nevertheless, as a permanent member of the UN

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Security Council, and with an increasingly responsible approach to nonproliferation, it will need to balance its short-term interests against Iran’s threat to the nuclear non-proliferation regime. The support China gives to multilateral efforts – in the UN, the International Atomic Energy Agency (IAEA), and in the dialogue group involving the Permanent Five members of the Security Council, Germany, and Iran – to resolve outstanding tensions between Iran and the international community, especially regarding Teheran’s nuclear programs, will provide a critical insight into its own understanding of its role in the maintenance of a rule-based order. The Peaceful Resolution of Territorial and Sovereignty Issues China has been embroiled in territorial and sovereignty disputes with many of its neighbors, and has turned to military means to push its claims on numerous occasions in the past: Taiwan, the South China Sea, India, Russia. Tensions prevail concerning territorial and sovereignty claims, involving Japan, Taiwan, and claimants to islets, reefs and seabed resources in the South China Sea. In recent years China has taken multilateral approaches resolving these disputes peacefully, or then shelving them indefinitely. Its long-standing border disputes with its Central Asian neighbors, including Russia, have been almost entirely settled under the auspices of the Shanghai Five, and later the Shanghai Cooperation Organization. It was noted above that China and several ASEAN neighbors agreed to exercise restraint and to engage cooperatively in the South China Sea under the “Declaration on the Conduct of Parties in the South China Sea.” Continuing and genuine diplomatic approaches to its territorial and sovereignty disputes will be an important indicator of China’s willingness to engage in responsible and effective multilateralism. Military Affairs China’s rapid military build-up in line with its economic re-emergence has given considerable worry to some who see in these military modernization efforts a China positioning itself to re-make East Asia, and the globe, by force. The critical question is not one of specific weapons systems per se, but has more to do with “strategic transparency.” There are several potential indicators of the movement toward increased strategic transparency. Perhaps the strongest of these would be a greater Chinese willingness to commit fully to developing a robust series of confidence- and security-building measures with its neighbors. This would involve greater transparency on matters of military doctrine and operations, and defense budgets. This could take the form of more detailed, comprehensive, and regularized open-source “white papers” and other formal publications, as well as reciprocal official exchanges of defenserelated information and briefings between China and its principal security partners in multilateral settings. Other steps, which are also potentially multilateral in nature, should include increased military-to-military exchanges, defense-college


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exchanges, port visits, joint exercises, and senior-level dialogues between both uniformed and civilian counterparts on military and security matters. Some Concluding Thoughts and Recommendations This chapter argues that China’s approach to multilateralism and global governance has significantly changed over the past 10 to 15 years. In general, these changes mean that Beijing is more open to participation in multilateral institutions, more supportive of their aims, and more demonstrably active in their activities. This is especially true with regard to its activities in regional multilateral organizations, but less so regarding multilateralism on the global level. Overall, these developments have meant some convergence in policy and practice between the European Union and China on questions of multilateralism and global governance, but that convergence has notable and significant limitations. For the most part, Beijing continues to understand multilateralism as “cooperation” rather than “integration.” Nonetheless, the European Union and its partners should continue to engage China in ways that will strengthen the country’s commitment to responsible and effective multilateralism and global governance. Five strategic understandings should frame any approach that seeks greater Chinese commitment in this respect. First, there must be recognition of and sensitivity to China’s self-perception as a unique player in the international system. With its ancient civilization, its past contributions to mankind’s development, its former imperial glories, and a strong sense of cultural identity, China shares with its people a sense of its unique character and “differentness” from the dominant political West of today. This is not necessarily an insurmountable obstacle to gaining greater Chinese commitment to effective multilateralism and global governance, but any approach to do so must accept this reality concerning the country’s self-image of its place in global affairs. Secondly, there must be a willingness to acknowledge and work with the current one-party Chinese political system. This does not mean in any way that the international community has to accept specific practices of the Chinese government that violate its norms or conscience, or to refrain from criticizing perceived defects and shortcomings in the Chinese system. Nor does it exclude the possibility that there will be those who hope for and seek to work with China to effect real and sustained change that will lead to the evolution of its system and the development of greater pluralism, justice, equitability, and rule of law in the country. It is an approach that is built on the realistic assumption that any expectation of genuine international partnership can only begin with an acknowledgement of and willingness to work with the political arrangements of the other players in the system. Thirdly, it has to be accepted that China’s sheer size and weight in contemporary world affairs – economic strength, population size, territorial breadth, and ethnocultural heft – give it the right to a substantial and respected presence at the table of


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international affairs. The Chinese might call this regaining the country’s “rightful” place as major power in a more multipolar world. It also implies an increase in weight and influence relative to the now-dominant political West, with all the unease and umbrage that could bring. Fourthly, China is far more likely to engage responsibly with the international community in the absence of significant deterioration in relations with any of its key partners, especially the United States. A lingering sense of aggrievement remains just below the surface in China, which is quick to react negatively to slights, and destructively in the face of open hostility. This does not mean accommodating a China that exploits its (often-too-easily) wounded pride, but it does imply the need to realistically recognize that it is far less likely to take on a more responsible role if it believes it is being bullied, coerced, or confronted with ultimatums. It will be critical to avoid fanning the flames of revanchist nationalism in China, which would likely lead to a less cooperative and multilaterally-inclined foreign policy. Finally, it is far more reasonable to expect the emergence of a more responsible China as long as the country is able to maintain domestic stability and steadily build up its capacity to deliver public goods to its citizens in an accountable and responsive way. A China that is plagued by domestic instabilities, or is incapable of meeting the increasingly high expectations of its people, will likely be a far more suspicious and far less cooperative partner on the international scene. As for the future, there is a range of areas in which the EU can work with China to deepen the country’s commitment to a more integrated, jointly responsible, and effective problem-solving multilateralism that would contribute to upholding the regional and global order. These areas for multilateral cooperation – which is not an exhaustive list – could be placed in three broad categories. On global economic growth and development: •

• •

strengthen common approaches to global development challenges, especially harmonizing best practices and coordinating development assistance and financing in Africa, including engagement of the China Development Bank, the China Export–Import Bank, the China Investment Corporation, and other financing and investment bodies; encourage China to take on a greater role within global economic, trade, and financial institutions and mechanisms, including the World Bank and the G8 process; work within the United Nations and other global mechanisms, such as the G8 process, to reach a stronger consensus on the need for and capacity of the Great Powers to coordinate overseas development aid as well as responses to natural disasters and the provision of humanitarian relief.

A variation on these recommendations is also found in Gill and Murphy 2008.


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On transnational and regional security challenges: •

•

•

•

•

•

•

•

•

draw China out to engage more responsibly as a Great Power in recognizing and addressing emergent transnational security issues, and particularly so on issues – such as global health, energy security, resource depletion, and environmental concerns – in which it is having an increasing impact beyond its borders; encourage China to take a more active part in the United Nations reform process, including questions such as greater operational accountability and transparency, recalibrating the balance of membership dues and contributions, and further empowering the United Nations to address regional security challenges; work within the United Nations Security Council, the G8 process, the G20 process, and regional mechanisms in which China and the EU or EU states are active (such as the ARF and ASEM) to reach a stronger consensus on action by multilateral bodies, and on the need for and the capacity of the Great Powers to manage, alleviate and, if necessary, contain regional conflicts; strengthen the capacity of the United Nations and other multilateral bodies such as the African Union to foster effective conflict prevention and postconflict security and reconstruction, including the encouragement of an even greater role for China in peacekeeping activities; empower regional institutions such as the ARF and the SCO to address regional challenges – including regional tensions, money laundering and the illicit trafficking of goods and people – through preventive diplomacy, conflict resolution, and law enforcement, and including opening the SCO and its Regional Anti-Terrorism Structure in Tashkent to outside exchanges and consultations with European and other national authorities; increase consultations and consensus regarding the international response to developments in countries such as North Korea, Burma, Sudan, and Iran, including the possibility of stronger and more cohesive United Nations Security Council action; encourage greater military-to-military ties and defense-related exchanges with China, especially regarding the observation of and participation in peacetime military exercises, defense-college exchanges, and peacekeeping training; strengthen global norms on arms control and nonproliferation within the bodies in which European countries and China share membership, including the Nuclear Nonproliferation Treaty, the Chemical Weapons Convention, the Comprehensive Test Ban Treaty, the Australia Group, the Zangger Committee, and the Nuclear Suppliers Group; expand cooperative programs aimed at strengthening China’s exportcontrol system and related to the protection, control, and accounting of its supplies of fissile materials.


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On China’s domestic challenges: •

strengthen and expand cooperation with China to assist the country in addressing its domestic developmental challenges, with a particular focus on the rule of law, administrative reform, regulatory capacity, social welfare and the efficient provision of public goods, government accountability, transparency and responsiveness, poverty alleviation, environmental protection, energy efficiency, health care, and education.

In conclusion, the EU and China share an interest in improving regional stability and economic development, especially in Asia. They also share an interest in encouraging a greater and more responsible role for China across a range of global and regional issues. Such an approach would help to build in China a greater awareness of its responsibilities as a growing global power, would involve and give it a bigger stake in global and regional stability, and would draw Beijing away from a more insular, narrow, and potentially dangerous overemphasis on regional rivalries and problems – especially with Taiwan but also with Japan, the United States, and other Asian neighbors. Beijing’s leaders have come to recognize the benefits of becoming more open to and dependent on a globalizing outside world, and of doing so in part through multilateral engagement. Moreover, Europe and China also share an interest in seeing China succeed in its ongoing socioeconomic and sociopolitical transition, and emerge in years to come as a more politically open, socially just, economically prosperous, and developmentally sustainable country. Such an outcome would likely bring enormous benefit to global development and security. It is also true that addressing the world’s principal challenges cannot be done without engaging China, or without more effective Europe–China cooperation, and more committed and effective Chinese multilateral engagement overall. At the same time, the challenges facing these power centers and the world more broadly are becoming more complex, difficult, and transnational in nature, demanding an effective and multilateral response. They include the negative fallout from globalization, increasing nationalist and protectionist tendencies, unsustainable global fiscal and current-account imbalances, climate change, energy and other resource insecurity, terrorism and religious fundamentalism, energy security, emerging and re-emerging infectious diseases, and illegal and potentially destabilizing flows of weapons, sensitive technologies, capital, contraband, and people. Not only do Europe and China have some of the greatest stakes in seeing these challenges mitigated, they are also in many ways in the best position to directly respond to them. Gaining a deeper Chinese commitment to effective multilateralism and improved global governance will be critical in this task.

Chapter 8

Scrutinizing China’s Quest for Energy Security Abroad Linda Jakobson

Introduction China’s energy security is of interest to the European Union for three prime reasons. First, its growing demand for oil has an immediate as well as a longterm economic impact on the rest of the world. China is already a major actor in world energy markets and its oil imports have grown markedly in the past decade. As a consequence, there have been disquieting estimates of how much oil China (and India) will need to import 20 years from now. In the mid 1990s China was self-sufficient in oil, but with imports of roughly three million barrels per day (mbd) it is currently the world’s third largest importer of crude oil after the United States (almost 14 mbd) and Japan (over five mbd). If China’s rapid economic growth continues it will need to import 60 to 80 percent of its total domestic oil consumption by 2020, anywhere from six to 11 million barrels per day (Downs 2006: 9-10). Its increasing need for foreign oil has also been blamed for fluctuations in oil prices and volatility in the global oil spot market (see Zhao 2005: 26; Hoyos 2004). Secondly, China’s energy needs have come under scrutiny because the country is the largest emitter of greenhouse gases. How it deals with the challenges of energy conservation, energy efficiency, and energy supply diversification are questions in which the rest of the world also has a stake in. China will not choke to death alone. Despite the Chinese government’s efforts to improve energy efficiency and increase the use of renewable energy, the amount of fossil fuel used in energy consumption will, in absolute terms, quintuple in the next few decades. Air pollution from China is already affecting its neighbors and countries further away. Furthermore, attempts to curb global warming will be fruitless if China does not reduce its carbon dioxide emissions. Thirdly, the heightened level of activity by Chinese political leaders, diplomats, and businessmen in oil-rich countries has evoked questions in the European Union concerning the type of behavior that can be expected from China as it expands its The author is grateful to Gao Shan and Alex Luta for their research assistance during the writing of this chapter. Data from the BP Statistical Review of World Energy, June 2007 (2007: 21).

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global reach. European policy makers are trying to assess whether the impact of China’s increasing economic, political, and in some cases military influence in other parts of Asia, Africa, Latin America and the Middle East will undermine European interests in these areas. How will Beijing’s energy-related commercial interests abroad affect its foreign-policy thinking and actions in the international arena? In sum, China’s energy security matters to the EU because of its effect on the global oil market, the global environment, and international relations. This chapter focuses on the third facet mentioned above, namely the presence and activities of an increasing number of Chinese actors in energy-rich countries, described by some analysts as China’s “energy diplomacy.” Although this popular term is misleading because energy security is only one variable in the evolution of China’s strategic foreign-policy thinking, China’s global reach does have implications for its strategic partnership with the European Union. Consultation and coordination on issues related to Africa have been described by both parties as important to this partnership (China–EU Summit 2007). China’s energy relations with Russia and Central Asia are also of significance for European nations. The particular focus in this chapter is on the effect that China’s commercial interests in foreign countries – especially its energy-related interests – are having on its leaders’ stance toward Beijing’s long-standing principle of non-interference. The following two basic questions are addressed with a view to enhancing our understanding of the strategic implications of China’s energy-related activities abroad. Which actors in China are making the decisions with regard to securing energy overseas? What is the degree of coordination between these actors? After an examination of these issues, two further questions are posed. What effect can energy security be expected to have on Chinese officials’ evolving perceptions of the usefulness of Beijing’s non-intervention policy in the light of the other strategic national interests that China pursues? To what degree do China’s policies to secure energy abroad run counter to the strategic interests of the European Union? The chapter ends with a discussion of the sub-strategies that could enhance cooperation between the European Union and China in energy-rich countries in which their interests converge and, potentially, collide. In addition to the official EU–China energy dialogue that has taken place since 1994 and the recently agreedupon official dialogue on Africa, there are various other initiatives and avenues that could serve as tension-defusing mechanisms in the EU–China partnership. The Decision-makers and their Willingness to Cooperate For more than a decade Chinese national oil companies (NOCs) have sought to secure the country’s growing need for imported oil and gas by diversifying their

Scrutinizing China’s Quest for Energy Security Abroad

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overseas energy supplies. The three major NOCs (CNPC, Sinopec and CNOOC) have signed long-term contracts for the supply of crude oil and liquefied natural gas across Africa, Southeast Asia, Central Asia, Latin America, and the Middle East. They have invested in pipeline projects, and have bought equity investments in overseas oil sites (so-called physical control over oil supplies). In addition, Chinese companies providing oil services ranging from exploration to rig management and drilling equipment have expanded their overseas operations, and are competitive in the international market. Chinese government officials have supported the overseas activities of the NOCs by cultivating strong bilateral ties with the governments of oil- and gas-rich countries, granting trade advantages, promising investments, and providing aid and other development assistance. Consequently, China’s “energy diplomacy” has become a popular term among researchers, policy makers and the media (Zweig and Bi 2005; Tang 2006; Cai and Yang 2006; Zhang, Tao and Liu 2007). However, this term is not entirely accurate for two reasons (Jakobson 2008a: 122-126). First, it conveys the impression of a planned and coordinated policy enacted by government officials who direct the overseas activities of NOCs. This is not the case, especially with regard to coordination, and further examination reveals a more nuanced and multi-faceted picture. Secondly, the term “energy diplomacy” portrays Chinese diplomacy as solely geared to the country’s energy needs. China’s foreign policy is in a state of flux. Chinese policy makers are continuously adjusting their policies and their diplomatic efforts to the changing international conditions, and also to the country’s developing needs. This is a natural consequence of its increasing economic, political and military weight on a global scale. The dramatic increase in activity by Chinese government officials and businessmen in oil-rich countries needs to be viewed as just one dimension of China’s new global activism (Saunders 2006: 6-9; Gill, Huang and Morrison 2007: 16-18). On the question of whether Chinese NOCs operate according to a comprehensive policy plan, first devised and then enacted by government officials, there is conflicting evidence with regard to which party is in the driver’s seat. On the one hand, a symbiotic relationship undeniably exists between the Chinese government and the NOCs. For example, the top executives in the major Chinese NOCs are appointed by the Chinese Communist Party’s Organization Department. Moreover, the NOCs must, at least in theory, receive government approval for large overseas investments. On the other hand, the government is dependent on the NOCs. The three major ones are powerful and wealthy entities that employ hundreds of thousands of people and provide the government with substantial tax revenue. In 2006 their net profits accounted for about one-third of the total net profits of state companies (Qi 2007). In order to succeed in the international market they have had to increasingly operate as market-driven companies, seeking profits and maximizing efficiency. Their executives maintain good ties with high China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec), China National Offshore Oil Corporation (CNOOC).

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ranking government officials in order to operate effectively, just as oil-company executives do the world over. Business delegations that accompany political leaders abroad with the aim of maximizing the goodwill gained from an official visit are a worldwide phenomenon. Rather than following explicit government directives, Chinese NOC executives are more likely to use government policies to justify decisions they want to make for commercial reasons. The wording of most government edicts in China is so lacking in specificity that it is usually possible to find a clause validating any sort of action (Jakobson 2007: 15). The much publicized “Go Out” government policy, for instance, encourages Chinese companies to invest abroad and develop their international competitiveness (Wang 2007). It provides a useful umbrella under which any and all overseas activities can be deemed appropriate. As has been the case in the implementation of several policies during the reform period over the past three decades, vaguely-worded policy formulation leaves room for multiple interpretations and makes it possible for initiative-taking individuals and enterprises to follow numerous different routes. The objective of an NOC top executive is to expand his business empire. When government assistance is deemed beneficial, it is sought; when government help is not needed, the NOC operates alone. For example, Chinese oil companies have not always secured approval for large overseas investments before committing to them, and the investment decision has only later been reported to the State Council (Downs 2006: 24). China’s energy bureaucracy is weak and fragmented. There are several government agencies overseeing energy policies that are not subordinate to each other in terms of political power but have overlapping areas of authority. This has led to intense rivalry and ineffective management. There is no single government entity with authority over all of the stakeholders. Consequently, effective policy formulation is not forthcoming, nor is there a comprehensive national plan for acquiring energy assets abroad. Despite the Chinese government’s restructuring in March 2008 the country’s “fractured energy bureaucracy [impedes] formulation of a long-term national energy strategy accepted by all stakeholders (Downs 2006: 24).” Moreover, if China did have an “energy diplomacy” it would require not only submission by the NOCs to government policy but also close cooperation between the NOCs in the name of national interest. The three major NOCs basically regard each other as rivals. They occasionally make joint bids when it is in their interest,

Parts of this chapter are based on the author’s off-the-record research interviews with Chinese and American oil-industry specialists as well as with Chinese diplomats in Beijing, Boston, New York, Shanghai, and Washington DC during 2006 and 2007. See also Downs 2006: 21-24. Downs provides an insightful description of the relationship between the senior executives of major Chinese NOCs and government officials.


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but they have also bid against each other despite the admonitions of Chinese officials to avoid competition. Here, too, the picture is mixed. Energy Security, One of Many National Interests It is useful to assess the degree of importance of energy security among China’s many national interests to gain a more comprehensive understanding of its quest for energy security abroad and the implications for strategic foreign-policy thinking in Beijing. The goal of any country’s foreign policy is to secure its national interests. China’s foremost national interests include ensuring continued economic growth (of which energy is the paramount component), securing international support for the “One China Policy” in relation to Taiwan, and deterring the United States from constraining its rise while at the same time avoiding conflict with Washington (or any major power) so that it is also able to maintain its stability and concentrate on its modernization drive. Economic growth and stability constitute the foundation upon which the legitimacy of the Chinese Communist Party is based. Furthermore, as the economic, political, and military power of China grows, an increasingly significant fourth national interest is to ensure that its rise to international preeminence evokes respect rather than hostility. This goal is reflected in Hu Jintao’s call in 2005 for a “harmonious world”, and his assurances that China will continue on its path of “peaceful development” by upholding “multilateralism, mutually beneficial cooperation and the spirit of inclusiveness” (Hu 2005). The concept of a harmonious world is an extension into the arena of foreign relations of Hu’s domestic policy doctrine, which portrays China as striving toward a harmonious society (Zheng and Tok 2007). Taiwan’s unresolved future political status is still of overriding importance in the formulation of Chinese foreign policy. Consequently, the vast African continent – not only the oil-rich African nations – that wields 49 votes in favour of Beijing in the United Nations and other multinational organizations is important (Xinhua 2008a). Another major national objective of the Beijing leadership See Zhang Ying 2004. On the Chinese government’s attempts to reign in competition between the NOCs see, for example, Zeng Qinghong 2005. At the time of writing Zeng Qinghong was a member of the Standing Committee of the CPC Central Committee Political Bureau, and Vice-President of the PRC. The journal Xuexi shibao is published by the Chinese Communist Party School. There are 53 African countries in the United Nations (see , accessed 19 May 2008). On 27 December 2007 Malawi established diplomatic ties with the PRC, reducing to four the number of African countries maintaining formal diplomatic relations with Taiwan: Burkina Faso, Gambia, Sao Tome and Principe, and Swaziland. In addition, the Taiwan government operates four quasi-official liaison missions in Africa: one in Nigeria (Abuja) and three in South Africa (Pretoria, Cape Town, and Johannesburg).

