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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 presentsinnovative 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 aboutmyriad heterogeneous intermediate level interactions.

Reective of its cosmopolitan and creative orientation, this series is developed

by an international editorial team of established and emerging scholars in both theSouth and North. It reinforces ongoing networks of analysts in both academia and

think-tanks as well as international agencies concerned with micro-, meso- andmacro-level regionalisms.

Editorial Board

Timothy M. Shaw, Institute of International Relations atThe University of the West Indies, St Augustine, Trinidad & Tobago

Isidro Morales, Tecnologico de Monterrey, Escuela de Graduados enAdministracion (EGAP), MexicoMaria Nzomo, Permanent Mission of the Republic of Kenya to the United

Nations Ofce in Geneva

Nicola Phillips, University of Manchester, UK Johan Saravanamuttu, Institute of Southeast Asian Studies, Singapore

Fredrik Söderbaum, School of Global Studies, Göteborg University, Swedenand 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 AntiglobalizationProspects for a New World Order?

Edited by Henry Veltmeyer



The Role of theEuropean Union in Asia

China and India as Strategic Partners

Edited by

BART GAENS, JUHA JOKELA, EIJA LIMNELLUniversity 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 systemor transmitted in any form or by any means, electronic, mechanical, photocopying, recording orotherwise without the prior permission of the publisher.

Bart Gaens, Juha Jokela and Eija Limnell have asserted their right under the Copyright, Designs andPatents Act, 1988, to be identied as the editors of this work.

Published byAshgate Publishing Limited Ashgate Publishing CompanyWey Court East Suite 420Union Road 101 Cherry StreetFarnham BurlingtonSurrey, GU9 7PT VT 05401-4405England USA

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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 regionalismsseries) 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--Foreignrelations--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--dc222009022180

ISBN 978 0 7546 7790 1 (hbk)ISBN 978 0 7546 9536 3 (ebk .I)



Contents

List of Graphs and Charts vii List of Tables ix Notes on Contributors xi Foreword xiii Acknowledgements xv List of Abbreviations xvii

Introduction 1 Juha Jokela and Bart Gaens

1 The EU–India–China Strategic Partnership and the Impact of Regional Constructs 9

Timo Kivimäki

2 The European Union as an International Actor: Europeanizationand Institutional Changes in the Light of the EU’s Asia Policies 37

Juha Jokela

3 The Development of the EU’s Asia Strategywith Special Reference to China and India:Driving Forces and New Directions 55

Bart Gaens

4 EU–India Relations: An Expanded Interpretive Framework 77 Stig Toft Madsen

5 Thinking Clearly on Political Strategy:The Formulation of a Common EU Policy Toward China 95

Mikael Mattlin

6 Sino-European Relations: From the Height to the Width 121 Zhang Tiejun

7 China’s Evolving Approach to Multilateralism andGlobal Governance: Implications for the European Union 139

Bates Gill

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The Role of the European Union in Asiavi

8 Scrutinizing China’s Quest for Energy Security Abroad 155 Linda Jakobson

9 Engaging the European Superpower:India and the European Union 173

Rajendra K. Jain

10 The Ambiguities in the China–India Relationship 189 Claudia Astarita

Conclusions and the Way Forward 211 Eija Limnell

Bibliography 223 Index 251

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Graphs

1.1 Regional military expenditure in East Asia 121.2 Regional military expenditure in South Asia 121.3 Military expenditure and Central Asia: Regional actors 131.4 Military expenditure and Central Asia: All actors 14

1.5 The GDP of the three biggest economies in South Asia (PPP) 151.6 The GDP of the East Asian powers 15

2.1 Key Asian actors in Commission and Council documents,2001-2007 43

2.2 Key Asian actors in all Council documents and CFSP relatedsubject matters, 2001-2007 43

Charts

5.1 A longitudinal analysis of the occurrence of operative wordsin the European Commission’s China policy papers 101

5.2 A longitudinal analysis of the occurrence of substantive wordsin the European Commission’s China policy papers 102

5.3 The EU member states’ trade balance with China, 2006 106

List of Graphs and Charts

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1.1 Oil and natural gas consumption and production 17

3.1 ASEM initiatives jointly launched and (co)supported by China 663.2 ASEM initiatives hosted by China 67

5.1 The use in Chinese diplomatic rhetoric of the concept

“strategic partnership” 115

10.1 Major items of bilateral trade in 2006-2007 197

List of Tables

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Claudia Astarita is a research fellow at the Centre of Asian Studies, University ofHong Kong. Her research focuses on the interactions between China and India asmajor emerging Asian powers.

Dr Bart Gaens is a senior researcher at the University of Helsinki Networkfor European Studies, where he is coordinating a research project on the EU’s

relations with Asia. His original eld 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 duringthe preparations for the Asia–Europe Meeting (ASEM) Summit in Helsinki. Hehas recently edited a volume on Europe–Asia interregional relations and the roleof 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 internationaland 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-relatedtrends in the post-Cold War world, including multilateral security organizationsand 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 theCentre for European Studies, School of International Studies, Jawaharlal NehruUniversity, New Delhi. He has been visiting professor at Leipzig, Freiburg andTübingen universities, and at the Maison des Sciences de l’Homme in Paris. Heis the author/editor of 30 books and has published 80 articles/book chapters. Hismost 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 hercontribution to this volume. In March 2009 she took up the position of seniorresearcher at the Stockholm International Peace Research Institute (SIPRI). Herresearch focuses on societal development in China, China’s energy policy and theimpact on its foreign policy, and its policies on climate change.

Notes on Contributors

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The Role of the European Union in Asiaxii

Dr Juha Jokela is a senior researcher at the University of Helsinki Network forEuropean Studies and a research fellow at the Ministry for Foreign Affairs ofFinland. He has also worked as the Director of the Network for European Studies.His research focuses on Europeanization and foreign policy, and he is currentlyexpanding these themes in the broader analytical frame of regional and globalgovernance and the EU’s Asia relations.

Dr Timo Kivimäki is a Docent, and a senior researcher at the Nordic Institute ofAsian Studies NIAS (Copenhagen). His current research interests include conict

resolution, security needs, and regional cooperation in Asia.

Eija Limnell is a Finnish diplomat who is currently a visiting researcher at theUniversity of Helsinki Network for European Studies. Before that she held the

post of Director for Policy Planning and Research at the Ministry for ForeignAffairs from 2005 to 2008. Her elds of interest include EU’s foreign and security

policy, human rights, conict resolution, and international mediation.

Dr Stig Toft Madsen is currently a guest lecturer at the Centre for East and South-East Asian Studies at Lund University, and is also Assistant Director of SASNET(the Swedish South Asian Studies Network, Lund University). His research focuseson the political culture of India and South Asia.

Dr Mikael Mattlin is University Lecturer in world politics at the Department ofPolitical Science, University of Helsinki. His research interests include EU–Chinarelations, informal political structures in Taiwan and Mainland China, Chinesestrategic SOEs and political economy, Cross-Strait relations, Chinese politicalstrategy and China’s roles in multilateral organizations.

Dr Zhang Tiejun works as a senior researcher at the Shanghai Institute forInternational Studies. He obtained his PhD degree in Peace and DevelopmentStudies from Gothenburg University in Sweden. His research interests lie in theareas of China’s foreign policy, East Asian regionalism, Sino-European relations,and Chinese engagement with Africa. He has publications in both China and theWest, including two books and a number of papers.



Given that there are almost no global problems that can be resolved without theactive engagement of China and India, this volume is a most timely analysis ofthe EU’s relations with these two major emerging powers. The astonishing growthrates of “Chindia” over the past decade have propelled both countries to a leadingrole on the world stage, whether the issue is trade and development, energy andclimate change, global governance or political and security affairs. In cultural and

IT matters, China and India are also making their mark. The Beijing Olympics werea great success and the Shanghai Expo will probably be the greatest internationalexhibition of modern times. Cinema audiences around the world were fascinated by Slumdog Millionaire, the Oscar winning lm that captured the chaotic, vibrant

society of today’s India. Bangalore is a world center for IT and software. Theworld marveled as 700 million Indians took part in the world’s largest genuinelydemocratic 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 becauseof disillusionment with the EU in Beijing and Delhi. Early on in the decade, Chinaand India had high hopes of the EU. Both produced policy papers that painted aglowing picture of an expanding EU, a powerful economic and trade bloc with itsown currency, and an increasing presence as a global actor. Each saw the EU asa counterweight to the unipolar world of George W. Bush. But the EU was splitapart by the Iraq war, failed to agree on lifting the arms embargo on China, andstruggled 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 Dutchrejected the constitutional treaty in a referendum. Three years later, the Irish threwout the revised Lisbon treaty.

It is hoped that the new treaty will provide the EU with more visibility, continuityand coherence in foreign policy. These are certainly much needed attributes indealing 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 pastdecade, 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 andIndia on their own. Only a common policy, whether on trade or climate change, onAfrica 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 considersthe very large number of EU politicians and ofcials visiting China, compared to

Delhi (or Tokyo), then there is something in this criticism. But visits do not tell the

Foreword

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The Role of the European Union in Asiaxiv

whole story. The EU shares more basic values with India (and Japan) compared toChina. This volume brings out the efforts of the EU to inuence China and India

with its normative values. These efforts have not been particularly successful andit may be timely to consider how to change tactics. But it would be a major errorfor 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 theEU’s relations with Asia and its efforts to establish a more visible and effectiveglobal footprint. It provides a balanced and comprehensive survey of the mainissues in the EU’s relations with China and India. It is also very timely as the EUis currently negotiating a new strategic partnership with China and a free tradeagreement with India. The volume deserves a wide readership.

Fraser Cameron

Director of the EU–China Academic Network (ECAN)



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 ForeignAffairs 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 ofHelsinki 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 EUtowards China and India, and to explore ways of promoting a stronger and moreversatile role for the EU in Asia. In particular we are indebted to Professor KariMöttölä 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 brainstormingsessions 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 representativesof the project’s partner institutions, namely Dr Bates Gill of SIPRI, Dr TimoKivimäki of NIAS, and Dr Henri Vogt of NES. They have all been an invaluablesource of ideas and expertise. In particular we would like to note their contributionin the formulation of the practical policy recommendations for the EU.

Several other scholars have participated in this project at different stages. Weare indebted to Professor David Shambaugh, Professor Jin Canrong and Dr FraserCameron for their insightful comments and suggestions. We furthermore gratefullyacknowledge the input provided by all the other scholars and civil servants whohave participated in the lively discussions during the project’s brainstormingmeetings and preparatory seminars. Special thanks also go to Professor TimothyShaw for his advice and support, and to the staff of Ashgate Publishing for theirassistance 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 LimnellUniversity of Helsinki Network for European Studies

Acknowledgements

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AFTA ASEAN Free Trade AreaAPEC Asia-Pacic Economic Cooperation

APT ASEAN Plus ThreeARF ASEAN Regional ForumASEAN Association of Southeast Asian NationsASEM Asia–Europe Meeting

BJP Bharatiya Janata PartyBRICs Brazil, Russia, India and ChinaCBM Condence-Building Measures

CENTO Central Treaty OrganizationCFSP Common Foreign and Security PolicyCIDA Canadian International Development AgencyCNOOC China National Offshore Oil CorporationCNPC China National Petroleum Corporation

COREPER Comité des Représentants Permanents(Committee of Permanent Representatives)CSCAP Council for Security Cooperation in the Asia Pacic

CSE Centre for Science and EnvironmentCSTO Collective Security Treaty OrganizationCTBT Comprehensive Test Ban TreatyDPRK Democratic People’s Republic of KoreaEAS East Asia SummitEC European Community/CommunitiesEEAS European External Action ServiceEEP Experts and Eminent PersonsEES European Security StrategyEMM Economic Ministers’ MeetingENP European Neighbourhood PolicyESDP (Common) European Security and Defence PolicyEU European UnionEURATOM European Atomic Energy Community

FDI Foreign Direct InvestmentFinMM Finance Ministers’ MeetingFMM Foreign Ministers’ MeetingFTA Free Trade AgreementG7 Group of SevenG8 Group of Eight

List of Abbreviations

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The Role of the European Union in Asiaxviii

G20 Group of TwentyGATT General Agreement on Tariffs and TradeGDP Gross Domestic ProductGOI Government of IndiaIAEA International Atomic Energy AgencyIBSA India, Brazil and South AfricaICCPR International Covenant on Political and Civil RightsICJ International Court of JusticeIMF International Monetary FundIPR Intellectual Property RightsITER International Thermonuclear Experimental Reactor JCC Joint Co-operation CommitteeKEDO Korean Peninsula Energy Development Organization

LNG Liqueed Natural GasMES Market Economy StatusMFN 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 StateODA Ofcial Development Assistance

OECD Organization for Economic Cooperation and DevelopmentONGC Indian Oil and Natural Gas CorporationOSCE Organization for Security and Cooperation in EuropePCA (EU–China) Partnership and Cooperation AgreementPPP Purchasing Power ParityPRC People’s Republic of ChinaROC Republic of China (Taiwan)SAARC South Asian Association for Regional CooperationSCO Shanghai Cooperation OrganizationSEATO Southeast Asia Treaty OrganizationSEPA Chinese State Environmental Protection AgencySEZs Special Economic ZonesSinopec China Petroleum and Chemical Corporation

SMEs Small and Medium-sized CompaniesSOM Senior Ofcials’ Meeting

SOMTI Senior Ofcials’ Meeting on Trade and Investment

TAC Treaty of Amity and CooperationUN United NationsUNHCR United Nations High Commission for Human Rights



List of Abbreviations xix

UNSC United Nations Security CouncilWB World Bank WTO World Trade Organization



Introduction

Juha Jokela and Bart Gaens

Background and Aims

This book explores the interaction between Europe and Asia, focusing on theEuropean Union’s (EU) strategic partnerships with China and India. In Europe,

the EU is striving to become a more efcient, visible and coherent regional andglobal actor. In Asia, meanwhile, China’s leadership aspirations in the East Asianregion and India’s growing involvement in the regional cooperation frameworksare further evidence of the global ramications of regional dynamics and relations.

The EU, China, and India are critical players in several key issues, such as nancial

markets and trade, security and climate change, poverty alleviation and energysupply, 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, theawareness of growing interdependence due to the forces of globalization, and theincreasingly strong role of the United States (US) in global governance. The EU’sinitial strategy toward this vast and diverse area was largely based on region-to-region 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 asan 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 withtheir billion-plus populations, rapidly growing economies, signicant military

capabilities including nuclear weapons, regional status, and increasingly close tieswith the US.

The aim of the book is to assess the strategies of the EU toward China andIndia since the 1990s, and to explore the ways in which Europe could assumea 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 andIndia in the context of global governance? Conversely, how do China andIndia view the emergence of the EU in conjunction with the impact and

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The Role of the European Union in Asia2

future role of the US in Asia? How are these perceptions reected in the

strategies and policies of these actors?The EU’s role and action. What kind of role does the EU play on theground in Asia? Apart from its economic inuence, what are its prospects

for making a political, security-related and cultural impact? Can the EU bea role model for the development and integration of Asia as a region?Global governance. What is the interplay of the EU with India and Chinain global governance, and in reforming and utilizing multilateralism,especially in the context of climate change and energy security? How dothese three powers relate to the pre-eminence of the US and its globalstrategies? Moreover, how is the concept of multilateralism dened in the

EU, China, and India? Which issue areas are dealt with in region-to-regioncontexts, and which in bilateral frameworks?

Recommendations. What conclusions can be drawn from the analysis inview of the EU’s future strategy toward India and China? How could theEU pursue its interests in Asia and its objectives in global governance andmultilateralism through partnerships with India and China, while retainingits special relationship with the United States?

Analytical Themes

In order to make any assessment of EU’s strategic partnerships with China andIndia it is necessary, rst of all, to clarify what kind of actors are involved. The

EU, India and China are outwardly very different actors in world politics withtheir own distinct political and economic arrangements. Although China is movingtoward a market economy, its economic system is qualitatively different from theEuropean and Indian systems. On the other hand, there are signicant differences

between the two market economies of the EU and India, which have at times beenreected in their respective positions in global governance institutions. The political

contexts also differ substantially, from (i) the communist one-party rule of mainlandChina to (ii) the quasi-federalist system of India, often labeled the world’s largestdemocracy, and (iii) the EU political system based on a mixture of supranationaland intergovernmental governance. The differences among international actors havenot, however, prevented scholars from comparing and contrasting their strategiesand behavior. For instance, much of the rationale behind foreign policy analysis inthe Cold War era was to explain the similarities (and to some extent differences) instrategic action between the two superpowers based on distinct political traditions

and economic systems. While the similarities were largely seen as resulting fromthe external environment, differences were explained with reference to internalconditions and personal characteristics of the state ofcials. 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

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Introduction 3

it is not a state or traditional international organization – highlights some noveldevelopments in global governance. Consequently, two analytical themes are centralto this book. The rst relates to the novel features of the EU’s international actorness

and its formulation of foreign policies and strategic action plans, and the second tothe signicance of multilateralism and regionalism in the contemporary world.

First, many of the authors contributing to this volume suggest that the deepeningof European integration is indicative of post-modern European actorness and post-sovereign politics. This does not, however, imply the erosion of national foreign policies, but rather highlights the complex interdependence and multilateralarrangements in Europe and beyond. On the other hand, the actorness of Chinaand India is predominantly understood in terms of modern statehood within whichsovereignty 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 actionsmark 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 majorimportance in the analysis of the partnerships. Does it relate to narrowly dened

national or EU interests and power politics in an increasingly multi-polar world?Or is it used in conjunction with increasing interdependence and multilateralarrangements both regionally and globally? Moreover, is a third way possible?

Further to these questions, the distinctiveness of the EU as an international actormight yield novel insights into China and India as strategic actors. In accountingfor the EU as an international actor scholars have underlined the unique history ofEuropean integration, institutional evolution, and, in particular, its foreign policydecision-making system. Consequently, the emergence of the EU on the internationalstage has led to the questioning of xed or given state interests in world politics. It

has called for a closer and context-specic evaluation of the formulation of these

interests in an increasingly globalized world. It is suggested in this book that whileit is crucial to specify what kind of actor the EU is, we should pay equal attention tothe special characteristics of China and India, including the historical context(s) andtradition(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 theseemerging 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 inAfrica (Alden 2007; Broadman 2007). However, the existing empirical literature

on the EU’s relations with these emerging powers is scarce and focuses mainly onrelations with China.

Second, post-war European developments underline the importance of theregional level in world politics. Regional politics and institutions such as theEU, the North Atlantic Treaty Organization (NATO), and the Council of Europehave played a major role for quite some time in European politics and foreign




policy, and more recently have extended their inuence elsewhere partly, but not

exclusively, due to EU support for regionalism. The EU’s role as a hub of a largenumber of region-to-region arrangements is often emphasized in the developmentof interregional relations. Moreover, it has openly supported regional institution- building beyond Europe. In terms of the distinction between a post-modern EUand a modern Asia, the interregional dialogue forms a novel layer of governanceclosely related to advanced multilateralism, and for many the concept representsincreasing interdependence and a departure from state sovereignty and strictlyintergovernmental arrangements. However, the signicance of interregional

relations has been questioned due to the generally disappointing functional performance of the dialogues. This has been attributed to two interconnectedfactors, namely the structural weakness of the interregional institutions and thecrisis of multilateralism (Rüland 2005: 50). On the one hand, the asymmetric

regional institutional capacities have tended to result in the adoption of theinstitutional 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 multilateralismhave highlighted bilateral relations and the role of the individual states. Recently,this has been associated with the rise of so-called BRICs (Brazil, Russia, Indiaand China).

Whereas the regional level and regional institutions are highlighted in

Europe, they are frequently downplayed in Asia. The different functions of theinstitutions and the premises of regional politics in Europe and Asia are also oftenemphasized. Europe has thus failed to promote its model for regional integrationin, and to establish well-functioning interregional relations with Asia or its sub-regions such as East and Southeast Asia. The EU’s strategic partnerships withChina and India could be seen as an attempt to engage these emerging regional andglobal powers in regional and global governance. After all, the establishment ofthe strategic partnerships was embraced in the European Security Strategy (ESS) promoting effective multilateralism (Council of the European Union 2003a). Thusthe chapters that follow reect the theoretical aspects of interregional relations

and comparative regionalism in the study of global and regional governance, andcontribute to a deepened understanding of the EU’s strategic action.

The book represents a multi-faceted approach. It brings together scholars fromChina, India and Europe who have been working explicitly or implicitly on anumber of key questions related to the strategic partnerships. Although focusing onthe role of the EU in Asia both as reected 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 andcompetition between these two newly emerging powers. Secondly, the aim of thevarious chapters is to contextualize the dening issues of the partnerships within

bilateral, regional, interregional and multilateral frameworks. Finally, the objectiveis to provide analyses that have direct policy relevance, to which end the differentchapters provide concrete policy recommendations. Methodologically the authors



Introduction 5

largely draw on (foreign) policy and document analysis often combined withthe institutional approaches that characterize the elds 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 inthe region, such as China and India;

the driving forces in the denition of China’s and India’s policies towardthe EU;the relationship between China and India.

Timo Kivimäki analyzes regional constructs as essential tools in dening rational

strategies for strategic partnerships with China and India. He examines how theEU, China, and India, but also the US, mobilize their strategies regionally, andhow this affects their relations with the other actors. In particular, China’s position

within the developing East Asian regionalism, and the country’s involvementin Central Asia, compel the EU to take into account the regional realities in itsstrategic partnership with China. The focus is on regional material, institutionaland normative/constitutive/ideational tools of strategic partnerships, and Kivimäkisingles out climate change and energy security as areas on which these regionalconstructs have particular bearing. He rst points out the need for a pro-active

strategy for energy cooperation, in Central Asia for example, as a counter-balanceto the growing inuence of China in this region. He argues that in the eld of

energy security Europe should recalibrate its energy- and environment-relateddevelopment cooperation by making its voice heard through informal networksand 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 atdeveloping a common approach toward the Asian region and the major individual players in Asia. The second chapter, authored by Juha Jokela, explores thefeasibility of the “single voice” approach by clarifying the EU’s disposition asan actor and examining how its external policies are formulated. Taking into

account the impact of global developments such as the increasing inuence ofChina and India, he elucidates the EU as an actor by focusing on the processesof Europeanization (i.e. the dynamic interplay between EU institutions and themember 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 emergentsuperpower, 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 dene the EU’s foreign and security

policies, and the role of the member states remains crucial in the formulation ofits external actions. The chapter highlights the institutional changes outlined in theLisbon Treaty as a double-edged sword. On the one hand the Treaty may foster amore visible, coherent and unitary EU external policy, which can transform the EUinto a more active model-power. On the other hand, it is possible that inuential

member states will be increasingly able (and willing) to project their national andshort-term interests in the EU level thus propelling superpower development.

The same reciprocal relations between the EU level and the inuential role

of individual member states underlies Chapter 3 by Bart Gaens. He reects 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

dene itself as a global actor was at the root of the rapprochement with Asiancountries during the rst 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 engagementand the creation of interregional dialogue mechanisms such as ASEM, dened

as “Asian-style,” need to be placed within the context of internal processes ofEuropeanization. To date, relations with Asia have been marked by a bilateral andintergovernmental focus. The tension between the EU’s disposition as a region

and its “natural” preference for region-to-region interaction on the one hand, anda predilection for intergovernmentalism resulting in the de facto attribution of asecondary and ancillary role to interregionalism in its relations with Asian countrieson the other, signicantly reduce the importance of an overarching Europe-Asia

framework. Interregional constructions are yet to display their full potential inengaging countries such as China and India in a regional and multilateral context.

Chapter 4, by Stig Toft Madsen, subsequently explores the EU’s relations withIndia. Emphasizing the importance their common past and shared institutions andvalues, Madsen rst looks back on the origins of the EU–India strategic partnership,

and then proposes seven different scenarios that portray varied permutations andconceptualize prospects for EU–India relations. He identies key spokespersons

for the various scenarios, and provides examples drawn from economics, scienceand technology, education, the environment, and politics. He draws attention to theincreasing prevalence in both worlds of grand visionary statements combined withthe 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 criticalstance toward potential processes of “endarkenment” in Europe and within the

European Commission. Nevertheless, as the EU and India are both bureaucraciesadministrating civilizations democratically, their partnership builds on commonground.

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 Chinastrategy on paper and to implement it in practice. Mattlin’s analysis points out the



Introduction 7

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 value- based agenda, and the pursuit of economic interests by individual EU memberstates. It is clear that one of the EU’s strategic aims, the endorsement of China asa responsible and engaged global player, has been accomplished relatively well,even if its impact is not entirely obvious. The EU faces the challenge of nding

the right balance between developmental goals, rights-based goals, and economicand security interests in the creation of a new political strategy. Three elementswill determine success or failure: direct security interests in East Asia, the EU’sinternal institutional development, and a rights-based agenda in relations withChina. In conclusion Mattlin suggests that the EU’s normative and rights-basedforeign policy has been toned down in its relations with China, whereas the broadtrend 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 analyzesthe asymmetries, complexities and changing dynamics of Sino-Europeanrelations after the Cold War. He then identies several key criteria on which

to judge a strategic partnership before framing it in the particular context ofSino-European relations. He argues that the changing dynamics of the bilateralrelations represents a transformation from an emphasis on one major ideationalissue (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-grantingof a market economy status (MES), and Chinese and European engagement withAfrica, to illustrate the challenges and opportunities for Europe following the re-emergence of China. The chapter underlines the need for an acknowledgement ofthe differences between the two partners (confronting them rather than bypassingthem), and of the shared interests and common responsibilities in promotingmultilateralism and global governance.

Chapter 7, written by Bates Gill, addresses the question of how China willexercise its power and inuence in a world increasingly marked by transnational

challenges calling for multilateral, global solutions. Gill’s analysis covers China’sevolving approach to multilateralism and global governance, starting with anoverview of its past and current approach to these issues. In assessing this approachhe addresses the question of how China’s deepening commitment to an effective,integrated, jointly-responsible, problem-solving approach to multilateralismand global governance will become visible. He considers China’s stance towardinternational institutions and public goods, regional hotspots, the peaceful

resolution of territorial and sovereignty issues, and military affairs. The concludingsection of the chapter provides some broad guidelines and recommendations onhow the EU could strengthen China’s commitment to responsible and effectivemultilateralism.

