Dragon nightmares

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Dragon nightmares
http://www.economist.com/world/europe/displaystory.cfm?story_id=13496093

Apr 16th 2009 From The Economist print edition

The European Union finds it hard to agree over how to deal with China


Illustration by Peter Schrank

HERE is a quick way to spoil a Brussels dinner party. Simply suggest that world governance is slipping away from the G20, G7, G8 or other bodies in which Europeans may hog up to half the seats. Then propose, with gloomy relish, that the future belongs to the G2: newly fashionable jargon for a putative body formed by China and America.

The fear of irrelevance haunts Euro-types, for all their public boasting about Europe’s future might. The thought that the European Union might not greatly interest China is especially painful. After all, the 21st century was meant to be different. Indeed, to earlier leaders like France’s Jacques Chirac, a rising China was welcome as another challenge to American hegemony, ushering in a “multipolar world” in which the EU would play a big role. If that meant kow-towing to Chinese demands to shun Taiwan, snub the Dalai Lama or tone down criticism of human-rights abuses, so be it. Most EU countries focused on commercial diplomacy with China, to ensure that their leaders’ visits could end with flashing cameras and the signing of juicy contracts.

Meanwhile, Europe’s trade deficit with China hit nearly €170 billion ($250 billion) last year. China has erected myriad barriers to European firms, notes a scathing new audit of EU-China relations by the European Council on Foreign Relations (ECFR), a think-tank. The trend is ominous. In five years, China wants 60% of car parts in new Chinese vehicles to be locally made. This is alarming news for Germany, the leading European exporter to China thanks to car parts, machine tools and other widgets.

As ever, Europeans disagree over how to respond. Some are willing to challenge China politically—for example, Germany, Britain, Sweden and the Netherlands. But they are mostly free traders. That makes them hostile when other countries call for protection against alleged Chinese cheating. In contrast, a block of mostly southern and central Europeans, dubbed “accommodating mercantilists” by the ECFR, are quick to call for anti-dumping measures. But that makes them anxious to keep broader relations sweet by bowing to China on political issues.

The result is that European politicians often find themselves defending unconditional engagement with China. The usual claim is that this will slowly transform the country into a freer, more responsible stakeholder in the world. The secret, it is murmured, is to let Europe weave China into an entangling web of agreements and sectoral dialogues. In 2007 no fewer than 450 European delegations visited China. Big countries like France and Britain add their own bilateral dialogues, not trusting the EU to protect their interests or do the job properly. There are now six parallel EU and national “dialogues” with China on climate change, for example.

Alas, familiarity with Europeans does not preclude contempt. EU-China dialogues on human rights or the rule of law are a way of tying Europeans down with process, avoiding substance. China abruptly cancelled an EU-China summit scheduled for last December. The astonishing snub was presented by Chinese diplomats as punishment for France’s Nicolas Sarkozy for meeting the Dalai Lama when his country held the rotating presidency of the EU (with other EU countries left to take note).

Chinese interest in the EU peaked in 2003, when it looked as if the club would soon acquire a constitution, a foreign minister and a full-time president. But the honeymoon had ended by 2006, after China failed to get the EU to lift an arms embargo imposed after the Tiananmen Square killings of 1989. At policy seminars and closed-door conferences, state-sponsored Chinese analysts now drip condescension. America is a strong man and China a growing teenager, said one at a 2008 conference in Stockholm; Europe is a “rich old guy”, heading for his dotage. At a recent Wilton Park conference in Britain, a Chinese academic called the EU a weak power, unprepared to challenge American hegemony: China was not about to work with it on a new world order.

Unity meets disunity
If you wanted to design a competitor to show up European weaknesses most painfully, you would come up with something a lot like China. It is a centralised, unitary state, which is patient and relentless in the pursuit of national goals that often matter more to the Chinese than anyone else. European governments do not even agree on what they want from China. They are fuzzily committed to EU “values”, but will readily trample on those in a scramble to secure jobs and cheap goods for their voters. They do not share the same vision of trade policy, or how best to press China on climate change. Worse, the biggest countries, especially France, Germany and Britain, compete to be China’s favourite European partner. This causes damage. It was mad that the British and Germans did not rush to back Mr Sarkozy when he was bullied over the Dalai Lama. They could easily have insisted that EU leaders meet whomsoever they want.

Yet talk of a “Chi-merican” G2 running the world is overblown. For one thing, China will probably prefer to keep its own global options open. For another, senior Brussels figures rightly insist that the EU’s voice cannot be ignored in global economic discussions. It is China’s largest trading partner, after all, with two-way trade worth a huge €300 billion.

Ideally, European governments would be less feeble and fractious. Failing that, Europe could set itself more modest goals. Chinese officials are reportedly fascinated by European welfare and public-health systems, as well as by EU product regulation. Providing a model for red-tape or welfare reform may not be as much fun as jointly running a multipolar world. But with its pathetic record of handling partners such as China, Europe should welcome recognition of its relevance, however it is offered.

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