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is to manage its complex relationship with Washington. China seeks to avoid confrontation with the United States, but is simultaneously intent on deterring Washington from containing China and impeding its modernization efforts. The converging energy- and resource-driven commercial interests of the Americans, Europeans and Chinese, at least in Africa, Central Asia, and the Middle East, make them competitors (both seek oil and other natural resources), while at the same time Americans, Europeans, and Chinese would stand to benefit from cooperation. The US, the EU and China share a range of common interests in Africa, from combating infectious diseases (HIV/AIDS, malaria) to countering terrorism and preventing instability and humanitarian crises (Gill, Huang and Morrison 2007: 14-16). Especially in the quest for oil, the United States and China – the world’s two largest consumers – are becoming fierce competitors (Jakobson 2008b: 1617). Securing energy is obviously a key national interest in both Washington and Beijing. Imported oil currently accounts for about two-thirds of US oil consumption, and about half of Chinese consumption. Although China’s reliance on coal will remain high (currently around 70 percent of primary energy consumption), the International Energy Agency expects oil imports to triple by 2030 (International Energy Agency 2007a: 7). Africa has been described as the “frontier of competition” between China and the United States in the oil sector in that dependency on African oil is increasing in both countries (Kang 2006: 80). In 2007 US crude-oil imports from Africa (20 percent, including the North African producers Algeria and Libya) surpassed those from the Middle East (18 percent). Of China’s oil imports 34 percent came from Africa in 2007 (42 percent from the Middle East). Chinese academics often describe United States policies in Africa as aimed toward containing China’s growth (He 2007: 27; Zhang Xiangdong 2007: 53). Some Chinese analysts have suggested that China should be prepared for a potential conflict with the US over Africa, especially in the realm of energy (Zhang Chun 2007: 15). Further compounding the oil factor in assessments of China’s national interests is the tendency of Chinese leaders to view dependency on the global oil market as undesirable because of their perception that Western countries, and the United States in particular, are able to manipulate markets (Jiang Wenran 2006). Moreover, the voices of the Chinese policy makers who see Westerners as wanting to impede China’s growth were strengthened by the unsuccessful attempts by Chinese NOCs to join an international consortium led by British Gas to buy a stake in the Kashgan oil fields and to acquire shares in Unocal

Calculated from data from the Energy Information Administration 2008. Calculated from data from the General Administration of the Customs of China, details of data received from Reuters, Beijing office (2008). The data contained in this news article was incomplete; the author is grateful to the Reuters Beijing office staff for providing the full list of countries that export oil to China.


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(Jakobson and Zha 2006: 67). Rhetoric about the need to contain China and the “China threat” in statements by US Congressmen and other Western politicians has been recurrent since the mid 2000s in Chinese discussions about energy security, especially since the Unocol bid (Zhang Shirong 2007: 36; Zhang and Guan 2007: 28; Zha Daojiong 2006: 47). Given the scepticism concerning the existence of a level playing field in the global oil business the Beijing government is expected to continue to back Chinese NOCs in their acquisition of stakes in overseas oil fields (Downs 2006: 35). However, there is a growing realization among mid-level ministry officials in Beijing that this will not substantially enhance China’s energy security.10 The original notion of the importance to national security of overseas oil equity has proven over-optimistic. As Trevor Houser notes, Chinese NOCs would much rather sell their equity oil on the world market for a higher price than they would get from Chinese consumers (it was only in 2008 that the Chinese government took the first steps in a lengthy process to implement price reforms forcing Chinese consumers to pay world market prices for energy) (Houser 2008: 162). The overseas equity production of Chinese NOCs totalled roughly 681,000 barrels per day in 2006. If all of this oil had been returned to China it would have accounted for 19 percent of its total imports. Most of it was not brought back to China, however, but was sold on the open market to the highest bidder (Houser 2008: 162). Several mid-level officials in Beijing acknowledge that China’s energy security would be better served if the country became more active in strengthening coordinated international efforts to keep the world oil market stable, as well as stringently enforcing national measures to drastically increase energy efficiency and the use of alternative sources.11 Saving more energy and further relying on non-fossil fuels would also alleviate China’s severe pollution problems. However, as long as the powerful oil-company executives have the ear of the top leaders, in other words as long as this powerful lobbying group of oil industrialists is perceived by the top leadership as instrumental on account of their contribution to economic growth and stability as tax-revenue providers and employers, they will continue to expand their overseas oil-equity portfolio.12 At the same time, China will continue to diversify its sources of oil imports, build pipelines, pursue a higher degree of energy efficiency and reliance on alternative fuels, and participate in international

The Kashgan oil field bid took place in 2003; the Unocal bid in 2005. 10 The author’s discussions with officials working for the Ministry of Finance, the Ministry of Foreign Affairs, and the National Development and Reform Commission, Beijing and Shanghai, November 2007-February 2008. 11 Cf. note 10. 12 Cf. note 10. In March 2008 Jiang Jiemin, chairman of PetroChina, which is 88 percent-owned by CNPC, announced plans to expand its overseas investments (“Petro China eyes foreign push,” Financial Times, 20 March 2008).

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efforts to keep the world oil market stable (see, for example, Zhang, Tao and Liu 2007: 42; Cheng, Cheng and Lü 2007: 150). Energy Security and Foreign Policy: The Non-interference Trap Ensuring that China’s foreign policy and diplomacy support its national interests, energy security among them, is a daunting challenge. The focus in this section is on the effect energy security could have on the evolution of China’s strategic foreign policy, especially on Beijing’s principle of non-interference in another country’s domestic affairs. This long-standing pillar of Chinese foreign policy is what officials on every level refer to when fending off criticism of China’s actions in countries known for grave human-rights abuses. In recent years Beijing’s support for the Sudanese government has been the particular focus of Western governments and international human rights because the Sudanese government is strengthened both by oil revenues from Chinese NOCs and by the weapons it purchases from China. Beijing also uses the principle of non-interference in the domestic affairs of another country to defend its stance that it does not, as an aid donor, demand even a minimum standard of labor protection or anti-corruption practices. It is as if it does not acknowledge that an economy of its size inevitably interferes in the affairs of another country merely on the basis of its economic engagement. Since 2006 Chinese researchers have laid the groundwork for the acceptance of a more “flexible” approach to the non-interference principle in carefully worded articles in academic journals (Zeng 2008: 61, see also Wang 2005: 38). In the past, analyses by academics with new interpretations of a doctrine or principle have often indicated that a major policy change is being mulled over in higher circles of power. Wang Jisi (2007: 1) of Beijing University writes: From the diplomatic point of view, non-interference in domestic affairs will still be an important principle. We should, however, see that the stability of other countries has become more and more related to our rights and interests in those countries, including the security of our overseas organizations and civilians. Therefore, China will contribute to the construction of a harmonious society in other countries through diversified means of cooperation, consultation, aid, communication and so on.

In an article about China’s energy diplomacy, published in 2008 in an influential Chinese-language journal supervised by the Central Committee of the Chinese Communist Party, Li Geqin advocates adjustment of the definition of what could be considered the domestic affairs of another country. He points out that domestic issues sometimes spill over borders, which has implications for global security and stability. Political, economic and governance crises often threaten China’s energy security in Africa, Central Asia and other regions. Li suggests that China should incorporate these threats into its international crisis-management system,


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so that crisis management would become an important component of its energy diplomacy (Li 2008: 56-57). Some researchers have directly alluded to humanitarian crises in analyses of China’s policies of non-intervention. For example, in an article about the Darfur crisis published in “Encyclopaedic Knowledge,” a Chinese-language journal, Shi Xianze (2007: 35) writes: China has always emphasized non-intervention in another country’s domestic affairs, and has been opposed to any form of intervention, based on the principle that ‘sovereign rights are superior to human rights.’ However, as its views are gradually converging with the international community’s mainstream values, China recognizes the existence of a ‘humanitarian crisis,’ and believes that intervention is necessary when the country in question agrees to it, or it is authorized by the international community.

There are numerous examples since the turn of the millennium of China’s accepting a role that entails interfering in the affairs of other countries, from its active participation in recent years in UN peace-keeping operations to Beijing’s hosting of the six-party talks on North Korea’s nuclear program. When President Hu Jintao met Sudanese President Omar Hassan Ahmed al-Bashir in February 2007 he made it clear that China wanted to help stabilize Sudan by announcing its support for a United Nations peacekeeping mission in Darfur (Chen and Liu 2007). Chinese diplomats have been praised by several Western leaders for having taken a more active role since early 2007 in trying to persuade the Sudanese government to cooperate with international efforts to stop the violence in Darfur. In late 2007 the Vice Minister of Foreign Affairs Wang Yi publicly called on the junta in Burma/Myanmar to speed up democratic reforms (Xinhua News 2007). Ahlbrandt and Small, in a 2008 Foreign Affairs article about China’s changing policies toward dictatorships, conclude that Beijing’s experiences in dealing with North Korea in 2006 left the leadership convinced that “fence-sitting can be more damaging than decisiveness” (Ahlbrandt and Small 2008: 46). As it strives to protect the overseas investments and commercial interests of its NOCs and many other large state-owned companies the Chinese government will find it increasingly difficult to adhere to its long-standing principle of noninterference in another country’s domestic affairs. China’s fast-growing economy will continue to need more energy and other resources, and more markets, and consequently Beijing will have to engage more deeply with supplier and customer countries, especially fragile states. The slaying and kidnapping of Chinese oil workers in Ethiopia and Nigeria in 2007, and in Sudan in 2008, were all reminders that China will have to deal with a growing number of non-traditional threats in countries in which it has commercial interests. Commenting on the principle of non-interference at the 2007 China–EU Roundtable in Beijing, a Chinese participant observed that “in Chinese foreign policy practice, when there is a conflict between national interest and principle,

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national interest will prevail.”13 A senior foreign-policy specialist who consults the country’s leading policy makers went a step further in January 2008, stating that China is moving toward a policy of “constructive interference.”14 Analyses by a growing number of non-Chinese researchers also support this line of thinking (see, for example, Ahlbrandt and Small 2008; Gill, Huang and Morrison 2007; Jiang 2007). European versus Chinese Interests Europeans have an interest in China’s actions to secure energy from abroad because their imported oil and gas come from the same regions, namely Africa and the Middle East and Russia. Africa provides 12 percent of the EU’s and 34 percent of China’s imported oil, the Middle East provides 19 percent and 42 percent, and Russia provides 27 percent and 9 percent, respectively.15 China’s rapidly expanding role in Africa’s energy sector is of particular significance to countries such as France and Germany, where oil imports from Africa in 2006 accounted for 1716 and 18 percent 17 of all oil imports, respectively. Oil and gas will continue to meet over half of the EU’s energy needs. Import dependency is high and is expected to increase from 82 to 93 percent for oil, and from 57 to 84 percent for natural gas by 2030 (European Commission 2007a: 3, 10). From Finland’s perspective Russia is the key; 64 percent of oil imports in 2006 were from Russia (Öljy ja kaasualan keskusliitto 2007: 5), and almost all of Finland’s overall oil consumption relies on imports (Forfás 2006: 19). A strategic decision in Russia to sell more oil and gas to China and other countries in Asia would affect Finnish energy security in the long-term because of the uncertainty surrounding Russia’s oil and gas reserves, and above all the condition and scope of the infrastructure needed to extract them. In reality, Russia is not expected to substantially diversify its exports to Asia because of the higher price it charges Europeans compared to Asian countries. Iran and Saudi Arabia are China’s two most important energy suppliers in the Middle East. China’s close ties with Iran in particular constitute a challenge for 13 Comment by a Chinese researcher at the China–EU Roundtable held at the China Institute of International Studies, Beijing, 28 June 2007. 14 The author’s off-the-record meeting in Shanghai on 17 January 2008. 15 For Europe’s oil-import percentage, see European Commission 2006a: 19. China’s oil-import percentage was calculated from data supplied by the Energy Information Administration (2008). 16 Calculated from data based on personal correspondence between Alexandru Luta, research assistant at the Finnish Institute of International Affairs, and Bernard Nanot, Ministère de l’économie, de l’industrie et de l’emploi [Ministry of the Economy, Industry and Employment]. 17 Compiled from monthly figures obtained from Amtliche Mineralöldaten (Bundesamt für Wirtschaft und Ausfuhrkontrolle 2006).


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the European Union because of concerns surrounding Iran’s nuclear program. Although Iranian energy has become “indispensable to China’s energy security,” the two countries have extensive cooperation in other fields as well. Iran is China’s biggest overseas market for large products and labor (Aarts and van Rijsingen 2007: 32-33). The extent of current Chinese–Iranian cooperation in military applications and nuclear technology is not precisely known, but between 1992 and 2007 China had seven separate licensing agreements providing Iran with various weapons, such as infantry fighting vehicles, as well as surface-to-air and anti-ship missiles (SIPRI Arms Transfers Database 2007: 32-33). Apart from straightforward supply-demand considerations, China’s policies on securing energy abroad are of interest to the European Union because China can be expected to increasingly strive to protect its substantial overseas oil and gas investments by intervening in other countries’ domestic affairs. In Africa in particular, where the EU views its position as “privileged,” China’s more active and multifaceted role may challenge the European Union’s interests (European Commission 2007b: 3). About one-third of Chinese oil imports currently come from Africa. China’s presence in Africa has expanded dramatically in the last decade. Between 1997 and 2008 the value of China–African trade rose twenty-fold from 5.7 billion USD in 1997 (Burke, Corkin and Tay 2007) to 106 billion in 2008 (Xinhua News 2009). China’s investments in Africa increased almost six-fold from 56 million USD in 1996 to 370 million in 2006 (Huang and Li 2007: 51). The trend is indicative, even though the value of China’s trade with Africa in 2008 was less than half the 2007 value of EU–Africa trade (230 million USD in 2007).18 Oil is the critical factor. Four of the five African countries from which China imports the most (Angola, Sudan, Congo, and Equatorial Guinea) sell their oil almost exclusively to China, and these are also the African nations that have shown the most robust economic growth during this period (Sandrey 2006: 8).19 The three top countries (Sudan, Algeria, Nigeria) in which China invested in 2004-2006 were all oil producers. Each one recorded an average annual investment inflow of over 50 million USD while China invested less than five million USD in most other African countries (Ministry of Commerce of PRC 2007: 54-55). China’s political and military engagement on the continent has also strengthened considerably in recent years. Hu Jintao and Premier Wen Jiabao made five highprofile visits to Africa in 2003-2007, and in November 2006 Beijing hosted 41 African heads of state at the third Forum on China–Africa Cooperation. Since 1990 the People’s Republic of China (PRC) has participated in nine peace-keeping operations in Africa, and is currently (2009) the second largest contributor among the United Nations Security Council members to UN peace-keeping operations worldwide (Zhao 2007: 67; Gill and Huang 2009). 18 Calculated from monthly EUROSTAT data from January to December 2007 on EU imports and exports per partner country (52 in total). 19 South Africa is the nation among the top five that is not a major oil exporter.

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While China benefits from its relationship with Africa on account of the economic opportunities and diplomatic support on offer, it is simultaneously running the risk of antagonizing the European Union because of its close ties with dictators and its disregard for transparency or accountability when providing aid. Television footage of China’s president warmly welcoming Zimbabwe’s Richard Mugabe, and numerous public statements by Chinese officials that low-interest loans and development aid are granted to Africa with “no strings attached” reinforce the image of a Beijing government with little regard for human rights among Europeans as well as among segments of the African population. Outsiders’ views of China are colored by accounts of loans being granted by the China Export–Import Bank or the China Development Bank to Chinese companies for projects in Africa on the basis of recommendations given by provincial government officials who have received bribes from the companies.20 The European Commission targeted the need for transparency in China’s aid policies in Africa in the Commission’s “Communication” on China in late 2006 (European Commission 2006b). Since 2007 China’s international credibility has been a recurring theme in internal discussions involving officials, foreign-policy advisors, and scholars.21 Chinese academics have also written about China’s image problem in Chinese journals, calling on the country to “improve its credibility in the international community through enhancing the transparency of its governmental and commercial activities” (Zha 2005: 10). Ministry officials have admitted in research interviews that Chinese oil companies’ operations in Sudan in particular, but also the nonchalant attitudes of some Chinese companies toward working conditions and workers’ safety more generally in Africa, have damaged China’s international standing.22 Chinese academics have spoken and written about this problem openly: Ge Zhiguo of Hebei Normal University refers to the “poor behaviour” of Chinese companies in Africa and “their lack of social responsibility,” which have not only caused obstacles to the “Go out” strategies of the enterprises, but “have also hindered the great efforts made by the Chinese government to maintain good China–Africa relations” (Ge 2007: 33-35). Zhu Feng of Beijing University was quoted in the Financial Times as saying that Chinese state-owned companies were “hijacking China’s diplomacy” (McGregor 2008). 20 Corruption was brought up continuously by the interviewees when they spoke about decisions regarding Chinese low-interest loans for projects in Africa (the author’s discussions with officials working for the Ministry of Finance, the Ministry of Foreign Affairs, and the National Development and Reform Commission in Beijing and Shanghai, November 2007-February 2008). 21 The author’s off-the-record conversations with officials at the Ministry of Foreign Affairs of the PRC and Chinese researchers at universities and research institutes in Beijing in October and November 2007. 22 The author’s off-the-record research interviews during 2007 and 2008, see note 4.


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However, most Chinese officials and researchers take to heart the criticism China encounters in the international arena regarding its overseas investments, in particular its role in Africa. They dismiss outsiders’ descriptions of China as an exploiter of Africa, or worse yet as a modern-day colonizer, pointing out that the Chinese, regardless of whether they are government officials or businessmen, are in Africa with the consent of the Africans (Luo and Liu 2007: 29). In 2007 the President of the China Export–Import Bank said that China was spreading prosperity and delivering concrete benefits in Africa, and that roads and radios were more urgent needs than human rights and freedom (Reuters 2007). Chinese researchers and officials also point out that Africa remains poor and undeveloped despite decades of European aid, indicating the failure of Western policies to genuinely benefit Africans. Chinese policies are viewed as injecting hope that new industrialization and trade patterns will emerge in African countries (Yao 2008: 24; Fu and Yu 2007: 51). There are some Western observers who agree (see, for example, Bräutigam 2003: 466-467, 2007a, 2007b). China has given little direct aid23 to African and other developing countries in the first decade of the twenty-first century: its assistance consists of concessional loans (with little or no interest) granted by the China Export–Import Bank and the China Development Bank to Chinese companies for infrastructure projects, including roads, ports, dams and railways, as well as power plants, oil facilities, mines, and medical centers. This Chinese focus on “hardware” differs from the “software” approach preferred by Western countries that concentrates on capacity building in the recipient country (Brandtzaeg et al. 2008: 10). Chinese observers state that the Chinese approach leads to tangible results that benefit the African populace. The Chinese leadership stresses the importance of equality in its relationship with African nations by dogmatically avoiding the words “donor” and “assistance” when referring to development aid, and using instead the term “economic cooperation.”24 Criticism of China’s nonchalant attitude toward human rights in other countries has also been questioned by non-Chinese academics, who note that the more important China has become as an economic power the more the issue of human-rights abuses within China has taken a back seat in relations with Western countries. Ian Taylor writes: 23 The OECD defines Official Development Assistance (ODA) as follows: Flows of official financing administered with the promotion of the economic development and welfare of developing countries as the main objective, and which are concessional in character with a grant element of at least 25 percent. Lending by export credit agencies – with the pure purpose of export promotion – is excluded (OECD ). 24 The author’s research interview with He Wenping, Director of the African Studies Section at the Institute of West Asian and African Studies, Chinese Academy of Social Sciences, on 26 February 2008 in Beijing.

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The Role of the European Union in Asia Critiquing China’s human rights stance when it is played out in Africa, whilst selectively overlooking the abuses that underpin much of the consumer boom in the developed world, driven in part by cheap Chinese imports, lacks coherence, as does ignoring continued Western support for assorted dictators and corrupt regimes across Africa. (Breslin and Taylor 2008: 68)

Moreblessings Chidaushe of the African Forum and Network of Debt and Development remarks that only time will tell whether China is indeed a better partner than the West, and whether Western concerns are justified (Chidaushe 2007: 107). She points out that China’s Africa policy of 2006 projects a “gentle, friendly, caring attitude which appears to many Africans as a welcome contrast with the exploitation and heavy-handed top-down relationship which has typified the West’s approach (Chidaushe 2007: 109).” The same phenomenon is evident in the commercial dealings of the Chinese in the Middle East. For example, with regard to Saudi Arabia, where ARAMCO and Sinopec are jointly investing in the petro-chemical industry, Professor Tim Niblock, a Middle East specialist at Exeter University, sees a clear difference in the nature of cooperation between the Saudis and the Chinese on the one hand, and the Saudis and the Americans on the other. The former is based on mutual interdependence; the latter is shadowed by the Americans’ constant reminder that the United States wants to decrease its reliance on Saudi oil.25 In future years China will undoubtedly continue to stress this gentle approach, emphasizing sincerity and mutually beneficial cooperation in its relations with other countries. Furthermore, although Beijing states that it is not trying to promote its development model and defends the right of each nation to choose its own development path, it can be expected to subtly use any possible progress made by developing countries, especially on the African continent, to defend its own pursuit of economic development without meaningful political reform. If African nations are able to follow a similar development path as China and would succeed in raising significant portions of the populace out of poverty without expanding the political decision-making process, it would place China in an advantageous position in the international governance debate on authoritarianism versus democracy. African government officials have been conspicuously vocal in their praise of China’s approach to investment in Africa and its policy of aid with “no strings attached” (Xinhua News 2006a, 2006b, 2007a, 2007b). Given the fact that in 2006 almost half of the EU’s collective Overseas Development Assistance (48 billion euro) was intended for Africa, it is understandable that European policy makers are wary of the degree of goodwill among African governments that the vastly more modest investments and aid contributed by the Chinese government and Chinese companies have generated (the value of Chinese investments and aid to Africa was estimated to amount to less than one billion euro in 2006). 25 Niblock 2008 (based on the author’s correspondence with Mari Luomi, who attended the lecture).