The ensuing chapter by Linda Jakobson focuses on what is sometimes referredto as China’s “energy diplomacy,” or the presence and activities of an increasing




number of Chinese actors in energy-rich countries, including Africa. Because ofits effect on the global oil market, its repercussions for the environment, and theimpact on international relations, this energy diplomacy is highly signicant to the

EU. Jakobson rst identies the actors behind China’s overseas energy security

policy, pointing out the fragmented nature of the bureaucracy. The chapter thenzooms in on the effect that China’s commercial interests in foreign countries –energy-related interests included – is having on its leaders’ stance toward Beijing’slong-standing principle of non-interference. Jakobson argues that nationalinterests and practical considerations will increasingly take precedence, and non-interference, at least in practice, will become unsustainable. This will furthernecessitate dialogue and joint aid projects involving the EU, China, and Africannations. In conclusion it is suggested that the creation of an organization of oil-importing 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 partnershipand what it entails for both players he focuses on attitudes toward global governance,multilateralism, multilateral trade negotiations, and Indian perceptions of theEU’s growing prole 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 tradenegotiations. Jain argues that the country has emerged during the post-Cold Warera as a pragmatic power favoring realpolitik , and fundamentally wary of the EU’smissionary zeal to become an exporter of norms. Furthermore, the possibilitiesfor 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 fromfurther interregional linkages because of the low level of meaningful cooperationwithin the South Asian region. Jain concludes the chapter with some concrete policy recommendations, emphasizing the need to focus on priorities that couldstrengthen the India–EU strategic partnership.

The nal chapter in the volume, authored by Claudia Astarita, addresses

a fourth vital dimension of EU–China–India strategic partnerships, namely themutual 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 theyare both committed to supporting a peaceful and respectful mutual relationship.

Furthermore, she argues that the strategies they have chosen to adopt in theface of their internal challenges will have a signicant 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 ConstructsTimo 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 itsregional development cooperation instruments, while East Asian leaders constructnormative and constitutive realities of Asian values. The common threats fromthe 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 settingcollectively 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), accordingto which issue areas of interregional importance are regulated, managed andcoordinated.

Trying to interpret the strategic game of the four actors – the EU, India, China,and the US – without acknowledging the regional realities and opportunitieswould lead to simplication and agent-atomism. Parts of the reality would remain

unintelligible, and some of the strategic options of the EU would not be identied.

This is why the regional elements of the strategic setting need to be analyzed in astudy that focuses on the perceptions, objectives, strategies, roles, and relationshipstructures among these four players. Regional material, and institutional andnormative/constitutive/ideational realities and tools of strategic partnership areimportant in general, and particularly so with regard to issues of climate changeand 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 treatregionalism as something more than a set of organizations. Nevertheless, regionalorganizations and institutions constitute one of the focuses of this chapter. Of particular concern are the institutionalization that has developed around ASEAN+3and 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 inuence

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 Europeanside the focus is on the EU, and the relevant institutions of interregional interactionare ASEM and APEC (Asia–Pacic Economic Cooperation).

Analyzing the material relevance of regions one also has to consider theregional military commitments, the regional arrangements for developmentcooperation, energy arrangements, and patterns of economic interaction. Power politics is ultimately based on military realities, which as well as more subtlediplomacy are often based on economic realities. One of the most fundamentalof these is the availability of energy, which conditions economic developmentas well as military capability. Energy security is given special emphasis in thisexamination 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 changeand the common fears related to material climatic environmental threats constituteanother area of strategic partnership that is taken under scrutiny.

Regional reality is also expressed in EU–India–China–US relations in termsof normative and constitutive orientations. The normative coherence of EastAsian states built around the ideas of the Treaty of Amity and Cooperation, which

were also expressed in the Sino-Indian ve 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 andidentitive realities of Asian values occasionally need to be taken into account inanalyses of China’s orientations in its relations with the EU and the USA. Finally,European partnership philosophy is based on many normative principles. SeveralEU documents dene human rights, democracy, and the rule of law as essential

elements of partnership, whilst good governance is often dened 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 – thatdene the SCO exemplies 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 theinterregional partnerships between the US and Asia, and the US and Europe. Thisconstruction of the global threat could easily be challenged by another construction placing all global agents on one side ghting common environmental threats.

Study Focus

The focus of this study on regionalism is four-fold:



The EU–India–China Strategic Partnership 11

What are the roles of India and China in their regional contexts, and howdo these roles affect the regional strategies of other actors in the “game offour”?What kind of relations and structures do China and India place in theirregional contexts, and how do these relations and structures affect thestrategic partnership with the EU?To what extent and in which issue areas do the four actors mobilize theirstrategies regionally, and base their perceptions on common regional perceptions and constructions of the world?To what extent and in which issue areas are the four actors able to mobilizetheir strategies toward each other through the regional constructs of therespective targets, and to what extent and in which issue areas could theyinterpret the positions of these targets as a reection of their regional

organization?

In sum, this study considers politics from a strategic perspective. This impliesa certain level of focus: the intention is not to look at independent operations ortactics, but rather to examine entire strategies in the game of EU relations withChina and India.

Secondly, with regard to the regional inuence 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 relevanceto the EU strategic partnership with India and China. On the one hand one couldconsider the role of India and China in their regions, which would enhanceunderstanding of how much the regional context might inuence their policies,

and thus of the need for the EU to consider the regional realities in its dealingswith these two countries. At the same time one could consider the relevance andcompatibility 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). 1

1 All military expenditure gures were calculated from information provided in TheWorld Factbook (Central Intelligence Agency 2008).

1.

2.

3.

4.




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).

Graph 1.2 Regional military expenditure in South Asia

China

Japan

Korea

India

Pakistan

Bangladesh




Even a shallow interpretation of the statistical evidence in the light of existingscholarship will change the picture of the regional military roles of China and India,however. The deterrence effect does equalize the military power balance betweenthe two regional nuclear powers, Pakistan and India (Basrur 2008). In East Asia,China is militarily constrained by the US, especially in the archipelago: its navalcapacity 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 inSouth Asia. Furthermore, India, and China even more so, are prevented from usingtheir military dominance by the inter-linkages between military and economicissue areas: an aggressive military posture would create a regional unwillingnessto foster economic cooperation with China, and that would not be in the besteconomic (and strategic) interests of the country (Lampton 2001).2

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).

Graph 1.3 Military expenditure and Central Asia: Regional actors

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

Russia

Kazhakhstan

China

Kazakhstan




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 fromoutside 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 asignicant factor, making the USA the third major military power in the region.

China and Russia have close connections with Central Asian countries and conductmilitary exercises under the Shanghai Cooperation Organization. Russia even hasa formal military alliance with many of the Central Asian states (Kazakhstan,Kyrgyzstan and Tajikistan as the active members) under the Collective SecurityTreaty Organization (CSTO), and major military bases in Azerbaijan, Kazakhstan,Kyrgyzstan, and Tajikistan. The American presence is also considerable with fourmajor military bases in Afghanistan and one in Kyrgyistan (Lachowski 2007). Therole 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 builton norms of non-interference and sovereignty, on the nationalistic approachesof the various governments, and the capacity of the Central Asian economiesto complement the regional and global powers, especially in the energy sector

(Wohlforth 2004). Kazakhstan alone, for example, has the potential to coveralmost one third of the Chinese oil decit with its own production surplus.

In terms of economic power, India is a dominant actor in its region, whereasthe position of China is not comparable (see Graphs 1.5 and 1.6).

Russia

Kazhakhstan

China

US

Kazakhstan




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

Graph 1.6 The GDP of the East Asian powers

As can be seen, the economic position of India is unchallenged in South Asia. InEast Asia there is a greater challenge from Japan and Korea, and the SoutheastAsian countries represent a bigger share of the regional economy than the smaller powers of South Asia. The inuence of the US and the EU in both South and

India

Pakistan

Bangladesh

China

Japan

Korea




East Asia is considerable, even if it is declining. However, again in East Asia oneshould make a distinction between the continental and maritime areas. It seemsthat China’s dominance as the biggest trading partner is almost unchallengedamong its continental neighbors (Ross 2006). More importantly, however, on theregional level it has a major inuence on globalized production structures. Regional

production requires Chinese inputs, which makes China inuential as a necessary

actor on this level. Yet, its regional economic position is not comparable to thedominance of India in South Asia (Hossain 2002), which has been strengtheningdue to the regional tendency to focus economic attention on Asia rather than theWest.

The differences in their economic positions have inuenced the roles China and

India have taken in their regional organizations. While the South Asian Associationof Regional Cooperation is very much dominated by India, the East Asian Summit

and the emerging East Asian Community are Southeast Asian creations, products ofASEAN’s agreements and dialogue forums with the three major East Asian powers,China, Japan and Korea. Power politics is considered to have been instrumental inshaping ASEAN’s institutional leadership, which seems to have emerged out of astalemate created by the power struggle between the two biggest actors, China andJapan. Since neither can assume the role of regional leader without the acceptanceof 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 theexisting organizations based on ASEAN, ASEAN Plus Three (APT) and the ASEANRegional Forum (ARF) (Hund 2003: 383, 411).

Since the availability of energy is a crucial source of material power in themilitary and economic spheres, the question of energy security must be consideredin any analysis of the EU’s strategic partnership with India and China. Since oiland 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 arewell worth investigating.3

It is clear from Table 1.1 that the EU, the US, East Asia4 and South Asia allhave an energy decit 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, theEAC (East Asian Community), the EU and the US all are net importers – the USand the EU being the biggest – only the area covered by the Shanghai CooperationOrganization has the potential to ease the regional energy dilemma. Kazakhstanhas ample supplies of oil and coal, while the Kyrgyz Republic and Tajikistan havehuge potential for hydroelectric energy (Asian Development Bank n.d.). Most

importantly, however, Russia is the world’s second largest producer of oil (with

3 All oil and gas gures were calculated from information provided in The World Factbook (Central Intelligence Agency 2008).

4 Even Indonesia has become a net importer of oil, making Malaysia and Brunei theonly net exporters in East Asia.




one eighth of global production), and the world’s largest producer of natural gas(with one fth 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-richCaspian Sea region with almost one fth of global oil production. Yet, the current

rate of production in the SCO area covers less than one quarter of the needs of theEAC, the EU and the US, and about 80 percent of what the EU needs in additionto its own production.

Table 1.1 Oil and natural gas consumption and production

According to the estimates of the International Energy Agency, China’s energydemand is growing by 5.1 percent per year, and India’s by 3.6 percent (InternationalEnergy Agency 2007a). Thus, China is aiming to secure its supply routes bydiversifying them. Given its limited naval power, it cannot protect the sea routesthat bring Middle Eastern oil and liqueed 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 ofChina’s energy policy (Tønnesson and Kolås 2006), and its regional institutionalinstruments 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 toassess the potential relevance of China’s regional institutional contexts to the EU’sstrategic partnership with the country.

Global Politics With regard to energy, the main challenge facing the EU andits strategic partners over the next 25 years is not its availability. According to

Oil surplus

(billions more barrels per dayproduced than consumed)

Gas surplus

(billions more cubic metersproduced than consumed)

India -1,603,400 6Pakistan -276,780 0

Bangladesh -79,254 0

China -3,200,000 3

Japan -5,228,000 -79

Korea -2,112,950 -33

US -12,478,000 -113EU -9,712,000 -281

Russia 6,954,000 46

Kazakhstan 1,104,000 8

Indonesia 30,000 37




the International Energy Agency, the projected growth in demand until 2030 can be satised provided that sufcient 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 consumptionis environmental. The world’s energy demands in 2030 could be 50 percent higherthan today, and up to 45 percent of this growth of demand could be attributableChina’s and India’s needs. By 2030 half of world’s energy consumption will be inthe developing world. If the current patterns continue, this will mean a decline inglobal energy efciency 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 Agency2007a: 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 emissionsof 57 percent between 2005 and 2030. It is possible to calculate from the statisticsgiven 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 ofthe global use of coal. In 2007 China took the questionable honor from the USA of becoming the world’s biggest emitter of CO

2 gas.

On the regional level, it would seem that South Asia is not making much progress

in terms of energy efciency and the use of cleaner sources, while East Asia posesthe biggest threat despite progress in some areas (Japan, Singapore, Malaysia, thePhilippines). While Europe has no de facto allies for its environmental policiesin South Asia, in East Asia the increased understanding has been balanced out by the magnitude of the problems. Yet, analyses comparing energy growth andconsumption seem to suggest that both China and India are among the nationsthat have taken strong measures to limit the growth in consumption and haveattempted to make the expanding production more energy efcient. Despite higher

growth rates, the average increase in energy consumption in China is lower thanthe average in East Asia, and percentage growth in India is lower than the averagein both East and South Asia. The ratio of growth to consumption is lower in bothIndia 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 nd its strategic partners

regional allies in its attempts to prevent climate change.




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 AsianSummit and the ASEAN Plus Three and ASEAN Plus One arrangements, whichare 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 (AsiaEurope Meeting).

India is a leading light in the SAARC, and a strategic partner of the EU as wellas 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 muchin terms of operative importance. Its relevance in South Asia is limited by thedominance of India: the structure of communication in SAARC is of a federalistnature, with India controlling all the interaction. Instead of developing a networkof institutional contacts, SAARC operates within the power realities of India’sleading role, and this limits the emergence of a genuinely multilateral framework:

multilateralism or regionalism give way to bilateralism (Gonsalves and Jetly1999). Furthermore, regionalism is limited by the strategic competition betweenIndia and Pakistan, especially on security issues. Unlike in East Asia, wherethe competition between China and Japan has paved the way for ASEAN-ledregionalization, South Asia has not had minor powers that have been strongenough to take over the development of the regional institutions. Bangladesh, theinitiator of the SAARC, together with Nepal, Bhutan and Sri Lanka that werethe rst countries to endorse the idea, were not strong enough to develop their

own organizations capable of co-opting regional institutional development in asimilar manner as the Southeast Asian countries did in East Asia. Indeed, the mostlikely opportunity for South Asia will be related to the expansion of ASEAN-

based East Asian regionalism. The expansion of the Asian side of ASEM, togetherwith 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 thatit 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 policyareas. One of the seven technical committees is devoted to the environment andforestry, while there are high-level working groups in ve policy areas, one being




energy. Yet, the level of regional coordination on energy and environmental issuesis very low. The organization has conducted a regional study on greenhouse effectsand their impact on the region, but its main focus has been on disaster managementrather than on the South Asian contribution to a global reduction in the greenhouseeffect. SAARC has little regional institutional relevance behind the facade of its basic organizational structures. Yet, the debate going on within it could be takenseriously in the identication of the regional approaches and opportunities the EU

might follow in South Asia. Management of the greenhouse effect is probablythe most effective form of regional environmental action and activity to preventclimate change. The SAARC action plan for the environment is not really open toEU–SAARC cooperation in that its implementation was on the national level andthe regional activity was limited to diagnosis. EU activity could rather focus onoffering expertise in terms of planning what should be done to improve the regional

environment, and specically in managing the practical problems of ooding and preventing its recurrence. Perhaps some of the India–EU Environmental Forumscould be utilized to facilitate the exchange of expertise, which would also serveregional needs and the needs identied in the SAARC Plan of Action on the

Environment. This would require a focus on the greenhouse effect and on themanagement and prevention of the regional effects of global warming. The EU’s programs for clean development could be suitable institutional instruments for thistype of regional cooperation with India in the context of SAARC.

In terms of energy, the regional interest in countering the greenhouse effectcould provide a basis for broader regional cooperation. While the exclusion ofIndia and Pakistan from the Nuclear Non-Proliferation Treaty limits cooperationin nuclear-energy production (as an alternative to fossil-fuel-based production),the fact that India is the only regional representative in the ITER (InternationalThermonuclear Experimental Reactor) project limits the institutional options forEU–SAARC cooperation in research on fusion energy. Finally, India’s perceptionof Iran as its major future natural-gas supplier places constraints on any cooperationin nding alternatives to fossil fuels. Thus the development of regional expertise

in energy efciency, 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 “fair-weather” cooperation that is limited to non-controversial issues and for the lackof implementation mechanisms and committed decision-making (Leifer 1999).According to Rüland (2000: 427), ASEAN-based regional integration “has hardlygone beyond […] ‘negative integration’ … [to] commonly agreed interventions

in specic policy elds through the setting of rules and their subsequentimplementation.”

At the same time, there is extensive consensus-building, facilitation ofinformation ow, and dialogue between the national authorities in several

regionally interesting issue areas in East Asia. In terms of policy planning, theEast Asian Community is already a reality. Even if national authority is not




being challenged by complex mechanisms governing regional decision-makingand implementation, cooperation in the preparation of policies does facilitate thedevelopment of regional institution-building. Even if national sovereignty is notcompromised, the common preparation of policy lines does inuence national

decisions, especially in issue areas in which there is a genuine commitment toregionalism. This kind of regionalism involves not only policy communities butalso academic communities, which, despite their lack of ofcial decision-making

power exercise a lot of knowledge power in the preparation of common approachesto policy issues. Enhanced communication and regional policy development alsoresult in common normative and constitutive approaches, which are discussed below.

On the security front, regionalism has proceeded despite conict and

competition between Japan and China. One of the main unofcial drivers of East

Asian security institutionalization has been CSCAP, the Council for SecurityCooperation in the Asia Pacic, which was a result of cooperation among strategic

think tanks in Japan, Malaysia, Singapore, Thailand, and Australia. It wasestablished as a reaction to the realization in 1992 that “a more structural regional process of a non-governmental nature” could “contribute to the efforts towardsregional condence building and enhancing regional security through dialogues,

consultation and cooperation.” However, the cooperation had started much earlier,and was already inuential in the latter half of the 1980s when discussions began

on plans for the ARF.5

It is also interesting that the European CSCAP is an ofcialmember of the ARF. It could thus be an entry point – which has so far not beenfully utilized – for Europe into a forum that has a great deal of inuence 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 dialoguearrangement in 1990, South Korea in 1991, followed by China, Russia and India in1996. Currently the list of partners is long and the coverage extensive: Australia,Canada, China, the Democratic People’s Republic of Korea, South Korea, theUnited States, India, Japan, New Zealand, Russia, Mongolia, and the EU. Whilethe ASEAN forums do not allow the EU to inuence East Asian “regional decision-

making”, they would give access to the real agenda building and preparation ofthe broad policy approaches. Involved in the ASEAN dialogue are certain, morespecic, lower-level forums that are more specialized arrangements and work on

a more bipolar (country X & ASEAN) basis. The most important of these arethe joint committees that ASEAN shares with its main partners. The Joint Co-operation Committee (JCC) between the EU and ASEAN was established under

5 The author participated in such discussions at the Strategic and Defence StudiesCentre, 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, seeBall 2004: 37-40 and Kahler 1994.




the EC-ASEAN Co-operation Agreement (1980) to “promote and keep underreview the various co-operation activities envisaged … in the framework of theAgreement” (European Commission n.d. a).

While the ASEAN Plus Three is less accessible to the EU as an institutionalcooperation arrangement, it is nevertheless an inuential forum for regional

security dialogue. It reects 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 in1992 that “ASEAN shall move towards a higher plane of political and economiccooperation to secure regional peace and prosperity” (ASEAN n.d.). Thisobjective was institutionalized by the respective foreign ministers working withtheir dialogue partners and culminated in the establishment of the ARF, which

was decided upon at the 27th ASEAN Ministerial Meeting in 1994. The declaredobjective of the ARF was to promote condence-building among the participants,

to develop preventive diplomacy, and to broaden its approach to conicts. It has

not exercised direct conict resolution, which is why, according to some scholars

and diplomats, it has not succeeded in moving from condence-building measures

(CBM) to conict prevention. However, it has been inuential in the build-up of

an institutional network that has transformed the agent structure of the region sothat conicts are less probable. Given the extensive collaboration and the common

tackling of regional political issues, ARF has the potential to build bridges, andeven transnational alliances (related to tackling specic 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, thePhilippines, the Republic of Korea, Russia, Singapore, Thailand, the USA andVietnam. Together with the ASEAN ministerial dialogues and post ministerialconferences, which are less permanently institutionalized but broader in theirmembership base, the ARF is probably the most inuential regional institutional

instrument for security cooperation. Despite its state-centered nature, most of itsinputs come from Track Two diplomacy initiatives. This is also why efcient work

within the ARF would require sufcient (also nancial) investment from the EU in

terms of participation in the unofcial forums that feed into its processes.

There are many ASEAN forums for security cooperation in addition to theARF and the permanent institutions that are of a more ad hoc nature. The conict

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 importantrole. In the case of the disputed territories, the so-called Jakarta Process under theleadership of Ambassador Hasyim Djalal and the Canadian Professor Ian TownsendGould was the forum in which the principles of the code of conduct in the SpratlyIslands were drafted and their acceptance was negotiated. It is signicant that,

despite the Indonesian leadership in this project, the initiator was an outsider to




the region, namely Professor Townsend. For a decade the process was funded by CIDA, the Canadian International Development Cooperation Agency. Whenthis funding ran out, the leadership looked to the Nordic countries. Accordingto Ambassador Djalal, the reason for this was the Nordic experience with themanagement of the Baltic Sea, and because the Nordic countries were smallenough to avoid accusations of using their own power politics to promote theirown hidden agenda.6 Ambassador Djalal’s reasons for seeking assistance from the Nordic countries proves that there are opportunities for nations like Finland withan interest in the stability of Asia to play a part for the sake of world peace, withoutany power interests of their own to pursue.

Finally, in order to deepen the Track Two approach the ARF decided toestablish a register of so-called “Experts and Eminent Persons” (EEPs) under theARF (2006). EEPs are retired statesmen and/or former high-ranking diplomats

who are nominated and registered by their respective governments as advisers tothe ARF. Following several years of drafting and deliberation as to whether theywould primarily have a ‘research’ or an ‘operative’ function, “Guidelines for theOperation 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 throughthe Chair by undertaking formative work on condence-building, the development

of preventive diplomacy, and elaboration of approaches to conicts in the region.

They are supposed to work in groups, but the process of formally activating them

for a specic task is not yet underway. The EU and its member countries shouldexplore ways of supporting and being involved in this process in the future. EEPshave been open to EU involvement, and in fact the rst 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 ratheradvanced. The issue of climate change seems to be the focus in both environmentaland energy cooperation. The EU and China established a Partnership on ClimateChange in 2005, which now has a summit-level Memorandum of Understandingon transport and energy strategies for cooperation in energy regulation, renewableenergy (including alternative transport fuels), energy efciency, natural gas, clean

coal technology (near-zero emissions), and other new technologies in the energysector (European Commission 2005).7 Activity on energy efciency and clean

coal technology have been institutionalized through an action plan that has beenaccepted on the ministerial level. Furthermore, China and the EU are workingwithin EURATOM on the peaceful use of nuclear energy. China, like India, is a

6 Discussion between the author and Ambassador Djalal. Kivimäki assisted in theapplication process, but Ambassador Djalal aired his views on the understanding that theywould be shared freely.

7 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).




member of ITER, a project promoting the development of fusion energy. Witha view to facilitating cooperation, especially in environmentally sustainableenergy policies, the European Commission and the Chinese State EnvironmentalProtection Agency (SEPA) have established close ties. According to AxelBerkofsky (2008), the EU–China Partnership and Cooperation Agreement (PCA),which the Commission has been lauding for some time, will be the next big bangin bilateral relations, promoting cooperation on energy and environmental issues.

However, none of these energy and environmental activities have beenconnected, on the level of basic documents, to China’s extensive regional ties inenergy policies.8 East Asian energy ministers met in Manila, Philippines on 9 June2004 (ASEAN 2004) and institutionalized energy cooperation on the ministerialand senior-ofcial 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 Asianregional cooperation only in a commitment to collaborate in terms of investingin renewable energy sources and in natural-gas production, which is cleaner thancoal and oil. Otherwise, the Chinese focus in East Asian energy cooperation seemsto be on safeguarding Burmese, Brunei, and Malaysian oil and gas resources. It isthe same in the narrower regional context of ASEAN + China, as the FrameworkAgreement On Comprehensive Economic Cooperation Between the AssociationOf 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 mentionedonly as an additional rather than a prioritized matter for economic cooperation, theinterest behind energy cooperation remains the same.

The development of renewable energy sources therefore remains the maincommon interest in both East Asian and EU–China cooperation. However, accordingto the multi-annual indicative program for China (European Commission 2007c), atleast 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 inthe energy and environmental sectors is based on sectoral cooperation it is likelythat the main resources will come from outside the development instruments. Inany case, the EU’s region-to-region effort at development cooperation with EastAsia in the prevention of climate change seems to be very limited in terms ofcommon objectives and economic commitment.

On the level of the highest inter-regional organization, ASEM, the issues ofenergy 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, togetherwith the European Commission, organized an ASEM Energy Seminar in Tokyo

8 Whether this is the case on the level of actual cooperation is not known to the author.




in January 2006, and the ASEM foreign ministers discussed the need for human-centered and sustainable development, specically 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 mechanismsstill have relevance, especially in the energy sector. The material setting, withthe Central Asian region possibly being the only one that could complement theenergy proles 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 sufciently realized is that the regional institutionalization

of Central Asia driven by China and Russia has focused on energy security soas to satisfy the energy needs of the member countries, possibly at the expenseof non-members. Within the political institutional framework of the SCO, China

is investing heavily in the energy infrastructure in Central Asia, and is makingexclusive agreements within the framework of the SCO, especially in Kazakhstanand Turkmenistan. The projects have often been implemented in collaborationwith the Asian Development Bank, within the multilateral framework of theCentral Asian Regional Economic Cooperation program. Given the growth inenergy demand in China, there is a risk that the potential markets of Central Asiawill become unavailable to the EU on account of the Chinese cooperation withinthe 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 gassupply to China, Turkmenistan will provide the required extra amount at theexpense of its other export markets. It has also been claimed that agreements between Turkmenistan and China manipulate energy prices to the detriment ofEurope and to the benet of China.

