Enter the Dragon to save the Euro

Posted: July 10, 2011 in Oriental Morning Post
Tags: , , , , ,

Not the actual title of my latest article for Oriental Morning Post (东方早报), but instead the title of an article in the Telegraph that quoted my recent ISN piece. Wen’s trip to Europe also elicited an interview with Reuters, which they used a small quote from that was picked up in a variety of places. In any case, here is the link to the Dongfang Zaobao piece (in Chinese), and below is the text I drafted in English.

Premier Wen Jiabao returns from his latest European trip with a raft of new deals and contracts with old European friends. In contracts geared to bring benefits to both sides, Premier Wen’s trip led to the signing of deals worth $15 billion in Germany (part of which was a purchase of some 88 Airbus planes), $4 billion in the UK and $1.8 billion in Hungary. He also announced the establishment of $2.8 billion fund to support cooperation between Small to Medium sized Enterprises (SME) in China and Germany and a special loan of $1.4 billion to support similar relations between Chinese and Hungarian firms. But while these deals show the strength of the Sino-European relationship, the fact that they are the big issues to come away from Premier Wen’s trip to Europe shows the relatively immaturity of the EU-China relationship. This is not a “strategic partnership” with any depth.

The blame for this is two-fold. On the one hand, Europe has not managed to clarify its decision-making processes yet. The selection of Herman van Rompuy as President of the EU and Catherine Ashton as Foreign Minister was a conscious choice by the member states of the European Union to maintain authority over Brussels, the traditional seat of power in the EU. Neither are known as being aggressive leaders, and the member states have continued to use Brussels when it is useful and ignore it when it is not. The result has been to confuse matters with outside partners uncertain of whether they should focus their efforts on the member states or Brussels when they are looking for a partner to talk to in Europe.

But at the same time, China remains a hesitant actor on the world stage. Unless dealing with obvious trade or economic questions or issues that are seen as “core interests,” China is not a very certain actor in international relations. The traditional policy is one of “non-interference”: but as a Chinese colleague put it to me the other day this can also mean, “not doing anything.” The end result is that as China’s interests in the world are expanding, its capacity and ambition to do anything have not matched this growth. This has led to trips like this latest one to Europe, where big trade deals have been signed while there has been little serious discussion about anything else.

This is unfortunate, as both China and Europe share interests in the world beyond trade. To look at Libya, both suffered greatly as a result of Colonel Gadaffi’s slow strangling of his nation and the subsequent chaos that it caused. China lost unknown billions in investment and had to suddenly evacuate tens of thousands of citizens. Europe had to evacuate less people, but nevertheless lost a major energy supplier and an equally substantial investment. While now there is some divergence on how to address the problems that the chaos in Libya has thrown up, there is clearly a joint interest in making things better and in establishing ways that such situations can be avoided in the future.

And beyond Africa, both China and Europe clearly have a keen interest in making sure that things in Afghanistan and Pakistan calm down considerably from their current tense tempo. While clearly it is the US that is the lead actor in AfPak at the moment, both China and Europe have active interests in ensuring stability prevails and some discussion of what they want to do there in the longer term might be a good idea. And it is not only geopolitical questions that are important: climate change remains an crucial issue to both, but aside from discussions of developing green technologies, there was surprisingly little conversation between China and her European interlocutors on this topic this time around.

All of this is a missed opportunity, as clearly China is coming to a period of reconsidering its position in the world, while Europe is figuring out how to do more with fewer assets. A moment that would lend itself to more comprehensive consultations between Chinese and European leaders than the trade and economics show that just took place.

The point is simple: trade between nations will always take place. In a globalized world, men will always sell things to each other across borders. If we want to make this into a truly “strategic partnership” however, then we need to deepen the seriousness of our discussions beyond this realm. In this way, the EU-China relationship can live up to its long-missed potential.

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