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The European Union is well aware of the challenges that China’s increasing presence in Africa poses to European interests. The 2007 European Commission Communiqué on EU–Africa relations acknowledges China’s role as Africa’s new partner and outlines the objectives of the new political partnership between the EU and Africa. It calls, among other things, for a willingness to “reinforce, and in some areas reinvent, the current (EU–Africa) relationship – institutionally, politically and culturally” (European Commission 2007b: 3). The European Commission’s “Initiative on trilateral cooperation” between the EU, China and Africa, made public in October 2008, is testimony that Africa is moving toward center-stage in the EU–China strategic partnership. Both the EU and China have a strong shared interest in promoting stable and sustainable development in Africa. In the 2008 EU Initiative the Commission proposes that Africa, China, and the EU work together in a flexible and pragmatic way to identify and address a specific number of areas that are suitable for trilateral cooperation (European Commission 2008). There are numerous official dialogues between the EU and China in which the need for more policy coordination on the practical level and mutually beneficial initiatives with regard to relations with African countries can – and presumably will – be encouraged (China–EU Summit 2007; European Commission 2006b). However, there is an urgent need to expand and substantially increase forums for Track II dialogues, informal meetings, and concrete joint projects involving Europeans, Africans, and Chinese. Chinese officials acknowledge that some of the practices of Chinese in Africa, in particular among businessmen, risk tarnishing China’s international image. They refer to the enormous challenge of balancing the conflicting interests of the numerous Chinese actors in Africa.26 This has been discussed in the presence of foreigners in research interviews and seminars in the PRC. Foreigners are often reminded that the Chinese government is experiencing a steep learning curve in Africa because activities on the ground have progressed with such speed that it is struggling to keep up with developments. This has applied to many phenomena in China during the past 20 years; the speed with which change has taken place surpasses the ability and capacity of the bureaucracy to adapt, acquire expertise, and put in place a regulatory framework. The fundamental dilemma and the source of increasing tension between the EU and China concerning the different approaches of European governments and the Beijing government toward investing in and granting aid to Africa will not disappear. However, more knowledge and a more sophisticated level of understanding within the EU regarding China’s multifaceted activities in Africa could help to somewhat defuse tensions and minimize misunderstandings. In specific areas, such as the environment, cooperation between China and the EU in Africa could lead to the pursuance of similar goals. Chinese officials are likely 26 The author’s research interviews during 2007 and 2008, see note 4.


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to welcome the opportunity to benefit from European expertise and thus to avoid funding projects that are environmentally unsustainable. Conclusion China’s energy bureaucracy is fragmented. No single overarching ministry or commission dictates energy policy. As a result, energy companies – the national oil companies in particular – are powerful entities. The chief executives of the NOCs owe their positions to the Organizational Department of the Chinese Communist Party Central Committee, and the Party relies on the oil companies to contribute to stability and economic growth as providers of jobs and tax revenue. Because NOCs want to expand their profits and become competitive world-class oil conglomerates, they will continue to invest in oil assets globally even though these investments do not markedly enhance China’s national energy security. They earn more money selling oil pumped from their overseas investments on the world market than from Chinese consumers. China will continue to make efforts to improve energy efficiency and to expand its reliance on alternative energy. These are both areas in which China’s and the EU’s interests converge, and more extensive collaboration is possible. However, China’s dependency on imported oil will grow as the standard of living in China rises, and it will be increasingly difficult for it to diversify its overseas oil suppliers: in 2007 over three-fourths of its imported oil came from just two regions, Africa (34 percent) and the Middle East (42 percent).27 China’s energy-related investments in Iran and across Africa in particular pose challenges for the European Union. As China’s foreignpolicy thinking evolves to adapt to the changing needs of Chinese society and the changing international environment, practical considerations will take precedence. China is expected to move away from its principle of non-interference, at least in practice, and to try and influence the domestic politics of African countries. For this reason, trilateral dialogues and joint aid projects involving the EU, the PRC and African nations should be encouraged and supported. On the other hand, as pointed out by the European Commission in an annex to its Green Paper (European Commission 2006a), “It would be a mistake to pay too much attention to the geographical or national origin of today’s oil imports.” The stability of the global market is still crucial to the energy security of all importing countries, China and the EU included. As the Commission paper notes, major oil importers depend on a global oil market “where available resources are being distributed worldwide by a number of more or less globally operating oil companies which try to maximise their profits through a global distribution of crude oil and products in a way that minimises cost of transportation and maximises the value of crude oil against specific refinery capacities and market demands for products.” 27 The author’s research interviews during 2007 and 2008, see note 4.


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The Commission does not predict a change in this state of affairs over the next 20 years (European Commission 2006a: 19). It is in the interests of oil-importing countries to attempt to curb the fierce competition that would decrease the value of oil as a geo-strategic commodity. The current situation in which all the major importing countries pursue their respective overseas oil-supply-security strategies by trying to outdo each other is unsustainable in the long term. Competition in this context strengthens the political power of the oil-exporting states. When oil is used as a political weapon by the producer states all importing countries pay a higher price, both in the market and within the broader realm of international security (Jakobson and Zha 2006: 60-73). Hence it is in both the EU’s and China’s interests to genuinely explore the possibility of creating an organization of oil-importing countries. The main purpose of such an organization would be to reduce the transaction costs associated with the current global oil structure (Jakobson and Zha 2006: 60-73).


Chapter 9

Engaging the European Superpower: India and the European Union Rajendra K. Jain

South Asia has never been a region of frontline policy for the European Union because of the low levels of trade and investment. Politically, it has been perceived as a complex region with intractable problems. At the turn of the twenty-first century, EU indifference seemed to change somewhat as it began to increase its engagement in India and to hold annual summits. A consistently growing economy of a billion-plus people, the acquisition of nuclear weapons, and its steadily improving relations with the US led to the recognition of India’s growing stature and influence regionally and globally. Within the European Commission, External Affairs Commissioner Chris Patten was behind the decision to give greater priority to India, which was then no longer “hyphenated” with Pakistan, but with China. Since 9/11 the Union’s engagement with South Asia has grown significantly. Interest was further heightened with the Goldman Sachs report (2003) prediction that by 2050 India, along with Brazil, Russia and China, will form the BRIC (i.e. Brazil, Russia, India, and China) group that will challenge the G7 and the US economies because of its market size and economic dynamism. The Indian elite’s perceptions of the European Union continue to be essentially conditioned by the Anglo-Saxon media, which impedes a more nuanced understanding of the processes and dynamics of European integration as well as the intricacies and roles of EU institutions. Relations with India are driven by “very small circles” in Brussels. In the first circle are those with substantial economic stakes − primarily the Big Three (France, Germany and the United Kingdom). They are the ones with the requisite energy, especially when push comes to shove, to move things forward in an increasingly heterogeneous community of 27 member states. The second circle includes member states with interests in certain sectors, but which do not quite fit into the big picture. In the third circle are the remaining member states, which generally feel that if some things are good for others, it is fine with them.

The report also predicted that India will witness annual growth exceeding 5 percent in the next 30 years, and of almost another 5 percent for another 20 years after that − such persistent growth at 5 percent per annum for 50 years is without historical precedence (Wilson and Purushothaman 2003: 3).

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This chapter is divided into seven sections. The first one gives a brief review of the evolution of the India–EU strategic partnership, and of what it means for both. The focus in the second section is on their attitudes toward global governance, multilateralism, multilateral trade negotiations, and on Indian perceptions of postmodernist Europe’s growing profile as a norms entrepreneur. Section three assesses the nature of the enhanced political dialogue and examines the potential for security cooperation. The discussion turns in the fourth section to Indian approaches toward climate change and energy security, and in the fifth to the question of why the United States is more important than the Union for Indian policy makers, and how the EU’s strategic partnership with China differs from its partnership with India. Section six considers the question of whether the EU is a model for South Asia, and the chapter ends with some policy recommendations. Building a Strategic Partnership The term “strategic partnership” entered the vocabulary of international politics in the late 1990s. Some tend to refer to it as an “honorary degree” conferred by the Union on certain countries, whereas others consider a political declaration of intent. There is no “official” definition of the term, which remains an elusive and elastic concept. The India–EU strategic partnership was first mentioned in the inaugural India– EU summit (June 2000), which resolved that the two sides would build “a new strategic partnership” in the twenty-first century founded on shared values and aspirations. The Union’s first-ever Security Strategy (December 2003) advocated closer cooperation with half a dozen “key international players,” including India in addressing the challenges and objectives identified in it (Council of the European Union 2003a: 21). The strategic partnership was endorsed at the fifth India–EU summit (2004). The following summit adopted a new Political Declaration and a Joint Action Plan divided into four sections (politics, trade and investment, economic policy, and cultural and academic matters) covering issues of mutual concern. Apart from a number of sectoral initiatives, a High Level Trade Group was launched to study and explore ways and means of intensifying and extending the bilateral trade and investment relationship. It was decided to launch a security dialogue at the senior official level. All of the Union’s strategic partnerships have a common template in terms of annual summits, a Joint Plan of Action with a laundry list of actionable points and an incrementally increasing number of need-based sectoral and policy dialogues. In time the partnerships were expected to evolve their own unique internal dynamics and momentum. CFSP High Representative Javier Solana candidly admitted that there is “no definition” of a strategic partnership (China Youth Daily 2004).

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India perceives its strategic partnership with the EU as a series of “strategic” dialogues wherein one can discuss just about anything, including bilateral, regional and global issues. Brussels, in turn, defines “political cooperation” with India as “a constructive, open and equal dialogue based on common values.” However, many observers in India consider it to be a misnomer to call the India–EU partnership strategic because there is no security dimension, meaning that only the partnership with the US qualifies. Nevertheless the so-called strategic partnership with the Union is one amongst more than a dozen similar partnerships it has with Russia, France, Germany, the United Kingdom, Brazil, Japan, South Africa, and even China, Iran, and Saudi Arabia! Global Governance In this era of globalization and an increasingly integrated world economy, international institutions are playing a significant and intrusive role, especially in developing countries seeking to increasingly regulate their social, economic, and political structures (Chimni 2004: 3). Emerging powers such as India argue that global governance must be made more democratic, representative, and legitimate by extending the participation of developing countries. The increasing share of the developing and emerging economies in terms of world output and trade must be reflected in the redistribution of power in international financial institutions such as the International Monetary Fund (IMF) and the World Bank in order to allow for genuine dialogue on the governance of the global economy. “Treating the world as a single global constituency,” Joseph Nye (2001: 4) argued, “in which the majority ruled would mean that the more than two billion Chinese and Indians could usually get their way.” Europeans see a patchwork of existing institutions of varying scope and often overlapping in terms of competences, principles, A “strategic relationship,” according to Lalit Mansingh, former Foreign Secretary and Indian Ambassador to the United States, must have five essential qualities: (1) a commonality of global interests; (2) a fairly long-term view of future cooperation; (3) broad-based bilateral cooperation extending beyond a limited number of areas; (4) mutual concern with national security; and (5) frequent dialogue at the highest levels of leadership. According to these criteria, he suggests only the US would qualify as a strategic partner today, with Russia coming a distant second (Mansingh n.d.). In 2005 India and Japan agreed on a “global partnership.” A year later this was renamed a “strategic and global partnership.” The US has a 17 percent voting share (a controlling share in that 85 percent approval is necessary for action) and the EU has a major say in the appointment of 10 of the 24 members of the board. Indian Finance Minister P. Chidambaram, said at a press conference in Sydney that the IMF’s representation “must be revisited, and countries or groups of countries which are obviously over represented must yield part of their share in favor of countries which are clearly under represented.” According to Meraiah Foley, “FM says he will push IMF reform at G20 meeting” (Hindustan Times, 17 November 2006).

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and governance structures, most of which have limited compliance or weak enforcement mechanisms that they would like to strengthen. Although Europe acknowledges the need to restructure international institutions and possibly broaden the membership and power base at the World Bank and the IMF, “the assumption is that the rising powers will simply be accommodated within the existing system – a small adjustment here, a tweak there and everything will be fine again. Missing is a willingness to see that this is a transformational moment that demands we look at the world entirely fresh …” (Stevens 2008). India is a revisionist power in the sense of improving its standing in the global order, and “many Indians believe today that historical circumstances and failures of its past leadership have robbed it of its rightful place at the high table in the international system” (Mohan 2007a: 46). The emerging powers will be able to shape and influence global agendas and decisions to a greater extent than in the past, but this will happen in an increasingly contested environment since these emerging powers seek to change the prevalent order to facilitate their preferred outcomes. India realizes that a radical restructuring of international institutions is not possible, and that change will only come about incrementally. Multilateralism The European Union has been placing considerable emphasis on “effective multilateralism.” Multilateralism is ingrained in the DNA of Europe’s political elite (Grant 2008: 4). India generally endorses it, but does not wish to rely on multilateral diplomacy pivoted on the United Nations, which it feels continues to be an instrument of nation states. It seeks a seat in the United Nations Security Council, but its emphasis is on the classic balance of power. India is opposed to the aspirations European liberals have nurtured since the end of the Cold War to transform the United Nations into a supranational organization or a sort of “world government” that could interfere in domestic affairs to either uphold collective interests or deal with the new challenges to peace and security. According to one observer, India is “for the UN everywhere, except in its own neighbourhood” (Mohan 2006: 260).

It is not easy to radically re-order existing international economic and security institutions. Changing the “rules of the game” means changing the norms or ideology. However, “most institutions have rules about rules; there are often procedures that govern how these norms, ideologies, and institutional purposes can be changed … And not surprisingly, in many institutions these procedures tend to be highly conservative. They are designed to prevent actors whose preferences might change or new actors with different preferences from easily altering the purposes of the institution. The institutions themselves, if they are highly developed, with their own bureaucracies and sense of organizational interests and mission, will also develop decision rules and norms that prevent erosion or dilution of their power and mission” (Johnston 2003b: 23).


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Ever since the 1990s India has been steadily expanding its linkages and interaction with multilateral institutions and regional groupings in Asia. It has been energetically and proactively looking at any and every meaningful emerging triangle and growth quadrangle. It has cooperated in the establishment of new regional organizations. It has contributed to the establishment of alternative structures of emerging powers such as India, Brazil and South Africa. It has recently started participating in OECD trade ministers’ meetings and is willing to join OECD panels as an observer, participant or member depending on the relevance and need. India’s delight at joining the world’s elite at the G8 seems to have worn off. It considers it inappropriate that the G8 meets for two days and the G8 + Outreach 5 (China, India, Mexico, South Africa, and Brazil) for just two hours. “We have come here [at the Heiligendamm summit],” Prime Minister Manmohan Singh remarked, “not as petitioners but as partners in an equitable, just and fair management of the global comity of nations.” India does not seem too keen to join EU-run institutions or clubs for minimal gain or misplaced prestige, which would require it to share additional responsibilities without reaping any perceptible and tangible benefits in return. EU leaders are now conscious that both “the focus and the locus of debate over the future of multilateralism are shifting away from them” (Gowan 2008: 50). “Effective multilateralism” will continue to be elusive because it cannot be reduced to “legal regulation or common values: it is essentially a question of political negotiation and innovation” (Maull cited in Gowan 2008: 44). Most Indian analysts, in fact, doubt whether some notion of multilateralism could promote Indian primary or priority interests. It would therefore have to take “a differentiated position – where it can serve our interests, we should pursue it and build that way. But in a lot of important areas it won’t serve our interests best, and we have to craft a different kind of policy” (Khilnani 2006: 543).

As part of its “Look East” policy, it has over the years become more integrated with the ASEAN and has participated in the East Asian Summit since its inception in 2005. It also became an Observer at the Shanghai Cooperation Organization (SCO) in the same year. New Delhi joined the ASEM in 2006 – a decade after its establishment. However, its efforts to gain membership of the Asia–Pacific Economic Community (APEC) have not borne fruit so far since it has not lifted its moratorium on new members. India has set up the Indian Ocean Rim Association for Regional Cooperation (IORARC), and established BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka and Thailand – Economic Cooperation) in 1997 (now rechristened the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation) and the Mekong-Ganga Cooperation in 2000. He added: “We were not active participants in the G8 processes. In fact, the G8 communique was issued even before our meeting and we did make the point that in future, if similar meetings have to take place, then we should get a chance to discuss issues of our concern before the G8 meeting so that our point of view can be reflected in the thought processes of the G8” (Madhavan 2007).

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Multilateral Trade Negotiations The traditional conflict of interests between the rich North and the poor South has acquired new forms in the twenty-first century. The WTO has ceased to be a body in which the US and the EU have almost complete control over the scope, content and direction of multilateral trade negotiations. Ever since the Cancun Ministerial in 2003 the developed countries have been consistently challenged in multilateral trade negotiations by emerging powers such as China, India, Brazil and South Africa, which have become increasingly proactive in the debates. Senior EU officials have generally expressed a preference for and approval of China’s low profile and its general caution about assuming a leadership role inside the WTO in sharp contrast to the higher profile that India tends to occupy in multilateral trade negotiations. The greatest challenge, former Trade Commissioner Peter Mandelson remarked, is to have “a Chinese negotiator to start talking and an Indian negotiator to stop talking” (Dutt 2007). Some European thinktankers even wondered why China had “bizarrely allowed Brazil and India to speak for the developing world” in the on-going Doha Round (Grant and Valasek 2007: 30). However, the world witnessed a vocal and assertive China, which like India asserted at the Geneva mini-ministerial in July 2008 that it had already made as many concessions as it could on important issues such as special products and special safeguard measures affecting millions of its poor farmers. India realizes that the rules of the WTO may be skewed against developing countries, but it is convinced that having rules is better than not having them. Postmodernist Europe and its Norms Postmodernist Europe has increasingly become a norms entrepreneur and exporter with a missionary zeal to propagate and reflexively impose social, economic and ideological norms that have been so successful on the global level. This is to be done according to the principle of sovereignty-sharing in the management of global public goods. The Europeans have come to believe that their transcendence of power holds lessons for others, and they have “a civilizing mission” (Mohan 2007a: 40) in the modern and pre-modern states irrespective of their stage of development. In the post-Cold War era India has shed its moralpolitik10 in favor of realpolitik. It has emerged as a far more pragmatic power, more willing to serve its fundamental economic and trading interests and less engaged in sanctimonious moralizing. In fact, there seems to be a reversal of roles: whereas India as part of Nehruvian idealism stressed morality, principles and norms, it is Europe that is doing so today. India feels that hard power is as necessary as post-modernist 10 “In diplomatic discourse and conduct, India has tended to carry many chips on its shoulder, almost always moralistic, needlessly arrogant, argumentative, mistaking such attitude as being an assertion of national pride” (Singh J. 2006: 276-277).


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Europe’s fascination for and advocacy of “soft power.” Most stakeholders in India feel that “soft power” really means no power. India resents postmodernist Europe’s hectoring attitude. It is acutely sensitive about its sovereignty and strongly against intrusive human rights politics and the International Criminal Court, and remains wary about humanitarian intervention and the circumstances in which force may be used. Morality and universal causes such as disarmament, Indians argue, are essentially instruments of state and are espoused “primarily to advance the national interest and, only secondarily, some collective good” (Karnad 2006: 494). It is economics that is the primary driving force behind norm-setting rather than an abiding faith or inherent belief in the values themselves. Integration into the global market and membership of the World Trade Organization is imposing a great deal of discipline on the government. India seeks to play a greater role in the making of new rules for the international economic and financial system, in the establishment of which it had no role since it reflected the geopolitical realities of the end of the Second World War, and which so far has been exclusively managed by Western industrialized countries. India, like China – the two new big kids on the block – have no difficulty whatsoever with a rulebased world order, but what they want is “a different set of rules” that reflects today’s realities. To many discerning Indians, the EU has a tendency to raise issues that seem rather innocuous at the outset, but once introduced are taken to their logical conclusion to meet the Union’s determination to incrementally build an entire corpus of norms. In cases in which it is not successful in incorporating a norm multilaterally, it does so bilaterally and still persists in its quest to attain greater international recognition. It is well aware that it can only incrementally transform the existing corpus of norms that have been built into international law, but it is determined to play a meaningful and assertive role in the formulation of new norms, seeking to safeguard the interests of Indians who constitute one sixth of humanity. Many Europeans have criticized India for not supporting the pro-democracy forces in Myanmar. India supported Aung Suu Kyi for many years, and gave asylum to her supporters. But when India’s rivals, especially China, were “gaining ground in our backyard and we were losing out: the price of pursuing a moral foreign policy simply became too high.” Most stakeholders in India feel that the country does not need any “ethical lessons” from Europe, which has “long coddled” military dictators in its neighborhood, notably in Islamabad (Tharoor 2007). As far as India is concerned Myanmar is a close neighbor (one fourth the size of India with one-twentieth of its population) in which it has major stakes – controlling insurgency, access to oil and gas resources, connectivity and therefore cannot sacrifice its national interests for the sake of promoting democracy (Mohan 2007b).

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Enhanced Political Dialogue Even though India was one of the first countries to establish diplomatic relations with the European Economic Community in 1962, it took another 34 years to take the first step toward ministerial-level political dialogue with the troika representing the European Union. Since then, institutional mechanisms for bilateral discussions have grown in both scope and number.11 In fact, India–EU bilateral consultations currently cover around 45 of the 100-odd items mentioned in the Joint Action Plan. On most issues of high importance to India, such as enlargement of the UN Security Council and civilian nuclear power, the EU either has no common policy or is unable to formulate one now or in the near future. Because of differences over whether the Union should have a single seat instead of two national seats (France and the United Kingdom), and Italian opposition to a permanent seat being given to Germany, it is rather unlikely that a common EU position will evolve any time soon. Similarly, given the strong differences amongst the EU member states on the need for civilian nuclear power, it will be difficult to establish a common position on the nuclear deal. Many European countries (Austria, Denmark, Finland, Ireland, the Netherlands and Switzerland) had initially resisted the “clean waiver” sought by India from the Nuclear Suppliers Group before they eventually came on board and approved it in September 2008. With regard to the two dominant themes in Indian foreign policy since 1998 − refashioning the international nuclear-control regime to accommodate Indian aspirations, and using the new global norms being created by the war against terrorism to force an end to the Pakistani sponsorship and sustenance of crossborder terrorism − Indian policy makers realized that the “key to success was to bring Washington around to the Indian point of view. The rest of the world was more or less irrelevant” (Ruet, Chowdhury and Vasudevan 2004: 103). Indian stakeholders wondered how EU espousal of human rights and its promotion of democracy could be reconciled with political expediency and the hugging of military rulers responsible for ousting democratically-elected rulers simply because of the contributions Islamabad could make in the fight against terrorism and because it was adjacent to Afghanistan, where a NATO-led operation was under way. The Union did not share Indian characterizations of Pakistan as either a failed state or the epicenter of terrorism. Although there was a concerted Western position in response to Indian coercive diplomacy in the aftermath of the terrorist attack on the Indian Parliament 11 Apart from the annual summit taking place alternately in Europe and India since 2000, there are annual foreign ministers’ meetings and a dialogue between senior officials. There is improved cooperation, engagement, exchange and interaction in multilateral fora such as the United Nations. The Senior Officials Dialogue currently focuses on migration, and there are working groups on consular affairs and terrorism, and more recently a security dialogue (the first meeting was held in May 2006).