Furthermore, A.T. Kearney (Laudicina 2005) even suggested that the SCOcould 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 itwould be possible for oil and gas currently targeted on EU markets to be redirectedto China. Given that most countries in East Europe, including Finland, are verydependent on Russian natural gas, this would be worrying.9 It is impossible toestimate how realistic these scenarios are. Yet, the material setting of an extensivesupply decit, and regionalization that binds the EU’s major energy suppliers to

China, a major regional net importer of energy, could be considered problematicfor the EU. According to Bernard A. Gelb (2007) of the Congressional ResearchService, the only strategy left for Europe is to diversify its energy supplies andto establish supply (pipelines) from Central Asia, through Russia. However,

dependence on Russian supply and the fact that the pipelines go through Russiacreate an adverse power-political setting. Thus there are projects to channel Central

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




Asian gas through pipes that do not traverse Russian territory (the Baku–Tbilisi– Ceyhan pipeline, for instance).10

The Normative/Constitutive Relevance of Regionalismin the EU’s Strategic Partnership with India and China

East and South Asian normative and constitutive constructs are largely based onwhat is often referred to as the ASEAN Way: developmentalist state ideologies, thearticulation of an Asian commonness, and a complicated state-centric, even elitistcode of conduct in international relations. Yet the system allows for the input ofinformal private argumentation in state policies. It has been shown elsewhere thatthis construction has been highly successful in the reduction of violent conict rst

among ASEAN members and later, after 1979, in all of East Asia (Kivimäki 2001,2008). As a developmentalist orientation replaced the revolutionary approach, andas the East Asian nations started developing their own ways of handling disputes,the number of conict casualties went down drastically. Average annual numbers in

the ASEAN countries decreased to less than seven percent following membershipof the Association, and no member country has been engaged in a conict 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 normativeapproaches that characterize ASEAN were adopted by East Asia in general at thevery end of the 1970s, and the results were the same. The average annual numberof 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 Wayemerging in South Asian political debate. Many date the change to the ASEANWay in South Asia at the end of the 1970s and the beginning of the 1980s, whileothers see it emerging with the exposure to the ASEAN institutions after the turn ofthe millennium. In any case, while the evidence of South Asian success in conict

prevention is not yet as impressive as it is in East Asia, an association between theASEAN Way and peacefulness is evident. Thus the normative approach has beenvery successful in the whole of Asia, possibly still with the exception of CentralAsia. It is no wonder, therefore, that some of these approaches, such as the primacyof economic interests in the political development, are not negotiable in the EastAsian political debate. This is probably the most important “regional normativereality” 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 inrepressive violence (Kivimäki 2001, 2008; see also Johnston 2003a).




environmental and energy cooperation, developmentalism and the valuation ofsustainable growth could explain the relative differences in the European, and theChinese and Indian approaches. As in the case of institutional development, Chinaand India are still very much focused on energy security, and are not as concernedabout environmental issues as Europe is.

While the main characteristics of the ASEAN Way normative system alreadygive us some idea of the normative/constitutive realities of strategic partnership, adeeper understanding would require more detailed analysis, especially concerningclimate and energy issues.

India, China, and the ASEAN Way12 The rst element in the East Asian and

South Asian norms for international relations is related to the recognition ofcommon 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 witheconomic arguments, according to a general who was once very close to him.13 Thissubjective sensitivity toward common economic interests also has its institutionalexpression. “The economic integration in the region has brought interdependenceand a shared destiny to the region” (Wanandi 1996: 31). ASEAN and all thesubregional cooperative institutions within the area have concentrated theirattention on issues of common economic interest rather than on those over which

there is competition or conict. The rst sentence of The Bangkok Declaration,the founding document of ASEAN, emphasizes the importance of the commoninterests of the member countries. National achievements are often seen as partsof the collective ASEAN development in its publications.

The emphasis on development-related interdependence has also led totransnational institution building in ASEAN, another feature of liberal pluralistic political systems. Development and stability have been explicitly linked in manyof its documents, and this link has been seen as one of the rationales behind thecooperation (ASEAN 1976a: rst paragraph). According to former President

Fidel Ramos of the Philippines, ASEAN countries “try to build up something thatunites 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 ofcooperation, such as in the growth areas (Kurus 1997) and the institutions set upfor the resolution of a particular dispute (1st Meeting 1993). As a result, disputessuch as those related to territories that were fought over during the MalaysianConfrontation currently carry less subjective weight than the issues of commoninterest.

The developmentalist principles set out in the Treaty of Amity and Cooperationand the Five Principles of Peaceful Coexistence have a broad ofcial 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.




of ASEAN. Developmentalist principles are explicitly afrmed in the bilateral,

long-term framework agreements negotiated by China between February 1999 andDecember 2000 with Vietnam and Singapore (omitting the reference to the Treatyof Amity and Cooperation, TAC), Thailand, Brunei, Malaysia, the Philippines,Burma, Indonesia (ve 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 reect

developmentalist ideas. In a recent speech India’s foreign minister dened his

country’s foreign-policy goals in the following manner (Menon 2007):

The primary task of our foreign policy is to ensure an external environmentthat 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 statewhere our people can realize their potential?

Analysts of later (post-Mao, post-1979) Chinese foreign-policy ideas havefocused on the rise of developmentalism as the leading principle. According to XiaLiping (2003), for example, “developing economic exchanges, based on equalityand mutual benet, 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 affairsof nations” (ASEAN 1976a: Principle 8). While the EU is a post-modern, post-Westphalian entity, East Asia and South Asia are still very much committed tomodern 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 pacication of

East Asia, but are older and were already prevalent during the times when the mostdeadly conicts 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 andCooperation from 1976, emphasizes them in the rst three of its six principles:

Mutual respect for the independence, sovereignty, equality, territorialintegrity and national identity of all nations;The right of every state to lead its national existence free from externalinterference, subversion or coercion;

Non-interference in the internal affairs of one another (ASEAN 1976b).

The fact that the same document endorses regional cooperation against insurgencyand articulates the concept of “regional resilience” (ASEAN 1976b: second paragraph) against popular forces of instability reveals that national sovereigntyand 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 peoplechallenging it can be combated against collectively. It is clear that at the time of theestablishment of ASEAN, the leaders of the original ASEAN member states, FieldMarshal Thanom Kittikachorn (Thailand’s military leader), Ferdinand Marcos(the authoritarian President of the Philippines), General Suharto (Indonesia’smilitary ruler), Lee Kuan Yew (Singapore’s authoritarian President) and MohamadMahathir (Malaysia’s Prime Minister) based at least some of their perceptions oftheir common interests on their common elitist interests vis-à-vis their people.

Chinese and Indian principles of cooperation tend to emphasize the same elitistlogic. Three of the Five Principles of Peaceful Coexistence from 195414 illustratethis:

Mutual respect for sovereignty and territorial integrity;

Mutual non-aggression; Non-interference in each other’s internal affairs.

The third normative element in East and South Asian international cooperation isrelated to the management of differences. The remaining three principles of theTreaty of Amity and Cooperation (TAC) are related to the distinctive East andSoutheast Asian approach to conict management. The ASEAN parties (and later

China in the bilateral arrangements) agree to the:

Settlement of differences or disputes by peaceful means;Renunciation of the threat or use of force;Effective cooperation among themselves.

The focus of this approach is to “try to build up something that unites us, andcope [note: not resolve but cope] with all problems that separate us.”15 Instead offocusing on the resolution of disputes, the emphasis is on constructing a socialreality of harmony by expanding, in the minds of people, the common interests,the common identity and other features held in common, while smoothing overdisputes and other things that divide people. More systematically, one coulddescribe the Asian culture of consultation and consensus originating from ASEANin the following manner. Conict avoidance incorporates a preference for (a)

lengthy negotiations; and (b) quiet; (c) non-legalistic; (d) personal; (e) condence

building aimed at the (f) gradual down-playing and prevention (or sometimesresolution) 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 ofcial 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 thatunites rather than on issues of conict has left East Asia (and South Asia) with an

underdeveloped normative code of dispute resolution. As a consequence, Asianshave had to resort to mechanisms outside the region, such as the InternationalCourt of Justice (ICJ), when they have had a real need for a certain dispute to be settled. This culture of conict avoidance exists despite the fact that there are

explicit mechanisms of dispute resolution in the ASEAN system.17 The IndonesianPresident and the Malaysian Prime Minister, for example, agreed on October 6,1996 on the principle of deferring the territorial issue of Pulau Sipadan and PulauLigitan to the ICJ. The formal written agreement to forward the issue to the ICJwas signed by the Foreign Ministers of the two countries on 31 May 1997 and wasratied 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 inmultilateral forums. For example, it did not allow issues related to territorialdisputes to be tackled during the Jakarta Process covering the South China Seaarea,18 and it rudely rejected the Thai idea of discussing territorial disputes in the2000 ARF meeting ( Bangkok Post , 27 August 2000). The nal two Chinese and

Indian principles of the Five Principles of Peaceful Coexistence, later adopted bySoutheast Asia, point to non-aggression and the build-up of mutual benets as the

foundation of peaceful relations (PRC Embassy in India 2004). Furthermore, some

analysts close to the Chinese defense establishment go even further in dening theChinese approach by highlighting several elements of conict 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: 46-7); 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 Caballero-Anthony (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 recommendingappropriate means of settlement to the parties to a dispute; i.e. good ofces, mediation,

inquiry or conciliation. The Council may also “constitute itself into a committee” ofmediation, inquiry or conciliation (Amer and Kivimäki 2002).

18 Discussions by Kivimäki with Ambassador Hasyim Djalal, the coordinator ofthe 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 Conict management here means coping with conict and making it less violent,

without trying to resolve the disputes behind it. Conict transformation means thetransformation of structures that make conicts more likely. This approach also tackles

the disputes, but only indirectly. Transforming the conict structures may prevent violent

disputes from arising, but conict transformation does not, as such, focus on the dispute or

resolve it. For more on conict transformation see Auvinen and Kivimäki (2001).




the conicts. According to Zhu Majie,20 the preferred Chinese mechanism forregional security cooperation consists of the following ve elements:

The mechanism must be based on the Five Peaceful Co-existence Principles,and no country should seek regional hegemony;Disputes between countries must be solved peacefully and if an immediatesolution is not available, relevant disputes could be shelved and normalexchanges between countries should be maintained;Armament must be maintained at the level that is necessary for a country’s proper defence;All the nuclear powers realize their responsibility and obligation not to usenuclear weapons rst, and not to use or threaten to use nuclear weapons

against non-nuclear countries;

Cooperation in economic, trading, scientic and technological elds must be enhanced, and the developed countries should help the developingcountries (Zhu Majie 2003).

The two older normative approaches – non-interference and hiding dis-agreement – have recently been challenged by the democratization of Asia.Transparency became part of China’s military thinking after its 1998 DefenceWhite Paper (China’s National Defence in 1998: 6). The same thing had already

happened in Thailand and the Philippines, and happened soon afterwards inIndonesia. It seems that the Asian principles of cooperation are being modied

to include alternative solutions that will accommodate this contradiction. In particular, the institutionalization of the treatment of conict issues on a Track Two

level seems to offer some promising new ideas on how to deal with disputes (Job2003). The fact that the ARF was able to organize its rst high-level conference

on security policies in China under Indonesian chairmanship at the end of 2004 proves that sensitive issues do nd their way into the ofcial forums of Asian

interaction, and are not just left on the Track Two level. The role of Japaneseintellectuals and ofcials has also been important here.

However, the most recent of the main principles of East Asian and South Asianinternational 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 Partnershipwith India and China on Energy and Climate Issues It has been suggestedthat Europe should adjust to the relatively stable regional normative realities of

developmentalism in its relations with India and China. In terms of energy andenvironmental cooperation this would mean that in promoting its environmental

20 Vice President of the Shanghai Institute of International Studies (SIIS), which isoften 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 oneanother. It would be wiser to try to construct arguments that balance European anddevelopmentalist concerns. SAARC has expressed concern about the economiceffects of the greenhouse phenomenon, which should be the European regionalentry point into the climate debate in South Asia. As Claudia Astarita puts it in thisvolume, cooperative framing should treat pollution as an obstacle to developmentand competitiveness rather than considering environmental policies a compromisewith regard to developmentalist policies.

Energy security has been the main concern in East Asia due to developmentalistimperatives. Nevertheless, many areas and their economies have suffered from thedirect and indirect effects of climate change. The promotion of energy efciency

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 environmentalsuccess in one country benets all the others. Thus environmental issues could

assume further signicance in the build-up of regional resilience and condence:

identication 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 thedevelopmentalist mind-set of both South and East Asia will lead the countries tofocus on achieving measurable results, preferably in the economic sphere. Thefact that Asia is not known for quick, binding political decisions does not makeefciency impossible. The normative orientations of the East and South Asian

regions make it difcult for the EU to persuade China or India into formal binding

agreements, the economic impact of which is difcult to measure in advance. It

would be possible, however, to inuence their energy agendas and their thinking

in non-binding dialogue forums and meetings of policy-relevant experts. Energyand environmental security issues could also be promoted in the existing ofcial

security forums such as the ASEAN Regional Forum, and in unofcial expert

forums such as CSCAP and the ARF EEP, in order to inuence 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 exactlythis kind of policy environment, and if the EU needs to refocus regional attentionon the environmental threats, non-committing forums would be the right place inwhich to do so. Furthermore, mobilizing the development instruments could create

economically attractive cooperation projects with technology-transfer componentsin both China and India, where the regional ideology of developmentalism has been dominant. For that, however, the EU should be more serious about allocatingsubstantial resources.

The unwillingness to tackle difcult issues head-on and the limitations related

to the normative principles of non-interference in domestic affairs have indirect




impacts on energy and environmental partnership with China and India. Theirdevelopmentalist concerns over energy security, together with the principle ofnon-interference, make them reluctant to cooperate with Europe on human-rightsand democracy issues in Burma/Myanmar. Burma/Myanmar offers China accessto natural-gas resources that could be useful for the Yunnan province. At thesame time, it offers access to one or several of the Burmese ports, thus alleviatingChina’s helping problem of vulnerable sea routes for oil and LNG imports. A portin Myanmar would give it access to Middle Eastern oil without having to transportit through the volatile Strait of Malacca (Haacke 2006).

The EU will be challenged in its bargaining about global environmentalresponsibilities by the Chinese and Indian constructions of a divide betweendeveloping and developed countries. This divide is highly relevant in the debateon environmental responsibilities, and is reinforced by the regional aspirations of

all South Asian and most East Asian countries (all developing countries). It fuelsthe argument that developed countries cannot expect developing countries to carryas great a burden of responsibility for the prevention of climate change since theyshould also be allowed to grow in economic terms, as the developed countrieswere allowed to when they were on the road to prosperity. The formulation of thisargument and the construction of Indian environmental policies is further analyzedin Rajendra K. Jain’s chapter in this volume: While European emissions can becharacterized as life-style related, Indian emissions are seen as survival emissions.

The above-mentioned divide also plays an important role in Chinese policies, evenif recently it has lost some of its meaning due to China’s identity as a responsibleregional superpower. As a developing country it is not expected to focus on itsglobal 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 thatsupports the regional constructions, and also affects the bargaining on globalenvironmental responsibilities. While the West often compares responsibilities forenvironmental damage in terms of emissions per production unit, per producedvalue or by simply looking at total emissions, China and India often argue in termsof per-capita emissions. According to this logic, China, the greatest polluter, onlycontributes 40 percent of the per-capita emissions compared to the United States.21 Furthermore, East Asian normative constructions have emphasized the need toempower populous nations in international forums, including in the decision-making on global environmental problems. Abdurrahman Wahid, Indonesia’sformer 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 Indonesianforeign policy as the country pursues its claim to be identied 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).




argument has not been very prominent in the climate debate, it is likely to becomeso in the strategic partnership with India and China, the world’s two most populousnations. The growing focus on issues of global democracy will further strengthenits power, as Rajendra K. Jain mentions in his chapter in this volume.

Finally, the normative and constitutive construction of Central Asia could alsoaffect the EU’s strategic partnerships, especially with China, which is a prominent power in the region. The Asian emphasis on sovereignty and non-interference hasstructured Central Asia’s engagement with China within the Shanghai CooperationOrganization. China and Russia have not imposed intrusive conditions relatedto domestic politics on its political and economic ties with Central Asia. This is probably the reason why China has made such impressive institutional progress inCentral Asia, while the EU has not managed to do as well. However, as mentionedin 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 faras European energy security is concerned. In order to remedy the situation the EUcould try to utilize the normative constructs of sovereignty and non-interferencefor its own benet. The growing network of oil and natural gas pipelines from the

SCO area to China is creating a material infrastructure that binds Central Asiato China in a way that could be perceived as problematic for the independenceand sovereignty of the Central Asian countries. This could make these countriesinterested in diversifying their dependencies. Kazakhstan and Turkmenistan have

already made major efforts to navigate between the inuences of Russia, China andthe US by setting each of the big powers against each other. If the EU took the threatto its energy security seriously it could possibly exploit the normative orientationfor uncompromised sovereignty in Central Asia in negotiating arrangements thatwould guarantee its energy supplies from Central Asia in the event of competition between Chinese and European demand.

Conclusions

In order to dene rational strategies for strategic partnership with India and China

the EU needs to explore all the options. The utilization of regional institutionsoffers an opportunity that should not be overlooked in this respect.

The dominant position of India in South Asia makes regional organization lessrelevant, and limits the usefulness of approaching the relationship with India froma regional perspective. In East Asia, however, regionalism is very real, and hassubstantially more potential in terms of inuencing China’s policies than bilateral

relations. The development of Chinese institutional power-projection capacity inCentral Asia also makes it very relevant to consider the regional realities in theEU’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, EastAsia, South Asia and the EU are all growing increasingly dependent on energy




imports. This adds an element of zero-sum interaction to the EU–India–Chinastrategic partnership. Despite the opportunities for cooperation in increasing energyefciency and exploring new sources, the fact is that the strategic partners are all

competing for the same energy resources. For Europe this means, among otherthings, that the institutionalization that unites its strategic partners in an exclusivemanner with its potential and current energy suppliers is a worrisome regionaldevelopment. More precisely, while the Shanghai Cooperation Organizationdeserves EU support in many ways, Europe should not view energy cooperation assomething it can afford to totally steer clear of. Given the nationalist sensitivitiesof the Central Asian countries, Europe could try to forge closer energy cooperationwith them by offering them a way of balancing the growing inuence 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 energyefciency, and environmentally sustainable production and consumption. The

main focus in both of these regions is on the more common environmentalconcerns, and their foreign-policy approaches are dominated by concern foreconomic development. This makes bargaining over the burden of responsibilityin the prevention of climate change difcult. 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 notcompromise economic growth, but which make it more durable and sustainable.Thus, in addressing both environmental and developmental concerns, Europe shouldmake serious efforts to resource energy and environment-related developmentcooperation. Furthermore, in promoting environmental consciousness in SouthAsia 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 pursuethis it has to nd a way into the debate.



Chapter 2

The European Union as an International Actor:

Europeanization and Institutional Changesin the Light of the EU’s Asia PoliciesJuha Jokela

Introduction

On the face of it, the EU, China and India seem to be very different kinds ofactors in world politics, with their distinctive economic and political systems based on different historical experiences and traditions. On the other hand, thereare signicant similarities among them. All are regional actors occupying a vast

territory, characterized by internal cultural, ethnic, and religious diversity. Inaddition, they all play an important role in the global economy, and have recognized

their relevance and responsibilities for global security. Comparing and contrastingstrategic action in the EU, China, and India is thus highly relevant. I suggest thatin doing so it is imperative to clarify what kind of actors we are dealing with. Thefocus of this chapter is on the way in which the EU stands out among them: it isnot a state.

The rapid development of the EU’s external relations with states andinternational organizations suggests that it is not a traditional internationalorganization 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 manyit represents a novel turn in world politics, and therefore it deserves to be putunder 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 ofglobal developments on it. The aim of this chapter is to build a bridge betweenthe two approaches. The focus is therefore on the EU as an international actor,the process of Europeanization and recent institutional developments in the lightof topical global trends such as the increasing inuence of China and India.

The chapter is divided into three parts. The rst one focuses on the EU asan international actor, the rise of China and India, and the increasing globalcompetition. The EU’s actorness is elucidated by examining it as a novel typeof model-power and a more traditional superpower . I argue that even if thedata related to the EU’s practical policy-making highlights some superpowercharacteristics − 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-termsystemic changes in world politics. The second part concentrates on the processof 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 processesconstitutes challenges that should be taken into account in its strategic partnerships.The concluding discussion concerns the institutional changes in the EU’s external-relations decision-making in the light of the Lisbon Treaty reforms as a double-edged sword. On the one hand the Treaty may foster a more visible, coherentand unitary EU external policy, which can transform the EU to a more activemodel-power. On the other hand, it is possible that inuential member states will

be increasingly able (and willing) to project their national and short-term interestsin 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 onworld politics. For some it constitutes a model for, or a benchmark case of, theinstitution-building related to processes of regionalization and/or globalization.Others have granted it a sui generis status and emphasized its internal dynamicsand distinct features in comparison to other regional and global organizations.

Recently, its role and inuence 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 inthe formulation of common foreign, security and defense policies (Hill and Smith2005).

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 thisrespect, largely concentrating on the internal dynamics of European integrationand EU policy processes such as the establishment of region-to-region relationsand 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 internationalembeddedness in global developments such as the rise of Asia. I suggest in thischapter that, while it is important to understand the ways in which the EU producesinternational action, we should also focus on how the international dimensionenters into EU policy-making and processes (Hill and Smith 2005: 3). Indeed, thevery 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 theworld and its attempts to shape it through strategic action, we need to look into theinternal dynamics of it in the context of global developments.

In order to shed light on its role as an international actor a distinction is madehere between the EU as (i) a model-power and (ii) a superpower. The idea ofthe EU as a superpower is not new, but has become more prominent as its role



The European Union as an International Actor 39

in world politics has been recognized. Some policy makers have suggested thatthe EU should assume the role of a powerful state-like actor in order to balanceother powers such as the US. As such the EU has economic, political, and securityinterests to defend, and it should use its inuence 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 model- power is perhaps more deeply rooted among European policy makers. As the EUhas sought a more prominent role in world politics, policy makers have drawn on itsinternal achievements in order to legitimize stronger activism on the internationallevel. They have emphasized the achievements of European integration in buildinga system of governance based on the values of freedom, human rights, the rule oflaw, 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 importantnot 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 promotingits model. These ideas are clearly reected in EU statements and are supported in

the member states. The UK foreign secretary David Milliband argued recently thatthe EU should not strive to become a superpower, but should rather develop intoa 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” suggeststhat the EU model, i.e. its own internal experience, constitutes its most valuableresource when acting internationally (Lenz 2008: 2).

As a model-power the EU has been described as both passive and active. Asa passive actor it is shaping the world by simply existing. In other words, it isexerting inuence 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 ofthe EU in preventing conicts in postwar Europe and providing prosperity for

Europeans. The region’s diversity and prestigious global status in high and popularculture, science, and technological innovation has also seemed to encourage othersto follow its model. This view resonates with idea of the EU exercising soft ratherthan hard power (Nye 2004). On the other hand, and reecting its structural position

in world politics, it has been noted that its internal market structure constitutes astrong incentive for others to engage in regionalism. This might also reect power

balancing in that states have realized that regional integration is imperative if theyare to have any inuence 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 hasnot been emulated without reservation elsewhere, as the emergence of the so-called Asian way to regionalism in the 1990s suggests. The EU’s ability to attractothers is increasingly combined with its ever-increasing activism in world affairs −

whether economic, political or military. For instance, it strongly promotes regionalintegration through its external relations. Here the Finnish foreign minister Alexander




Stubb’s reasoning is illuminating. He argues that the EU needs to become moreinuential 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 actionreects routinized rather than strategic behavior. As a routinized actor it behaves

in a rather premeditated manner mirroring its rm belief that Europe’s history is a

lesson for everybody. It follows that under uncertain and challenging internationalconditions EU actors do what they know best, rather than what would be mostfavorable for the intended outcomes. In contrast, strategic behavior implies moreexplicit 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 tothe single markets rather than the political preconditions related to democraticgovernance and fundamental rights. Similarly, the EU has been accused ofnarcissism and of a tendency to re-produce itself in its policy to foster regionalismabroad (Lenz 2008: 6).

In terms of the EU’s increasing external action, the type of strategic action andits objectives are relevant to the model-power and superpower distinction. Is theEU’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? Signicantly,short-term interests and systemic objectives may be contradictory. In other words, bringing about systemic change might involve sacricing short-term interests

related to giving up power in international organizations, for instance. On the otherhand, they could also be complementary. The Kyoto Protocol addressing climatechange could be seen as an example of advancing longer-term systemic changerather than short-term economic interests. Nevertheless, its implementation mighttranslate into economic benets in terms of business opportunities related to new

technologies, for instance. In contrast, the EU’s position in lowering trade barriersin the eld of agriculture indicates short-term and interest-based action.

The EU as a Strategic Actor and the Emergence of Asia

The EU’s rst ever security strategy, the European Security Strategy (EES), which

was agreed in 2003, is perhaps the clearest indicator of what kind of internationalactor the EU is or intends to become, and of how it positions itself vis-à-vis otheractors (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 beready 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 conicts and insecurity on the one hand, and economic and social factors




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 whichto address security challenges. It has developed military capabilities, designedmainly for crisis management, and runs a large number of development programs.It is increasingly developing its political and institutional capabilities to formulatecommon policies and positions, and will therefore be able to utilize its economicand political power more effectively in world affairs. It is working toward aninternational order based on effective multilateralism; its key objective is thedevelopment of a stronger international society, well functioning internationalinstitutions and a rule-based international order (Council of the European Union2003a).

In many ways the ESS reects 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 includesseveral traditional foreign and security policy features. It emphasizes the role of themajor states by referring to its strategic partnerships with the US, Russia, Japan,China, Canada, and India. Within the EU it calls for unitary diplomatic effortsas well as coherent development, trade, and environmental policies. Moreover,it stresses the EU’s power, capabilities, and intervention in world politics. Theworld is also reminded about the member states’ substantial military capabilities

and ability to sustain several operations simultaneously (Council of the EuropeanUnion 2003a: 11-13). Signicantly, the EU does not merely have responsibilities,

it also has interests to be promoted, secured, and ultimately defended (Council ofthe European Union 2003a: 1, 3, 6).