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(13 December 2001), EU statements were usually “extremely calibrated, as per diplomatic craft” and seemed to be defined by the search for “a delicate balance between the two competing neighbours” (Racine 2004: 150). For years Indian officials had been urging the EU to engage in “a frank and honest dialogue” on terrorism, but they realized that the effectiveness of cooperation in proscribing terrorism and its sources of financing would continue to be hampered by “a difference in perspective” (Saran 2005: 4). After repeated requests, the EU eventually declared three of the 26 terrorist outfits on the Indian list to be terrorist organizations in May 2002, and added another one in November 2005. However, there are major difficulties in regularly updating the list since the organizations tend to change their names quite often, and because EU member states are extremely reluctant to get into a rather demanding, time-consuming, permanent process of negotiation. In dealing with its problems with Pakistan India soon realized that its relationship with the EU was not going to help much, and it was essentially on its own in tackling the problem of cross-border terrorism. Growing realization that it might not always resolve regional crises in its difficult neighbourhood on its own has led India to overcome its traditional opposition to external involvement in South Asian affairs. In recent years it has started taking the trouble to explain its positions on South Asian issues to the EU. India coordinated with the Union (along with Britain and the US) in dealing with Maoist insurgency and working to restore democracy in Nepal. It has welcomed European efforts to broker peace in Sri Lanka. The EU, in fact, is no longer perceived as a “nuisance,” and there has been less informed lecturing and hectoring by Brussels (Mohan 2005). Limited Security Cooperation That the India–EU security dialogue began as late as in May 2006 and that only two such dialogues were held in the following three years is indicative of the potential of cooperation in this area. At the end of 2006 the EU Counter-Terrorism Coordinator was merely suggesting that “we might work closely together” by “exploring” practical links of cooperation with Europol and Eurojust to improve “information exchange and joint analysis” (cited in Baruah 2006). Prospects of security cooperation between India and the EU are rather limited because both India and Europe face different security contexts. Whereas India confronts traditional threats that impinge on its territorial integrity, related to border control, insurgencies and separatist tendencies, the EU, which is more of a secure community, mainly confronts non-traditional threats such as organized crime and terrorism. Because of the disparate priorities most EU member states do not share the same interests or feel an immediate and pressing need to cooperate with India. Thus, given the mismatch of context, concerns and goals as well as the disparate priorities, India is not perceived as a genuine security “partner” from halfway round the globe. Initial steps are more likely to be in “soft” areas of cooperation such as money laundering, technical cooperation, and information exchange. The

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prospects of practical, ground-level, hard-core security cooperation are rather limited as this falls within the competence of member states, not the EU. India is providing valuable intelligence to NATO countries without any quid pro quo since it is keen that NATO forces remain militarily engaged as long as possible to prevent the resurgence of the Taliban in Afghanistan. India and the EU are working together on the common task of reconstructing Afghanistan, where New Delhi has committed nearly one billion USD in development aid. Climate Change India, like China, argues that the West has a “historic responsibility” for cumulative emission levels. Between 1850 and 2000 the US was responsible for 30 percent, the EU-25 for 27.2 percent, China for 7.3 percent, and India for only 2 percent of carbon emissions (Saran 2008). There is both a “stock” and “flow” problem of global warming. When most people think of greenhouse-gas emissions they think of the flow of new emissions whereas the fundamental cause of the problem is the stock that has been accumulated by the West, especially in the two centuries since the Industrial Revolution (Mahbubani 2008a: 187-188). The International Energy Agency estimates that China and India will become the largest and the third largest emitters of carbon dioxide, respectively, by 2015 (the US being the second largest). The World Energy Outlook 2007 estimated that China and India would continue to account for about 45 percent of the total increase in energy demand. While this will push up per-capital emissions in both countries, it will still be lower than in the OECD countries. Before 2050 India will overtake Japan as the world’s third largest net importer of oil, after the US and China. India is willing to take voluntary measures to curb carbon emissions, but it is unwilling to accept any mandatory limits because only continuous growth offers the real possibility of lifting millions out of poverty. Indian policy makers feel that the West is seeking to wriggle out of its commitment under the UN Framework Convention on Climate Change and the Kyoto Protocol by arguing that unless and until “major emitters” such as China and India remain outside the reduction regime their own efforts will not be likely to make much of a difference to the global goal of reducing CO2 emissions. India stresses the need to maintain a distinction between the “lifestyle emissions” of the West (targeting affluent lifestyles and waste reduction by putting “a speed limit on Germany’s autobahns which could result in major energy savings,” for example) and “survival emissions.” “Capping or reducing emission levels in India may mean that 600 million Indians, who do not have access to electricity today, must be permanently denied this very basic energy service” (Saran 2008). It would be politically suicidal for any Indian government to accept any mandatory cuts. Moreover, it could, according to one estimate, cost India around $2.53 trillion in investments to reduce greenhouse-gas emissions by 9.7 percent by 2036 if 1990


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emission levels are taken as the baseline (cited in Sethi 2007).12 The West seems to be adopting a kind of “NPT Approach to Climate Change – that is, I get to keep what I have because I got here first. You have to stay where you are because you are a latecomer” (Mitra 2007). India argues that it is necessary for low-emission technologies to be made available to poorer countries at a price they can afford, and that technology needs to be shared generously and easily without the stringent constraints of intellectual property rights. Unless this is done, climate change is likely to become the next WTO-type of North–South divide. Energy Security The West is increasingly concerned about the rapidly rising consumption of raw materials by the emerging powers, especially China, and about the possible competition for increasingly scarce resources. As Chinese (and to a lesser extent Indian) companies purchase overseas assets and lock up preferential access to raw materials and energy, the West perceives China as a competitor, not least because its commodity diplomacy and policy of non-interference in the internal affairs of authoritarian regimes in resource-exporting countries such as Sudan, Uzbekistan, Myanmar and Zimbabwe makes it difficult for the West to impose governance norms of human rights and democracy. The search for energy security has led to differences over Iran’s nuclear policy, and over agreements with certain “troublesome” countries such as Sudan, which do not abide by liberal norms of human rights and democracy and on which the West has imposed sanctions. There is likely to be more competition and less cooperation between China and India in the scramble for oil and gas. Neither is willing to allow the West to constrain its autonomy in determining its developmental priorities and ensuring continued economic growth that is contingent on ensuring energy security. Some Comparisons: India, China, the EU and the US Like many other nations, India accords greater importance to the United States than to the EU largely because the former will remain the dominant player in the foreseeable future and because how it builds that relationship will influence its relationships with other countries in the region and in the wider world. The US has the capacity to act in ways that are more beneficial to India than the long European declaratory statements.

12 According to Amit Mitra, Secretary-General of the Federation of Indian Chambers of Commerce and Industry, “If we are to control pollution on a war footing, we desperately need the transfer of clean technology from the West … The developed nations, who pollute 10 to 20 times more, must put their money where their mouth is” (Mitra 2007).

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As an aspiring power, India is more sympathetic to the American effort to “rework the rules of the global game” (Mitra 2007), whereas Europe is a staunch defender of the current order. Europe appears increasingly as “a conservative force: protectionist, in relation to markets but also much else, hoping to keep what it has; it seems cornered by, on the one hand, a triumphant US, and on the other an emerging Asia” (Khilnani 2006: 490-491). A quantum leap like the Indo–US civilian nuclear cooperation agreement (July 2005) would have been inconceivable with the EU, many of whose member states have remained wedded to the theology of nuclear proliferation and have tended to view India as part of the problem rather than integral to the solution. Unlike Washington, the EU does not have much of a strategic vision or perspective towards Asia, and does not seem to be unduly concerned about managing the challenges of a re-emergent China apart from the economic difficulties it poses. The Europeans have a more benign view of China, whereas the United States and India have more in common with the country. The EU talks of a multipolar world, but not a multipolar Asia given a rising India and an assertive Japan. A key difference between EU and American documents on India’s strategic partnership with them is that while gradual incrementalism through dialogue and discussion is the hallmark of the Union, the American approach is more practical and direct, focusing on vital issues such as geopolitics, energy and technology. India also finds it comparatively easier to deal with the United States on a oneto-one basis. It is characterized by effective leadership whereas decision-making in an increasingly heterogeneous EU-27 driven by committees and compromises is inherently time-consuming. India’s interaction and institutional engagement with the European Union is less intense and less dense in terms of both visits and consultations, and less extensive and sustained in terms of dialogue than the EU’s interaction with China, for two reasons. As a permanent member of the UN Security Council China has all the advantages of “great power exceptionalism” (Ikenberry 2008: 32) (which India does not). Both China and India remain influential in the resolution of many global problems, but because of its Security Council membership Beijing is crucial: in 2007 it became the largest trading partner of Iran, North Korea, and Sudan and the second-largest one of Burma and Zimbabwe. In the view of most Indians, a Sinocentric Europe has been more willing to accommodate China rather than India, which, as former Commissioner Mandelson said, “is getting there, but not quite arrived” (Cited in Rao 2007). China is perceived to be in the Olympics League whereas India is in the Commonwealth league. There is a qualitative difference in the attention and focus the European Union gives to China and India in that Beijing is closer to European interests in view of its political clout and economic potential – Indian trade with the EU in 2007 was worth around €55 billion, whereas trade with China was worth over €300 billion. To a great extent, the size of the economic stake tends to define the degree of political interest that the EU and its member states take in certain countries.


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India’s strategic partnership is unlikely to reach the same level as the partnership with China, even though India does not have the same problems concerning human rights and the arms embargo, for example. India’s democratic polity and shared values do not necessarily earn it any brownie points in Europe. Senior EU officials express a preference for and approval of China’s low profile, and do not exactly relish the more vocal approach of an increasingly influential India and its confident and articulate elite. People in Brussels often argue that, unlike China, India has been neither proactive nor entrepreneurial enough to avail itself of existing opportunities or to make the requisite efforts to understand their working. Whereas Beijing is perceived as having an uncanny ability to implement plans and to get things moving, India seems to stagger along, and is more obsessed with the United States. Is the EU a Model for South Asia? Since the turn of the twenty-first century, Indian leaders have time and again appreciatively referred to the European Union as an example that could be emulated in South Asia, which remains one of the least integrated regions of the world. A former Indian prime minister even proposed a common currency. Whereas the EU has “a natural interest” in propagating the “gospel” of regional integration worldwide, there is no desire within the South Asian region for European-style integration primarily because of the different socio-economic and geopolitical environment, a refusal to share sovereignty, and the wish not to replicate costly EU institutions − the SAARC Secretariat being an office with no executive or implementation powers, for example (for a more detailed discussion, see Jain 2003 and 2008). The experiences of a particular organization are “unique” and “may not necessarily be replicated” in another regional organization. No two regions can ever be similar with regard to the motivations, imperatives and strategies for regional cooperation in view of the differences in their history and socio-economic and geopolitical conditions. The differences in the origins and the evolution of SAARC and the European Union illustrate the fact that regionalism acquires its own specific features that no other region can possibly hope to either replicate or emulate. Brussels is still wondering what to do with its new status in the region as an observer at SAARC; some skeptics are even wondering why the EU joined in the first place since not much concrete progress is likely.13 At long last, however, 13 Under SAARC guidelines observers are allowed to attend the opening and closing sessions of the summit and may make a four-minute statement in the presence of the heads of state or government at the inaugural session if their representatives hold ministerial rank. They are also invited to the opening and closing sessions of the summit and to make brief statements. In these circumstances, the EU External Affairs Commissioner Waldner did not

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several modest projects are currently in the pipeline.14 The draft of the EU’s first regional strategy for South Asia considered by the Heads of Delegation in the region at a meeting chaired by External Affairs Commissioner Ferrero-Waldner in Mumbai in March 2007 was a mere compilation of bilateral issues. However, Brussels has apparently concluded that prospects of developing interregional linkages with South Asia will be limited until there is more meaningful cooperation in the region. Policy Recommendations India no longer regards the European Union as a mere trading bloc, and sees it more as an emerging political actor in world politics with a growing profile and presence. Strategic partnership does not mean identical interests. Even if there is complete unanimity on objectives, there may be very different means of achieving them. An emergent India not only presents intellectual, technological, organizational, and political challenges to the West, it also provides opportunities in that the growing consumerist middle class (estimated to be around 250 million) is fuelling a growing demand for European goods, technology, and services. The eventual India–EU Free Trade Agreement (FTA), which, it is hoped, will be concluded by the end of 2009, is likely to considerably enhance bilateral trade, which in turn could make political differences more manageable because the overall relationship very often tends to be affected by differences in the WTO.15 More extensive engagement with the European superpower has intrinsic value even if it does not narrow the differences or produce immediate results since it does facilitate greater clarity and understanding of each other’s perspectives and approaches toward bilateral, regional and global issues. Most stakeholders in the Union have to revise their mental maps of a changing India and China in an emerging Asia. The driving force behind the European Union’s relations with India will, for the most part, continue to be trade and commerce. There is evidence of the political will on both sides to take the relationship forward, but in the final analysis, it will be shared

consider it worthwhile attending. The Delhi-based Ambassador of Germany, which held the EU Presidency at the time, attended and made the statement on behalf of Waldner – a practice that is likely to be repeated. 14 At present, there are three small-scale projects at various stages of consideration: (1) on economic cooperation (€2.6 million) in improving customs procedures and infrastructure; a financing agreement to be signed; (2) on civil society (€1.2 million) to foster linkages between Chambers of Commerce, business associations, and academicians (in preparation); and (3) on civil aviation cooperation (€4 million, in preparation). 15 The Confederation of Indian Industry (CII) estimates that the full implementation of the bilateral trade and investment agreement could increase two-way trade to €120 billion.


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interests rather than shared values that will determine the scope and content of the India–EU strategic partnership. Strengthening the India–EU Strategic Partnership 1. Identify and focus on a smaller number of long-term strategic priorities (such as climate change and energy) rather than on the mere mushrooming of dialogues and consultation mechanisms. 2. India should intensify its engagement in EU institutions, especially the European Parliament (including inter-parliamentary exchanges) and the Council. 3. Establish an Eminent Persons Group, which could offer a more detached perspective on India–EU relations, and make recommendations linking internal and external policies and comparing internal policy-making systems. 4. Explore the possibilities of establishing joint development-cooperation projects in Africa and Latin America. 5. Begin consultations on peacekeeping operations and peace-building under the UN multilateral umbrella. 6. The changing demographic profile and the graying population is compelling the European Union to address the advantages and disadvantages of insourcing highly skilled immigrants, and of outsourcing services. Because skilled immigrants are seeking better locations and conditions, European countries are now increasingly willing to conclude social security agreements with India. The easing of labor movement among professionals and skilled workers will be high on the agenda in the negotiations on an India–EU FTA. Sustained efforts on both sides could turn this into a mutual win-win situation. Civil Society Dialogue 1. Broaden, deepen and intensify the dialogue in order to dispel persistent stereotyping and to increase the visibility and profile of the EU in India, and vice versa. 2. Foster research and the study of India and India–EU relations within the European think-tank community, and strengthen academic networks and linkages. 3. Encourage and attract Indian elites and students in larger numbers to study in Europe. 4. Foster greater intercultural and interreligious dialogue with India, including dialogue on Islam. 5. Strengthen the role of think tanks in Europe, which have for too long been fixated on China. 6. Increase the number of Indian cultural centers in Europe.


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Climate Change 1. Enhance access to advanced, cleaner and affordable technologies when there is a pressing need to share technology generously and easily. Scientific and Technological Cooperation 1. Forge more partnerships in cutting-edge technologies so as to combine India’s strengths and European capabilities. 2. Intensify dialogue and the sharing of information on the activities of European centers of excellence and innovation, and finding out about European best practices in terms of managing innovation processes and technical collaboration, and joint ventures in renewable energy, biotechnology, pharmaceuticals and the social sciences.

Chapter 10

The Ambiguities in the China–India Relationship Claudia Astarita

Introduction The rise of both China and India is capturing the world’s imagination. Taken together, the economic emergence of both countries represents a seismic event that promises to alter the global economic, geopolitical, social, and environmental landscape. It is still unpredictable whether their developmental paths will lead them to interact as rivals or as partners, and this chapter therefore focuses on the recent evolution of their relationship. The chapter starts with an historical overview of China–India political relations since their respective independence, highlighting the reasons why they became closer in the 1950s and the 1960s, grew apart between the 1970s and 1990s, and now are trying to re-establish mutual responsible cooperation despite the persistent obstacles and hidden concerns. Having set the political scene, the chapter moves on to explore the scope of economic integration between China and India as (fast) developing countries, and considers whether this economic cooperation represents a turning point in their relationship. The symbolic value of the recent re-opening of the Himalayan border pass of Nathula is assessed, and the patterns of broad economic integration are analyzed from three different perspectives: import-export fluxes and their impact on both countries’ balances of payments, foreign direct investments (FDIs), and the state of the bilateral Free Trade Area (FTA). Finally, the chapter underlines how the rush for growth and industrialization is opening up new paths of cooperation and competition between the two countries. First, it is argued that access to primary resources may damage their partnership. Even though, in Asia and elsewhere, they are both apparently interested in developing joint strategies, in reality their behavior is shaped by the need to pursue their national interests, and cooperation is usually achieved only when no other option is available and coordination generates a mutually beneficial outcome. Secondly, given the fact that China and India are attempting to deal separately with their environmental problems, the question arises of whether or not they are interested in learning from each other’s past experiences and exploring cooperative initiatives. In conclusion, the potential role of the European Union in terms of active help or consultative support is assessed.

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History and Politics 1950s-1960s: From Brotherhood to War India was among the first countries that chose to recognize the People’s Republic of China in the post-World War II period, and established diplomatic relations on 1 April 1950. After recognition, both countries started exchanging high-level visits: Premier Zhou Enlai went to India in June 1954 and Prime Minister Jawaharlal Nehru visited China four months later. Both countries were early supporters of the Non-Aligned Movement of developing states. In 1955, China attended the important Bandung conference at the invitation of India. Indeed, China’s Five Principles of Peaceful Co-existence (also known as Panchsheel) were based not only on domestic policy but also on the processes and ideas surrounding Bandung. These five principles included mutual respect for sovereignty and territorial integrity, mutual non-aggression and non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. First highlighted during Premier Zhou Enlai’s visit to India, they were formally sealed in the “Agreement Between the People’s Republic of China and the Republic of India on Trade and Intercourse Between the Tibet Region of China and India,” and have since been quoted in several bilateral and international documents. During this early period the Sino-Indian relationship was frequently encapsulated in the expression “Indi-Chini Bhai Bhai” (India and China are brothers), reflecting the depth of their common cultural and intellectual history. China and India also share a longstanding tradition of rivalry and their relations were deeply strained between the late 1950s and the 1970s. The problems stemmed from two new developments, the Chinese “liberation” of Tibet and the border dispute. In addition, the increasing influence of the United States on them both caused discontent. Since the time of the British Empire the Tibetan plateau had been a vital buffer zone between the two countries. China decided to “liberate” Tibet in 1950, and this de facto takeover has never been accepted by the Tibetans (Garver 2001: 3278). China considered the annexation the final stage in its unification, and when Tibetans started demonstrating and demanding the end of Chinese rule, Chinese troops were sent to stop the revolt, killing thousands of protesters. Fearing arrest by the Chinese authorities, the Dalai Lama fled to India in 1959, where he was offered asylum. This issue of asylum continues to be the cause of tension between China and India today (Sidhu and Yuan 2003: 9-21). The “liberation” of Tibet aggravated the border dispute in that its removal as a buffer zone made China and India direct neighbours. The main disputed border areas were and remain the Askai Chin plateau in the West and the so-called McMahon Line in the East, the line drawn by the British in 1914. India disputed China’s occupation of the Askai Chin Plateau, which was critical to China’s control of Tibet, whereas China challenged the legitimacy of the McMahon Line because the Chinese government had never accepted the authenticity of the British

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deal (Garver 2001: 32-78, Sidhu and Yuan 2003: 9-21). This disagreement led to a short war in October 1962, when India suffered a humiliating defeat. In October 1964, exactly two years later, China became a nuclear power, and this further fuelled the distrust between the two countries. The China–India alignment changed in the 1960s, and not only because of the direct military confrontation and the Chinese achievement of nuclear status power. It was during this decade that China and the Soviet Union also ended their alliance when Moscow decided to adopt a neutral position in the India–China border dispute. Further, 1,600 Russian engineers, technicians and scientists who moved to China in the 1950s to supervise the installations of heavy industrial plants and equipment were recalled back home in September 1960, and in 1969, 10 army divisions joined the Soviet border troops who were confronted by the Chinese forces deployed along the Ussuri River (Musso 1989; Smith 2007: 4445). In 1971 the Soviet Union de facto protected India during the liberation war in Bangladesh (at that time the Eastern part of Pakistan), defending Bengali against Pakistani occupation (Landi 2007: 32). However, the Sino-Soviet split paved the way for Sino-American realignment, formalized during President Richard Nixon’s historic trip to China in 1972 (Garson 1995: 122, Bevin 1992: 213). Consequently, during the same decade India was geopolitically pushed into Soviet arms, and up until the end of the Cold War China–India relations inevitably mirrored the tensions of Soviet–American confrontation. China–India Relations and the Problem of Pakistan Ever since the British partition of the Indian subcontinent in 1947 Pakistan has represented India’s long-standing enemy. Even though the two countries share a common history and culture, their diplomatic relations are defined by numerous military conflicts and territorial disputes over the states of Jammu and Kashmir. Their rivalry dates back to the time of their independence, when Pakistan was established as a religious Muslim nation and India was set up as a secular country with a Hindu religious majority. They are separated by an International Border and a Line of Control in the region of Kashmir, which is officially divided into an Indian-administrated Kashmir, a Pakistan-administrated Kashmir and a Chinesecontrolled Kashmir. As far as China is concerned, Pakistan is a problematic but useful friend. Prior to the terrorist attacks on September 11, 2001 Pakistan was a supporter of radical Islam, including Islamic terrorism, and China was worried that the Pakistan-based Islamist groups may have had links with separatist movements in Xinjiang (Garver 2001: 216-242). Furthermore, Pakistan is involved in nuclear proliferation. China secretly helped Pakistan to build its nuclear arsenal and its missile capabilities in the 1970s and 1990s, allowing the country to become a nuclear weapon state (NWS) in 1998 (Sidhu and Yuan 2003: 9-12). Even if it is open to question whether Pakistan began its nuclear program development in response to India’s nuclear status, there is evidence supporting this supposition: it was in 1998, to be precise

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just a few days after India had conducted its own nuclear tests, that Pakistan carried out its first nuclear tests in the north of the Province of Beluchistan. Pakistan’s track record in supporting Islamic terrorism and nuclear proliferation does not fit in with China’s new diplomacy, which is based on presenting itself as a responsible power. Moreover, because of Pakistani proliferation China now has two new nuclear-weapon states in the vicinity, and this cannot be underestimated. However, it is reasonable to assume that China will not give up its friendship with Pakistan. The future scenario of the area is still unpredictable, and the potential role of Pakistan as a valuable partner cannot be ignored. Pakistan could act as a counter-weight against India, it remains the Chinese gateway to the Islamic world, and it maintains a critical geopolitical position at the crossroads of Central Asia, Western Asia and South Asia. Moreover, from an economic perspective, China is a leading investor in Pakistan and it is also its major weapons supplier. From the Indian point of view, Beijing’s statement of neutrality is also ambiguous. However, official declarations supported by the implementation of joint projects such as the construction of an Iran–Pakistan–India pipeline, the details of which are discussed below, would seem to have the potential of partially appeasing this complicated bilateral-trilateral relationship. China–India Relations: Changes after the Cold War The geopolitical scenario changed significantly at the end of the Cold War, so that even China and India had to rethink their bilateral relationship. There was a noticeable improvement between 1988 and 1998. In December 1988 the Indian Prime Minister Raijv Gandhi visited Beijing, where he agreed, together with his Chinese counterparts, to create a joint working group to discuss the border issue, starting a new era of gradual but potentially peaceful co-existence. May 1998 heralded a new setback, as India declared her willingness to conduct five nuclear tests (Pokhran II). Before explaining the consequences of these tests, it is worth mentioning that the decision was taken by the new Bharatiya Janata Party (BJP) government, elected in 1998 and officially oriented at promoting nationalism and self-reliance. In a letter to the then US President Bill Clinton, Indian Prime Minister A.B. Vajpayee explicitly linked the nuclear testing to a perceived nuclear threat from the People’s Republic of China. Obviously, This was the first visit by an Indian Prime Minister in 34 years, the previous one having been made by Prime Minister Jawaharlal Nehru in October 1954 (Landi 2007: 40). As far as the BJP economic agenda is concerned, it is interesting that, after winning the elections, the pragmatic wing of the party took power. Opposition to the WTO process was consequently abandoned, import duties and barriers to foreign ownership were reduced, and swadeshi was redefined: it was no longer a matter of self-reliance and was more a question of competing effectively in the global economy. In fact, it was also due to this evolution that China–India relations were quickly restored despite the explicitly antiChinese nuclear test conducted in 1998 (Smith 2007: 90).


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China considered this declaration a betrayal of the spirit underpinning the recent improvements in relations between the two countries (Garver 2001: 32-78; Smith 2007: 221-2). However, Pakistan’s role in all this cannot be underestimated. It was in the late 1980s that the Indian government became aware of its neighbor’s nuclear-weapons project, leading the Prime Minister Rajiv Gandhi to support a stepping-up of India’s own program. While China formally protested, it decided not to take any real counter-measures against India, and bilateral relations were quickly brought back on track in 1999 to continue the process of confidence building (Lei 2004: 399-422; Sidhu and Yuan: 9-12). This strategic choice was also influenced by the position the US assumed in the region. Whereas Indo–US relations were strained throughout the Cold War and New Delhi was a key member of the Non-Aligned Movement, by 1998 an emerging India–US relationship was clearly recognizable. Consequently, the Chinese leadership realized it was potentially dangerous to further stretch tensions with India. This dynamic is still relevant in that the better the India–US relationship is, the stronger will be the relationship that China will have to seek to build with India. Problems in Contemporary Relations In line with the restored habit of exchanging high-level visits, Prime Minister Vajpayee, the one who decided in the 1990s “to go nuclear,” and who announced the Chinese threat as justification of his decision, visited Beijing in June 2003. During this meeting negotiations on the border dispute were speeded up, India officially recognized China’s sovereignty over Tibet, and both countries expressed their willingness to start military cooperation. A new breakthrough was made in April 2005 when the Chinese Premier Wen Jiabao visited India. This resulted in the signing of the “Strategic Partnership for Peace and Prosperity” affirming that China and India were entering a new stage of development. The partnership was intended to be “based on the principles of Panchsheel (peaceful coexistence), mutual respect and sensitivity for each other’s concerns and aspirations, and equality; [provide] a sound framework for an all around and comprehensive development of bilateral relations based on mutual and equal security, development and prosperity of the two peoples; and [contribute] to jointly addressing global challenges and threats” (People’s Daily 2005; Lancaster 2005). Apparently, both sides wanted to openly show their willingness to go back to the entente cordiale of the 1950s (Landi 2007: 11). Indeed, in appreciation of Indian recognition of Chinese sovereignty over Tibet, China officially recognized Indian sovereignty over Sikkim, a region in the Himalayas, on the Indian Eastern border which officially became the 22nd state of the Indian Union in May 1975, when India abolished the monarchy. The Chinese had also claimed their sovereignty over the state and had never recognized Sikkim as being a part of India. However, the territorial issue of Tawang and Arunachal Pradesh has not been approached in a similarly positive manner (Landi 2007: 11-12). In November 2006, a couple of

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days before Hu Jintao visited India, the Chinese Ambassador in New Delhi, Sun Yuxi, reported to American CNN that, according to the Chinese position, “the whole of Arunachal Pradesh is Chinese territory and Tawang is only one place in it” (Outlookindia.com 2006). Arunachal Pradesh (AP) is a state in North-East India, and Tawang is a small territory between AP and Sikkim that China occupied in 1962 and reclaims as part of Tibet. The next day, the Indian External Affairs Minister Pranab Mukherjee reassured reporters in New Delhi that “Arunachal is an integral part of India” (RediffNews 2006). This incident confirms that when strategic interests are at stake, China is not interested in compromise. With the Tawang region under its sovereignty the People’s Republic will be able to open up a faster link with Bangladesh and the Bengal Gulf, and exploit local mining resources (Landi 2007: 127). Further, Tawang hosts the Galden Namgey Lhatse Temple, the most important Tibetan monastery after Potala in Lhasa. Controlling this temple is crucial for Beijing because the absence of direct Chinese influence in the area has progressively transformed the monastery into a base of operations for the Tibetan government-in-exile (Huchet 2008). Aside from these details, in the light of the China–India cooperative orientation it seems that the strength of the political relationship between the two countries is still developing, as the November 2006 visit of Chinese President Hu Jintao to India clearly demonstrates. This was the most senior in a series of visits and exchanges that were organized in 2006, designated the year of Chinese–Indian Friendship. Since then there have been frequent bilateral and multilateral meetings to be scheduled frequently. The two countries promoted the “China–India Year of Friendship through Tourism” in 2007, and in January 2008 Wen Jiabao and Manmohan Singh signed several documents promoting cooperation “in areas of economic engagement, defense cooperation, anti-terrorism efforts, culture, science, railways, traditional medicine, geological surveys, climate change ad energy, including civilian nuclear cooperationten” (China Daily 2007). It was also agreed to hold a “China Festival” in India and an “India Festival” in China in 2010 (Singh 2008b). It is therefore evident that China and India are experiencing and consolidating a trend of increasing mutual trust and respect and a high and broadening level of cooperation. However, a deeper and multilevel analysis reveals that even though the two countries have already signed dozens of memoranda of understanding, and even if the negotiations over the border dispute are making some progress, there have been only a few concrete improvements, such as the reopening of the border pass in Nathula, the consequences of which are considered in the following section. Finally, despite positive and peaceful declarations, Sino-Pakistani relations remain a major obstacle to more substantial Chinese–Indian cooperation, as apparently neither of them is disposed to accept any compromise on this issue.


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Economic Issues It is often stated that China and India are the fastest growing developing economies in the world, that their growth is seriously affecting global economic equilibrium, and that they are not only the best location for foreign investors, but also potential markets for any international company (The Economic Times 2008; Deccan Herald 2008; The Hindu 2005b; Dharam 2007). This section highlights issues that show why Chinese–India economic relations (do not) represent a turning point. First, it will be explained why the reopening of the Nathula border pass in July 2006 was nothing more than a symbolic gesture from the two countries in that in that it has no concrete implications in terms of bilateral trade. Secondly, it will be shown why, despite the rumors of exponential growth in the trade balance that have been circulating, bilateral trade conditions are “unfair and unsustainable,” and unless there is substantial readjustment, they will not be able to accommodate their bilateral relationship. Thirdly, and in confirmation of these aforementioned conclusions, the rationale behind China’s and India’s signing of Free Trade Agreements (FTAs) with the Association of Southeast Asian Nations (ASEAN) and between themselves are explained, together with the obstacles that are currently impeding progress in this regard. Nathula Traps and Border Trade The border trade between India and China is often given as an example of how fast their bilateral trade is growing. In connection, the re-opening of the Nathula Pass has been highlighted as one of the most significant achievements in recent years (BBC 2006a; Xinhua News 2006c; The Hindu 2003). The Nathula Pass is located in the Himalayas, at a height of 4,000 meters, and was reopened in July 2006 after having been closed for 44 years as a consequence of the 1962 war. In its first 51 days, this new route generated trade worth nearly USD two million (Xinhua News 2006d). Although this is a poor, sparsely populated area and is only open to trade during the non-winter months, the early figures indicated some potential for economic growth and development. Despite this encouraging beginning, however, bilateral trade remained stable in the following year, forcing the two sides to redefine their expectations (The Hindu 2007). It would perhaps be more appropriate to consider the border trade in Nathula in terms of its symbolic rather than its concrete meaning. The re-opening of what India’s Frontline magazine defined as “Routes of promise” in 2003 was mainly meant to cement what Prime Ministers Manmohan Singh and Wen Jiabao described in 2005 as a new “strategic partnership” between China and India (Choudhury 2003; Smith 2007: 219-20). The Indian scholar Iftekharul Bashar expressed his hope that “the re-opening of border trade will help ease the economic isolation of the region. Nathu La border trade markets will not only benefit border inhabitants in both countries and promote local openness and development, but also further motivate and open up a new channel for the blooming China–India trade relations”

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(Iftekharul 2006). The 2006 forecasts have not come true. However, in weighing up the potential of bilateral trade in Nathula it should be borne in mind that, according to the treaty, only 29 items can be exported from India, and 15 imported from China. In addition, because of bad weather conditions, the pass remains open only from 1 June until 30 September. Finally, neither of the two governments has as yet decided to approve massive investments in border infrastructures. “While China is advantaged because on its side a plateau of strong rocks can support the roads, landslides, soft soil and soft rocks on the Indian side make it necessary to rebuild the roads every year. Without improving the infrastructures-and without enlarging the tradable goods list-it is impossible to boost trade.” Problems of Unbalanced Bilateral Trade In terms of bilateral trade, China–India economic power is apparently only stronger. The development is impressive: China’s growth rate was 9.5 percent in 2004, 9.9 percent in 2005, 11.1 percent in 2006, and 10.9 percent in 2007, while the respective Indian rates were 6, 8, 7, and 9. It is significant that China has maintained an average annual growth rate of 9.5 percent in real terms since 1978, while between the 1950s and the 1980s India was trapped in what the economist Raj Krishna called “the Hindu rate of growth,” stagnating at around 3.5 percent, and only in the 1990s did it surpass six percent a year. However, for scholars such as Angus Maddison this developmental trend was no surprise, rather a return to the status quo of 2000 years ago, “when China and India between them held a 59 percent share of the world economy” – 33 percent to India and 26 percent to China (Smith 2007: 9; Landi 2007: 19). Today, the two countries find themselves at profoundly different developmental stages (Smith 2007: 4-5). From a purely economic perspective this is happening because, while China began implementing economic reforms in the 1970s, India waited until the 1990s before even starting to consider approving a new development path. It is not the intention here to assess the successes and failures of the two countries’ economic reform choices. What is interesting is that economic growth led both leaderships to implement a more export-oriented trade system that pushed them to look for potential partners. It was in September 1978 that the then Chinese Premier Deng Xiaoping “argued for actively developing relations, including economic and cultural exchanges, with other countries” (Smith 2007: 56-7). Since then China and India have tried to strengthen their economic ties.

Interview with Prof. Swaran Singh, Jawaharlal Nehru University, New Delhi, 21 January 2008. Even though the 3.5 percent growth rate was much lower than the Chinese rate, according to Indian politicians it was already far better then the average 0.7 percent the country registered during the 30 years before independence (Smith 2007: 39, 76, 80).


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Bilateral trade has expanded rapidly in recent years, from USD 200 million in 1991 to USD two billion in 1999, 18 billion in 2005, and 25 billion in 2006 (Xinhua News 2006g). Further, during Hu Jintao’s visit in 2006 China and India agreed to raise the annual volume of their bilateral trade to USD 40 billion by 2010. This target was increased to USD 60 billion in 2008 because the previous one was surpassed in the same year (Xinhua News 2006g; People’s Daily 2008; Landi 2007: 43). Despite these remarkable results, the Sino-Indian commercial relationship cannot be considered balanced. While half of the exports from India to China consist of primary products, Chinese exports to India are much more diverse, and high-value-added products are predominant, as Table 10.1 shows. Table 10.1 Major items of bilateral trade in 2006-2007 Major exports Iron ore Other ores and minerals Raw cotton Non-ferrous metals Plastics and linoleum

Value (USD mn)

Change (%)

3323.1

-0.3

665.0

111.6

656.3

65.8

591.1

391.6

502.2

57.5

Major imports Electronic goods Non-electrical machinery Iron and steel Organic chemicals Coal, coke and briqt.

Value (USD mn)

Change (%)

4990.9

43.9

1841.9

84.9

1487.1

351.2

1288.3

33.6

1101.3

61.1

Source: Directorate General of Commercial Intelligence and Statistics, Ministry of Commerce and Industry (Government of India n.d.).

From a commercial point of view, India is much more dependent on China than vice versa, its bilateral exports of manufactured goods in the financial year ending March 2006 being USD 71 billion, compared to 713 billion for China, and even though in absolute values both figures are growing, the gap has not decreased (BBC 2006b). In 2007, iron ore, other ores and minerals, raw cotton, non-ferrous metals and plastic and linoleum products together accounted for 70 percent of Indian exports to China, whereas the Chinese exports to India was dominated by electronic goods (29 percent of the total), followed by non-electrical machinery, iron and steel, project goods, artificial resins, plastic materials, and manufactured fertilizers (Government of India 2008a and 2008b). During Hu Jintao’s November 2006 visit China showed a strong commitment to encouraging Indian development. Of the 13 accords signed, most were designed to allow for high-level cooperation in key commercial and technological areas. In addition, as most of the trade between China and India was sea-borne, both countries stressed the need to build new land routes in order to improve transport and trade networks (Government of India 2006a).

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It is questionable whether growth in China–India bilateral trade is sustainable. While some think that increasing the quota of import–export fluxes is always positive, others argue that imbalance in trade diversity de facto conceals some of the problems Indian politicians have not been able to face yet. Exchanging primary products for secondary goods highlights the deficiencies of national industries, and this composition of trade balance is forcing India to accumulate, year after year, a significant deficit. Another reason why this is happening is because the Information Technology (IT) sector, generally acknowledge as “the jewel” of Indian industry, is not able even partially to offset the trend. IT represents just a small niche in the Indian economy, contributing only one percent per annum to the national growth rate and employing 2.3 million people directly and 6.5 million indirectly. In absolute terms this is a large workforce, but it is not that significant in a country with a working population of more than 402 million. These data confirm that India’s comparative advantage in software and IT services is not enough to fill the gap in terms of development with other countries, and investing only in IT cannot guarantee balanced growth for the whole country. According to Indian economists, who agreed on a sort of roadmap to bilateral economic integration synthesized in the Report of the India–China Joint Study Group on Comprehensive Trade and Economic Cooperation, sustainable bilateral trade can be achieved only by diversifying the composition of economic interchange. It would also help to change customs regulations, harmonize commercial procedures, and increase banking and financial cooperation. Finally, the two countries should sign agreements aimed at facilitating bilateral investments, and joint infrastructure projects should be explored in order to improve border connectivity (Government of India 2005). Thus, China–India bilateral connections will be strengthened and bilateral trade will cover more items, consequently becoming more balanced, sustainable, and profitable. These are the reasons why it was argued at the beginning of this section that, in terms of bilateral trade, China–India economic power is only apparently stronger. It is evident from the above analysis, however, that these two countries’ economic relations are neither balanced nor sustainable. China is strengthening its leading

Interviews in New Delhi with: Bhrama Chellaney, Centre for Policy Research, 14 February 2008; Bharat Wariavwalla, Centre for the Study of Developing Societies, 29 January 2008; Srikanth Kondapalli, Jawaharlal Nehru University, January 2008; Alka Acharia, Jawaharlal Nehru University, 11 February 2008; B.R. Deepak, Jawaharlal Nehru University, 28 January 2008; Mira Sinha Bhattacharya, Institute of Chinese Studies, 20 February 2008; Aradha Aggrawal, The University of Delhi, 12 February 2008; Chandra Rajes, National Council of Applied Economic Research, 22 February 2008. It is interesting that IT in India owes its success mainly to the many post-1991 reforms that have been implemented in the sector: since 1994 it has not only been liberalized, but the government has also welcomed foreign direct investments and technology.


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position and India has to change this trend if it wishes to avoid bilateral trade becoming another source of imbalance. New Partnership in FTAs? From the state of the negotiations on Free Trade Agreements (FTAs), both bilaterally and with the Association of Southeast Asian Nations (ASEAN), that China and India are signing, it appears that Delhi is trying its best to replicate what China does, but its efforts are not always successful. In Southeast Asia bilateral trade between China and ASEAN is growing very fast, spurred on by the Agreement on ASEAN–China Comprehensive Economic Cooperation signed in 2002, under which a free-trade zone should become operational in 2010 (Xinhua News 2006e). Once completed, the China–ASEAN Free Trade Area (FTA) will include nearly two billion people (Landi 2007: 14, 42). By comparison, the ASEAN–India relationship cannot be considered as important as the ASEAN–China one: India is less integrated into the ASEAN framework and its growth is less intense and widespread. Moreover, Chinese communities play a bigger role in ASEAN countries. Even though India is important in that it is a big country, has an expanding market and offers rewarding investment potential, its relations with ASEAN need more time to develop. Indeed, the India–ASEAN FTA scheduled for 2007 failed to materialize because of rules concerning the origin of goods and quota problems. During the last commerce ministers’ meeting in Singapore in August 2008, ASEAN and India finally found a compromise for the trade-in-goods agreement, which represents the first step in their FTA process. However, the Indian commerce minister Kamal Nath was vague regarding when the details for the following two steps (negotiations on services and investments) would be defined (Xinhua News 2008b). It should be remembered that the China–ASEAN FTA has generated a domino effect among Asian countries, and India is not the only nation aspiring to join the club. Japan, South Korea and Australia are working on their own agreements, although it is difficult to say whether this is in pursuance of their national interests or to counterbalance China in the region – probably both (Landi 2007: 14). The issue of the China–India bilateral FTA is even more delicate. When Wen Jiabao visited New Delhi in April 2005 he expressed his hopes for the two sides to explore the feasibility of a FTA (Financial Express 2005). However, three years later no agreement had been achieved (People’s Daily 2007). China is pushing this issue far more actively than India, stressing that an FTA would help both countries to further increase bilateral trade. Indian politicians and business people fear the competitiveness of Chinese goods. According to Indian analysts, as the Chinese economy is still more influenced by Central Government than by market forces, it would be better for India to integrate gradually rather than rapidly (Landi 2007: 44-5). In fact, prudence in opening the national market up to foreign exports was the precautionary policy attitude that China also followed at the end of the 1990s when the United States was pushing it to open the market to imports rather than

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confining trade to the export of low-cost manufactured goods. While it is true that China implemented an “open-door policy” in the early 1980s and it halved tariff and commercial tax rates, it is also true that this policy has been limited to Special Economic Zones (SEZs), so designated in an attempt to test the economic impacts and political implications of reforms. Further, even though tariffs and taxes were halved in the 1980s, the average rate in 1992 was still 43 percent, and dropped to 15 percent only in 2001 when China joined the World Trade Organization (WTO) (Smith 2007: 37, 57-59). India tried to implement a similar plan in 1991 when the Statement of Industrial Policy was approved, cutting tariffs and taxes from 100 to 25-30 percent on average, ending the public-sector monopoly in many fields, and creating some Export Processing Zones (similar to the Chinese SEZs), but without achieving notable results. One of the reasons for the different outcome in China and India concerns their political systems: while Beijing can effectively implement its policies, New Delhi has to face an open political debate before approving any reform. The availability of foreign direct investments (FDIs) also played a critical role. Chinese growth has been financed by huge flows of FDIs (taking advantage of the country’s low costs), which has also helped in terms of accumulating technologies. The same did not happen for India: the political turmoil the country had experienced since the 1980s not only suggested to foreign corporations that India was not a suitable destination for their investments, it also slowed down the implementation of any reform package. However, since October 1992, when the Party Congress declared that China was a “socialist market economy,” the country has regularly attracted USD 50 billion or more FDIs annually, averaging ten times the amount collected by India (Smith 2007: 59-60, 193-5). Some Indian scholars argue that it will be impossible for India to interact with China from an equal position unless all the obstacles that are hindering national growth are removed. Political achievement has been useful in terms of boosting bilateral trade, but now another “revolution” is needed in order to achieve more significant breakthroughs and to cement bilateral relations on a sustainable basis. New Areas for Cooperation and Competition Energy India and China have recently started spreading their international connections. Expansionism in both countries is currently dictated by the need to guarantee Interestingly, ever since India’s independence, any time the government has agreed on an economic-reform package not only has it not been able to implement it because the opposition parties have always managed to get their amendments approved, it has also lost power following the approval of any such package. Interview with Professor Alka Acharia, Jawaharlal Nehru University, New Delhi, 21 January 2008.