The EU’s Asia strategies (European Commission 1994, 2001a), and thespecic EU–China (European Commission 1995, 2006b) and EU–India (European

Commission 2004, 2006c) strategies all reect the strategic thinking laid out in

the EES. They deal with a broad set of questions related to regional and globalsecurity, trade and investment, human rights, cultural dialogue, and developmentand environmental questions. In fact, the reasoning behind the regional andthe country-specic strategies is related: whereas Asia is seen as an emerging

region economically and politically, India and China are seen as increasinglyimportant regional and global actors. It is in the interest of the EU to promotethe development of the region as a whole, and to integrate its actors into globaland regional governance structures and institutions. Accordingly, the documentshighlight region-to-region relations such as those with ASEAN and ASEM, aswell 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 bilateralrelations (see Chapter 3). Although this reects the EU’s internal developments, it

may also be related to its external environment. The 1994 strategy is an important




document in that it represented an attempt to bring together the economic and political objectives of the EU in the post-Maastricht environment (Palmujoki2001). It connected the EU’s Asia policies to the recently established CommonForeign and Security Policy (CFSP). The 1994 strategy clearly prioritized region-to-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 criticizedfor being too broad and lacking in concrete action plans. Attempts were made insubsequent 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. Signicantly, the increased signicance of

bilateral arrangements and state actors in the EU’s relations with Asia is alsorelated to the external environment. Although the EU has highlighted region-to-region 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 signicant role in ASEM, partly due to the

Asian states’ insistence on member-state involvement. Consequently, the role ofthe Commission has been altered and the High Representative of the CFSP has been sidelined.

The data collected from the Council of Ministers and the Commissiondocumentation registers indicate that EU policy-making related to Asia has beendominated by economic and trade relations with China and India in the 2000s

(Graph 2.1 and Graph 2.2).1

This is partly due to these countries’ increasedimportance in multilateral arrangements and organizations such as the World TradeOrganization (WTO). For instance, WTO-related anti-dumping issues have beenthe major factors in the EU’s external relations decision-making with China andIndia. However, bilateral trade arrangements are also visible in the policy-makingdocumentation. On the other hand, China and India have also been progressivelyaddressed in the context of the CFSP. Politically volatile situations in some partsof Asia (i.e. Afghanistan, Pakistan, East-Timor, and Tibet) are also reected in the

data, as is the human-rights dialogue with Japan. The references to the ASEANin the eld 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 thedocumentation is, however, strikingly marginal.

1 The data was collected from the Council of Ministers and the Commissiondocumentation registers. European Parliament documentation was also consulted. Themethod included searches with different key words − such as “China,” “India,” “ASEM,”

“Central+Asia,” “Asia” − in all the documentation and relevant elds. The searches were

limited to the document titles as they gave a clear indication of the topic and issue areas.




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

Graph 2.2 Key Asian actors in all Council documents and CFSP related

subject matters, 2001-2007

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China India Russia Japan ASEM ASEAN

Commission

Council

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China India Japan ASEM ASEAN SAARC

All CFSP related working groups (CFSP, COASI, COHOM)




The background interviews with some EU and member-state ofcials gave similar

indications.2 Although it is claimed that the EU is actively promoting its model,the practical policy-making with Asia is largely related to managing economicrelations with the major states, in particular China and India, and to some extentASEAN. As such, it potentially reects routinized behavior and suggests that the

EU is acting as a passive model-power. On the other hand, matters related to Chinaand India have been progressively discussed in the context of the CFSP. Politicalissues − 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 makethis type of activism difcult and divert the EU’s and its member states’ attention

to short-term interests. Indeed, the member states seem to be particularly activein promoting their interests and defending their “red lines” in different Council

congurations.

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 isthe faith of globalization. The liberalization of nancial 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 − havesent shockwaves through globalist thinkers and policy makers. For many, relativegains and national interests increasingly dominate the global agenda, not least inthe economic arena.

The plenary address given by Kishore Mahbubani − a prominent Asian

globalization author – at a major international conference on global and regionalgovernance attended by leading scholars and some policy makers is illuminating.3 The organizers gave it the title “Can Asia Save Globalization?”4 According toMahbubani it is not terrorism and fundamentalism, or developing countriestrying to protect their markets, which represent a real and present danger toglobalization, but the West. As the world has beneted tremendously from the

globalization pushed forward by leading Western powers, recent developmentssuggest that the same powers are losing condence in the whole process, largely

2 These included ofcials in the Council of Ministers and the Commission, and

representatives of the member states.

3 Kishore Mahbubani is Dean and Professor in the Practice of Public Policy at the LeeKuan Yew School of Public Policy at the National University of Singapore. He served for33 years as a diplomat for Singapore and has written many articles on world affairs.

4 The conference, Pathways to Legitimacy? The Future of Global and RegionalGovernance, was organized by the Centre for the Study of Globalisation and Regionalisation(CSGR) at Warwick University, in cooperation with GARNET, the EU-funded Network ofExcellence on Global Governance, Regionalisation and Regulation.




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 actorsare refusing to reform key international organizations such as the UN SecurityCouncil, the International Monetary Fund (IMF), the World bank, and the G8 (thegroup of highly industrialized countries) to better reect 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 aw in the West’s

strategic thinking.” The West assumes that it is the source of the solutions to theworld’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, “theworld is headed for an even more troubled phase” (Mahbubani 2008b).

In the light of these global tendencies, the future development of the EU as aninternational actor is a highly topical issue, although difcult to comprehend. Will

it retain the key characteristics of an active model-power or will it be transformedinto a fully-edged superpower? Whereas the other chapters in this book

explicitly concern the importance of India and China to the EU, the focus in theremainder 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 clarifyingthe EU’s international actorness. Before turning to the changes proposed in theLisbon Treaty, I will therefore discuss the Europeanization in the foreign policiesof 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 hereto illustrate what kind of actor the EU is in world politics. The key objective isto clarify the relationship between the EU’s external relations and its memberstates.

The EU’s External Relations:

The Europeanization of its Member-state Policies

The term Europeanization has been used mainly to describe and account for theeconomic and political change brought about by post-war European integration. Asa widely used term it has acquired a wide set of meanings and has recently emergedas a key concept in analyses of European politics and foreign policy/ies. Most ofthe analysts have focused on the domestic impact of European integration, andas such, the concept has been used to account for (top-down) national adaptationto EU governance. On the other hand, foreign-policy scholars in particular haveshown an interest in examining (bottom-up) Europeanization as the national

projection of interests on the EU level. It is argued here that it is particularlyuseful in capturing the reciprocal features of the relationship between the EU andits member states. Thus the concept of Europeanization helps us to comprehendand account for the key dynamics and mechanisms of the EU’s external-relationsdecision-making.




Top-down Europeanization: A National Adaptation Approach

Europeanization studies acknowledge that European integration has reached alevel 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 ofthe member states’ role and inuence in the analysis of EU politics. On the contrary,

scholars have attempted to bring domestic politics back into our understanding ofEuropean integration and explanations of EU politics (Börzel and Risse 2000;Radaelli 2004). The concept of Europeanization thus serves to illustrate the way inwhich the European dimension has become an embedded feature within Europeanstates, framing policy, politics, and polity. The question is no longer whetherEurope 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 isdifferential. Authors have demonstrated the importance of the national context inmodifying, accommodating, internalizing and, perhaps, even neutralizing European pressures (Hix and Goetz 2000: 216). Hence, the processes of Europeanization donot replace or reject national administrative structures, cultures, rules, and norms(Jupille and Caporaso 1999). Europeanization has been dened 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 andhave formulated comparative frameworks. The research outcomes point notonly to convergence, but also to divergence. In terms of the EU’s Asia policy, adegree of Europeanization is easily discernible in the member states. For instance,relations with Asia became a key feature of Finland’s EU Presidency in thatASEM6 was organized in Helsinki in 2007. Thus the national administration has been increasingly dealing with the EU’s Asia relations and the EU has thereforeshaped Finnish policy in the EU and beyond. Moreover, there have been severalinstitutional changes in many member states in the eld 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 advancedthat 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 approachto 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 theEU level. This could be a result of the relative weakness of EU competences andinstitutions in this policy eld, as compared to many aspects of market regulation.




According to Ruben Wong, the national projection school maintains that states arethe primary actors in and agents of Europeanization (2005: 137). They are highly pro-active rather than passive in projecting their preferences, policy ideas andmodels to the European level. This conception of Europeanization shares manysimilarities with the intergovernmentalist thinking that highlights the centralityof the major states. The bottom-up approach has also attracted attention to theimpact of the smaller states in EU-level policy-making. In this sense, Finland’srole in crisis management and recently also in Asian relations, has been noted inBrussels. The smaller member states may well play an important role in facilitatingconsensus among the big states. In addition, the expertise related to their role asmediators in disputes and conicts might empower them within in the EU.

Europeanization as Adaptation and Projection

The amazingly rapid development in the EU’s external relations in the eld

of traditional foreign policy is another reason for investigating the top-downEuropeanization of foreign policy. The reorientation of national foreign policiesand various domestic institutional changes can be explicitly connected to the EU(Raunio and Tiilikainen 2003). On the other hand, the prevailing inuence of the

member states, especially in the formulation and construction of the CFSP and theEuropean Security and Defense Policy (ESDP), may explain why the approaches

developed by foreign-policy scholars have been, in a sense, wider than in someother elds. Focus on the mechanisms, and on state-driven and largely given

interests in rationalist terms, has been complemented with approaches highlightingelite socialization and/or cognitive processes.

Ben Tonra, for instance, describes Europeanization as a transformation in the waysin which national foreign policies are constructed and professional roles are dened

and pursued, and in the consequent internalization of the norms and expectationsarising from a complex system of collective European policy making (Tonra2000: 229). M.E. Smith notes the increasing impact of EU processes on nationalforeign-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 conclusiveto the forging of common positions at the EU level (Smith 2000: 617-628). Tonraarrives at similar conclusion, suggesting that the relationship between national- andEuropean-level foreign policies has been, and continues to be, reciprocal (Tonra2001: 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 needfor 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, theyare also engaged in a process that is increasingly shaping the environment in whichsuch interests are formulated. The case of Finland is, again, illuminating. In orderto be an inuential player in Brussels, Finland makes strategic decisions concerning




foreign-policy issue areas on which it will focus. Accordingly, Finnish strategicthinking is shaped by the EU context. In a similar way, the interest formation amongthe major EU states is increasingly being thus shaped. Evaluation by the permanentrepresentations in Brussels of a particular international situation or issue area takesinto account the opinions of the other member states and EU institutions.

Few studies so far have addressed Europeanization in the context of relationswith 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 afar greater inuence than hitherto acknowledged. He uses the cases of Spain

and Sweden to illustrate the creation, adaptation, and modication of European

partners’ overall strategies for Asia, with particular reference to ASEM as a toolfor 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-policyframework. Both studies suggest that the development of the relationship betweenthe EU and its member states is crucial to EU’s external relations in the light ofits strategic partnerships with other major actors. On the one hand, the increasinginuence 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 policy-making framework is likely to promote convergence in member-states interestformations in the longer run. Moreover, the Lisbon Treaty reforms are likely to

shape both the institutional set-up and mechanisms and the relationship betweenthe 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 andexternal-relations policy-making. In the opinion of many, the EU has lacked theinstitutional capability to formulate coherent external policies, while others suggestit rather lacks the political will to formulate common policies and positions. Theinstitutional set up of its external-relations policy-making has been under constantreview, particularly after the single-market process was nalized 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 theintergovernmental pillars. Accordingly, external affairs related to the single markets,such as nance, 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 EuropeanParliament has also been involved in the process. All other external affairs, such asthe CFSP and ESDP, are decided within the intergovernmental pillar. The centralinstitution in this case is the Council of Ministers, in which the member states andtraditional diplomatic procedures dominate the policy-making process.




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 difcult

to sustain as the policy areas overlap. Moreover, the current institutional set-upand policy-making mechanisms are seen to result in fragmentation, incoherenceand inefciency, 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 eld of external relations is

not translated into common action. On the other hand, the EU is often seen as adifcult partner to negotiate with internationally. For one thing, its positions are

often xed, 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 debatesor even struggles. Secondly, member states do not necessarily follow the agreed

common positions. Indeed, the foreign-policy administrations of the 27 memberstates are not necessarily aware of all EU policies and positions, which mightcause unintended incoherence.

Proposed Changes in the Lisbon Treaty

The Constitutional Treaty signed in Rome in 2006 represented an attempt toovercome 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 EUin world politics. Although the Treaty was rejected during the ratication process,

support for the external-relations reforms has been substantial. Indeed, the sectionsdealing with the EU’s external relations were among the least contentious in thenegotiations (Avery and Missiroli 2007: 6). This was also the case in the Frenchand Dutch referendums that resulted in “no” votes and the end of the ratication

process. Moreover, the established consensus largely prevailed in the negotiationsfor the Lisbon treaty in the eld of external relations. The requested clarications

and subsequent changes made in it are said to be marginal (Avery and Missiroli2007: 6). The suggested title for the EU’s external-relations chief has been changedfrom the “Union Minister for Foreign Affairs” to the “High Representative of theUnion for Foreign Affairs and Security Policy.” Moreover, it is suggested that theadded clarications related to the CFSP and member states’ foreign policies are

irrelevant in that they state the obvious and reiterate existing norms (Missiroli2007: 18).

The provisions in the Constitutional Treaty on the external relations of theEU 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 tostrengthen its negotiating power and thus to make it more effective on the worldstage 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 two-and-a-half-year period, and transforms the European Council into a fully-edged




EU institution. Secondly, it creates the post of High Representative for ForeignAffairs and Security Policy, combining the roles and functions of the current HighRepresentative for CFSP and the Commissioner for External Relations. Thirdly,it sets up the European External Actions Service (EEAS) to support the new HighRepresentative.

The accorded international legal personality for the EU implies an end to thedistinction between the European Community and the European Union, which isalso reected in the pillar structure. A single legal entity is better able to conclude

international agreements and join international organizations. It is assumed thatthe EU will therefore be able to speak and to take action as a single entity in manyelds of world politics. This could potentially include the political and security

provisions of interregional arrangements such as ASEM, and relations withASEAN and SAARC as well as bilateral relations such as strategic partnerships

with India and China. Although it is usual for international organizations to have alegal personality – as the UN organizations and the World Bank have, for instance −

in the eld 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 themain task of the European Council is to “provide the Union with the necessaryimpetus for its development” and “dene the general political directions and

priorities thereof” (European Council 2007), the institution will therefore havea pivotal role in shaping the future directions of the integration process. Withregard to the external action, the Treaty stipulates that the European Council willidentify the strategic interests and objectives of the Union. In many ways thisinstitution will be responsible for deciding what kind of model the EU will bein 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-statecompetences in the eld of external relations. The European Council also plays a

key role in nominations for ofce. It proposes the President of the Commission

to the European Parliament and appoints, in agreement with the President of theCommission, the High Representative. Decisions of the European Council aretaken by consensus, except when otherwise stipulated in the Treaty.

The role of the permanent President of the European Council is currently thesubject of lively debate. The Treaty states that it will be to “ensure the externalrepresentation of the Union on issues concerning common foreign and security policy.” The practical implementation of the policies, however, is the responsibilityof other institutions and actors, in particular the High Representative (European

Council 2007). The President’s role may become signicant in the event of anexternal or internal crisis, for instance, and when a consensus on EU action hasto be sought in the European Council. She or he might also take on a substantialrole in high-level international meetings as the representative of the EU and itsmember states. In theory, as the EU assumes a legal personality, the Presidentcould replace the heads of states and governments of the EU member states in




ASEM, if so decided. This does not necessarily imply a more supranational EU.The European Council is essentially an intergovernmental institution, and itsincreasing role might highlight traditional features of international organizationand consensus-building rather than (qualied) majority decision-making. The EU

will therefore continue to be a difcult partner with which to negotiate. On the

other hand, how this will develop depends largely on the roles of the new Presidentand High Representative.

The most important institutional innovation in the Lisbon Treaty, the aim ofwhich is to overcome the pillar structure, is the new position of High Representativefor Foreign Affairs and Security Policy and the creation of the EEAS. The EEASwill draw on the resources of the EU institutions and the member states to assistthe High Representative. The main task of the jobholder will be to ensure theconsistency 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 forCFSP, and chair the new Foreign Affairs Council conguration in the Council of

Ministers, and will also be one of the Vice-Presidents of the Commission virtuallyin charge of the external relations assigned to it. Consequently, the two distinctinstitutions – the Council of Ministers and the Commission – will be broughttogether in the eld of external relations.

One of the consequences of these reforms is that the role of the rotating presidency will be signicantly reduced. Currently the member state holding the

presidency is in charge of all EU affairs in the Council of Ministers, and takes asubstantial role in representing the EU internationally. On the other hand, the roleof the European Parliament may well increase in the elds of CFSP and ESDP.

When the Community and the CFSP pillars become one, the distinction betweeneconomic and politico-military affairs may be even more difcult 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 processleading to the new Treaties, democratic accountability in external relations is stilllargely indirectly in the hands of the national parliaments rather than the EuropeanParliament.

The preparatory work done to establish the EASS suggests that the currentcivil-service staff dealing with external relations in the Commission, and withforeign, security and defense issues in the Council will largely form the newservice led by the High Representative. The Commission now has more than7,000 staff involved in external relations, who are based in Brussels and in morethan 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 therepresentations of the member states (Missiroli 2007: 9). In comparison, thereare about 500 employees based in the Council of Ministers General Secretariatdealing with foreign, security and defense policies. This gure 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.




Neither does it include the large number of member states’ diplomats participatingin Council congurations, or different preparatory bodies, or working for the

rotating presidency. The Lisbon Treaty contains very little about the precise set-upof the EASS and its relations with existing structures and bodies in the Councilof Ministers and the Commission. However, it is now common knowledge inBrussels that had the Treaty come into force on 1 January 2009, the Commissiondelegations would have become EU delegations and the heads would have beencalled 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 AfricanUnion reect 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 theAfrican Union.

The ending of the rotating presidency in the external relations and establishing

“two-hatted” representatives could potentially solve most of the currentfragmentation and incoherence problems. However, some new questions mightarise. First, the Treaties reveal very little about the role of the President of theEuropean Council in practice. She or he will most probably take some of theresponsibilities − arguably also some resources and personnel − of the Council

Secretariat and ensure some form of external representation in relation to theEU summits. Consequently, the High Representative will have to have a closeworking relationship with the President of the European Council. Moreover, it is

unlikely that the Commission President will refrain from intervening in externalrelations. Indeed, the opposite might be an unintended result of the reforms in thatthe Commission is involved in so many areas of external policy. Interestingly,the current President of the Commission took back the role of chairing thegroup 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 difcult with regard to

external relations as member states might be tempted to (re)gain some ground inthis eld, at least in terms of visibility. It should be noted that the country holding

the rotating presidency will still chair all the other Council congurations, most

importantly the General Affairs Council and the COREPER, unquestionably amajor player in foreign-policy matters. Observers have pointed out that it will bevery crowded indeed at the top of the EU (Missiroli 2007). The old formal troikaof Presidency countries might be replaced with a new informal one including theEuropean 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 EUexternal relations would have change substantially with bringing together oftwo bureaucracies with distinct decision-making structures. Without a doubt thechanges when they come about will have an impact on the EU as an internationalactor. Its legal personality and the visible EU foreign-policy posts served by staffin Brussels and representations around the globe will highlight the EU as an




international actor. This indicates that it is increasingly seeing itself as a highlyactive model-power. The reforms have the potential to facilitate more strategicaction. Signicantly, it is possible to formulate clear objectives and priorities for

all of the EU’s external-relations elds. However, the EEAS needs to adopt a

culture of strategic thinking, and to avoid the pitfalls of routinized behavior thatreect 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 morestrategic behavior. Indeed, the reforms highlight intergovernmentalism in externalrelations, which in many elds must be agreed among all 27 member states.

Thus the EU should carefully consider in which external areas common action isfeasible. Its external relations will need leadership in order to establish a commonand 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 andhow its external policies are formulated. It is suggested that the EU is aimingto become an active model-power, in other words that its internal development

and historical experiences will continue to shape its international actorness. It isaiming at making systemic changes in the world’s economy and politics in thelong 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 theone hand and the member states on the other, was discussed in the context of theEuropeanization, which is a reality in the eld of traditional foreign and security

policies even if the role of the member states remains crucial in the process. Thismust be taken into account in any strategic action. Finally the focus moved tothe ongoing institutional changes. It is suggested that the reforms might resultin an EU that is more visible, coherent and unitary in world politics, althoughon the other hand they reect increasing intergovernmental tendencies within the

Union. As such they may also increase the inuence of the member states in the

formulation of the EU’s external relations given their proneness to project anddefend national rather than EU interests in the various elds of EU policy-making.

Herein lies the real danger that the EU’s external policies will increasingly reect

either the EU’s or its most inuential member states’ short-term interests. The

increasingly competitive and turbulent world economy and the potential returnof power politics might provide the momentum for this kind of development.Accordingly, it might prove difcult to nd political support for policies pushing

through longer-term systemic changes. As a result the EU might increasingly actlike a superpower.



Chapter 3

The Development of the EU’s Asia Strategy

with Special Reference to China and India:Driving Forces and New DirectionsBart 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 rst place by commercial

incentives following the rise of Southeast Asian economies (the so-called Tigereconomies), but was also marked by a sense of urgency to engage more activelywith the region as a political actor. The European Commission’s comprehensiveAsia strategy of 1994 articulated this political will and prioritized enhanced

relations in multiple elds with Asia as a region. The ensuing era has been marked by a three-fold development. The rst of these is the process of “Europeanization,”

or the increased ability of the EU to act not only as an economic power but alsoas a political actor and present itself as a global player. Secondly, there is a process of “Asianization” going on, underpinned primarily by the intensication

of intra-regional trade and economic integration in Asia, but also highlighted bythe conguration 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” hascoincided with the re-emergence of China as an economic and political power, andin more recent years, by the growing involvement of India in the regional structure.Thirdly, the process of “new interregionalism” has entailed the encounter of tworegions as distinct and equal actors in a dialogue going beyond trade and theeconomy to include political, security-related, and cultural issues. This novel typeof interregional relations emerged as a post-Cold War product following the endof the bipolar power structure, adding a new dimension to global governance andcomplementing bilateral and multilateral interaction. In the context of EU–Asianinteraction this triple development was crystallized in the Asia–Europe Meeting

(ASEM) in 1996, a forum that enabled institutionalized interaction between theEU and a grouping of Asian states, and aimed to create a “partnership in a spiritof equality.”

The aim in this chapter is to reect on the development of EU–Asia relations

since 1994, taking the EU’s common policy and strategy for Asia as the primereference point and focusing specically on the perceived roles of India and

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China. Particular attention is given to dialogue and cooperation in the interregionalcontext, and relations with both countries are analyzed in the context of the widerAsian region. I will begin by tracing the historical development of the EU’s AsiaStrategy in order to give an insight into the changes occurring in the internationalenvironment as well as in perceptions toward China and India. It will also enhanceunderstanding of how the European Union perceives itself as an internationalactor, 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 isan 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 givessome 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 rst comprehensive policy for the Asian region in the

European Commission’s “Towards a New Asia Strategy” policy documentof 1994. The strategy reected 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 werelisted: (1) to strengthen the EU’s economic presence in Asia; (2) to contributeto regional stability by promoting international cooperation and understanding;(3) to contribute to poverty alleviation and sustainable development, and (4) tocontribute to the development and consolidation of democracy and the rule of law,and promote respect for human rights and fundamental freedoms. A geographicaldistinction was made between the eight countries of East Asia,1 the ten countriesof Southeast Asia,2 and the eight countries of South Asia.3 However, the boomingeconomies of Southeast Asia and the continuing economic strength of Japan carriedconsiderable weight in the document, and references to China and India are scarce.While relations with China were largely normalized in 1992 (with the exceptionof the arms embargo), no bilateral political dialogue was established until June1994. This was followed by the rst 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

1 China, Japan, North and South Korea, Mongolia, Taiwan, Hong Kong and Macao.2 Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Cambodia,

Laos, Vietnam, and Burma.3 India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, the Maldives and Afghanistan.



The Development of the EU’s Asia Strategy 57

Asia Strategy paper emphasizes the important role of European involvement in promoting reforms in the previously centrally managed economies of China andIndia. Both countries are furthermore referred to in the contexts of developmentaid, the ght against drugs, the low levels of energy efciency combined with

the relatively abundant supply of carbon-rich fossil fuels, and the large regionalimbalance 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 SouthKorea, Taiwan, Hong Kong, and Singapore since the early 1980s, and thesuccess of other so-called Tiger Economies in Southeast Asia (including ASEANcountries such as Malaysia, Thailand, Indonesia, and the Philippines) markedthe shift from development cooperation to economic competition. The gradual

increase in intraregional trade and investment in East Asia further intensiedAsia’s economic growth in the 1980s, making it the most dynamic region in theworld. In addition, the “sleeping giant,” China, started to emerge as a powerfulregional player. In the early 1990s it revealed its interest in integrating into theworld economy by expressing a desire to return to GATT and implementing aseries of reforms. Bilateral trade continued to increase following the normalizationof EC/EU–China relations in the early 1990s and China was the EU’s secondmost important trading partner by 1994 (Maull 1997: 174-5). Furthermore, there

was awareness in the EU that including China in the multilateral trading systemwas essential for reasons related to market access, intellectual property rightsand the reduction of distortions (Pelkmans 1997: 16). The main emphasis wastherefore on the economic dimension: “The Union needs as a matter of urgencyto strengthen its economic presence in Asia in order to maintain its leading role inthe world economy.” The new economic cooperation with Asian countries was tofocus (albeit not exclusively) on the newly emerging Asian markets, and the EUneeded to take an active interest in integrating the countries that were engagedin structural economic reform (China, Vietnam and India) into the open, market- based trading system.

Recognition that “the USA was way ahead of Europe in exploring and exploitingthe possibilities” offered by the dynamic Asian economies (European Parliament -Committee on Foreign Affairs, Security and Defense Policy 1999) was a second keyincentive to formulate a comprehensive strategic policy directed toward Asia. The New Asia Strategy (NAS), in particular, singled out the increasingly pragmatic andeconomy-focused attitude of the US in the Asian region. The US had disconnectedtrade and human rights in the aftermath of the Tiananmen events, extending the

country’s Most Favored Nation (MFN) treatment concerning Chinese exports tothe US, and seemingly prioritized the long-term goal of including China in worldtrade and economic relations.