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enough raw materials and energy resources to boost their explosive economic growth. “Energy intensity is higher in poorer, fast-growing economies because they have more heavy industry, use older technology and are less efficient in their use of energy” (Smith 2007: 216). What this section demonstrates is that China and India are adopting a competitive rather than a cooperative approach in other geographical regions, unless they are forced to coordinate their efforts in order to prevent the loss of good opportunities. The People’s Republic of China, “from virtually nowhere [as before its economic growth started, it was a net exporter of raw materials and oil], came to account for a fifth of consumption of many industrial commodities”: cement, aluminium, copper, zinc, iron, and steel. In addition, according to the International Energy Agency, in 2000-2005 oil demand rose globally by 7.9 million barrels a day, and China was responsible for 30 percent of that increase, although its domestic oil production is approximately 180 million tonnes a year (Smith 2007: 41, 198-9). India is also dependent on energy imports: although it is almost self-sufficient in coal, it needs to import two thirds of the oil it consumes. “In 2005 the Indian government signed a $40-billion deal to annually import 7.5 million tonnes of liquefied natural gas from Iran over twenty-five years,” and an Iran-Pakistan-India pipeline has been under discussion since 2000. In terms of raw materials, India is rich in iron ore and aluminium, but it is poor in copper, tin, nickel and zinc.10 At this stage it is worth pointing out that while the oil intensity of economic growth in the advanced economies averages 50 percent, in developing countries such as China and India it is as high as 120 percent. This confirms why India’s oil consumption has risen by 5.5 percent a year during the last 15 years whereas China’s has increased between 7 and 8 percent. However, a more realistic image of how oil-consumption trends are changing globally emerges upon consideration of the fact that the oil-demand per head is currently averaging 1.7 barrels a year in China, 0.7 in India and 30 in the United States. Thus, as some scholars argue, “every 1 percent reduction in US consumption would offset a rise of 2 percent in Chinese demand” (Smith 2007: 215).

This pipeline is known as the “peace pipeline”: it should be able to carry 90 million cubic meters of gas daily in its 2,765 kilometers of pipes. It is another project aimed at improving Indo-Pakistan relations, and its name, the “peace pipeline,” highlights its role as potential catalyst of economic integration in Asia (Smith 2007: 198; Landi 2007: 100-1). 10 As India imports 70 percent of the oil it needs for its economic development, and as it is widely recognized that if growth remains coal-intensive the environmental consequences will be serious, the government has recently started to explore the nuclear option in order to diversify energy resources (Landi 2007: 80).

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India and China as Competitors in Asia and Africa India has always seen itself as the major power in Asia. It is unwilling to acknowledge that China might also have an interest in South Asia and in the Indian Ocean, and China is currently strengthening its presence in this region. Both nations need to import oil from the Persian Gulf through the Indian Ocean, which from a geopolitical and strategic standpoint is becoming a crucial spot. At the same time, China is watchful of India’s growing profile in Central and East Asia, even if officially both countries welcomed Beijing’s association with the South Asian Association for Regional Cooperation (SAARC) as an observer.11 SAARC is critical to the two nations in terms of monitoring energy routes in South Asia. In Southeast Asia, India is strengthening its ties with Myanmar, expanding cooperation in the energy and trade sector in order to prevent Yangon from falling completely under Beijing’s influence. According to Amit Kumar, there are four countries in which China and India are harshly competing, these being the nations that could guarantee the maintenance of an “arc of influence” in South and Southeast Asia: Bangladesh, Myanmar, Maldives, and Sri Lanka (Kumar 2006). In Bangladesh, China traded natural gas for investment in infrastructures, in Myanmar, it guaranteed energy cooperation in the form of joint ventures, even though India managed to keep the development of the port of Sittwa within its control. Moreover, as China already has control of the strategic Gwadar port in Pakistan, India and China are competing to obtain access to the Bengali port of Chittagong. In addition, China recently set up a naval base at Marao in the Maldives, and has gone into the oil-exploration business in Sri Lanka, thereby forcing India to intensify its pace of cooperation with countries in the Indian Ocean littoral and beyond (Maitra 2005; Sud 2008; Kumar 2006; Aneja 2006; Malik 2006). Generally speaking, it is safe to say that while South Asian countries seem interested in reinforcing their connections with China in order to counterbalance Indian influence in the region, Southeast Asian nations are trying to adopt the same strategy with India, this time as a counterweight to China. The relationship between China and India in Central and West Asia is quite similar in terms of overlapping and differing interests. Strategically, this area is very important for energy resources, and apparently it is a context in which China and India can deepen their cooperation. Both countries are already cooperating within the Shanghai Cooperation Organization (SCO), an intergovernmental forum founded in 2001 by China, Russia, and the Central Asian countries, to which India, Pakistan, and Iran have recently been admitted as observers. Established as the Shanghai Five group in 2001 with the aim of settling the border dispute, the SCO is now committed to strengthening regional economic, cultural and security 11 The South Asian Association for Regional Cooperation is an economic and political organization founded in 1985 by the eight countries of Southern Asia. Its members include India and Pakistan, whereas China, the European Union, Japan, the Republic of Korea, and the United States are observer countries (Xinhua News 2006f).


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cooperation. Both China and India are trying to expand their links with West Asia, largely driven by local energy suppliers. As discussed above, the two nations are heavily reliant on imported oil from the Persian Gulf through the Indian Ocean. India is signing agreements with the Persian Gulf states. China is developing oil holdings in Iran, but India is catching up and in 2005 it signed the previously mentioned agreement covering natural-gas imports. From a strategic perspective the war on terror and the Iraqi conflict have further complicated the scenario. China is more concerned than India over a potential permanent American presence in the region. Further, as India has a more balanced relationship with the United States than China, the links between the US and Pakistan on account of the war on terror may thwart Chinese efforts to expand its influence within this area. China invested USD 200 million in Africa in 2005, for oil exploration and development projects, and 30 percent of China’s annual oil imports come from Sudan, Nigeria, Angola, Algeria, Gabon, and Equatorial Guinea. Moreover, Africa is an important source of raw materials: Chinese companies are interested in Sierra Leone’s diamonds, Zambia’s copper, Congo’s cobalt, and the timber from Gabon, Equatorial Guinea, and Mozambique. In return, China usually builds infrastructures (roads, bridges and dams), which foster the receiving country’s development and facilitate goods transportation (Smith 2007: 126). Ignoring both European and American concern about the help given to corrupt regimes, China seems more interested in ensuring for itself an adequate supply of energy and raw materials, and creating some form of loyalty and dependence oriented at opening new markets for national goods in Africa.12 In November 2006 the People’s Republic of China held the first China–Africa Summit in Beijing, where 53 countries gathered together to confirm their mutual friendship and to boost multilateral relations. India replicated this initiative in April 2008, but this time the representatives of only 14 countries flew to New Delhi to discuss cooperation strategies, trade, and investments. As Anver Versi states, it appears “that the Indians, unlike the Chinese, had failed to do their homework properly and were unable to arouse the same enthusiasm for the Delhi summit as for Beijing” (BBC 2006b; Versi 2008: 14-15). Even in terms of country-to-country investments India is doing less then China. It was only recently that New Delhi started seeking advantageous agreements with Niger, Zambia, South Africa, and Ethiopia (Teslik 2007). Although it cannot be denied that there are examples of joint efforts in terms of energy cooperation, they do not represent the dominant trend. In December 2005 the China National Petroleum Corporation (CNPC), the Indian Oil and Natural Gas Corporation (ONGC), and PetroCanada agreed to join forces in buying the 12 On account of China’s investments, the sub-Saharan Africa economy grew by more than 5 percent in 2005. However, it is open to question whether China’s help will benefit African countries in the long run. Indeed, Chinese competition has already had a negative impact on industries in Lesotho, Swaziland, Madagascar, Kenya, and South Africa, whose main advantage is the low cost of labor (Smith 2007: 125-7).

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majority of shares in the Syrian Al Furat Production Company. However, just a few months before, in May, while trying to build a consortium to explore oil and natural gas reserves in the area around the Aral Lake, the CNPC had approached the Uzbek Uzbekneftag, the Russian Lukoil, the Malay Petronas, and the South Korean National Oil Corporation, ignoring the Indian ONGC (Landi 2007: 2324). In January 2006 the Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar signed five energy-cooperation deals in Beijing covering scouting, oilrefining, research and development, and the promotion and development of alternative fuels. In addition, the two national companies (ONGC and CNOOC) signed an agreement to promote joint energy distribution (Associated Press 2006, Landi 2007: 108-112). During his official visit Minister Aiyar recalled that China and India were drawing their energy cooperation from the Five Principles of Peaceful Co-existence. He also mentioned that New Delhi had organized a successful meeting among the main oil-producing and oil-consuming countries in Asia (China, India, South Korea, Japan, Saudi Arabia, Iran, Qatar, Oman, UAE, Kuwait, Malaysia, and Indonesia) in 2005 in order to plant the seeds of regional energy cooperation (Landi 2007: 110-111). Although China and India have apparently been cultivating mutual cooperation since 2006, it is doubtful whether this is, in fact, the case. According to a Norwegian Report on Energy Security in Asia, “the question of reliable oil and gas supplies has become a matter of national security, and as a consequence energy security has become a core issue on many countries’ foreign policy agenda”. Clearly, it is difficult to achieve cooperation when national security is at stake unless joint actions are considered mutually beneficial (Tønnesson and Kolås 2006: 53-54). “Despite the conclusion of energy cooperation agreements, China is likely to go solo in its quest for energy security; energy competition, rather than energy cooperation, will be the norm” (Malik 2006). Accordingly, it seems more consistent to argue that China and India cooperate simply when they see no alternative, rather than because they are interested in helping one another. The Threat to the Environment Many analysts have started asking whether the planet can “cope with China and India as big energy consumers.” During spring 2006, when a cloud of soot and poisonous chemicals moved from North China to America’s West coast, the international community became even more concerned about the environmental consequences of the growth of these two nations (Smith 2007: 200). In developing countries, environmental problems and economic growth are directly proportional to energy consumption. Therefore, the more China and India grow the more they have to think about how to address the environmental threats their economic development is creating, within and outside national borders. The aim in this section is to ascertain the extent to which China and India are attempting


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to deal with environmental problems separately, or whether they are interested in learning from each other’s past experiences and exploring cooperative initiatives. Recognizing that safeguarding the environment was one of the major challenges facing China and India, during recent bilateral meetings the two countries started signing some agreements on environmental issues. In June 2003, Wen Jiabao and A.B. Vajpayee paved the way for bilateral cooperation: China and India face special and similar challenges in their efforts to protect the environment while simultaneously forging ahead with rapid social and economic development of their countries. In this context, the two sides agreed to work together in a practical manner to co-operate on preserving the environment and ensuring sustained development and to co-ordinate positions on climate change, biodiversity and other issue in relevant multilateral fora. (BBC 2003)

Some substance was added to this declaration of intent in January 2006 when the two countries drew up the Memorandum for Enhancing Cooperation in the Field of Oil and Natural Gas in which they agreed to promote environmentfriendly fuels (China Daily 2006). A few months later, they signed the Agreement on Forestry Cooperation in order to foster cooperation and joint development in forestry-related fields of the economy, manufacturing, processing, and science and technology (see Government of India 2006b). The aim is to build a framework within which environmental laws can be implemented and complied with, but since the two nations already have Environment Protection Acts that are not respected, and five-year plans for reducing energy consumption and pollution emissions, it is questionable whether bilateral commitment will be any stronger than unilateral intent (Etienne 2007: 148-151). China is aware of its environmental problems. Interviewed by the German magazine Der Spiegel, Mr. Pan Yue, Chinese Deputy Mininster of the Environment, made the following statement: Acid rain is falling on one third of the Chinese territory, half of the water in our seven largest rivers is completely useless, while one fourth of our citizens does not have access to clean drinking water. One third of the urban population is breathing polluted air, and less than 20 percent of the trash in cities is treated and processed in an environmentally sustainable manner. Finally, five [one year before only two, according to Time’s 2007 report] of the ten most polluted cities worldwide are in China. (Spiegel Online 2005; Walsh 2007)

China ordered factory shutdowns and the removal of most of Beijing’s two million cars from the street for the 2008 Olympics, but what it needs are long-term strategies addressing its environmental problems (Smith 2007: 97). According to the Ministry of Environmental Protection, “after rising steeply for many years, emissions of three important pollutants began to decline last year”: sulfur dioxide by 4.66 percent, organic pollutants by 3.14 percent, and industrial discharges

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of solid waste into the air and water by 8.1 percent (Bradsher 2008). This is a breakthrough, but it is not enough. Not many precautions are being taken to prevent or soften the effects of environmental disasters caused by the implementation of big infrastructure projects. The Three Gorges Dam in Hubei province has been completed notwithstanding environmental campaigners’ complaints and concerns. The Dam, work on which was completed in May 2006 although the reservoir will be ready in 2009, is the largest hydroelectric dam in the world. Its construction has changed the balance of the Yangtze River ecosystem: “When the area was flooded, it submerged factories, mines and waste dumps, spreading their toxic contents down the river, [turned the area into a] bog of effluent, silt, industrial pollutants and rubbish [that is impossible to clean] (Smith 2007: 196). The dam is also damaging fish stocks in the East China Sea, one of the largest fisheries in the world, and the levels of pollution are becoming so high that the water coming from a quarter of the tributaries of the Yangtze river is “not even suitable for spraying on crops in fields.”13 Nevertheless, Chinese officials insist on emphasizing its main benefit: providing some of the electricity required as a result of national economic growth. Environmental conditions are no better in India. Greenpeace claims that the country is full of large-scale and heavily polluting chemical plants that are still using obsolete technology.14 Many factories keep on pouring waste waters into rivers and lakes. America’s Energy Information Administration confirms that India’s big cities are among the most polluted in the world, and car emissions are making the situation even worse (Etienne 2007: 148; Walsh 2007). The environmentalist Lester R. Brown has suggested that China and India have no choice but to opt for environmentally sustainable growth. It is widely recognized that current US consumption patterns and Chinese and Indian resource-intensive models of economic growth will not work in the twenty-first century (Brown 2006). According to optimistic speakers such as Christopher Flavin, President of the American Worldwatch Institute, “China and India are positioned to leapfrog today’s industrial powers and become world leaders in sustainable energy and agriculture within a decade.”15 However, realism leads the majority of researchers to take a more cautious position. While the achievements have to be considered important breakthroughs, they are not enough to produce significant and longterm improvements. Bilateral cooperation could further ameliorate the current 13 This is not a surprise in a country in which “officially, 70 percent of […] rivers and lakes are polluted, more than 100 cities suffer from serious water shortage and 360 million people lack access to safe drinking water” (Smith 2007: 201). 14 The country is still paying for the world’s worst chemical disaster, at Bhopal in 1984, which killed 15,000 people, injured 550,000, and is still contaminating the atmosphere in the surrounding area. 15 According to the report, “China’s world-leading solar industry provides water heating for 35 million buildings and India’s pioneering use of rainwater harvesting brings clean water to tens of thousands of homes” (State of the World 2006).


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situation, but external intervention by an environmentally conscious entity such as the European Union is seen as a better option for tackling Asian environmental challenges. Implications for the European Union The aim in this chapter is not to produce the best recipes for China’s and India’s economic development. On the contrary, it is an attempt to help the European Union (EU) to find some means of interacting with these two countries, either separately or together, in the areas mentioned. From the political perspective, the only role the EU can play is in facilitating regular bilateral and multilateral meetings. Although it is obvious that only Chinese and Indian representatives have the power to decide whether they are ready to resolve the border dispute, or to pragmatically look at their relations with Pakistan, it is also true that facilitating multilateral meetings may produce two positive results. First, accelerating the confidence-building process, and at the same time getting involved in the mutual-trust enhancement mechanism will presumably benefit the EU in terms of increasing its confidence in and reliance on the two Asian powers. Secondly, being directly involved in multilateral meetings will increase its influence on the decision-making process and prevent it from being kept “out of the games.” From the economic perspective Asian equilibrium represents a thorny problem for Europe. In this sense, the China–India relation is meaningful in that it is predictive of the future balance in Asia. It seems from the above analysis that it is early for India to counterbalance China in the Asian region. Therefore, it would seem reasonable to assume that the People’s Republic of China will establish itself as a leader in the area, facing the EU as a strong interlocutor. However, even though India is not able to counterbalance China now, it is unlikely that the region will allow China to emerge as the unrivalled leader. As mentioned, Japan, South Korea, Australia, and New Zealand are also working on their own agreements with ASEAN. Although it is difficult to say whether this policy was adopted in pursuance of their national interests or to counterbalance China in the region, given that the East Asia Summit (EAS) was established in 2005, it seems that all EAS members (ASEAN countries, China, India, South Korea, Japan, Australia, and New Zealand) consider it the best framework for intensifying Asian economic integration and effectively counterbalancing Chinese regional influence. Nevertheless, an economically integrated region in which every single country has a role in terms of the balance of power is not necessarily a better outcome for the EU. Even though Asia has several challenges to address before being accepted as a fully integrated economic area, it is evident that when this stage is reached it will have stronger bargaining power and an influence over other regional blocs. Accordingly, the best strategy the EU can follow at this time is to strengthen its economic linkages with the East Asian Summit community as much as possible.

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As far as access to raw materials and energy resources is concerned, the EU should be careful because the Old Continent also needs both of these to boost its own growth. Once again, it seems that becoming actively involved in Chinese and Indian projects will be more rewarding than observing them from a distance. The two countries are investing huge amounts of capital to build pipelines, ports, and infrastructure in general. Co-participation in some of these projects may be useful for the EU in order not only to safeguard its raw-materials and energy supply and access to trade routes, but also to give it a say in the decision-making. However, this kind of cooperation requires deep mutual trust, achievable only through regular multilateral meetings and frequent and wide-ranging exchange of information. Finally, with regard to environmental cooperation, the EU has the skills to help both China and India with the technological upgrading of their industrial production. This upgrade will reduce global energy consumption and pollution emissions, but the EU should also be aware that it will necessarily boost growth and competitiveness in the two countries. It has been estimated that pollution is losing China between 8 and 15 percent of its gross domestic product, and India between 4 and 8 percent, and it is by no means certain that the EU will be interested in helping them to achieve a 20-percent and a 15-percent annual growth rate respectively (Spiegel Online 2008). Nevertheless, because these figures cannot be estimated with due precision, and in any case the emergence of the global financial crisis at the end of 2008 has forced economists worldwide to revise their calculations, the EU may consider environmentally friendly joint ventures and green partnerships with Chinese and Indian factories a way of facilitating economic recovery among its member countries. Conclusions Indian and Chinese officials always insist that the two countries are neither competing nor comparable. According to the evidence presented in this chapter, however, even if talk of a race is exaggerated, it is undeniable that they are competing in order to protect their national interests. They are also competitive in their political and economic relations, and even in the new areas of cooperation (energy and the environment) identified above they are not showing signs of strong bilateral consensus. This approach is understandable in that China and India share the same goals: becoming and being perceived as powerful countries, interacting with the West as economically powerful states, guaranteeing raw-materials and energy supply to fuel their economic growth, and finding new markets in which to sell their industrial outputs. It seems that neither nation can avoid copying the other, convinced that the one remaining behind will quickly lose all its advantages. China is more autonomous than India in this game, and for this reason “the Chinese government pays rather less attention to India than vice versa” (Smith 2007: 171). It is also relatively stronger than India, with “a formidable infrastructure to support manufacturing


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activities” that India lacks. Moreover, “India is a less open economy than China, with average tariff levels more than twice as high.” The restrictiveness of its hiring and firing regulations is not helping it to fulfill its potential as a manufacturing nation, and it is not even able to exploit its demographic advantage in that it seems incapable of solving the problems of low literacy levels and skills mismatch, and of generating the tens of millions of jobs required to employ its growing population (Smith 2007: 175-186). Finally, China also has some major challenges to face, such as maintaining a high level of growth, reducing inequality in order to prevent social unrest, maintaining growth in the western part of the country, and reforming its banking and financial system. Consequently, the strategies the two countries adopt in addressing their internal challenges will significantly affect their bilateral relationship, as well as the regional and international balance of power.


Conclusions and the Way Forward Eija Limnell

This book has examined the global role and image of Europe from the perspective of the EU’s strategic partnerships with China and India. Four key sets of issues underpinning strategic relationships define the opportunities and challenges embedded in these partnerships. The first of these concerns the convergence or divergence of values, norms and interests – related to political systems and human rights, global governance and sovereignty, for instance. Different approaches to multilateralism and regionalism constitute the second and related set of questions shaping the relationships. Thirdly, the challenges related to energy and climate change represent the main field in which strategic interaction is needed. Finally, the development of the mutual relationship between China and India should not be overlooked in defining the EU’s strategic interaction with both countries. Close scrutiny of these four sets of key issues shows a possible way forward, in the form of concrete policy recommendations. Values, Norms, and Interests The chapters comprising this book confirm the impression that European values are less convergent with Asian values on issues of domestic governance, while there are more commonalities in values related to international or global governance. Whereas domestic governance is one of the key challenges in the case of China, India is more prone to engaging in dialogue on democratic values and intra-state governance. The European Commission, especially in its early policy papers on China, assumes the universality of political values supported by the EU, and entertains ambitions that cooperative relations China will help it to evolve into a more open and just society. Europeans, far more than Americans, have in the past tended to see China’s emergence in terms of domestic reforms and transition, perceiving a role for themselves as ardent suitor assisting China in the transition process (Shambaugh 2007). However, as Mikael Mattlin points out, the EU is increasingly beginning to see China through a prism similar to the one the US looks through:

The author gratefully acknowledges the comments and input of Bates Gill and Timo Kivimäki in the drafting of this chapter.

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a more complex entity that is not only a monumental developmental undertaking but also a competitive challenge for EU governments and companies, as well as an indispensable partner in resolving global issues. Juha Jokela explains how dayto-day EU policy-making in relation to China and India largely tackles economic and trade issues rather than human-rights or security concerns. He suggests that this indicates pragmatism and EU interests rather than normative concerns and EU responsibilities. In this context the paucity of results achieved in the EU–China human-rights dialogue is not surprising. China has not ratified the International Covenant on Political and Civil Rights (ICCPR), for example. Many human-rights organizations estimate that conditions in China have deteriorated significantly in recent years, particularly in the case of persons considered politically threatening by the Chinese government. The EU will face a normative challenge if China succeeds with a model that maintains economic growth without meaningful political reform at home. It could cast doubt on the strong and widely shared belief in Europe that the market economy generates in addition to wealth a politically open society, and promotes human rights. India, in comparison, has in many respects a record that is more consistent with European values and norms, in areas such as freedom of expression and acknowledging ethnic and religious diversity. In terms of the latter, Europe could also learn from Indian experience, perhaps following one of the scenarios depicted by Stig Madsen, in which there is a process of merger, borrowing, and exchange between the “First” and the “Third” world. Nevertheless, India suffers from a number of human rights challenges, failing to more fully implement the rights of children, religious minorities, those living with HIV/AIDS, and those belonging to vulnerable communities such as certain tribal groups. Therefore, many normative challenges lie ahead in closer EU–India strategic partnerships. While China and the EU do not share common views on democracy and human rights, their partnership can still focus on issues related to global governance. In many respects Chinese and European norms and interests have tended toward a greater convergence in recent years, particularly as China has come to see the value of presenting itself as a more responsible player in international affairs. Beijing regularly calls for a more “democratic international order” – in other words seeking a greater voice in international matters for emerging powers and developing world countries – a point generally in keeping with EU aspirations. On the other hand, due to its status as a permanent member of the United Nations Security Council, China has been slow to accept a greater role for countries such as India and Japan as part of the Council’s reform and expansion. Indian policy also calls for more democratic, representative, and legitimate global governance structures that allow for a higher level of participation among developing countries. As a founding member of the non-aligned movement India has been a strong advocate of democratic global governance. In line with this policy it seeks a permanent seat in the UN Security Council. Rajendra K. Jain points out how India and many other emerging countries argue that an increasing share of the developing and

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emerging economies in terms of world output and trade must be reflected in the redistribution of power in international financial institutions. In terms of global governance, all three partners share a commitment to the primacy of the United Nations as a source of legitimacy for international action, an appreciation of multilateral diplomacy, and an emphasis on the rule of international law in international politics. These are opportunities for cooperation that EU strategic partnerships with China and India should explore further. In addition, the common interest in global economic development between the strategic partners offers platforms for common action. However, the EU’s relationship with both China and India is asymmetric and complex. There are many reasons for this, and perhaps the most important one is Europe’s post-modern (or “post-realist”) approach to sovereignty and state responsibility, which differs significantly from China’s and India’s modern (or “realist”) approach. Several authors in this volume confirm that rigid interpretation of state sovereignty, the national interest, noninterference in internal affairs, and traditional security threats remain central to Chinese and Indian foreign and security policy. This results in challenges in the EU–China and EU–India strategic partnerships, especially in the context of sovereignty and intervention in the current and future world order. The mainstream position in the Chinese modernization process implies a policy of compromise between international cooperation and self-reliance. Noninterference in the internal affairs of sovereign states remains a strong pillar in its foreign policy. India maintains a similarly strong position on this issue. As such, the EU faces difficulties in trying to encourage China and India to join with European and other governments in taking stronger measures in response to troubling developments in countries such as Iran, Burma/Myanmar, Sudan, Zimbabwe, and North Korea. According to Zhang Tiejun, China has slowly relaxed its traditional interpretation of non-interference, and there are some Chinese analysts who acknowledge that China can accept intervention in humanitarian crises when the country in question approves of it and/or it is authorized by the international community. As China and India become more deeply entwined with the international system, and their interests become more global in scope, it is likely that they will take an increasingly pragmatic approach to questions of sovereignty and intervention, with the aim of stabilizing regions and securing their perceived national interests. Interestingly, energy security may have had an effect on China’s non-intervention policy and, according to Linda Jakobson, it might have led to the acceptance of a more flexible approach to the principle of non-interference with regard to the protection of overseas investments and other economic and commercial interests. Approaches to Multilateralism and Regionalism According to its strategies, the EU strongly advocates effective multilateralism and promotes regionalism elsewhere. Its role will probably become stronger in

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the near future decision-making and executive powers with regard to its external relations are increased. Juha Jokela suggests that the EU is developing from a passive model-power characterized by routine behavior to a more active, strategic power. However, it is not clear whether or not the aim is to promote common global rather than exclusive EU interests. The focus of the day-to-day policies toward China and India indicates the latter. This might constitute obstacles to effective multilateralism. On the other hand, China and India are increasingly showing an interest in multilateral engagement. China has rapidly emerged as a major player in multilateral fora: membership in the WTO in 1999, increased China–Africa cooperation including the Forum on China–Africa Cooperation, the China–Arab Summit, NATO dialogues, ASEM, and the China–EU partnership. Even so, this view should be balanced by the observation that the two countries are far from fully embracing the norm of multilateralism as understood by the EU – to include giving up a certain degree of state sovereignty in order to achieve common purposes. Moreover, as suggested by Bates Gill, China’s future approach to multilateralism can be judged by how the country seeks to address global and transnational challenges that will demand multilateral responses: health, humanitarian assistance and development aid, peacekeeping, non-proliferation and arms control, climate change, and resolving regional instabilities. The same applies to India. Significantly, China appears to be more active in regional cooperation (APEC, ASEAN’s ARF) than on the global level, which might reflect the priority given to its “friendly neighbourhood policy.” The earlier three- and four-party processes on the Korean peninsula, the current six-party process, the Shanghai Five process which led to the establishment of the Shanghai Cooperation Organization, and the East Asia Summit are all good examples of China’s taking a proactive position in order to develop these mechanisms. China helped to found the ASEAN+3 process (the 10 members of ASEAN plus China, Japan, and South Korea), and considers it the preferred vehicle for developing free trade areas in the region and for fostering a broader and deeper East Asian Community in the longer term. The Shanghai Cooperation Organization was the first formal multilateral organization China had a hand in forming. In South Asia, India tends to dominate regional organizations such as the South Asian Association of Regional Cooperation (SAARC). As Bart Gaens shows, India’s joining of ASEM in 2008 as a result of the decision taken at the Helsinki summit in 2006 illustrates its ambitions to become more involved in processes of regionalism in East and Southeast Asia. The inclusion of India in ASEM offers a chance to widen existing dialogue with European countries, and will deepen India’s engagement with its Asian neighbours. Even though region-to-region interaction is yet to exploit its full potential, the EU’s interregional approach could be said to have compelled Asian states to closer cooperation and preparation of their views in advance of meetings. Conversely, Asian region-building (ASEAN+3) and ASEM have influenced the EU states’ foreign policies in Asia. It is also significant that civil society has been


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more closely aligned to the ASEM process, as this widens the opportunities for its further engagement within China and India. Energy and Climate Change as the Key Features of Strategic Partnerships Growth and development in China and India are connected to the availability of raw materials and energy resources. China’s energy security matters to the EU because of its effect on the global oil market, on climate change, and on international relations. China is the world’s third largest importer of crude oil after the United States and Japan, and the country is now the largest emitter of greenhouse gases. Some would go so far as to suggest that China’s foreign policy is really just its energy diplomacy. This policy is implemented in Africa, in Russia, and in Central Asia, but it has repercussions on the EU’s policy with these regions and countries. This diplomacy is tuned to securing energy supplies, but also involves efforts to safeguard access to the latest energy-related technology, such as through investments in European energy sector. Linda Jakobson argues that Chinese policy makers are adjusting policies and diplomatic efforts to changing international conditions and the country’s developmental needs as a consequence of China’s growing economic, political, and military weight on a global scale. The relationship between the government and the three major national oil companies (CNPC, Sinopec and CNOOC) is partly symbiotic, but due to ineffective governance the companies are applying their own versions of the “go out” policy of the Chinese government. There appears to be no well-established system of coordination either among the oil companies or between them and the government authorities. As long as the oil companies are perceived by top Chinese leaders as instrumental to their contribution to economic growth and stability as tax-revenue providers and employers, China’s national oil companies will continue to expand their overseas oil equity portfolios. There is some discussion within Chinese society about the behavior of Chinese companies and their lack of social responsibility, but most of the international criticism is dismissed. Nevertheless, at the same time Chinese authorities have a growing understanding that keeping the world oil market stable, saving energy, and relying on non-fossil fuels are all equally essential. The EU is increasingly interested in China’s activities in Africa where countries such as France and Germany import 17 and 18 percent, respectively, of all oil products, and where the EU has its largest development-assistance programs. China’s political and military engagement in Africa has also deepened considerably in recent years. Low-interest loans and development assistance are given without “political strings attached.” In contrast to the ideological, humanrights-oriented European concept of good governance, China’s conditions for engagement are based more on the idea of economically sustainable principles of effective governance. From the EU’s point of view, China’s support of Iran’s legitimate right to nuclear energy is another challenge. Iran, Saudi Arabia, and

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Sudan are China’s three most important energy suppliers and Iran is China’s biggest overseas market for large products and labor export. This, in addition to the ideological difference related to the Chinese perception of Iran’s equal rights to nuclear energy, explain the differences in perspectives between China and the EU toward these countries. India’s energy diplomacy is of equally high importance. Rajendra K. Jain emphasizes that India will not allow the West to constrain her autonomy in determining developmental priorities and ensuring continued economic growth. Like China, India has signed important agreements with Iran and is aiming to expand its links to West Asia. China and India are adopting a competitive approach in many geographical regions in order to safeguard their access to raw materials and energy resources. When national security is at stake it seems difficult to attain bilateral or regional cooperation. Both states need to import oil from the Persian Gulf through the Indian Ocean, which from the geopolitical and strategic standpoint is becoming a crucial spot. Timo Kivimäki points out that there are many ways in which the EU could try to enhance dialogue on energy and climate change, and adjust the agenda in the EU–China and EU–India dialogue by taking into account fundamental Asian developmental priorities. The China–India Relationship It is important to recognize that the EU’s partnerships with India and China are in many ways dependent on the relationship between the two countries. Overall, the EU has a strong interest in stable and productive relationships, and should do its utmost to encourage both countries in this direction. Indian and Chinese geopolitical spheres of interest already overlap, and will continue to do so across larger geographic, political, and economic spaces in the years ahead. Geopolitical competition can already be seen in areas such as Burma/Myanmar, where the military government has been able to deflect some international criticism by playing India and China against each other. The EU will need to account for this potential for competition between China and India as it assesses their respective influence in places such as Burma/Myanmar, Pakistan, and the African continent. Another factor for the EU to consider is the role Russia plays in its relations with India and China. Up until the end of the Cold War the China–India relationship inevitably mirrored the tensions of Soviet–American rivalry. According to Claudia Astarita a more positive India–US relationship beginning in 1998 compelled the Chinese leadership to reconsider the value of an arms-length and potentially tense relationship with India. This dynamic is still important: improvements in US–India relations have paralleled improvements in China–India relations. Deterioration in relations amongst China and India and their key partners, especially the United States, would not be in the EU’s interest.


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China has been more active in increasing bilateral and regional cooperation with India, and has been pushing for a bilateral Free Trade Agreement since 2005. China and India are at different developmental levels from both a policy and an economic perspective: China began implementing economic reforms in the 1970s whereas India waited until the 1990s to start considering a new economic policy. ASEM meetings between the EU and ASEAN+3 celebrated their tenth anniversary, but as described above it was only in 2008 that India joined ASEM. A China–ASEAN Free Trade Area should be in place in 2010 and once there it will include nearly two billion people. According to the analysis by Claudia Astarita, the China–ASEAN FTA has generated a domino effect, leading India, Japan, South Korea, and Australia to target finalizing their agreements, partly to counterbalance China in the region. As Timo Kivimäki contends, China is the leading regional military power on the East Asian landmass, and India is the leading regional power around South Asia. India dominates South Asia economically, but China does not have the same position within the region of East Asia, where Japan challenges its superiority. The importance of energy security is linked to the twofold role of energy in both economic but also military capability. Furthermore, both India and the EU will be affected by the Chinese lead in institutional integration with the energy producers of Central Asia. China has allowed India, Pakistan and Iran to join the SCO as observers. There are increasing demands or expectations from the outside world on the emerging China and India, which puts pressure on modernization processes in both countries. The EU’s chances of exerting pressure are limited, however, given the discrepancy between its importance to China and India on the one hand, and China’s and India’s importance to the EU on the other. In addition, the EU has a more benign view of China based on trade (it is China’s largest trading partner, and China is the EU’s second largest), but it has less powerful economic grounds on which to cooperate with India, as pointed out by Rajendra K. Jain. The Way Forward for the EU’s Strategic Partnerships with China and India The European Security Strategy (Council of the European Union 2003a) acknowledged the importance of developing strategic partnerships with three BRIC states, namely Russia, China, and India. The recent “Report on the Implementation of the European Security Strategy” (Council of the European Union 2008a) is rather vague regarding the future development of these strategic partnerships. It states that the EU has substantially expanded its relationship with China, that relations with other partners, including Brazil and South Africa have grown in significance since 2003, when the European Security Strategy was adopted, and that there is still room to do more in our relationship with India. Indeed, despite shared values, a shared respect for diversity and a strong civil society, India has lagged far behind China in its EU relations.

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In order to develop the role of the EU in Asia, and in particular the strategic partnerships with China and India, some ideas targeted mainly at European policy makers are proposed in the sections below. Enhancing the Post-modern Approach The EU’s relationship with China and India should move forward based on a common interest to further develop effective multilateralism as well as regional and interregional cooperation in order to gain win-win outcomes in economic development, but also in energy security and the fight against climate change as well as in producing other global public goods. EU–China, EU–India and China– India are three sides of the triangle that all have an effect on each other. A major challenge for the EU in the years ahead will be the development of judicial norms in support of the post-modern approach. UN Security Council Resolution 1674, adopted in 2006, which concerns the international community’s “responsibility to protect” citizens in states in which the ruling government is unable or unwilling to stop ongoing abuses of the citizenry, represents a new commitment and an emergent norm within the international community to protect civilians from genocide, war crimes, ethnic cleansing, and crimes against humanity. Making good on this commitment will require a more flexible and at times assertive approach in order to get support from such modern states as China and India in order to overturn traditional notions of state sovereignty and noninterference, which too often protect irresponsible and repressive governments instead of the citizenry of the states concerned. India is currently not able to counterbalance China, but it will probably challenge China’s emergence as the unrivalled leader in Asia. The EU should more clearly acknowledge and act on the increasing importance of India. Joint meetings involving the EU, China, and India within the ASEM framework could form a new context to discuss issues of joint interest. In addition to shaping international norms, the EU should also empower the model of India in support of democratic norms. While a powerful and developed EU could be viewed with suspicion in its support of democracy in developing countries, India as a non-interventionist developing country could attract the attention of nations determined to hold on to their uncompromising views on sovereignty. Furthermore, Indian experience of democracy could appeal to countries that use national unity as their main argument for hesitating on the path toward democratization. Despite their differing political systems, partners should be sensitive to China’s and India’s self-perceptions of their international and global identities. China’s perception of itself includes its role as a unique player in the international system, its civilization and historical contributions to humanity’s development. In the same way India’s civilization, history and role as the leader of the nonaligned movement should be recognized. Any genuine international partnership for the EU can only begin with an acknowledgement of and a willingness to work


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cooperatively with the political arrangements of the other players in the system, even as the EU supports bringing greater justice, equity, and prosperity to countries such as China and India. Strengthening the Region-to-Region Approach In order to facilitate China’s and India’s access to European cooperation the EU should have a common view on how to further engage both countries within the ASEM framework. ASEM provides a useful forum in which to consult both India and China on various political, economic, social and cultural issues, and to launch joint initiatives in the regional context. The EU needs to increase interregional contacts which would require from the EU a stronger approach on two levels. On the one hand, it should give priority to high-level dialogue and representation on an appropriate level in ASEM contexts. On the other hand, it should mobilize its second-track approach to Asia, as this level of preparing the concepts and agendas of international relations is the natural European access point to Chinese, Indian, and Asian international policies. People-to-people exchanges and the involvement of civil society are areas that are particularly worthy of further endorsement. The EU should give more attention to China’s regional initiatives, including the SCO. In general there is a need to acquire a better understanding of China’s relations with Russia, and in this context it would be useful for the EU to see the need for cooperation on the SCO platform, and to understand the competitive elements related to the SCO in particular. This institutionalization of the Central Asian area includes engaging China in cooperation with major potential energy suppliers, while excluding the EU. Interregionalism offers the opportunity for the EU to present itself as a normative power, and to increase awareness of human rights, democracy, the rule of law, and good governance in Asia, as well as of global governance. If the multilateral regional system could be strengthened, the EU as a normative power will be better placed to influence its Asian partners. As a normative power it should employ its diversity and rely on its common values in its strategies of engagement with China, India, and the rest of Asia. Encouraging China’s and India’s Roles as Responsible Global Actors As a strong supporter of effective multilateralism the role of a global normsetter is appropriate to the EU. China’s and India’s willingness to align with international norms gives the EU the opportunity to exert its influence. The EU should encourage both countries’ role as providers of global public goods, and in taking the responsibility for utilizing their expanding role and resources to shape cooperative, multilaterally-achieved outcomes in regional hotspots. In order to enhance the implementation of the norms the EU should work with China and India to deepen their commitment to multilateralism especially in three areas:

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global economic growth and development, transnational and regional security challenges, and domestic challenges. The EU should aim to increase joint action in third-party countries, such as African states, and increase forums for policy dialogue, informal meetings and concrete joint projects involving Europeans, Africans, Chinese and Indians. Furthermore, it should strengthen coordination on development cooperation with China, India, and African states both on the policy level and in the field, and encourage dialogue in regional organizations. Whereas India has already established its international development cooperation agency and program, China’s aid policy has not been clearly defined, even though it has in a very short time re-emerged as an important donor in Africa. Cooperation on environmental issues in Africa stands out as a key area in which to engage in concrete projects with the EU. Deepening Cooperation on Climate Change, Energy Efficiency and Reliance on Alternative Energy While strategic partners may share common interests in addressing environmental problems, countering terrorism, moderating unilateralism, tackling international crime, stemming pandemics, and promoting stable energy security, the emerging competition for resources, especially energy supplies, may well define the limits of common interest. The EU should work with its Asian partners to build a sense of positive interdependence. Regional institutions could be used to identify better the need to prevent climate change as a common interest. Both China and India are concerned about the economic effects of climate change, and the EU should take this as a basis for cooperation. Support given to the fight against climate change and for environmental protection should not be put in opposition to economic prosperity, but instead used as a vehicle of economic development. Common interests in energy security include energy efficiency, and environmental production and consumption. The EU should help both China and India to upgrade their industrial production on the technological level, improve energy efficiency and increased use of alternative sources with the aim of reducing global energy consumption and pollution emissions, and at the same time boosting growth and competitiveness in both countries. The EU could explore the possibilities with regard to strengthening the common identity of the oil-importing countries, since all three actors (the EU, China, and India) are energy importers and would benefit from stability in oil markets. Using the EU’s Role as a Model Power The EU should develop its role from that of a passive model power to actively promoting its model in support of common global interests. It should also enlarge the focus of cooperation to areas other than trade and economic development, in particular to energy efficiency and climate change, in its cooperation with


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China and India, and on the regional level where the EU’s own experience gives it a credible role. Global, regional and national interests are not competitive or contradictory, but go hand in hand. At the same time it will be easier for Europe to “sell” its model, and to expect Asia to learn from it, if it is also prepared to learn from the Chinese, Indian and Asian models and values. While many of the European normative models are received with enthusiasm in Asia, the ideal of equality in Asian-European relations creates an obstacle for the European model unless the EU is prepared to engage in a process of mutual learning. This approach does not compromise the obligation to respect fundamental human rights which are universal in nature as stated in the Universal Declaration for Human Rights. Enhancing Dialogue with the United States and Russia The EU policy is influenced by the American approach to China and India, and it is surely in the interests of both the EU and the United States to work together and to find common approaches – and to avoid confrontation – in their relationships with both states. The ongoing transatlantic dialogue on Asian affairs should be upgraded and sustained. Finally, since Russia is an influential force in geopolitical, economic, and diplomatic dynamics of EU relations with China and India, it would also make sense to initiate more extensive consultation between the EU and Russia on Asia. In the end, managing global issues demands from the EU and from the international community a new type of approach that will integrate as many perspectives and as many interests as possible to find the way forward.