Thirdly, it was also foreseen that greater economic weight would have strong political ramications. The European Union was therefore compelled to increase

its role as a political actor in the region, in particular with regard to the promotion




of stability in Asia, poverty alleviation, and the spread of democracy, the ruleof law, and respect for human rights and fundamental freedoms. The 1994 AsiaStrategy added a political dimension: “The European Union is entrusted with thetask of developing a common foreign and security policy to enable it to protectits 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 growingawareness in Southeast Asian countries in particular that a distinct set of Asianvalues underpinned the development of these countries’ economic and politicalsystems (Bridges 1999: 1). The EU’s Asia Strategy reected the awareness that

an Asian identity was gradually taking root, and that Southeast Asian countriesin particular had acquired political condence and no longer hesitated to question

“our” moral values and social systems. It was accepted that ways of advocatinghuman 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 asa “necessary strand in the policy mix.” Increasing internal coordination among theEU member states was seen as a sine qua non in terms of achieving the objectivesthat Europe imposed on itself. EU cooperation in the region had to complementmember-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 two-way internal dynamics between member-state and EU-level institutions, i.e. the

inuence of national policies on the EU level, and conversely the impact of theEU component in national policies. Germany, a country without extensive formercolonial links with the Asian region, pushed for the creation of an overarchingAsia 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 thefollowing year. According to the Asienkonzept (Deutsche Bundesregierung 1993;Deutscher Bundestag 1993), the growth potential of the Asian markets and theexcellent prospects of the Asia–Pacic region heralded the advent of a “Pacic

Century.” German attention was focused primarily on Japan, with which it alreadyenjoyed 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 liberalcourse, and normal bilateral relations had resumed. The German government was,in fact, one of the rst to support the relaxing of sanctions after the Tiananmen

massacre, implementing a mercantilist approach in order to secure contracts forGerman companies (Maull 1997: 471). Chancellor Kohl’s visit to ve Asian states

in early 1993 was both a symbol and the actual starting point of the creation ofGermany’s Asia strategy, which was nalized in the fall of the same year. Placing

top priority on a foreign policy targeting Asia, Germany pulled the EU along inaiming for the expansion of trade with and investment in Asia in order to ensureEurope’s competitiveness, and prompted the European Commission to propose itsown EU strategy toward Asia (see International Herald Tribune, 23 September1994). As a more recent German policy paper (Federal Foreign Ofce of Germany




2002) explicitly mentions, “[Germany’s] policy towards the regions of East Asiainuences 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: AStrategic Framework for Enhanced Partnerships” appeared in 2001. Like itsforerunner seven years previously, the strategy paper was a very broad policydocument. 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 denition

of Asia, and targeted “the countries stretching from Afghanistan in the west toJapan in the east, and from China in the north to New Zealand in the south, plusall points in between” (European Commission 2001a). Furthermore, while NAS1994 was targeted towards Southeast Asia and Japan, the revised paper gave muchmore weight to the emergence of new powerful regional players, including Chinaand (to a lesser extent) India. Both countries were now acknowledged to havegrown 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 1994relations with China had certainly advanced, as evidenced in the establishmentof 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 inthe elds of sustainable development, political dialogue, human rights, the world

economy, and WTO accession. China was seen to be exerting increasing economicand political inuence 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 betweenthe world’s largest democracies” after the rst summit of June 2000. It noted the

economic reforms supporting a regular growth rate. Furthermore, the country’sconict with Pakistan was one of the issues that illustrated the importance of

political and security dialogue in South Asia. As with China, cooperation withIndia would increasingly have to cover global issues, such as the promotion ofa global environmental agenda. However, despite the shared values, the sharedrespect for diversity, and a strong civil society, the EU’s relations with India laggedfar behind those with China.

A Greater Emphasis on Political and Security Dialogue and Increasing Awarenessof the EU as a Political Actor Secondly, ensuring peace and security in Asiathrough wider EU engagement took a much more prominent position in the listof objectives. The need to defuse tensions on the Indian subcontinent, and thenecessity to engage China further in the international community (by promoting




reform, sustainable development, and good governance and rule of law) were atthe core of this perspective. Developing trade and investment relations was listedonly as the third objective, after the promotion of human rights, democracy, goodgovernance and the rule of law. Whereas the original Asia Strategy was deeplyrooted in economic and trade-related interests, the revised version reected an

increased awareness of the EU as a political actor, resulting in a stronger emphasison political and security-related dialogue. The core objective for the EU thereforelay 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 anenlarged EU.”

This higher awareness of EU actorness is increasingly evident in nationalstrategies for Asia, as member states adapt national policies to EU-centricarrangements, and aim to complement the promotion of national interests with

a common European policy in order to achieve success in the region. It is clearthat European integration has a bearing on domestic (foreign) policies through a process of adaptation, or top-down Europeanization. For some member states theEU has served as a vehicle enabling (re-)engagement with Asian countries, whileoffering economies of scale. Working through the EU facilitates trade negotiations, providing at the same time an instrument for promoting dialogue on political andsecurity-related issues and, importantly, human rights. Furthermore, acting as aunion could strengthen collaboration and regional integration among the Asian

partners, which in turn could contribute to sustained stability in Asia (see, forexample, the German (2002) and Danish (2007) strategy papers). A recent strategydocument (entitled “Asia as a strategic challenge and opportunity for Germanyand Europe,” dated 23 October 2007) released by the CDU/CSU parliamentarygroup further states that strengthening the European dimension is vital in order tosurvive in the new global world order: “We Europeans must formulate our sharedinterests and values clearly and be prepared to defend them.”

Constructive Engagement Thirdly, the EU’s Common European Foreign Policywas to be based on constructive engagement and dialogue, multilateral cooperation,openness, and commitment to human rights (Patten 2000). This could be seen as theresult of a Europeanization process of the German-French policy since the early-to-mid-1990s advocating silent diplomacy and “constructive engagement” ratherthan confrontation and sanctions. This approach allowed Germany to substantiallyincrease its trade with China in the rst half of the 1990s, and led other EU states,

primarily France, to copy the German model. It also inuenced 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 prioritizedeconomic liberalization at the expense of human rights by rather adhering to“discreet diplomacy.” Germany’s approach to the July 1994 summit meeting ofEU and ASEAN foreign ministers held in Karlsruhe serves as a concrete exampleof this emphasis. Even though the meeting failed in its aim to conclude a new




EU–ASEAN cooperation agreement, the constructive and non-confrontationalapproach 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 stanceon human rights, emphasizing economic exchange and implicitly acknowledgingthe validity of the cultural relativism thesis as put forward by the Asian countries(Wong 2006: 37). According to the French Foreign Minister Hubert Védrine, “thegist of French policy is to treat the question of human rights through dialogue andnot through ineffective confrontations” (19 January 1998, quoted in Dorient 2002:176). The approach of France, the staunchest supporter and even the cradle ofhuman rights, but still showing no hesitation in concluding contracts with China,was a matter for discussion in other member states (see, for example, the debatein 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 humanrights top priority would signify a de facto absence from Asia. A “politics of presence,” on the other hand, would require the creation of appropriate mechanismsthrough which to conduct lasting constructive bilateral and multilateral dialoguewith Asian countries. Other member states thus seem to have accepted thisemphasis on a “discrete” policy: since the Asian region will not accept preaching,and certainly not from former colonizing powers, it is necessary to address thehuman-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 aresponsible and constructive Chinese role in the region though participation inregional fora and bilateral dialogue. The “constructive engagement” approacheffectively 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 Italyannounced that they would no longer support the EU’s annual draft resolutionagainst China, thereby blocking the formulation of a common position (Glen andMurgo 2007: 339-340).

Bilateral Focus Fourth, the new Asia strategy placed more emphasis on bilateraland multilateral cooperation: specic measures aimed to “help improve relations,

in a bilateral framework with each country, but as part of a larger Europe–Asiaframework” (European Commission 2001b). It favored a “pragmatic approach,

based on an individually tailored analysis of its relations with each countryor groups of countries” (European Commission 2001b). The prime focus on bilateralism and pragmatism in engaging with Asian countries is also a feature innational policy papers of countries such as Belgium. Its most recent discussion paper on Asia dened China, India, and ASEAN (provided it could reach its

integration goal) as the main regional engines of growth for the following decennia




(Federal Public Service Foreign Affairs of Belgium 2006a). The paper emphasizesthe need to “establish a more coherent and efcient strategic framework based on

rm knowledge,” but suggests that Asia’s heterogeneity is a complicating factor in

establishing a comprehensive policy. An Asia strategy should therefore be adaptedto the specics 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 diversied and

“clever” policy, both of which should take into account and take advantage of thediversity within the Asian continent (Federal Public Service Foreign Affairs ofBelgium 2006b).

In sum, the 2001 Strategy placed higher emphasis on the EU as a politicalentity but failed to elaborate on a clear EU-wide approach. In addition, it advocateda pragmatic and bilateral approach, especially on economy-related issues, and

neglected the wider regional context. The European Parliament deplored the absenceof a common approach based on clear priorities for the region as a whole and for thesub-regions in particular: the strategy should express “a clearer common approachnot least because the most recent developments require a specically 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 CommonForeign and Security Policy (CFSP) did not yet seem to cover Asia.” Of coursethe Asian strategy was only intended to describe the overarching, multilayered

policy for the Asian region, and therefore should be read concomitantly withadditional policy papers aimed at providing more detailed strategies and initiativesfor interregional, sub-regional and country-specic relations. It may indeed be

absurd to think of a monolithic EU–Asia relationship, and to attempt to implementa single policy or approach that is equally valid across the whole region (Patten2002). Yet, the recognition of Asian difference and diversity is seen as complicatingthe establishment of a comprehensive strategy. The result is a bilateral focus, anexplicit bias toward certain countries, and a policy based on pragmatism. As aconsequence, the emergence of regional actors such as China has not been placedin a wider regional context, in a framework that extends beyond purely bilateralrelations. This could be seen as the Commission Communication’s greatest aw.

As the European Parliament contended, “In the light of the increasing regional andinternational role of China the strategic relationship with the People’s Republicshould 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 eld of policy practice and assesses the role and potential

of “interregionalism,” both as a tool with which to implement the Asia Strategyand as an instrument to engage India and China. Interregionalism is often seen




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 relationshave been considered a new and important diplomatic tool in the emergingmultipolar system, and have even been referred to as a “landmark on the way to anew world order” (H.D. Genscher, quoted in Regelsberger 1990: 13). In the contextof EU–Asia relations, interregionalism was rooted in the EU–ASEAN region-to-region construction (the rst ASEAN–EC9 ministerial conference took place in

1978, Regelsberger 1990: 5). In the early 1990s, however, the EU’s increasedemphasis on the human rights agenda resulted in a failure to revise the 1980EU–ASEAN Cooperation Agreement. One of the main underlying motivationsfor the creation of the Asia–Europe Meeting (ASEM) was to rekindle the troubledrelationship between the EU and ASEAN.

ASEM, originally a Singaporean initiative, was created in 1996 as a top-levelyet informal dialogue forum aiming to advance interregional rapprochement between Europe and Asia in the political, economic and cultural elds. The

inaugural summit in Bangkok, held in March 1996, signied for many the highly

promising start of an interregional partnership between equals, based primarily oneconomic interests (Gaens 2008b: 29). The location of the rst 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 theEU’s prime yet less explicitly stated objectives. This broad policy objective, whichwas also included in the EU strategy papers, could be considered to have beenrather successfully implemented given China’s involvement in ASEM, and India’srecent joining of the partnership.

China in ASEM

China’s display of a stronger commitment to a multilateral approach has been amarked feature of the country’s regional policy in recent years. It was less thanenthusiastic about the ASEAN idea for an Asia–Europe dialogue forum in themid-1990s, perhaps anxious to avoid being once again the target of internationalcriticism (see Bridges 1999: 182; Camroux 2006: 7-8). Yet it has graduallyand increasingly skillfully shown its dedication to multilateral and regionalcooperation, not in the least in order to create a counterbalance to US unilateralismin the region. As argued by Michael Yahuda, China’s economic pre-eminence bythe turn of the twenty-rst century increasingly led the country to adopt a policy

of “good neighbourliness,” avoiding antagonizing the other states in the regionand enhancing its economic integration. Beijing also embraced multilateralismand regional engagement, visible in its participation in the consultative processesof regional associations such as the ARF and in cooperative arrangements suchas ASEAN+3 (Yahuda 2004: 216, 234). China’s “embrace of multilateralism” isfurthermore evident in its involvement in the East Asia Summit (EAS).




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

In 1996 it used the opportunity offered by the rst ASEM summit to lobby

for WTO membership.In 1998 it was praised by European leaders, including Jacques Chirac, fordodging the Asian nancial 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 sidelinesof ASEM2, opinions among the member states were divided and the EUended up not supporting a resolution at the UN Commission on HumanRights condemning China’s record.The German chair of the ASEM Financial Ministers’ Meeting in 1999criticized China for imprisoning political dissidents for expressing theirviews, for its extensive use of the death penalty, and for its policies on

Tibet. The Chinese accused Europe of interfering in Chinese domesticaffairs, and of acting arrogantly by criticizing human-rights abuses in Asiawhile such abuse was rife in Yugoslavia.China persuaded the European Trade Commissioner to revive talks onChina’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 SilkRoad” between Asia and Europe that would facilitate mutual respect and boost exchanges. Beijing argued that the ASEM ministers should focuson economic and social issues, and not turn it into a forum for politicaldispute.China showed its commitment to a multilateral approach to combatingclimate change by hosting the rst ASEM Ministerial Meeting on the

Environment in 2002.At the Foreign Ministers’ Meeting in 2002 China called for the internationalcommunity to speak with one voice on the tense relations between India andPakistan, 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 coalitionagainst terrorism at ASEM4 in Copenhagen (2002). At the same time,however, together with France it stressed the need for the US to avoidtaking unilateral action.China teamed up with France in order to express respect for culturaldiversity, organizing the Meeting of ASEM Culture Ministers (2004).At the Foreign Ministers’ Meeting in 2005 China lobbied the EU towithdraw the arms embargo imposed after the 1989 massacre of pro-democracy demonstrators.At the Financial Ministers’ Meeting in 2005 China launched the “TianjinInitiative,” the aims of which was to establish a new dialogue mechanismfor coordinating policy responses to crises in the wake of the devastatingtsunami in Southeast Asia.

China has furthermore been the single most active ASEM partner, launchingand (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 eightto 10 years the country has used ASEM initiatives in order to demonstrate itscommitment to economic cooperation and to issues of global concern, includinghuman rights, cultural diversity, energy security and anti-terrrorism. The change inits attitude toward the role of civil society in ASEM is also striking. The Informal

ASEM Seminar on Human Rights (Beijing 1999), a favorable attitude towardthe establishment of a social dimension within ASEM, and the organization ofworkshops and meetings on labor and employment are all examples of this changein policy. As Bersick (2004: 146) argues, “While China uses the ASEM processas a counterweight to the United States’ increasing unilateralism, Beijing becomesengaged in a democratization of the international system through the participationof civil society actors.” The involvement of civil society representatives incooperation programs as part of a “socialization process” at grassroots level(Panebianco 2004: 145) could therefore be seen as one area in which the EU’sconstructive engagement process has made some progress (see also Keva2008). This, in turn, could strengthen ASEM’s role in ghting 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 Study group on technological exchange and cooperation

1999 Science and technology ministerial meeting2000 Anti-corruption initiative2001 Science and technology cooperation on forestry conservation and

sustainable development2001 Symposium on law-enforcement organs’ cooperation on combating

transnational crime2002 Environment Ministers’ Meeting2002 Seminar on water resources management2002 Ministerial conference on cooperation for the management of

migratory ows2002 Cooperation on promoting awareness in the young generation of the

drug problem2003 Seminar on anti-terrorism2003 High-level conference on agricultural cooperation2003 Culture Ministers’ Meeting2003 Workshop on the future of employment and the quality of labor 2003 Seminar on the management of public-health emergency2004 Workshop on urban forestry2005 Young political leaders’ forum2005 Strengthening cyber-security2005 Prosecutors-General Conference2005 Trade and investment exposition2005 Accounting issues workshop2006 Seminar on international nancial report standards (IFRS)

2006 Forum and exposition on tourist investment and cooperation2006 Workshop on climate change and energy security

2007 Workshop on avian inuenza control2007 Small and medium-sized enterprises (SME) ministerial meeting2008 Ministerial meeting on education and qualication




Table 3.2 ASEM initiatives hosted by China

Year Hosted initiative

1996 Customs DG Commissioners’ Meeting

1997 Study group on technological exchange and cooperation1999 Informal Seminar on Human Rights1999 S&T ministerial meeting1999 Working group on sanitary and phyto-sanitary measures2001 S&T cooperation on forestry conservation and sustainable development2001 Foreign Ministers’ Meeting2001 Symposium on law enforcement organs’ cooperation on combating

transnational crime2001 Promoting the welfare of children including combating child abuse

2002 Environment Ministers’ Meeting2002 Seminar on water resources management2002 Meeting on standards and conformity assessment (SCA)2003 Seminar on Anti-terrorism2003 Economic Ministers’ Meeting2003 High-level conference on agricultural cooperation2003 Culture Ministers’ Meeting2003 Seminar on the management of public health emergency

2004 Informal seminar on human rights2004 Workshop on urban forestry2004 Senior Ofcials’ Meeting on Trade and Investment (SOMTI)

2005 Young political leaders’ forum2005 Prosecutors-General Conference2005 Finance Ministers’ Meeting2005 Trade and investment exposition2005 Accounting issues workshop2006 Seminar on international Financial Report Standards (IFRSs)

2006 Forum and exposition on tourist investment and cooperation2006 Workshop on climate change and energy security2006 Meeting on eCommerce2007 Workshop on avian inuenza control

2007 SME ministerial meeting2007 Interfaith Dialogue2008 Forum on rural development2008 ASEM7 Summit

2008 ASEP5 (Asia–Europe Parliamentary Partnership Meeting)2008 Forum on trade and investment in marine shery

2008 AEBF (Asia–Europe Business Forum)2008 Roundtable meeting for investment promotion agencies2008 Senior Ofcials’ Meeting




India in ASEM

The decision taken at the Helsinki summit to enlarge ASEM to form a partnershipof 45 members by including India, Pakistan, Mongolia and the ASEAN Secretariatwas 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 inEast Asia. First of all, it underlined India’s “turn to the East” and illustrated thecountry’s ambitions to become more involved in processes of regionalism in Eastand Southeast Asia. Its economic integration endeavors with ASEAN since theearly 1990s resulted in the signing of an FTA in 2003. In addition, India joinedthe ARF and became a member of the East Asia Summit in 2005. Its regionalcollaboration with Southeast and East Asia in particular has led to intensied

bilateral economic relations, and has strengthened its image as a great power, evenas a possible counterweight to China (Wagner 2006: 56-57). Furthermore, India’s joining of ASEM indicates China’s increased condence and regional commitment,

as mentioned above, and is also a sign of the enhanced relations between ASEANand India. In particular, it marked the end of a long period of neglect and achievedthe 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 oppositionwas probably the main reason why India was kept out (Wagner 2006: 55). Indiaitself heavily criticized the narrow denition 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 PranabMukherjee sneered at the time that “Asia minus India is like Hamlet without thePrince of Denmark” (Datta-Ray 1998). Even in 2002 the former CommissionPresident Jacques Santer expressed his frustration over China’s, Thailand’s, andVietnam’s refusal to let India, Pakistan, and Bangladesh join ASEM ( EuropeanVoice, 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 theinclusion of India along with Pakistan and Mongolia. Interestingly, the new SouthAsian members also became part of the Northeast Asian coordinating mechanism,and the ASEAN Secretariat secured its prominent position in the Asian region- building process by becoming a separate partner and casting itself in a role notdissimilar 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 willfurthermore impel India to interact and coordinate policies with other Asian states,which could have a positive impact on regional stability. As India, the world’slargest democracy, shares common values such as “commitment to democracy, pluralism, human rights, the rule of law, and the independence of judiciaries and themedia” (European Commission 2006c), ASEM offers the EU further opportunities




to increase the weight of its projected soft power, such as in the area of non-traditional security and the promotion of regional stability. As far as cooperation intackling climate change and ensuring energy security is concerned, the inclusion ofSouth Asia is highly signicant in that the support of India is vital in order to lower

emission levels. Nevertheless, the country’s reticence to criticize the Myanmarmilitary rulers, for example, may become a point of friction in its relations with theEU. Furthermore, the conict between India and Pakistan over Kashmir, the non-

compliance of both countries with the Treaty of the Non-Proliferation of NuclearWeapons (NPT), and their refusal to accede to the Comprehensive Nuclear TestBan Treaty (CTBT) could cause further ssures within the partnership.

The EU in ASEM

It was argued at the beginning of this chapter that the EU’s Asia strategies fail tosufciently 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 exploitthe ASEM process also places question marks against the possibility of speakingwith 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 hasinstitutionalized “regular cooperative contacts with China in a multilateralEuropean framework which excluded the US (as well as Taiwan)” (Wong 2006:85). The forum took an “Asian” informal and non-binding approach, for whichFrance has taken the credit on the European side. The initially German and laterFrench emphasis on problem-solving through dialogue (also on sensitive subjects) behind closed doors rather than confrontation and sanctions was adopted as part ofthe European Asia policy and as the basis for a new political partnership betweenEurope 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 AsiaStrategy. The EU’s approach to Burma within ASEM, for example, limitingsanctions and maintaining channels of communication with Burmese generals,reveals the French inuence (Dorient 2002: 176). This method of constructive

engagement prevails in that the EU allows Burma to participate (albeit at a lowerlevel) in ASEM summits, despite the visa ban for the country’s ruling junta.

The high-level yet informal approach has furthermore contributed to

condence-building, and has facilitated discussion of difcult and sensitiveissues in the dialogue with China, for example. As such it tted perfectly into

the EU’s goal of “constructive engagement” with Beijing. ASEM’s informal andnon-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 differentintra-EU levels, namely the European Commission representing the interests of




the Union as a whole, and the Council embodying the different national interestsin Asia, while still allowing sufcient 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. Thismeans that each partner state or region gains some benet from the process, but at

the same time imposes limitations on the achievements it can accomplish. ASEM’sgreatest challenge, not least for the EU, is therefore that it is an intergovernmentalmultilateral forum in which all states take part on an equal footing, but that itsworkings are ingrained in region-to-region coordination machinery. The processassumes the existence of two distinct regions. The EU member states and theEuropean Commission represent “Europe,” and membership of the EU shouldautomatically lead to participation in the ASEM partnership. Furthermore, policy

coordination takes place on a regional basis, and within Europe ASEM functionsare closely integrated into the institutions and mechanisms of the EuropeanUnion.

Yet, in spite of this interregional basis, ASEM is predominantly an inter-governmental construction, with a strong independent role attributed to themember states. As the German policy paper for East Asia (Federal Foreign Ofce

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 primarilyas an intergovernmental process that allows all partners to debate freely, even ifit is understood that EU member states should keep close to the CFSP. As far asthe Irish (economy-oriented) Asia Strategy (Government of Ireland 2005: 5) isconcerned, ASEM’s value lies primarily in the possibilities for bilateral (state-to-state) interaction: “[ASEM’s] biennial meetings at the level of Heads of State andGovernment, and annual meetings of Foreign, Economic and Finance Ministers,will continue to provide platforms for worthwhile bilateral opportunities andcontacts with our Asian partners.” The ASEM process therefore places primeemphasis on a state-to-state approach, and intergovernmental initiatives formthe core of the cooperation. This emphasis on intergovernmentalism seeminglycontradicts the general (albeit non-linear) development of the EU as a legal personality. According to Teija Tiilikainen (2008), ASEM as one instrument inoverall EU–Asia relations therefore assumes an increasingly rare position in thelight of the EU’s continuous process of integration.

Within ASEM the EU thus speaks with a coordinated voice but not withone 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 withinASEM as well as in the larger framework of relations with Asia even a coordinatedEU voice has often been lacking, especially on issues related to regional security.




In 1996 France and the UK applied for individual membership, separatefrom the EU, of the ASEAN Regional Forum (ARF), citing their status asnuclear powers as justication ( European Voice, 5 September 1996).Before the Seoul ASEM3 Summit in 2000, the UK and Germany decided toestablish diplomatic links with North Korea, which was strongly criticized by France and the European Commission ( European Report , 20 October2000).The ASEM4 Summit in Copenhagen (2002) was marked by internal EUdivisions over policies toward Iraq, with Spain, Italy and the UK stronglysupporting 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 Summitin Hanoi in 2004, whereas France argued that because Burma was part

of ASEAN it would be difcult to exclude it. France found it difcult“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 sellingweapons to China. France and Germany supported a review of the ban,whereas Sweden, Denmark, the Netherlands, and the UK criticized the planto end the embargo ( European Report , 18 April 2005).

The Promotion of an Asian Identity

It is widely accepted that the EU’s dispositionhas inuenced 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, tocoordinate on diverse and occasionally sensitive issues, and to build a consensusahead of meetings with their European counterparts. The ASEAN+3 initiative, forexample, arose after a regional grouping of East Asian states started interactingwith the EU in ASEM. ASEM thus could be seen as a means of promoting aregional approach to problem-solving, and even of advocating a European wayof “regionalizing” issues of common interest. The growing development of astructured East Asian region is obvious within ASEM in the increased coherencein Asian positions and solidarity, as exemplied 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 ofASEAN’s fortieth anniversary the grouping’s Foreign Ministers proposed thatAugust 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 thedrafting of the ASEAN Charter in 2006 and 2007 to the ASEAN Eminent PersonsGroup and the High Level Task Force. The draft charter furthermore includeda 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 fromthe “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 theEast,” it is clear that ASEAN has successfully proled itself as the driving force

behind regionalism in Asia through a number of organizations such as the East AsiaSummit 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 centralrole 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 thedriving force in the ASEM process along with the EU. The Secretariat’s membershipof ASEM and the inclusion of three new members to the Northeast Asian coordinatingmachinery de facto resulted in an “ASEAN Plus Three-Plus-Three” conguration.

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 andstability in the region, the EU should attach higher importance to the promotionof ASEAN-driven regionalism by presenting itself as a source of “good ideas and best practices.” With regard to China and India, greater intra-regional coherencewould 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 asto the best way to proceed with ASEM, in particular how to further engage Chinaand India. Three lines of thinking have emerged.

Keep the status-quo. With its emphasis on consultation and condence-

building, ASEM’s added-value lies in its informal, multidimensional, andcomplementary approach. It functions as a catalyst feeding into bilateral,subregional, regional, interregional, and multilateral processes.Develop the forum’s multilateral dimension. The rst step towards

institutionalization materialized in the creation of the ASEM VirtualSecretariat, a public website with an archive for ASEM-related documentsand including a closed intranet system aimed at facilitating the day-to-daymanagement. The project’s main sponsor was Japan, a country that prefersto 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 Asiancountries are in favor of institutionalization, and the European Parliament as

well as separate member states have also supported ASEM’s developmentinto an organization that is capable of acting collectively. This scenariocould promote the formation of groups of countries rallying behind oneinitiative (based on so-called issue-based leadership). It could open thegate to Russian membership, and approach the common “Eurasian” spaceenvisaged by the Asia–Europe Vision Group (1999).

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Develop the forum’s interregional component. In order to achievemore concrete results, the dialogue should be based more on a bloc-to- bloc approach, without entirely doing away with the opportunities forintergovernmental contact on the sidelines. Collaborating on a region-to-region basis rather than just through country-to-country alliances wouldalso allow ASEM to play a stronger role in promoting multilateralism (seeWanandi 2006). This would seem the “logical answer” given the natureof the EU. It would promote a common European policy, and could allowthe EU to show itself as strong independent actor. This, in turn, wouldcontribute much to the promotion of regionalism in Asia, exceeding thelip service currently paid to the idea. However, for three reasons thegeneral tendency within the EU and its member states seems to be notto over-emphasize the region-to-region aspect. First, many of the national

governments agree that the EU’s strong coordinating role (and possiblefuture collective representation) should not eclipse the intergovernmentalaspect and the vital role played by the member states. Secondly, bloc- building on the Asian side should be avoided due to the specter of Chinesedomination. Finally, the fear exists that this could weaken the EU’s bilateralrelations 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 issue-driven projects may necessitate further institutionalization and may weaken theregion-to-region aspect. On the other hand, from a European perspective there isa need to bring ASEM more in line with internal developments within the EU andits growing potential to display a “legal personality.” In Asia, India’s increasedinvolvement in the region through ASEM and the central role taken on by theASEAN secretariat as of 2006 points toward increased “regionness.” The EU coulddo more to promote the development of ASEAN from a solely administrative unitto 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 multilateralcooperation. The alternative could be dominance through bilateral major power politics.” The EU has every interest in supporting this development. Even if itdoes not aspire to increase the region-to-region character of relations with Asia, itshould 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 senseof political actorness on the part of the EU were at the root of Europe’s rediscoveryof Asia during the rst 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 economicand strategic powers, and both countries’ increased importance within the regionalarchitecture, 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 politicalactor globally; an increased emphasis on security in Asia (not least through theengagement of China in the international community); an expanded geographicalscope and a shift of attention toward China and, to a lesser extent, India; andan emphasis on bilateral relations in an overarching Europe–Asia framework.The EU’s new policy on Asia was to be guided by constructive engagement anddialogue, multilateral cooperation, openness to rule-based free trade in the WTOframework, and a commitment to human rights, good governance and the rule oflaw.

The EU’s policy on Asia should furthermore be seen in the context of theinternal processes of Europeanization: the member states’ policies for the regionhave 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 andnon-confrontation emerged rst from Germany. France adopted this “silent

diplomacy” approach and connected it with its ambitions to create a multipolarworld, leading to the creation of the Asia–Europe Meeting (ASEM) in 1996. Atthe EU level this offered opportunities to introduce an “Asian-style” approach

in order to engage China, while promoting the notion of the European Unionas a normative power. The national policy papers for Asia portray the EU as atool complementing domestic policies, as an information multiplier, and as aninstrument offering benet in terms of its collective weight in trade, human-rights

policies, and the promotion of regional cooperation. However, the insufcient

focus on the EU’s common voice, and more importantly the failure to go beyondthe bilateral framework and situate the rise of the new powers in the overarchingAsian context, could be regarded as the main aws in the strategy.

ASEM has offered the EU an informal dialogue forum with a view to advancinginterregional rapprochement between Europe and Asia in multiple elds. Since

the establishment of the forum in 1996 the EU’s relations with Asia have come along way. Trade with Asian ASEM countries has expanded substantially, growing10 percent on average annually during 2002-2006, for example. Bilateral traderelations with China increased by almost 20 percent during the same period,and with India by over 13 percent. In addition, and contrary to the stagnationor even decline in its share in trade with Asian countries in general, the EU’sshare of imports and exports to and from both new regional powers increased

signicantly. Furthermore, ASEM has successfully contributed to engaging Chinaand India. China, an ASEM partner from the outset, has used the forum skillfully todemonstrate its multilateral commitment and its embrace of regional engagement.India was nally allowed to join the partnership in 2006, illustrating the country’s

increased involvement in processes of regionalism in East and Southeast Asia.




However, the perception of the EU as a credible geopolitical and strategic partner remains weak and vague among Asian policy makers. Many Asian countriesstill see it as a “geopolitical dwarf” (Mahbubani Kishore, Financial Times, 22 May2008). The predilection for interregionalism is seen as the EU’s “natural” stance.However, it plays only a secondary and ancillary role to bilateral/intergovernmentalinterests in the strategy papers as well as in the eld 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 domuch more to present itself as a regional entity and convert its bilateral policiesinto a coherent whole. ASEM in particular should be seen more as a regionalizingagent 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 promoteeffective multilateralism in the context of structured regional groupings.

As Germany’s Asia-Pacic Conference of Ambassadors pointed out already in1994 (Botschaftkonferenz Asien-Pazik 1994: paragraph 9): “A strong European

component is essential for an active Asia policy. Politically we will only besuccessful in Asia if we present them increasingly with joint European positions.As Europeans we will only be successful in economic terms if we show moreconsideration for one another. The European project therefore promptly has tond 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 extendits reach beyond its territory … Visitors to India will come to know that theIndian giant is a friendly one who does not threaten others, but aims at peacefulcoexistence. (Rothermund 2008: 244-5)

A signicant 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 fora Europe seen as mired in its economic stagnation and content with the bourgeoiscomfort of elderly retirees … Explaining this in terms of the haughtiness of thenew 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 exemplifymajor 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 detailingseven scenarios that portray diverse permutations of the EU–India relationship.Some scenarios are presented in brief and others are described more illustrativelyin 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 conceptualizingthe 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 termed3. The meeting between the twain is termed 1+3. At stake is the “outcome” of the1+3 equation. I consider the following outcomes:

Scenario 1Developmental optimism: 1+3 = 1The 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 2Evolution: 1+3 = 4As time goes by both the First World and the Third World will disappear and anentirely New World will emerge. Evolution prevails.

Scenario 3Status quo: 1+3 = 1+3While the First and the Third Worlds may both develop, the gap essentiallyremains. “ Plus ça change, plus c’est la même chose.”

Scenario 4Radical developmental pessimism: 1+3 = 3The 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 ofhumanity (including possibly its Fourth World indigenous inhabitants) residentsin the Third World. Regression prevails.

Scenario 5Annihilation: 1+3 = 0The meeting of the First World and the Third World will result in disaster(s).Anarchy and collapse prevail.

Scenario 6Radical inversion: 1+3 = 3+1In 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 FirstWorld. Inversion prevails.

Scenario 7Something in between: 1+3 = 2The First World will regress downwardly converging with the Third World’s progressive rise, making all of humanity (including possibly its Fourth Worldindigenous inhabitants) residents of a world conforming to the least commondenominators of both. Hybrid pre- and post-modernity prevails.

Scenario 7 appeals to the euroskeptic cynic in me.1 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.

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



EU–India Relations 79

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 placeamong other developed nations through a long bourgeois revolution graduallymoving millions of resource-starved tribals and dalits, farmers and workers outof backwardness and into the industrial and service sectors. Since independence,the average life expectancy has, indeed, increased considerably. More than halfof the population now works outside agriculture, the contribution of which to thenational economy has steadily decreased, as one would expect of any countryengaged in what Kishore Mahbubani calls the March to Modernity (Mahbubani2008a).

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 thecomforting words of one of Europe’s longest-standing observers of India, DietmarRothermund:

India is rightly called a ‘status quo’ power as it has no ambitions to extend itsreach beyond its territory. Any future steps India takes will thus be devoted tothe preservation of the status quo …

Visitors to India will come to know that the Indian giant is a friendly one whodoes not threaten others, but aims at peaceful coexistence. (Rothermund 2008:244, 245)

Rothermund’s assessment echoes the liberal ideologies that took root in India inthe rst 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 hasoutgrown that system; that by good government we may educate our subjectsinto a capacity for better government; that, having become instructed in Europeanknowledge, 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 avertor 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 PrimeMinster said:

It is a privilege for me to be here in India today. India not only has so many tiesof history with Britain, of which we are very proud, but now stands as a shining




example to the world of our shared faith in free institutions, free markets andfree societies. (Brown 2008)

Even more strikingly, the picture of Lord Swraj Paul sitting on the traditionalwoolsack chairing the UK House of Lords as deputy speaker in December2008 illustrates the India that has come of age (The Hindu 2008). The pictureconrms 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 hisoverview of the relations between the European Union and Asian countries,the well-versed author Georg Wiessala (2002) seems content to relegate therun-up to the present to oblivion. In my view this common past should not bedismissed 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, thisincludes the institutions and values brought about by a long colonial history andits 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 towhich 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 fateor is their partnership comparatively new? Some readings of history, includingthe philological, do link Europe and India through commonality of language, but according to Christopher Chase-Dunn, Europe’s ebbs and ows are coeval

with ebbs and ows in China rather than with those in South Asia. In their article

“World Systems in the Biogeosphere: Urbanization, State Formation and ClimateChange Since the Iron Age,” Chase-Dunn et al. consider the pulsations acrossthe Afroeurasian expanse and show that a “remarkable synchrony” in terms ofdemographic trends, trade ows, and state formations has existed between East

Asia and the West Asian and Mediterranean Regions without including SouthAsia. This synchrony may have been driven by climate change, epidemics, andtrade cycles. An intervening factor, familiar to those who hold that states rise andfall due to events in the interior of a continent and not due to maritime factors, wasthe incursion of steppe nomads from the Central Asian heartland. These Mongols

forcefully yoked together East and West. Several rulers of Hindustan, includingthe Great Mughals, also came from Central Asia, but in Chase-Dunn’s readingSouth Asia had its own relatively autonomous history beyond the Himalayan barrier (Chase-Dunn et al. 2007, Figure 3 and Figure 7).




Insofar as Europe and South Asia have gradually become more closely linked,this is a relatively recent trend caused by sea-borne European colonial expansionand 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 isnot only economic, it also fuels political integration. In his recent magnum opus,Strobe Talbott dares to argue that global governance is the destiny of humankindin that “humanity is learning to govern itself as a whole on those issues where itcan do so to avert planetary disaster” (Talbott 2008: 6).

From this perspective the EU–India Strategic Partnership acquires historical

signicance. Talbott is fully aware of the many confusing nodes and links thatcharacterize 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 righttrack from an evolutionary perspective. Whereas in the Middle East, relationshipsare few and the region unstable, the EU–India Strategic Partnership is one amongmany that will foster global governance by creating a denser web of interactionand 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 asa fresh effort to establish Eurasian relations on a post-colonial footing. In 1978the relationship was anchored in ASEAN, which was chosen probably becauseit presented the most formalized and efcient organization in a region in which

regional organizations were otherwise few or vacuous. The choice of ASEAN asthe EU’s partner excluded India, which was not a member. With the end of theCold War, the issues of democracy, human rights and good governance rose upin a “swell of universalism” (Madsen 1996: 186). Neo-liberalism, in turn gaverise to an Asian response highlighting Asian values and, in particular, Confucianvalues, thus setting the stage for a virtual clash of civilizations. The Asian nancial

crisis of the mid-1990s provided an interlude, but the debate picked up again afterthe economic recovery. This trajectory of events meant that human rights haveremained central in the formation of the Asia–EU relationship. Clashes on thisissue have concerned specic problems in member countries as well as divergent

approaches to third countries, such as Burma/Myamar and Tibet. During the1990s ASEM replaced ASEAN as the EU’s main strategic partner in Asia. Therst 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 putadded stress on its own Look East policy, which was rst formulated around 1992.

India nally joined ASEM in 2007.




The incorporation of India took place because it had emerged as a desirable partner in its own right after liberalization and globalization gradually restructuredits economy from around 1991 onwards.2 Summit meetings took place betweenthe EU and India in 2000, 2001, 2002, and 2003, and in 2004 the two forged astrategic partnership (European Commission 2004). This was followed in 2006 bya country strategy paper for the period 2007-13 (European Commission 2006c).Among the noteworthy initiatives was the inclusion of India in the Galileo-European Satellite Navigation System program (Bagla 2008).

In his account of EU–Asia relations Wiessala incorrectly omits India from hislist of Asian countries with a rooted Western-style democracy (Wiessala 2002: 7).In fact, India has nursed its democratic form of government almost continuouslysince 1947 although it has not gained much mileage from this stubborn andadmirable commitment (Jaffrelot 2007). When India nally stood to gain from

its democratic record after the disintegration of the Soviet Union, it was criticizedfor its brutal human-rights violations in Kashmir. Moreover, its own version ofreligious bigotry, referred to as Hindu Nationalism, was repeatedly exposed andwidely condemned.

India faced one more obstacle before it could emerge as a suitable partner. InMay 1998, the government, led by the Bharatiya Janata Party, conducted a seriesof nuclear tests. Tit-for-tat, Pakistan responded by conducting a similar series oftests. Condemnation of India’s unilateral decision was widespread. The Australian

Prime Minister expressed his outrage saying it was as if dirt had been kicked inhis face.3 It was only after September 11, 2001 that the West shifted its blameto Pakistan, and even curtailed its sympathy for the Kashmiri demand for self-determination. The ght against terrorism has ensured more goodwill for India,

now perceived as a longer-standing fellow victim of Islamic extremism. Thisshared perception – India and the West as fellow victims of Islamic extremism – islikely to endure.

The process of rapprochement has been especially noteworthy in the case of theUSA. According to Christophe Jaffrelot (2006), the USA has simply outmaneuveredthe EU by initiating a close strategic dialogue with India and signing a series ofagreements that effectively brings India closer to the USA militarily than ever before. Economically, too, India has developed its ties with the USA much fasterthan it has developed its ties with the EU. The degree to which it was willing tostake its future on its evolving relation to the USA became clear when the PrimeMinister of this aspiring superpower had to garner parliamentary support for thenuclear deal with the USA. Coalitions had to be broken, ministerial berths hadto 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

2 India’s economic globalization actually started before 1991. For an early stocktakingof its economic relations with other Third World countries, see Dutt 1980.

3 See Vicziany (1998) on the general tenor of reactions in lieu of a precise reference.




among legislators to buy their vote for Manmohan Singh so that he could muster amajority on the oor 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 developeconomically, but the gap between the First and the Third Worlds remains. Thereis evidence of this scenario in a report from the Norwegian Ministry of ForeignAffairs 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 becomericher. However, the average income in rich countries was still 13 times higherthan in poor countries where 33 years previously, it was 15 times. Thus 1+3remained 1+3.

Included in the scenario is a situation in which the pie gets bigger, therebyallowing 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 theFirst World announcing a big prot margin to his audience. As he opened a box

containing a cake symbolizing the fruits of his investments, he realized a slice wasmissing. The scene then shifted to India, where a three-generation extended familywas happily sharing the slice taken from the executive’s cake courtesy of a timelyinvestment in a particular scheme. Both are eating cake. The First World is notreduced to eating grass, but the advertisement played on the relative deprivationexperienced by the Western executive upon realizing that part of the cake hadvanished.

The storyline of this scenario could be developed in many directions. Forexample, the notion of long-term relational stability between the First and theThird Worlds fuels the argument that since the First World has had a long-termlead the Third World should be allowed to follow its trajectory. This ideas wasdeftly developed by Anil Agarwal, the Indian environmentalist who compiled therst State of the Environment Report for India (Gadgil 2002). He also helped theGovernment of India (GOI) to develop its policy on global warming at a timewhen 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 percapita than those in the Third World. He concluded that in order to combat globalwarming the First World, having long beneted from the industrial revolution,

would have to limit its emissions, while the Third World, having an equal rightto development, would not have to impose limits until the historical debt owed tothem had somehow been paid (Jakobsen 1998). As long as 1+3 remains 1+3, these




debts are not easily repaid.4 Anil Agarwal’s argument remains strong in the Centrefor Science and Environment (CSE), the organization he founded. Its currentdirector, Sunita Narain, is keen that India should not make formal commitments tocontrol its emissions (Narain 2008). According to Greenpeace, however, the line ofthinking 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-termeconomic 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 meagersubsistence in impoverished surroundings de-linked by high transaction costs andresource scarcities from urban centers.

Re-agriculturization could involve a skewed gender relation. Young womenin 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 reconguration of intergenerational, gender and ethnic

relations may dene the picture the emerging Europe: a countryside inhabited

by poor, elderly and disempowered hard-drinking men amidst rural slums, andan urban world of indigenous women and long-distance immigrants driving theeconomy.

Scenario 5. Annihilation: 1+3 = 0

India and China have both increased their military spending. Together with SaudiArabia, their outlay increased more rapidly between 1996 and 2005 than that ofany other major Third World power. China has dramatically upgraded its nucleararsenal.5 Consequently, India faces both a militarily increasingly sophisticatedChina 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

4 Compare e.g., Mahbubani 2008a: 188-9 and Jain in this volume on lifestyleemissions versus survival emissions.

5 In the tribal area of Pakistan, cheap Chinese weapons have virtually out-competedthe products of local weapon smiths (Amir Rana, personal communication, December2007). On the other hand, as noted by Bates Gill, China has tried to prevent Chinese smallarms from reaching conict zones ( Indian Express 2008).




this century is 50 percent. Asia is playing an increasing role in such doomsdayscenarios.6

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–Islamicconnection. This, he speculated, was likely to gain strength as China sought toensure continued access to fossil fuels. As Huntington (1996: 244) visualizedit, 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 notshare the kindred political value of democracy. Theirs was an instrumental alliance based on common interests. Whether the strengthening of relations between Indiaand 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 greatocean of modernity. Instead, it suggests a zero-sum game of concurrent rise anddecline. 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 gloricationof a past that is to be recovered or resurrected. Thus, in the case of China, it isoften articulated as the “re-emergence” of Chinese power rather than simply asthe “rise” of China. The intervening period is likely to be seen as a period oftemporary decline, or more gravely, as a dark period during which a “historicalwound” that needs to be avenged is inicted upon the rising power.7

According to Huntington, rapidly industrializing powers tend to be assertiveand aggressive whereas Mahbubani suggests that powers losing their relativeadvantages in a situation of power reversal tend to be grumpy and aggressive(Mahbubani 2008a; also Orientering 2008). Therefore, Scenario 6 is a volatile onewith elements of succession and replacement.

In economic terms, the scenario has been seen in terms of a competitive gamein which emerging nations overtake stagnating nations at particular points in timewithin a certain timeframe. For example, the Goldman Sachs Group has producedvery inuential reports that extend up to the year 2050. Until the nancial crisis

hit the world in 2008, bankers advising clients on investment in Denmark wouldrefer 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 andJapan in terms of GDP. Similarly, a report released by a World Bank commission

6 See Knudsen (2008) for more on risk assessment and panic.7 “Historical wounds” are analyzed in Public Culture, 20(1), 2006.




on 26 May 2008 calculated that India could catch up with the developed countriesin 50 years (Iqbal 2008).

The BRIC concept was coined in 2002, but there was a surge in the productionof scenarios of reversal and inversion as the calendar approached the year 2000.Because these scenarios are still widely disseminated, I would like to expand onthem 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 nationinto the “Vision and Mission Mode.” Until 2007 he was the President of theRepublic of India. He is a Tamil-speaking Rautar Muslim from Rameshwaram, born into a family working in the shing sector. Although a Muslim, he sat next

to the son of the head priest of the great Hindu temple in Rameshwaram in thelocal 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 inthe eighteenth century. Kalam then joined the defense establishment as a scientist,where he worked on satellite-launch vehicles, the development of missiletechnology, and India’s nuclear-bomb program.

Kalam’s vision is of an India taking its rightful place in the world by virtueof a combination of armed force, scientic and technological strength, economic

development and a skilled and healthy population. Given self-respect and theright 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 smallerunit 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 natureinefcient 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 havedone, whether in the private or public sector, and whether in hi-tech or low-techelds.

Kalam’s gurus in innovation and management include Abraham Maslow,Rudolf Steiner, Mahatma Gandhi, and JRD Tata (Kalam 2006: 172), but behindall this lies his belief that the ancient Indians already knew how to be innovativeand creative teamworkers. This is what made him quote Patanjali:

Let us recall the saying of Maharishi Patanchali in Yogasuthra: When you areinspired by some great purpose, some extraordinary project, all your thoughts break their bounds. Your mind transcends limitations, your consciousnessexpands in every direction, and you nd 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 andPillai 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 onthe Internet and in books. For example, it appears in Henry Balogun’s book for




healthcare managers, Beyond Cut, Copy and Paste (Balogun 2003: 161), in a bookfrom 2007 by Shlomo Maital and DVR Seshadri about innovation at Tata Steelentitled Innovation Management: Strategies, Concepts and Tools for Growth and

Prot , and in Debashish Chatterjje’s Leading Consciously: A Pilgrimage TowardSelf-Mastery from 1998. Chatterjje ascribes the words to Laurence G. Boldt,who published How to nd the work you love in 1993. Like others, Boldt quotesPatanjali without due attribution. Thus, Boldt (1993: 84) is as far back I can tracea text dating back 2,000 years.8

Abdul Kalam clearly treats modern self-help literature in an “inclusivist”manner, in other words he tags contemporary ideas onto ancient Indian moulds.9 He is not a “regressive modernist,” however (Nanda 2002: 10-11). His worldviewis scientistic and developmentalistic, not traditionalist or fundamentalist. In hisvision, science may integrate with any society, anywhere and anytime, which

implies that he is not concerned with social science at all. Like Margaret Thatcherhe sees individuals and not societies. Moreover, he also does not look at history asa 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 managementor self-help literature. On the other hand, he talks of hard science. The Adam’sBridge 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, ifnot superior, to that of signicant others. In this context the rise of scientism,

developmentalism, and nationalism seems to be a function of the acceleratedMarch of Modernity that India is experiencing.

The emergence of a vision of a bright future rooted in the remembrance of aglorious past is not conned to India. Similar visions-cum-remembrances in China

posit Confucianism as a model for the future. According to one quotation makingthe rounds, “If mankind is to survive it must go back 25 centuries in time to tapthe wisdom of Confucius.” This statement is generally uttered as the conclusionreached by a group of Nobel Prize winners deliberating on the future of the planetin a meeting in Paris in 1988. According to Tong Shijun (2008), however, it stemsfrom the Swedish physicist and Nobel laureate Hannes Alfven.

Grand visions (sometimes condensed into canons) have ourished in

Denmark, too, but they do not necessarily invoke the European equivalents ofConfucius or Patanjali. These visions for the future are rather combined withdetailed schemes for work supervision of the present. Such detailed regulation and

8 Patanjali’s Yoga Sutra 1.18 has been translated as: “The void arising in theseexperiences is another Samādhi. Hidden impressions lie dormant, but spring up during

moments of awareness, creating uctuations 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.

9 See Killingley (1990) on “inclusivism.”




micro-management has increasingly entered state institutions such as schools anduniversities. The introduction of an Audit Culture in universities has coincidedwith the abolition of collegial governance and institutional autonomy. The AuditCulture was spearheaded by the Ministry of Finance, which in the early 1990ssought to decentralize decision-making while holding subordinate institutionsresponsible for the delivery of contractual obligations (Gjørup 2007; Madsen2007; Shore and Wright 1999).

Salary-wise, Indian public universities have moved upscale in that it is nolonger farfetched to state that an Indian professor may earn more in real termsthan a Danish lecturer (Ammitzbøll 2008). However, Indian public universitieshave not so far experienced a loss of autonomy similar to that suffered by Danishuniversities on their road “from idea to invoice,” as an ofcial 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 elementof 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 theFirst and the Third World is blurred.

The First World is characterized by an informed literate citizenry with votingrights and the ability to derive security and predictability from the rule of lawwithin a formalized “systemworld.” In contrast, the Third World is characterized by the existence of many poorly educated and poorly informed people tied asclients to powerful patrons adept in the art of rigging formal systems, whetherin the private or the public sector, that forestall the rule of law and the rise of thedemocratic voice, thereby maintaining their ability to harvest rents arising fromthe uidity of the “lifeworld.”10

Indigenous moves out of the iron cage of the systemworld are visible in severalspheres within the EU. One crucial gray zone is corruption which in fact andfolklore 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 corruptthan the North European countries, but in the recent past some of the bigger cases

of corruption have emerged from Germany. The biggest engineering companyin Europe, Siemens, has been engaged in a “one billion dollar corruption case”( International Herald Tribune 2008). It was accused of providing funds to bribeclients 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.




in Germany earlier in 2008. Each time it happens the Germans are outraged, andswear to take steps to ensure it will never happen again, only to nd 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 isto 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 toFinland, which together with Denmark ranks among the least corrupt countriesin the world.11 This is what I wrote in an earlier version of this chapter. Sincethen Denmark has produced a case exemplifying how several checks and balancesin the private sector have been breached in such a way as to corrupt the system

as a whole. The case involves a rm called IT Factory. In 2007 and 2008 thisrm emerged as the best Danish IT company according to various prestigiousrankings, but apparently its turnover derived from non-existent services moving ina “circular construction” of lease agreements willingly nanced by leading banks

that did not investigate its actual production before extending large sums in credit.The employees of the rm 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 rm, Stein Bagger, apparently relied

on his Hells Angels security ofcer for an unknown range of transactions involving, possibly, blackmail. When the leasing circus became unsustainable, Stein Baggerdecamped to Dubai and thence to California, where he gave himself up.

The Danish media preferred to interpret Stein Bagger’s rise in cyclical termsas the product of the economic boom and, hence, as a phenomenon not likely torepeat itself in the near future. I prefer to see it as an early avatar of things to comewhen 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 Itoccurs within the formal sector of the economy, but also within the informal sectorin which workers are almost unprotected and rarely unionized. Indian workersmay 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 ofcorruption ( 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 theUN. The company agreed to pay a ne of $9 million to avoid further proceedings. The case

involves the public sector outside of Denmark, but it may also involve the public sectorwithin the country (Bendtsen et al. 2009).