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Index Figures are indicated by bold page numbers, tables by italic numbers. Africa China and energy sources in 203 China and the EU in 133–6, 165–70 Agarwal, Anil 83–4 Ahlbrandt, S. 163 annihilation scenario 84–5 anti-dumping 107, 131 anti-secession law in China 111 arms control by China 147–8 arms embargo on China 110–11, 114 ASEAN Plus Three 22, 142–3 ASEAN Regional Forum (ARF) 21, 22, 23, 142 Asia, EU’s development of relations with 55 Asia strategies, EU’s bilateralism and pragmatism in 61–2 constructive engagement approach 60–1 geographical focus of 59 lack of comprehensive strategy 62 politics and security emphasis 59–60 Strategic Framework for Enhanced Partnerships (2001) 59–62 Towards a New Asia Strategy (1994) 56–9 Asia–Europe Meeting (ASEM) as bilateral, interregional and multilateral 69–71 China’s role in 63–5, 66, 67 climate change focus 24–5 creation of 63 EU in 69–73 further engagement of China and India in 219 future directions 72–3 impact on foreign policies of EU members 48 India in 68–9 institutionalization of 72–3

interregional component 72–373 Association of Southeast Asian Nations (ASEAN) Chinese and Indian FTAs with 199 as driving force behind regionalism 72 EU as exemplar for 71–2 institutional infrastructure 21–2 institutional leadership of 16 Treaty of Amity and Cooperation 28–9, 29 Astarita, Claudia 32 asymmetry in relations with China 122–5 Audit Culture 88 avoidance of conflict 30, 32 Bangladesh economic power 15 military expenditure 12 Bashar, Iftekharul 195 Belgium, pragmatism in approach of 61–2 Berkofsky, Axel 24 bilateralism economic relations with China 130–1 in EU’s Asia strategies, 61–2 border trade through Nathula Pass 195–6 bottom-up Europeanization 46–7 BRIC concept 85–6 Brown, Lester R. 206 Bt cotton 90 Burma 69, 149 Camroux, D. 62 Central Asia military expenditure 13, 13 normative and constitutive construction of 34 Shanghai Cooperation Organization 19 Chase-Dunn, Christopher 60 Cheng Siwei 124

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Chidaushe, Moreblessings 168 China acknowledgement of as regional power 59 in Africa 133–6, 165–70, 215–16 anti-dumping 107, 131 anti-secession law 111 arms embargo 110–11, 114, 132 and ASEAN Plus Three 142–3 asymmetry in relations with 122–5 attitudes towards EU 112 bilateral economic relations 130–1 border disputes with India 190 border trade through Nathula Pass 195–6 broad strategy towards as working well 118–19 and Burma 149 central role in multilateralism 139 change in EU view of 102 common ground between EU and 117–18 competition with India over energy 202–4 compromise between cooperation and self-reliance 122–3, 123n3 conflict management 30–1 constructive engagement approach with 61 criteria for strategic partnership with 126–8 dark areas in Eu relations 131–2 deepening commitment to energy efficiency 220 definition of strategy towards 95 developing country/potential world power duality 123–5 developmental aid from 146 developmentalism 28 development-policy goals of EU as problem 103 different approaches to by EU member states 114–15 divergent values of EU and 127–8 economic issues with India 195–200, 197 economic power 15, 16 emergence as powerful regional player 57 as emitter of greenhouse gases 155

energy imports 164 energy needs of 155, 201 energy security 183 energy supplies to 17, 164–5, 215–16 environmental consequences of growth 204–7 EU and deepening multilateralism of 152–4 EU and relations with India 184–5, 207–8 and EU values and norms 211–13 EU/East Asia energy/environment cooperation 23–4 euro, status of 117 and European energy interests 164–70 expectations on from outside 124–5, 129–30 first EU policy paper 99–100 Five Principles of Peaceful Coexistence 29, 190 foreign direct investment (FDI) to 200 foreign policy and energy needs 155–6 form of EU policy documents 98 founding member of ARF 142 FTA with ASEAN 199 FTA with India 199–200 functional work with international institutions 145 further engagement of in ASEM 219 future strategy towards 119–20 and global health issues 145–6 government and oil companies 156–8 and greenhouse-gas emissions 182 history of relationship with India 190–4 human rights 103–4, 167–8 humanitarian assistance by 146 and India’s nuclear testing 192–3 institutions binding to East Asia 19 integration into global structures 104 intellectual property rights (IPR) 108, 113 interests in common with EU 104 and Iran 149–50, 164–5 key factors in growing role 139 key words in policy papers on 100–2, 101, 102

Index lack of strategic partnerships with US allies 116 market-economy status 105–8, 113–14, 131–2 meaning of strategic partnerships for 116–17 mechanism for regional security cooperation 31 member states attitudes towards 125 membership of SCO as driven by own needs 25 military expenditure 11, 12, 13, 13, 14, 84 most recent policy paper in 2006 100 motivation for multilateralism 144 multilateralism approaches 118, 213–15 global 143–4 past experiences of 140–2 recent positive approach to 142–4 multipolarization 128, 128n7 national interests, energy as one of 159–61 non-interference 162–4, 213 non-proliferation approach 147–8 and Pakistan 192 peacekeeping contributions 147 popular nationalism in 112 population 33–4 quality of multilateral commitments 144–51 relations with France 113 relations with India 216–17 relationship with US and EU 133 role in ASEM 63–5, 66, 67 role in East Asia Summit 143 role in regional hotspots 148–50 scarce references to in Asia Strategy of 1994 56–7 sectoral cooperation 104 similarities to EU and India 37 split with Soviet Union 191 strategic partnerships with EU 217–21 with India 193–4 and Sudan 149 Taiwan 108–10, 114, 147 territorial disputes 150

253

thesis of responsibility 124–5, 124n4, 124n5 Tibet 111–13, 114, 190 ties to Asia Europe Meeting 19 transparency in international activities 166 in military strategy 150–1 unbalanced bilateral trade with India 195–9, 197 understanding of strategic partnerships 116 understandings concerning multilateralism of 151–2 US approach to 221 use of strategic partnerships concept 115, 115–16 values and EU strategy 97 view of strategic partnerships 126 Clash and Civilization and the Remaking of World Order, The (Huntington) 85 climate change. see environment Colquhoun, David 91 common positions 97–8 competition between nation-states 96–7 conflict management 26, 29–31, 30n19 32-3 constructive engagement approach 60–1, 69–70 Cooper, Robert 122 corruption 88–90, 166n20 Council for Security Cooperation in the Asia Pacific (CSCAP) 21 dark areas in EU–China relations 131–2 De Prado Yepes, C. 48 ‘Declaration on the Conduct of Parties in the South China Sea’ 142–3 Denmark Audit Culture 88 corruption 89 exodus from the countryside 84 visions for the future 87–8 developmental aid and China 146 developmental optimism 77–8 developmentalism and energy/environmental issues 31–2 recognition of common interests 27–8

254


in South Asia 26–7 differences, management of. see conflict management dispute management. see conflict management East Asia conflict management in the ASEAN way 26 drivers of security in 21 economic power 15, 15–16 energy/environment cooperation with China 23–4 ‘fair weather’ cooperation 20 institutions binding China to 19 military expenditure 12, 13 normative basis of 28 recognition of common interests 27–8 East Asia Summit 143 East Asian Community 16, 19, 20–1 East Asian Summit 16, 19, 207 economic issues between China and India 195–200, 197 economic power 14–16, 15, 17 economic systems of EU, India and China 2 ‘Endarkenment’ 91 energy and avoidance of conflict 32 China and India as competitors 202–4 China in Africa 165–70, 215–16 China’s government and oil companies 156–8 China’s need for 155, 201 Chinese ad EU imports 164 and Chinese non-interference foreign policy 162–4 deepening China and India’s commitment to efficiency 220 and developmentalism 31–2 environmental impact of increased consumption 18 EU/China and China/East Asia cooperation 23–4 European vs Chinese interests 164–70 EU–SAARC cooperation 20 fusion 20 India’s need for 201

as one of China’s national interests 159–61 satisfaction of SCO’s members needs as priority 25 security and China and India 183 supplies of 16–18, 17 supplies to India 216 environment and avoidance of conflict 32 China as emitter of greenhouse gases 155 consequences of China and India’s growth 204–7 deepening China and India’s commitment to 220 and developmentalism 31–2 divide between developing and developed countries 33, 83–4 EU/China and China/East Asia cooperation 23–4 EU–SAARC cooperation 20 increasing energy consumption in Asia 18 as uniting rather than dividing 32 euro, status of 117 European Council as full institution 50 European External Action Service (EEAS) 51, 53 European Security Strategy (EES) 40–1 European Union analysis of international actorness 37 in ASEM 69–73 common positions 97–8 as contributor to ‘Endarkenment’ 91 decision-making concerning external relations 48–9 development of relations with Asia 55 distinctiveness as international actor 3 divergent values of China and 127–8 economic presence in Asia 57 energy supplies, potential problems with 25, 34 Europeanization of member-state policies 45–8 hybrid world as already existing in 92–3 increase in political role in Asia 57–8 India, relations with (see India) joint actions 98

Index Lisbon Treaty, proposed changes in 49–53 as model for South Asia 185–6 as model-power 39–40, 220–1 normative role 97, 178–9, 211–13, 218–19 and regionalism 4 role of 2 similarities to China and India 37 as single legal personality 49, 50 staff involved in external relations 51 view of strategic partnerships 126 as superpower 38–9 see also international actor, EU as European Union and Asian Countries, The (Wiessala) 81 Europeanization as adaptation and projection 47–8 bottom-up 46–7 and relations with Asia 48 top-down 46, 60 use of concepts 45 Experts and Eminent Persons (EEPs) register 23 external forces, military dominance of 14 Finland 46, 47–8 Five Principles of Peaceful Coexistence 29, 190 Flavin, Christopher 206 foreign direct investment (FDI) to China and India 200 France constructive engagement approach 61 relations with China 113 Free Trade Agreements (FTAs) 199–200 fusion energy 20 Gaens, Bart 41 Ge Zhiguo 166 Gelb, Bernard A. 25 gender and re-agriculturization 84 genetic modification 90–1 geographical focus of strategies 59 Germany and Asia vision at EU 58–9 constructive engagement approach 60–1 corruption 88–9

255

view of ASEM 70 Gill, Bates 214 global governance 2 EU, China and India 213 radical change in institutions as India’s preference 175–6, 175n6 see also multilateralism globalization, changes in 44–5 governance, good/effective 135–6 Green, Stephen 107 greenhouse-gas emissions 182–3 health issues, global 145–6 Herring, Ronald 90–1 High Representative for Foreign Affairs and Security Policy 50, 51 hotspots, China’s role in regional 148–50 Houser, Trevor 161 Hu Dawei 129 Hu Jintao 163 human rights as central in Asia–EU relations 81 as central in EU global policy 99–100, 103–4 and China 167–8, 212 constructive engagement 61 humanitarian assistance by China 146 Humphrey, John 130, 131, 136 Huntington, Samuel 85 identity Asian 58, 71–2 China as developing country/potential world power 123–5 India Abdul Kalam 86–7 acknowledgement of as regional power 59 advantages of partnership with 186–7 annihilation scenario 84–5 in ASEM 68–9 border trade through Nathula Pass 195–6 China, relations with 216–17 and China’s split with Soviet Union 191 competition with China over energy 202–4 corruption 89–90

256

The Role of the European Union in Asia deepening commitment to energy efficiency 220 developmental optimism 77–8 developmentalism 28 dominance of SAARC 16 economic issues with China 195–200, 197 economic power 15, 16 energy security 183 energy supplies to 216 environmental consequences of growth 204–7 EU and relations with China 184–5, 207–8 and EU as norms entrepreneur 178–9 and EU values and norms 211–13 evolution of EU relationship with 80–3 evolution of strategic partnership with 174–5 Five Principles of Peaceful Coexistence 29 foreign direct investment (FDI) to 200 Free Trade Agreement with China 199–200 further engagement of in ASEM 219 genetic modification 90–1 and greenhouse-gas emissions 182–3 growing EU engagement with 173 history of relationship with China 190–4 IT sector 198 mathematics based scenarios 77–8 merger scenario 88–93 military expenditure 11, 12, 13, 84 multilateralism approaches 213–15 participation 176–7 trade negotiations 178 non-interference 213 nuclear testing 192–3 and Pakistan 191–2 political dialogue with EU 180–1 population 33–4 radical change in global institutions as preference 175–6, 175n6 radical developmental pessimism 84 radical inversion scenario 85–8

recommendations for improving relationship 187–8 scarce references to in Asia Strategy of 1994 56–7 security cooperation, limited 181–2 similarities to EU and China 37 status quo relations with EU 83–4 strategic partnership with China 193–4 strategic partnership with EU 217–21 unbalanced bilateral trade with China 195–9, 197 United States approach to 221 relations with 82, 183–4 universities 88 visions for the future 87–8 infectious diseases 146 institutional realities of regionalism 19–26 institutions, international 175–6, 176n6 intellectual property rights (IPR) 108, 113 international actor, EU as Asia/EU–China/EU–India strategies 41 and changes in globalization 44–5 economic relations with China/India as dominant 42, 43, 44 European Security Strategy (EES) 40–1 as model-power 39–40 paradigm shift in Asia strategy 41–2 passive/active actor 39–40, 44 short/long term objectives 40 strategic/routinized action 40, 44 as a superpower 38–9 two-fold analysis of 38 International Monetary Fund (IMF) 175, 175n5 interregionalism China’s role in ASEM 63–5, 66, 67 creation of ASEM 63 as diplomatic tool 62–3 EU in ASEM 69–73 India in ASEM 68–9 Iran 149–50, 164–5 Ireland, view of ASEM 70 IT Factory 89 IT sector in India 198 Jaffrelot, C. 77, 82 Jain, Rajendra K. 33, 80, 216

Index Jakarta Process 22–3 Jakobson, Linda 213, 215 Japan and China 140–1 economic power 15 military expenditure 12 Jiang Zemin 128, 128n7 joint actions 98 Joint Cooperation Committee (JCC) 21–2 Jokela, Juha 58, 212, 214 Kalam, Abdul 86–7 Kazakhstan, military expenditure 13, 14 Kearney, A.T. 25 Kivimäki, Timo 216, 217 Korea economic power 15 military expenditure 12 Kumar, Amit 202 Lenz, Tobiaz 39 Li Geqin 162–3 Lisbon Treaty, proposed changes in 49–53 long-term policy for China–Europe relations, A (European Commission 1995) 99–100 Macaulay, T.B. 79 Mahbubani, Kishore 44–5, 85 Mandelson, Peter 103, 108, 178 Manners, Ian 97 Mansingh, Lalit 175n3 market-economy status of China 105–8, 113–14, 131–2 material realities of regionalism 11–18, 12, 13, 14, 15 Mattlin, Mikael 211–12 member states attitudes towards China 125 different approaches to China by 114–15 Europeanization of policies 45–8 strategies for Asia 60 merger scenario 88–93 Messner, Dirk 130, 131, 136 military expenditure 11–14, 12, 13, 14 Milliband, David 39 model-power, EU as 39–40, 220–1

257

modern states 122 multilateralism China 118 approaches to 213–15 central role in 139 deepening of commitment 219–20 developmental aid 146 global health 145–6 humanitarian assistance by 146 international institutions and 145 non-proliferation approach of 147–8 past experiences of 140–2 peacekeeping contributions by 147 quality of commitments 144–51 recent positive approach to 142–4 role in regional hotspots 148–50 territorial disputes 150 transparency in military strategy by 150–1 understandings concerning 151–2 India approaches to 213–15 deepening of commitment 219–20 participation by 176–7 multipolarization 128, 128n7 Nathula Pass 195–6 nation states competition between 96–7 types of 122 nationalism in China 112 Naumann Report 91–2 Netherlands, trade with China 106 New Asia Strategy 56–9 Niblock, Tim 168 non-interference 28–9, 162–4, 213 non-proliferation approach of China 147–8 normative/constitutive relevance of regionalism 26–34 norms entrepreneur, EU as 178–9, 211–13, 218–19 North Korea, alliance with China 141 nuclear testing 192–3 oil supplies 17 organizations, regional, roles taken by China and India 16

258


Pakistan and China 141, 192 economic power 15 and India 191–2, 193 military expenditure 12 Pan Yue 205 passive actor, EU as 39–40 Patanchali, Maharishi 86–7, 87n8 peacekeeping contributions by China 147 perceptions of EU, China and India of each other 1–2 policy planning 20–1 policy towards China, EU analysis of occurrence of key words in 100–2, 101, 102 development-policy goals of EU as problem 103 first paper 99–100 most recent paper in 2006 100 political systems of EU, India and China 2 pollution in China and India 205–6 see also environment popular nationalism in China 112 post-modern states 122 power politics 11–17, 12, 13, 14, 15 pragmatism in EU’s Asia strategies, 61–2 pre-modern states 122 President of the European Council 50–1, 52 radical inversion scenario 85–8 re-agriculturization of First World 84 recommendation for future strategy of EU 2 Rees, Martin 84–5 regional organizations, roles taken by China and India 16 regionalism ASEAN as driving force behind 72 in Asia, EU and 4 importance of in world politics 3–4 institutional realities of 19–26 material realities of 11–18, 12, 13, 14, 15 normative/constitutive relevance of 26–34 Rothermund, D. 77, 79 routinized action of the EU 40 Rüland, J. 20 Russia

links with concerning China and India 221 military expenditure 13, 14 Sanskrit 92–3 science, hybridizing with superstition 90–1 sectoral cooperation, EU–China 104 security ASEAN institutional infrastructure 21–3 drivers of in East Asia 21 see also energy self-determination 28–9 Shambaugh, David 134 Shanghai Cooperation Organization 19, 25, 143, 202–3 Shanghai Cooperation Organization (SCO) 14 Shi Xianze 163 Sino-European relations. see China Sjursen, H. 97 Small, A. 163 Smith, M.E. 47 Solana, Javier 98, 109, 117, 118 South Asia ASEAN way 26 developmentalism 26–7 economic power 15, 15–16 EU as model for 185–6 institutionalization in 19 military expenditure 12, 13 normative basis of 28 recognition of common interests 27–8 South Asian Association of Regional Cooperation (SAARC) 16, 19–20, 185, 185n13 South China Sea 142–3 sovereign equality 28–9 Soviet Union 191 staff involved in external relations 51 strategic action of the EU 40 and competition between nation-states 96–7 definition of 95 and values 97 Strategic Framework for Enhanced Partnerships (2001) 59–62 strategic partnerships

Index China and India 193–4 common ground between EU and China 117–18 criteria for with China 126–8 divergent values of EU and China 127–8 doubts about EU–China 117 essential qualities of 175n3 establishment of 3 EU and China’s view of 126 EU with China and India 217–21 evolution of with India 174–5 future potential for between EU–China 127 institutional realities of regionalism 19–26 lack of between China and US allies 116 material realities of regionalism 11–18, 12, 13, 14, 15 meaning of for China 116–17 normative/constitutive relevance of regionalism 26–34 origin of concept 115 shared values of EU and China 127 as understood by Chinese leaders 116 use of concept 115–16 strategies concerning Asia , EU’s bilateralism and pragmatism in 61–2 constructive engagement approach 60–1 geographical focus of 59 lack of comprehensive strategy 62 politics and security emphasis 59–60 Strategic Framework for Enhanced Partnerships (2001) 59–62 Towards a New Asia Strategy (1994) 56–9 Stubb, Alexander 40 Sudan 149 superpower, EU as 38–9 superstition, science hybridizing with 90–1 Taiwan 108–10, 111, 114, 147, 159, 159n6 Talbott, Strobe 81 Taylor, Ian 167–8 territorial disputes, China’s approach to 150 terrorism 180–1

259

thesis of responsibility 124–5, 124n4, 124n5 Tibet 111–13, 114, 190 Tiilikainen, Teija 70 Tonra, B. 47 top-down Europeanization 46, 60 Towards a New Asia Strategy (1994) 56–9 trade balances with China 105–8, 106, 113–14 multilateral negotiations, and India 178 through Nathula Pass 195–6 unbalanced bilateral between China and India 195–9, 197 transparency Chinese international activities 166 in military strategy by China 31, 150–1 Treaty of Amity and Cooperation 28–9, 29 UN Security Council 100, 180, 212 United Nations, India’s attitude towards 176 United States approach to China and India 221 and the arms embargo on China 111, 132 and China’s economic and trade practices 107 economics focussed approach to Asia 57 energy security competition with China 160 and EU relations with China 128–9 military expenditure 14 military might of 13, 14 relations with India 183–4 relationship with China and EU 133 and strategic partnerships concept 115 ties with India 82 universities, Indian 88 Vajpayee, A.B. 205 values abstract 97 domestic security 127–8 democratic 211–13 Vietnam 141 visions for the future 87–8 Wacker, Gudrun 132, 136 Wang Jisi 162 Wen Jiabao 116, 126, 199, 205

260


Wiessala, Georg 60, 81, 82 Wong, Ruben 47, 48, 60 World Trade Organization (WTO) 42, 52, 64, 178, Xia Liping 28 Yahuda, Michael 63

Yang Fuchang 135 Zhang Tiejun 28, 213 Zhang Zhidong 123n3 Zhou Hong 122 Zhou Xiaochuan 136 Zhu Feng 166 Zhu Majie 3

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