13 See Widmalm 2008 and Sissener 2008 for recent Nordic studies of corruption inSouth Asia. The Dutch International Institute of Asian Studies has started a research projectcalled “Illegal but licit” (IIAS n.d.).




of the weak, but on a day-to-day basis most remain “drawers of water and hewersof wood” in their relationship with their employers. As the “systemworld” in theEU informalizes, European indigenous corruption will hybridize more freely withIndian patterns of corruption in both the private and the public sector. The ITsector has already shown the way: The IT Factory had a presence in India, and asthe exposure in 2008 of the giant Indian IT company Satyam showed, the Indianregulatory framework was not impenetrable.

There is another equally crucial gray zone of diffusion, i.e. the zone wherescience hybridizes with superstition. The introduction of genetically modied

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 byinserting a gene (which occurs naturally in soil bacteria) into cotton seed renderingthe cotton toxic to the pest. When the multinational company Monsanto acquired

permission to conduct trials with Bt Cotton in India in collaboration with an Indiancompany called Mahyco in the late 1990s, key Indian NGO leaders Vandana Shivaand Prof. Nanjundaswamy objected. They and others argued that Monsanto wascausing farmers to commit suicide by forcing them to buy “Terminator Seed”made sterile in order to force them to purchase fresh seed every season. Monsantodid not market such “Terminator Seeds,” but the scare successfully mobilizedmany people in India and elsewhere.

Subsequently, one employee left Mahyco apparently taking with him genetically

modied cotton. He set up shop in Gujarat and started marketing his own brand ofindigenously developed Bt Cotton clandestinely. When this came to light he wasthreatened with prosecution, but he was never brought to trial. Following his lead,many other entrepreneurs and farmers started producing illegal but licit desi BtCotton varieties and selling them in the ungovernable “anarcho-capitalist” Indianmarket. Since then, Bt Cotton has gained a large market share in India (Herring2008; Madsen 2001).

NGOs, however, continue to oppose what is seen as a highly toxic substance tohumans and animals. According to the national coordinator of the Kisan BachaoAndolan (or Save the Farmer Movement), milk from farm animals eating BtCotton is deadly to their offspring. Such milk has also supposedly caused increaseddeath rates and disease in humans. Similarly, in Andhra Pradesh local NGOs (withforeign funding) have reported sheep and cattle dying after eating Bt Cotton.

The trouble with these reports is that they are not true. Triing as it may seem,

the story about Bt Cotton presents two faces of India. Shining India stands forScience-Technology-Innovation and Globalization, but the acronym S-T-I-G alsostands for Superstition-Trash-Imitation and yet more Globalization.

There is a European angle to the controversy. While Europeans are generallynot adverse to the use of biotechnology in medical research, they have played a keyrole in promoting junk science by framing transgenic technologies in agricultureas risky, thereby encouraging people elsewhere to oppose genetic modication.

According to Ronald Herring:




Metropolitan elites in low-income countries adopted European framing throughinternational networks opposing globalization. Complementarities of interestsare apparent. INGOs [International Non-Governmental Organizations] neededauthentic 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 thatattract media attention and spread through internet connections. (Herring 2008:461)

Herring concludes that European countries have been instrumental in framingthe ideology that delayed the introduction of a useful technology that would benet farmers in the Third World. Therefore, one could view Europe as a

contemporary contributor to processes not only of Enlightenment but also of “Dis-

Enlighthenment” and “Endarkenment.”According to David Colquhoun, European universities have started to offer

subjects, such as homeopathic medicine, that have no scientic validity. He ascribes

this to “the bureaucratisation and corporatisation of science and education,” whichsidelines normal scientic 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 percentof 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 Reportnamed 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 nationstates and national identities may, it argues, open up a space for the irrational andfor religious extremism. Innocent “political frivolity” and “demagogy” may limitfreedom of speech and other liberties, which will make rational decision-makingmore difcult.14

The main recommendation of the report is to form a directorate consisting ofthe EU, NATO and the USA in order to coordinate cooperation in the Transatlanticsphere 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 Indiansoftware industry and other services, and that if India becomes unstable dueto internal unrest or war, it will affect the West in a manner that few think ofcurrently. In 2007, Estonia was subjected to a “cyber attack” that led NATO tothink about its own cyber security (Naumann Report 2007: 44). Whoever attackedEstonia, 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 productof two million years of evolution and is designed to assist the newborn to be able to dealwith the world by the time he or she grows up. The complexity of today’s rapidly changingenvironment makes adaptation increasingly difcult (Chapman 2007).




including IT professionals, are noteworthy in this context (Madsen 2008a). Hindu Nationalism is already embedded in many Hindu IT professionals in India andabroad. More interaction means globalization for all or many political cultures.The culture of dis-enlightened political fundamentalism may also adapt tosophisticated urban environments. Thus, Bourgeois Jihad may emerge amongSouth Asian professionals far removed from traditional seedbeds of revolt such asthe tribal agencies of Pakistan.

If Scenario 7 is traceable in universities and in cotton elds, 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 brochureabout the EU–India Strategic Partnership, specically the chapter dealing with

dialogue between the two old, yet modern, dynamic cultures of Europe and India.Again the matter may seem triing 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 scientic research,

which concluded that: ‘Sanskrit is the mother of all European languages, [and]the most suitable language for computer software.’ (European Commission2006c)

Sanskrit is not the “mother” of Finnish, Hungarian, Estonian or the Basque

languages. Other European languages do share common roots with Sanskrit inthe sense that they, too, derive from an Indo–European language that can be partlyreconstructed. The notion that Sanskrit is the mother of all languages is widespreadin Indian towns and villages. The wave of Hindu nationalism, which has engulfedthe country since the 1980s, has not made this idea any less attractive. The oldestoften being considered the best, many Indians also believe that Sanskrit is amore scientic 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 thecitation. An Indian website called Death Ends Fun has proposed that thesource may be a paper published by Rick Briggs in 1985 called “ Knowledge

Representation in Sanskrit and Articial Intelligence.” This paper is not aboutcomputer software, but it does argue that Sanskrit is eminently suited for projectsin Articial 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 perhapsoriginating in a Hindu religious movement, has found its way into a EuropeanCommission publication. Thus, the hybrid pre-cum-post-modern world already




exists not only on Internet platforms and not only among Indian farmers, but alsowithin EU institutions.

Were the Chinese government to write that Chinese was the mother of allIndian languages and the best language for software writing, riots might break outin India. In Europe, the “civility of indifference” (cf. Bailey 1996) – or blissfulignorance – allows one plus three to equal two.

Parting Call

I have sought in this chapter to orient the reader to seven scenarios, ve of which I

have elaborated in some detail, without claiming that the different ones should betaken 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 geopoliticalinversion or reversal. This scenario might be phrased politely, with resignation, oras a veiled threat, but the substance remains the same.15 Taken to the extreme, theargument, 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 IndiaToday showed that the two most popular leaders among Internet-active Indiansremain the freedom ghter (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 asa friendly giant.

Several scenarios, including the sixth raise the question of the interplay ofeconomics and politics. The supposition that “the ag follows trade” embraces

the argument of economic determinism, which posits that political change followsfrom economic change. Thus, increasing Indian (or Chinese) economic clout wouldwarrant a global power realignment. However, as noted above, if the current sizeof the Indian economy makes a difference with regard to admission to the club ofsuperpowers, 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. theHindi saying: Jiske lathi uske bhais) denies that political power necessarily ows

from economic power. In other words, even if BRIC forecasts remain valid, powerrelations 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 politicaland 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 nancial commitment to bear the burdens of globalization and institutionalmaintenance.

Scenario 7 suggested a double move in which the EU exits the iron cage ofthe “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.




but as a parting shot I would suggest that the state entities engaged in this doublemove are, in fact, already akin. The EU and the Government of India are both“states encompassing civilizations” (Rothermund 2008: 1), or bureaucraciesadministrating civilizations. While the EU bureaucracy is obsessively zweckrationalor goal oriented, the more path-dependent Government of India often appears asa weak actor even though it commands a much greater share of the resources ofits constituent states than the EU does. However, as close observers may readilyadmit, the EU, too, is short of governing capacity (Cameron 2007: 194). Thus, bothare messy juggernauts. Fortunately, they share the luxury of being able to governtheir 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 CommonEU Policy Toward ChinaMikael Mattlin

Strategy is a word frequently used by bureaucrats and diplomats these days. TheEU is no exception. Strategies are launched on a regular basis on the most variedtopics and with the most diverse objectives. In a national context, and with a clearlydened (sectoral) focus, the use of the word is reasonably intelligible, but what is

actually meant when the European Commission talks about a China strategy? Orwhen a union of 27 member countries launches a strategic partnership with theworld’s most populous country?1 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 frommilitary discourse.2

If we nonetheless take talk of strategy seriously, to the extent that it is morethan merely vacuous political rhetoric, how are we to make sense of the EU’sChina strategy? If we strive for as neutral a denition 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 neutralof denitions, that the EU possesses a reasonably clear China strategy? Is such a

strategy even possible given the partly divergent economic interests and the lackof a strong common foreign policy capacity – most likely predicated on a federalEU – with attendant hard-power capabilities?

The EU is currently in the process of negotiating a new comprehensiveframework agreement (Partnership and Cooperation Agreement, PCA) for itsrelationship with the PRC, with greatly enhanced political cooperation. Beijingincreasingly also responds to the EU as a collective actor rather than justmaintaining traditional bilateral relations. In 2003 it published its rst-ever foreign-

policy 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

1 EU documents rst referred to China as a strategic partner in 2003 (European

Commission 2003).2 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. Thesecondary objective is to identify the main impediments to formulating a commonEU 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 withoutit. 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 denition

are several further specications. Namely, a strategy needs to have an objective (or

a limited number of objectives) and some kind of plan for achieving it that is long-term 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, theimmediate problem with applying strategy jargon is that states very seldom endup in anything resembling a football tournament in which victory conditions areclearly delineated, or even a situation where an overarching objective can be clearlydened. 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 underattack by a much larger one will nd it easier to dene 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 alsooccasional elimination (bankruptcy). This is especially true in the case oflarge multinational corporations that may engage in brutal competition in themarketplace, while at the same time maintaining extensive cooperation on otherfronts (e.g., joint research projects, common technology platforms and standards,and intellectual property rights (IPR) cross-licensing). However, in times of peacethe cooperative elements of the state framework are more pronounced than in thecorporate framework. Therefore, developing a strategy in the former is necessarilya more complex endeavor. In the case of competition between states, strategyseldom aims for any clear-cut victory and thus the foreign-policy goals have to bemore subtle. Without a clear-cut goal and victory conditions the strategy revolvesaround setting priorities, and choosing a path and the requisite tools to advancethem. 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 superuous question to

ask to what extent this is even possible in as far as the participating states’ concreteinterests diverge. It is a question that is relevant in relations between the EU andChina (strategic partnership), and among the EU countries (a common EU strategy



Thinking Clearly on Political Strategy 97

or policy toward China). How can China and the EU develop a partnership withstrategic objectives if the EU itself is not clear on its own strategic interests? Howcan the EU countries agree on a clear China strategy if they are competing withone another in the Chinese market?

On the most general level, shared strategic objectives can be developed ontwo rather different bases, abstract values and concrete interests. Abstract valuesmay provide very powerful, shared long-term objectives, as the long history ofideologically motivated political action testies. However, developing shared

values between different societies is inherently hard. Beyond the blandestexpressions used, such as in the preamble to the UN Charter, there are signicant

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 recentcontroversies over the position of religion in the continent’s heritage and over

divorce procedures, testify. Nonetheless, in the EU context there is sufcient value commonality to allow

talk of a broad value consensus, or a normative basis. Ian Manners identied

ve “core norms” for the EU based on the acquis communautaire and the acquis politique:3 peace, liberty, democracy, the rule of law, and human rights (Manners2002: 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 politicalvalues. 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 theUnion’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 opposedto an inward-oriented, “defensive,” value-based foreign policy. According toSjursen, the latter is mainly aimed at ensuring and protecting the sustainability ofthe community’s own identity, whereas the former also promotes these same valueson the international stage (Sjursen 2006: 86). In Manner’s words, the core of theEU’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 universalityof political values cherished in the EU, and sets out to “assist” China in developingits 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 instrumentsat its disposal, common positions and joint actions. Common positions dene the

approach the EU takes on a certain matter, either thematic or geographical, and

3 Acquis communautaire refers to the total body of accumulated EU law, acquis politique to the accumulated EU political practice.




the general guidelines that member states must adhere to. Joint actions concernspecic situations in which operational action by the EU is considered necessary,

determining the objectives, scope and means to be made available and therebycommitting the member states to action.

However, these formal instruments are of no use in analyzing EU–Chinarelations. A cursory examination of the EU’s track record shows that it mainlyuses them with regard to conict-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 theexception of Nigeria, Iran, South Africa, and Indonesia, the Council of Ministershas abstained from using its formal foreign-policy instruments in its dealings withmajor countries.4 Therefore, these tools are of little use as a measure of the EU’s

ability to formulate a common policy on China.Instead, I rst examine the EU’s formulated policy on China, as established

in ofcial documents produced by the Commission and the Council. More

specically, I will analyze the ve policy papers (communications) on China

published by the European Commission since 1995, and the co-operation programstrategy 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); theEU High Representative Javier Solana’s statements on China; statements issued bythe Chinese Foreign Ministry on strategic partnerships; and news sources relatedto several issues concerning EU–China relations.

These materials have different functions and therefore reect different aspects.

In terms of form, on a tight-loose scale one could say that the EU–China jointstatements are generally the most form-bound in that both parties need to agree onthe formulations; the Council declarations express a united EU position and tendto be formulated in concise diplomatic terms, while the press releases of Councilmeetings give a more extensive description of the discussions and common positions. The EU Commission policy papers, although they are communicated tothe Council and Parliament,5 tend to be written in a relatively free form, explaining both the background and rationale of the policy objectives. Finally, the statementsand writings of the EU High Representative are the least form-bound, and areanything from speeches to newspaper articles and interviews. High Representative

4 The author used the Eur-Lex database on 30 January 2009 to search for CFSPcommon positions and joint actions in which the target country was mentioned in the title.

5 The 2006 Commission policy paper on China and a separate paper on economic andtrade relations were welcomed by the Council, and their recommendations were broadlyendorsed (Council meeting 2771: 6).




statements thus offer the most scope for freely formulating policy positions andcould be seen as the most important in foreign-policy terms.6

However, examination of published documents can only take us so far. Apartfrom being form-bound, they are often wide-ranging, and at times vague. Isupplemented the approach by examining how the EU has, in practice, formulatedand upheld a common policy position vis-à-vis China. My second approach wastherefore to analyze ve contentious issues in EU–China relations in order to gauge

how the EU has performed in this regard in the face of conicting interests.

An Overview of the Evolvement of the European Commission’s China Policy

To date the European Commission has issued ve policy papers in the form of

communications endorsed by the Council, which are supposed to form the basisof 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 commonChina policy. Ofcially, 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 difcultto achieve in sensitive foreign and security matters.

The European Commission published its rst 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 wereidentied as a shared concern about global and regional security, global economic

stability, and other global issues, and maintaining EU competitiveness. The mainobjectives set forth in that paper were threefold: to encourage China to becomefully integrated into the international community, to contribute to reform insideChina, and to intensify ties between the EU and China.

The rst Commission policy paper put human rights squarely at the center of

EU global policy (see, for example, European Commission 1995: 6). While theCommission was sensitive to the fact that the effectiveness of pushing humanrights globally was not assured and that such a policy could backre, it nonetheless

put human rights at the heart of the Union’s global agenda and provided guidelineson 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 theissue should be pursued at every opportunity. No special mention was then made

6 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, 2April 2008.




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 effortsthan a small, aid-dependent country. On the contrary, the Commission referredto China’s acceptance of the 1993 Vienna Declaration and Programme for Actionat 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 fromsetting clear overall objectives. The closest to such a statement was the reiterationof the EU’s policy of engagement with China that would enable the two sides towork together in order to solve global problems. However, even this was temperedwith sober remarks that indicated a growing frustration with China’s less-than-cooperative 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 responsibilitiesincrease. The partnership should meet both sides’ interests and the EU and Chinaneed to work together as they assume more active and responsible internationalroles, supporting and contributing to a strong and effective multilateral system.The goal should be a situation where China and the EU can bring their respectivestrengths to bear to offer joint solutions to global problems. (EuropeanCommission 2006b: 2)

The 2006 policy paper breaks the EU’s goals down into sectoral areas and sub-areas, and identies the main ones within each area. For example, under the

heading of sustainable development the Commission lists ve broad objectives:

to ensure secure and sustainable energy supplies, to combat climate change andimprove the environment, to improve exchanges on employment and social issues,to improve coordination on international development, and to maintain sustainableeconomic growth. Within each broader goal, several more specic key objectives

are identied. 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 ofkey words in Commission policy papers. Related operative words7 were grouped toform three comparable factors (see Chart 5.1). The “cooperation factor” comprisesthe words cooperation, cooperate, dialogue, partner, and partnership; the “reformfactor” 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 Councilwere discarded as irrelevant.

7 Operative words refer to keywords in a sentence that describe or are reective of

either the general state of EU–China relations or of Chinese society.




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 thanusual in the 2003 policy paper, which appeared at the time when the EU waslaunching a strategic partnership with China. The number of mentions returnedto the “normal” level in the 2006 policy paper. There has also been a gradualde-emphasis on reform and transition, while talk of competition and challenges,which was almost absent in the rst 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 specic 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 substantivewords8 were again grouped together to form three factors. The “IPR factor” is thesum of occurrences of the words IPR, intellectual property, and legal rights (ofcompanies). The “fair trade factor,” in turn, is the sum of occurrences of the words(un)fair trade, competition, subsidy/subsidies, antidumping, and trade decit

(referring to EU–China trade). Finally, the “rights factor” comprises occurrencesthe 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 wereomitted because they are less controversial in EU–China relations.

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

-20

30

80

130

180

230

1995 1998 2001 2003 2006

cooperation factor

reform factor

challenge factor




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 illuminatingwhen it comes to trade and IPR issues versus the “rights discourse.” Democracyhas never been a major theme in Commission policy papers on China, but politicaland human rights have been standard. The 2003 paper marked a high point in theuse 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 reection of EU dissatisfaction with China’s progress in this regard.

Since the rst Commission policy paper appeared the broad strategic objective

of the EU has been to assist China in its transition to becoming an increasinglyopen country integrated into the global politico-economic system. As stated inthe executive summary of the latest co-operation strategy paper: “Europe hasan important economic and political interest in supporting China’s sustainabledevelopment and successful transition to a stable, prosperous and open country”(European Commission 2007d). The emphasis in EU–China relations is stillclearly on cooperation. However, the data in the charts seems to indicate thatEuropeans are increasingly beginning to see China through a similar lens as

the Americans: less of a monumental developmental undertaking and more of acompetitive challenge to EU governments and companies on the one hand, andan indispensable partner in resolving global issues (including an array of securitychallenges) 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 theCommission’s China policy. The goals mostly revolve around supporting Chinato effect internal transformations in terms of social transition toward openness and pluralism, maintaining a sustainable environment, and moving toward a marketeconomy. The underlying idea is that the EU countries will be best served bysupporting China’s integration into the global community and its transition towarda society that resembles their own (European Commission 1995: 6-7). Many ofthe objectives expressed in the Commission’s policy papers could thus be prexed

with the word “development” because they read mainly as development-policygoals. While the logic was reasonable, particularly in the early phases of China’seconomic 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 eventuallyimplement changes it is because they perceive them to be in their self-interest. TheEU expects Chinese leaders ultimately to come to see that they should effect thesechanges in their own interests. What remains unclear is what happens if they donot agree with these goals, or even fundamentally disagree with them. In the caseof 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 theCommission. According to Chinese news sources, former EU Trade CommissionerMandelson recently publicly acknowledged that the EU could not ‘dictate’ solutionsto China on its internal issues (China Daily 2008). Furthermore, the very basisof the rights-based EU policy on China, enshrined in the 1995 policy paper, hasrecently been called into question. The Commission initially argued that efforts tointernationalize China were not only entirely consistent with a strong position onhuman rights, they were also at the heart of a long-term strategy of engagement. Itformulated this premise in the 1995 policy paper as follows: “EU policy is basedon the well-founded belief that human rights tend to be better understood and better protected in societies open to the free ow of trade, investment, people, and

ideas. As China continues its policy of opening up to the world, the EU will workto strengthen and encourage this trend.” The Commission saw signs of optimismthat China was indeed changing in the direction it regarded as desirable (EuropeanCommission 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. Manywell-educated Chinese urbanites are rejecting the EU-promoted political valuesthat they scorn as Western “hegemonic” ideas.9 Progress in the EU–China human-

9 Baquan, or hegemony/hegemonic, is a term frequently used when talking pejoratively about efforts by Western governments to promote their values.




rights dialogue has so far been very limited (Berkofsky 2006: 107). While thedialogue continues, it often does not appear to lead to much concrete action.Even the Commission now openly acknowledges that the EU’s expectations inthis regard are not being met (European Commission 2006b: 4). Human rightsare dramatically de-emphasized in the Commission’s latest China policy paper.While the 2003 paper mentioned human rights, political rights or democracy noless than 54 times, these words only received 10 mentions in the 2006 paper. TheChinese 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 placingheavy demands on China, perhaps even inappropriately so given the strategic partnership (Berkofsky 2008). Ironically then, while the Commission perhaps sawtalk of a strategic partnership as calling for more “frank discussion” on problemsin the relationship, the Chinese expected that it would mean less.

The trend toward the sectoralization of EU–China cooperation10 has clear benets in terms of focusing it and making it more concrete. A consequence of

this, intended or unintended, is that sectoral cooperation initiatives can be neatlyisolated from the global political agenda of cooperative relations. Conversely, thehuman-rights discussion is then effectively compartmentalized in its own specic

location. This solution is probably expedient both to Beijing and to some Europeancapitals. As it is hard for the EU to entirely drop its rights agenda given the self-identication 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 ofEU–China relations.

While China has not come to share European political values, it has becomea fully-edged member of the international trading system, a key WTO member,

and a more active and responsible actor in global crisis management, as evidencedin the six-party talks on North Korea and following the Asian tsunami. Overall,the Chinese integration into global multilateral structures and participation inworld organizations has been remarkable in quantitative terms (Johnston 2003b).In some key areas Beijing has come to share similar concerns and emphases as theEU, notably with regard to the centrality of multilateralism in general, and the UNsystem in particular, in global governance and in environmental concerns. Thesetwo areas stand out in recent EU–China joint statements (especially from the 9thand the 10th EU–China summits) as areas in which the two parties have genuinecommon, even strategic, interests.

10 There are currently 22 separate institutionalized sectoral dialogues between theEU and China, in addition to the general political and human-rights dialogues initiated in1996 and 1994 (EU Sectoral dialogues 2009).




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 implementedin practice. This section addresses a number of prominent and contentious issuesin recent EU–China relations, and how they have been handled. The focus is onwhether the EU has been able to effectively formulate a common position, and touphold it in practice.

As a guiding tool for systematically examining these cases I have used theconvergence or divergence of interests between the EU and China, and among theEU countries, respectively. This gave four different theoretical possibilities: issueson which there is broad interest convergence both between the EU and China andwithin the EU; issues on which the member states’ interests converge but there

are conicting interests between the EU and China; issues on which there is noclear interest conict between the EU and China, although the member states have

conicting interests; and nally issues on which the interests of neither the EU

member states nor the EU and China converge.The specic policy issues reviewed below are market-economy status (MES)

and antidumping, the IPR issue, Taiwan, the arms embargo, and Tibet. Followingthe 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 asrelated news reporting.

Case 1: MES and Antidumping

Despite talk of a strategic partnership and a deepening political agenda withregard to EU–China cooperation, far-reaching economic and trade ties remain atthe core of EU–China relations. However, partly as a consequence of a rapidlystrengthening euro, the relationship has become very lopsided as far as the EU isconcerned. Virtually no European country is able to sell signicantly more than

they buy from China nowadays. In 2006 only Austria had a large trade surpluswith China, and Sweden had a slight surplus, and most of the other countries hada decit of well over 50 percent of bilateral trade (Chart 5.3).




Chart 5.3 The EU member states’ trade balance with China, 2006

The picture is more complicated than this in practice, given that so manyEuropean companies operate from China (thus reducing EU exports to China andincreasing “Chinese” exports to Europe) and greatly benet from selling directly

to Chinese customers from within the country. A case in point is the Netherlandswith its dramatically lopsided trade balance with China. An in-depth study of theeconomic relationship between China and the Netherlands concluded that, despite

this imbalance, the Dutch economy benets in many ways, not least because alot 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 withChina has therefore had a generally positive effect (Suyker and de Groot 2006).

However, most European countries do not enjoy the same benets as the

Netherlands. In an unusually blunt statement, former Trade Commissioner PeterMandelson addressed the issue of the imbalance in EU–China trade in a letterhe sent to Commission President Jose Manuel Barroso in the autumn of 2007.Mandelson expressed concern, suggesting that “the Chinese juggernaut is, to someextent, out of control.” He argued that Chinese trade barriers and interventionslimited imports from the EU. The many EU–China sectoral dialogues were notalways helpful either, as the Chinese side could be procedurally obstructive (BBC2007).

The political debate on EU–China economic and trade relations has culminatedin the issue of market economy status (MES), which China has sought for a longtime. In the WTO negotiations it accepted that it was a non-market economy inorder 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 ofrecognition 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 rst 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 EUand the USA, do not.

Apart from the symbolic aspects, the main rationale for seeking MES is tomake 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 issuehas also assumed increasing importance in practical terms and is now high onBeijing’s political agenda (Rémond 2007). As long as China does not have MESstatus the US and the EU countries can determine a “fair market price” based onanother (MES) country’s production costs, under the assumption that it wouldnot be feasible to base fair-price calculations on Chinese prices. Given that theexport-oriented sector in China effectively already operates in a market-economyenvironment, Stephen Green has argued that Beijing could have pursued a verydifferent strategy. Instead of trying to gain MES status it could have challenged

the whole framework on the grounds that it did not reect the real circumstancesin the Chinese economy (Green 2004).

Until recently the United States was much more vocal than the EU in criticizingChina’s economic and trade practices. To date it has brought trade complaintsagainst China to the WTO dispute-settlement process no less than seven times,ve of these since 2007.12 The issue of alleged unfair economic practices has alsoassumed more importance in the EU of late, given the rapid growth in EU–Chinatrade. 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 coatedfree sheet paper in 2007), but none yet against the EU.

In an initial assessment published in June 2004 a working group set up bythe EU concluded that conditions were not right for granting China MES. TheEU position has not substantially changed since then, although Chinese progressin some relevant areas is recognized. However, the EU has been somewhatmore exible than the USA in that the Commission’s description of China as an

“economy in transition” allows determination of whether Chinese companies areoperating 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 thecontext of Chinese textile and shoe imports to the EU. The sudden ood of cheap

Chinese imports that followed the lifting of quota restrictions put EU countries atrisk of severe dislocations in their textile industries. The impact varied in differentcountries. Italy, with an economy more oriented to light manufacture (includingtextiles and footwear) than most other EU countries, was particularly severelyaffected. An article on the dispute concluded that divergent interests among EU

member states in the face of a ood of Chinese imports hampered a coherent

12 VAT on integrated circuits (2004), imports of auto parts (2006), measures grantingrefunds, reductions or exemptions for taxes and payments (2007), intellectual propertyrights (2007), audiovisual services (2007), nancial-information services (2008), and

grants, loans and other incentives in 2008 (WTO Dispute Settlement ).




EU response (Comino 2007). Nonetheless, although it was chiey the southern

European countries that were directly affected (Zhao 2007), the EU slapped animport duty on Chinese-made leather shoes in 2006 (Mandelson 2006), implicitlyinvoking China’s status as a non-market economy.

The MES issue has been discussed in recent EU–China summits, and atthe 2005 Beijing summit the two sides agreed to launch high-level talks (Jointstatement 2005). Although some member countries, notably the UK, have been infavour of granting MES to China (Minder and Lau 2005), as mentioned the EUhas not substantially budged on the issue since the Commission rst formulated

its position in 2004.

Case 2: IPR Issues

For years the IPR issue has been of utmost concern to European companies operatingin China. It is also a political issue that has grown in importance, as indicated inChart 5.2 above. Peter Mandelson has even been quoted thus: “Probably the mostimportant issue in Europe’s economic relations with China is the protection andthe enforcement of intellectual property rights” (EUBusiness.com 2006). On theofcial 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 deterrenceagainst piracy and to the effective enforcement of IPR legislation. Both sidesexpressed their satisfaction over the communication and cooperation of the pastyear under the EU–China IPR Dialogue and the IPR working group and stoodready to further the exchanges and cooperation in this eld. Both sides also

reiterated that they would strengthen the cooperation and exchanges in the eld

of geographical indications. (Joint statement 2006)

However, in practice, there is much less agreement. The two sides set up astructured dialogue on IPR issues in October 2003, and an annual meeting has been held every year since 2004. Nonetheless, the dialogue has not substantiallydeated 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, makingMES a carrot to prompt Beijing to move more aggressively on IPR protection. Atthe 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




American government. For instance, no European government has any directmilitary interest in supporting Taiwan, and most do not even think that theyhave a tangible interest in the area’s security. Consequently, despite occasional pronouncements of support for Taiwan in the European Parliament, there isgenerally little conict 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 Beijingincorporated the following passage into the joint statement:

The EU reiterated its concern over the intended referendum on UN membershipin the name of Taiwan as this could lead to a unilateral change on the status quoacross 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 futurestatus of the island. (Joint statement 2007)

The joint statement is well in line with Beijing’s position, even to the point of usingthe Chinese description of Taiwan’s government, the Taipei authorities, which isa translation of the Chinese Taibei dangju. In contrast, the 2005 statement didnot mention a similar concern over the anti-secession law introduced by Beijingearlier that year (Joint statement 2005).

EU statements and ofcial documents have been quick to criticize the actionsof Taiwanese politicians, in particular the former president Chen Shui-bian,seeing them as the main threat to the status quo. The EU Presidency and JavierSolana have expressed concern about Taiwan’s referenda, its application for UNmembership, its president’s statements, and the decision to abolish the symbolic National Unication Council. On the other hand, in recent years the Presidency

has only once made a semi-critical declaration regarding Beijing’s behavior in thelong-running conict, 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 EUonly ‘took note’ of the issue and reiterated its stance in the dispute (Council ofthe European Union 2005). The EU has also been largely silent about the Chinesemissile deployment across the Strait (Berkofsky 2006: 108).

The European Parliament has taken a different attitude toward the Taiwanissue all along, often expressing moral support for the island. However, withoutmuch say in the EU’s foreign and security policy, these expressions are largelyirrelevant. More interestingly, whereas the rst Commission policy paper made no

mention of EU interests in the dispute, and the 2003 paper made only a passinggeneral reference, the latest one (European Commission 2006b: 11) spells it outmore clearly. It states that the EU has a signicant stake in the maintenance of

cross-Strait peace and stability, and formulates ve points of EU policy that should

be taken into account. These include opposition to any measure that would amountto a unilateral change of the status quo, and strong opposition to the use of force.




This basic position was echoed in the recently adopted guidelines on theEU’s foreign and security policy in East Asia. Signicantly, while the Council

echoes its support for dialogue and peaceful resolution, it now also states thatthe EU considers its interests threatened when stability and peaceful dialogue isthreatened, and links the Taiwan issue to the arms-embargo issue:

The EU should also, in consultation with all partners, deepen its understandingof the military balance affecting the cross-strait situation; of the technologiesand capabilities which, if transferred to the region, could disturb that balance;of the related risks to stability including the risk of miscalculation; and factorthat assessment into the way that Member States apply the Code of Conduct inrelation to their exports to the region of strategic and military items. (Council ofthe European Union 2007)

Despite the increasing weight given to the issue in Commission and Council papersand the more active promotion of cross-Strait peace, particularly following thechange of governing party in Taiwan in the spring of 2008, Taiwan remains largelya non-issue in EU–China relations: at most it is an irritant rather than a source ofleverage (e.g., Cabestan 2007). EU countries appear relatively comfortable withreiterating 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 toformulate a coherent policy toward China. The embargo was imposed on Chinafollowing the 1989 Tiananmen incident. In 2003-04 pressure grew within the EUto lift it, given the long time that had passed and the irresistible lure of signicant

economic contracts.The Chinese side has long been pushing to have the embargo lifted. The issue

gathered signicant momentum when some EU leaders, particularly Germany’s

Schröder and France’s Chirac, began lobbying for lifting the embargo (Sparacoand Wall 2004). French and German political leaders have often brought homemassive commercial deals following state visits to China. Many other governments,including Italy’s, have also been sympathetic. The December 2003 EuropeanCouncil instructed the General Affairs and External Affairs Council to re-examinethe question (Council meeting 2259: 8). The latter resolved to search for a solutionthat reected 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 rightsconcerns remained and that the EU Code of Conduct on arms exports, introducedin 1998, needed strengthening (Council meeting 2622: 13). The EU reafrmed

its commitment to working toward lifting the embargo both in the 7th EU–China




Summit and in the December 2004 European Council meeting (Council meeting2631: 14). It was expected that the decision would be announced in conjunctionwith the June 2005 European Council meeting.

Although the momentum was growing for some kind of change there were alsostill considerable doubts in some EU countries, chiey the UK and some smaller

nations. However, the most signicant pressure came from Washington. American

concerns were both military and political (Archik et al. 2005: 18, 26-28). TheAmerican government took a relatively hard line, even suggesting implications forUS–EU security cooperation if the EU forged ahead with its plan. The embargoissue was seen by American observers as a kind of litmus test of the ability of theEU and China to develop genuine strategic relations, and conversely of the EU’scommitment to the transatlantic security relationship. An unintended side-effectwas 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 consideringseeking a kind of soft declaration of independence through referenda on Taiwan’sinternational status. An anti-secession law prohibiting any area of the fatherlandfrom seceding from it was passed. This provided a convenient excuse for EUleaders to extricate themselves from the conicting 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 theanti-secession law as a reason to postpone the decision. Others, notably someleading French politicians, initially continued to push for lifting the ban, and evenexpressed support for the anti-secession law ( Deutsche Welle 2005).

The issue has essentially been stuck in limbo since 2005, the EU reiterating itswillingness to work toward lifting the embargo in the joint communiqués and onother 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 inthe face of the lack of agreement between the member states. Chinese pressureis 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 createdexpectations in Beijing and fears in Washington that this would lead to a lifting ofthe embargo. China may even have perceived a quid pro quo situation in whichit would be part and parcel of the elevation of relations to a new level (Berkofsky2006: 105, 109), and likely regards the issue as primarily symbolic. In the shortterm the EU is unlikely to allow signicantly 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. Ithad been taken up annually as one human-rights issue among others in Council




meetings (e.g., Council meetings 2532: 9 and 2700: 24). Only rarely did theCouncil express particular concern about Tibet, but it has issued declarationsexpressing 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 arelatively strongly worded (by diplomatic standards) declaration (Council of theEuropean Union 2008b). This seemed to set it up for yet another juggling act between European commercial interests in China and the member states’ politicalvalues. 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 thereforealso down the political agenda.

A number of recent actions on Tibet within the EU have upset China. Firstthere was German Chancellor Angela Merkel’s hosting of the Dalai Lama in

Berlin in September 2007, despite Beijing’s objections and the cancellation of anumber of Sino-German events. Following the spring 2008 events in Tibet, someEU leaders considered boycotting the Beijing Olympics opening ceremony. TheEU High Representative also commented on the situation in an address to theForeign Affairs Committee of the European Parliament, but advised caution withregard to boycotting the ceremony (Council of the European Union 2008c). TheEuropean 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 on15 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 theDalai Lama’s representatives.

Talk of a boycott and the perceived lack of respect in the West for the HanChinese victims of the Tibet unrest caused a furious, nationalistic response inChina. Popular nationalism – as opposed to ofcially sanctioned nationalism – has

been developing in China since the early 1990s. Its enthusiasts are increasinglyconvinced 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, thelast time against Japan in 2005, and before that against the US in 2001 (the Hainanspy plane incident) and 1999 (the bombing of the Chinese embassy in Belgrade).

A recent study of Chinese attitudes toward the EU suggested culturalestrangement and the widespread feeling that as far as the Western media areconcerned, whatever China does is wrong (Lisbonne-de Vergeron 2007: 40).Symptomatic of this attitude is a poem published on the web by “A Silent, SilentChinese” 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 seeminglywhatever China does is wrong; it voiced the widely felt Chinese frustration withthe West, and was quickly copied to a number of other websites. This frustrationneeded an outlet. In Europe a set of coincidences focused the anger on France andthe supermarket chain Carrefour.




This was rather ironic in that France had perhaps been the strongest voice inthe EU deecting attention from human rights and emphasizing cooperation with

China also in the military sphere. This approach was initiated by Chirac, withthe support of Schröder and Berlusconi. France had been the strongest voice infavor of lifting the arms embargo, and in 2004 it became the second EU countryto conclude a bilateral strategic partnership with China. The French and Chineseeven held joint military exercises in 2005. In short, French–Chinese relations werecosy, and France was the most popular foreign country in China.

Chinese concern about the foreign-policy direction of the new FrenchPresident Sarkozy, set out in his talk of a “new course” (la rupture), was initiallylaid to rest after Sarkozy’s rst state visit to China in November 2007. It was a

huge commercial success for France, and politically satisfying for Beijing. Thedelegation 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 toedthe line on Taiwan and Tibet, but also reiterated its earlier stance that the armsembargo should be lifted (Bordonaro 2007). However, a year later Sarkozy metwith the Dalai Lama just before the annual EU–China summit, which was held inLyon on account of the French EU presidency (the UK prime minister had methim in May 2008). Sarkozy’s decision caused Beijing to postpone the summit atshort notice, which was unprecedented, and to warn of the serious consequencesfor French commercial interests in China.

At the time of writing it seems that the united front of key EU leaders on notallowing Beijing to determine whom they can receive is working this time. WhereasBeijing initially tried to isolate both Germany and France, it has eventually beenforced to come around. In the context of the current global economic crisis itseems to be unwilling to gamble its crucial relations with the EU, and has thereforesignalled that it is ready to mend fences.

Strategy in Action: Intermediate Observations

The ve cases briey analyzed above differ in terms of whether they are mainly

interest-based or rights-based. Broadly speaking, the IPR issue is the mostinterest-based, whereas the Tibet issue is the most rights-based. The other threefall somewhere in between.

The EU countries have solidly converged interests on IPR issues, it being inall 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 Chinais 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 aresomewhat divergent.

China and the EU also have partly divergent interests with regard to the MESissue, although here EU interests are increasingly convergent. Almost all EUcountries have a strong imbalance in trade with China, albeit some of it is due toEuropean manufacturers exporting from China to Europe. While Chinese imports




in specic 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 relativelyeasily by arguing that Beijing must address EU economic concerns rst.

Taiwan could be regarded as an issue on which the interests of the EUgovernments and Beijing converge somewhat, or at least do not directly conict,

given the prevalent understanding in the EU capitals. The European Parliamenttakes a different stand. Nevertheless, both the Council and the Commission haverecently given more attention to the issue and have more explicitly identied an

EU interest in peace and stability in the Taiwan Strait (e.g., European Commission2006b: 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 thetime being it is latent, political momentum having been lost following the passageof 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 ofreaching a common position.

Until recently Tibet was almost a non-issue for the EU, except for the EuropeanParliament. However, the conuence 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 theEU’s human-rights commitment in its China relations. Although, the EU has nodirect economic or security interests involved, it does test the extent to which it isable 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 governmentsdiffer widely.

The Tibet question is in many ways the most interesting test of the EU’s abilityto make good on its long-term strategic goal – assisting China in its transitionto becoming an increasingly open society and a responsible global actor. It is aUnion-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 rights- based 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 inGermany and then Sarkozy’s in France have not succeeded too well. If this patternholds it would indicate a strengthened resolve among EU members not to succumbto 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 Beijingskillfully exploits. A recent report identied four broad attitudes: accommodating

mercantilists, ideological free-traders, European followers, and assertiveindustrialists (Fox and Godement 2009: 4). Interestingly, a paper on the EU’sChina policy argued that Germany and France are in contention with regard towhich is the most important partner for China in Europe: France being politically




more important but emphasizing the economic relationship, while it is the otherway round with Germany (Weske 2007: 8-9). One could postulate that if a tacitagreement could be maintained between Germany and France regarding the mostdivisive EU–China issues, then the divergence would mainly be between the EUand 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 inthe Chinese political sphere. China has favored the idea since the late 1990s and hasentered 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 startedduring Jiang Zemin’s time in power. The concept was proposed by Beijing andtentatively accepted by the Clinton administration, which at the time was eager toimprove ties with China. However, from the start the American government was nottotally comfortable with the concept,13 and during Clinton’s state visit to China in 1998the 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”

The concept quickly fell out of usage in US–China relations following Chinesedispleasure at perceived unfairness in the WTO negotiations and the US bombingof the Chinese Embassy in Belgrade. It was buried when George W. Bushdescribed China as a competitor, not a partner. Meanwhile, Beijing had declared a

13 David Shambaugh at the Finnish Foreign Ministry, Helsinki, 1 February 2008.

Region Partnership (year)

Europe Great Britain (1997*), EU (2003), Germany (2003**), France (2004),Italy (2004), Spain (2005), Portugal (2005), Greece (2006)

Asia(geographical)

Russia (1998), Asean (2003), India (2005), Pakistan (2005), Indonesia(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 relationshipconcluded at the time; ** Use of the concept seems to have diminished after Schröderstepped down.




strategic partnership with Russia in 1998, with a stated goal to counter Americanand European military and economic inuence.

The great number of rhetorical strategic partnerships that China maintainstoday begs the question of what is meant by the term. Perhaps the most explicitaccount of how it is understood by Chinese leaders was given by Premier WenJiabao in a speech in Brussels on 7 May 2004 when he explained the meaningof the phrase “comprehensive strategic partnership,” used to describe EU–Chinarelations. Premier Wen stressed that cooperation in a strategic partnership should be long-term and stable, transcending both differences in ideology and socialsystems and the impact of individual events. Furthermore, it should take place onan equal footing and be mutually benecial ( 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, SaudiArabia and Israel. Almost all of these are among China’s top trading partners. Itthus seems that strong economic ties alone do not explain Beijing’s desire to enterinto strategic partnerships. It may or may not be a coincidence that these “absentfriends” have also been traditional American security allies. If this is a factor inthe Chinese political calculations, it would be reasonable to assume that Beijingwas not in a rush to conclude strategic partnerships with countries or regions withwhich there would be the potential for strategic conicts of interest.

Such conicts of interest could arise, for example, if the potential partner wasopposed to China’s aspirations to Asian leadership, was anxious to balance China’sincreasing military strength, or recognized the PRC’s diplomatic competitor,the ROC (Taiwan). Fortunately for EU–China relations, there are practically nostrategic conicts between the two parties (Geeraerts 2006: 30), at least as long

as Sino-American relations do not turn sour, in which case Washington may welldemand that the EU takes its side in any potential conict situation. In Chinese

political rhetoric both the overall EU–China partnership and the separate strategic partnerships concluded with some EU members are consistently qualied with

the adjective “comprehensive,” i.e., comprehensive strategic partnership. Tocomplicate matters further, Brussels insists that the very word strategic itselfshould in this context be understood as meaning comprehensive and not taken asimplying a counterbalance to US global inuence (Berkofsky 2006: 104-105).

In this context, it is interesting to note the terms used to describe the Sino-Indonesian strategic partnership, to which the concepts non-aligned and non-discriminatory 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, viewthe strategic partnerships they are so busy forging as almost the antithesis of theactual 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 worldwithout permanent exclusive military alliances or security blocs. This suggests




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 atraditional alliance. Preferring a uid and exible strategic position would be well

in line with the traditional Chinese strategic concept quanbian, implying “absoluteexibility,” identied 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 theCommission to clearly explain to concerned allies what is so strategic about therelationship (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 USin strategic areas (Narramore 2008). In other words, when push comes to shove, aswith 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 arguedthat it is their patterns of rivalry rather than cooperation that are likely to structuretheir global agency (Kavalski 2007).

The most feasible path to a genuine strategic partnership appears to be nding

common ground on issues over which both sides’ interests merge, or when thesame 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 theEU’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 biggestexport market and China has been looking to diversify its foreign-reserve holdingsaway from the dollar. There are also a number of more specic issues in which the

EU and China have a common interest, such as controlling terrorism and organizedcrime. Related to this is the need to mediate and control potential foreign-policycrises from North Korea to Iran. However, this is trickier, given the presence of both common and conicting interests.

It is easy to nd common political ground on the overall premise that the EU

accepts and encourages the emergence of China on the global stage, as Chinaaccepts and encourages the emergence of the EU – a classic example of “I’ll scratchyour back, if you scratch mine.” The EU’s High Representative Javier Solana wasquoted thus on his rst meeting with Chinese leaders: “Chinese leaders are willing

to see how Europe is becoming a strategic international actor” (Council of theEuropean Union 2003b). The theme of joint emergence as world powers recurredlater 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) isin support for multilateralism and the UN. This broad objective is perhaps the most

14 Johnston was mainly referring to absolute exibility as a high level of exibility

regarding offensive and defensive postures, based on an assessment of capabilities andcircumstances.




promising in terms of realizing a genuine strategic partnership. It is both long-termand 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 theBush administration.

In an article penned for the People’s Daily, Solana explained to a Chineseaudience the thinking behind the security strategy he had drawn up for the EU.He put the EU’s main security concerns – terrorism, nuclear proliferation, armscontrol, and organized crime – rmly in the UN context (Solana 2004). The code

word “effective multilateralism” has been inserted into the EU–China jargon torefer to this presumed common ground, without much concrete action to back itup, however. There are also doubts as to whether Brussels and Beijing really sharea common approach to multilateralism, as China still tends either to go it alone orto 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 oneadopted by the United States. With no perceived direct security interests in theregion, the EU has largely contented itself with supporting China’s transitions andglobal 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 fundamentaldifference from the American view concerns the strategic implications of China’srise and its developing hard power capabilities. While in the US China’s rise isset in a national security framework, the dominant EU perspective focuses on itsdomestic situation (Shambaugh 2004: 14-15).

Given the almost impossible task of reconciling the foreign policies of 27diverse countries with partly divergent interests, the EU has not done so badly,even if maintaining a unied 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, identied here as assisting China in becoming anintegrated part of global affairs – a stakeholder – has worked reasonably well,

15 A few years ago, Chinese commentators on international relations appearedobsessed with the concept zonghe guoli, denoting the comprehensive, all-round powercapabilities of a country.




although the inuence of the Union and the member states on this development

is difcult to quantify. China today is a major global player, which is acting in an

increasingly responsible manner on global issues, from arms proliferation to theenvironment.

The key question now is how to reorient the strategy, in particular how toset up the mix between developmental goals, rights-based goals, and economicand security interests. Rather ironically, given the frequent European criticismof 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 theycan be identied, 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 EUforeign policy in its current form could produce as clear priorities, objectives andstrategies as, say, Russia or China. As China’s economic transition has progressedand its global integration is largely complete, the EU’s China policy has come toa crossroads. There has been increasing mutual dissatisfaction between the EUand China at the very time when the two sides are in the process of negotiatingthe 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 whatkind of political strategy, if any, the EU will pursue in the coming years. In thelong term there are three potentially decisive factors that will determine whetheror not the EU will be able to effectively pursue a common political strategy towardChina:

the emergence of direct common security interests in East Asia as aconsequence of deep economic commitments;the development of the EU’s institutional and material capabilities to backup 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-relatedinterests in East Asia, of which the East Asia Guidelines, made public by theCouncil in 2007, is perhaps the clearest indication. Previously, the EU’s treatmentof the Taiwan issue has been regarded as perhaps the clearest indication of thefact that it has neither direct security interests, nor any military capability in East

Asia. The Guidelines and the latest Commission policy paper, although allowingfor only very soft means with which to inuence 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 outin the Guidelines.

•

•

•




paper. Eventually, pursing strong interests requires stronger means, and it is by nomeans 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 theinstitutional development of its foreign-policy capacity. In the short-to-mediumterm the EU can either continue to muddle through with its current institutionalstructure for foreign-policy making, with divergent interests and frequent minorconicts between member states and between rights-based and interest-based

foreign-policy objectives, or it can further tone down its value-based “voice” inorder to pursue a more Realist policy.

The documents and cases reviewed for this paper suggest that the EU has beentoning down its rights-based voice in policy papers, while insisting more adamantlythat Beijing cannot expect its demands to be automatically met in Europe whenthey conict 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 moredefensive 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 ofa normative foreign-policy agenda. This may indicate that, in practice, the EU ismore clearly adopting different approaches toward norm-promotion with regard toother great powers versus smaller nations; recognizing that while all nation-statesare formally equal, some are more equal than others.



Chapter 6

Sino-European Relations:

From the Height to the WidthZhang 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, developingcooperation with other organized/semi-organized regions, and building strategic partnerships with major global powers. With regard to the last of these, it iscurrently forging a strategic partnership with China, which involves a complicated process of initiating, bargaining, compromising, and initiating again. China, beingthe largest re-emerging power,1 is experiencing fast economic growth, reachingever more extensively to regions beyond its own borders, and having a stronger

inuence 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 rst discuss their asymmetry

and complexity, in the context of post-modern Europe and modern China, as wellChinese duality and European diversity. Secondly, given the lack of a denition of

what constitutes a genuine strategic partnership, I will attempt to identify severalkey criteria on which such a partnership could be based, taking into account therelevant interests, values and other attributes in the particular context of Sino-European relations. Thirdly, I will analyze the changing dynamics of these bilateralrelations from the height (multipolarity in this case) to the width (a concern witha broadening range of issues). Fourthly, I will discuss the rise of China as both achallenge and an opportunity for Europe, with specic reference to the two “dark

areas” (from a Chinese perspective), the non-lifting of the arms embargo and thenon-granting of market economy status (MES), and to Chinese and Europeanengagement with Africa. In conclusion, I will argue that in constructing the strategic partnership there needs to be an acknowledgement of the differences between thetwo 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

1 Stating that “China was a world leader (although without global reach) from 500 to1500,” Joseph Nye argues that “The ‘rise of China’ is a misnomer: ‘re-emergence’ is moreaccurate” (Nye 1997: 66).

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on the basis of perceived need and openness to cooperation in different issuesareas, 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 JavierSolana, identied 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 againsteveryone else”, and countries such as the Taliban’s Afghanistan, Somalia and

Myanmar belong to this category. Modern states, which include countries such asChina and India, rmly believe in the centrality of national interests, and for them

“internationalism is but one modus operandi serving the national interests andonly national interests” (Holslag 2007: 7). For post-modern states (EU membersfall into this category) the boundary between domestic and international affairsis blurred, and the use and threat of force are no longer options for resolvingdifferences and disputes.

While not referring specically 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 SocialSciences (CASS), identies 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 rst 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 alsoincrease interest disparity” (Zhou 2004: 276). The second area concerns not onlythe 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 relevantarea in this context is the asymmetry in historical and cultural traditions, betweenthe European self-identied “strong culture” and the Chinese self-criticized “weak

culture” whenever the two cultures encountered each other following the OpiumWar 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.2 Throughoutthe modern era, there have been those who, humiliated by its technological backwardness, believed that China needed to detach itself from its ancient past andundergo complete Westernization if it were to survive. At the other extreme were

2 Nonetheless, these are all reactive in nature.



Sino-European Relations 123

those who wanted to exclude all foreign inuences and to seek national salvation

through self-reliance. However, the most prevalent view throughout the modernera has been to seek a compromise between these two extreme positions: opennessto the advanced science and technology (and in some cases even economic and political systems) of the West, but a determination to preserve the major elementsof Chinese culture (such as Confucianism) from contamination by foreigninuences.3

This mainstream position in the Chinese modernization process implies a policyof compromise between international cooperation and self-reliance. In the contextof China’s relations with Europe, this compromise has several implications. First,while there is an essential need for cooperation in economic, political, security andcultural matters, there are limits in terms of extent and scope. Secondly, there isthe issue of sovereignty. While European integration is “all about interference in

each other’s affairs” (Berkofsky and Stumbaum 2009: 17), China emphasizes non-interference in international cooperation, although there is some relaxation in thisregard at present (see the relevant discussion below). Thirdly, generally speakingit would be difcult to imagine that modern China could meet the expectations

and demands of a post-modern Europe in areas such as development aid (to athird party such as Africa), climate change, market openness and nancial-system

reforms, precisely because they live in different “worlds” and have different worldviews.

Related to the post-modern and modern dichotomy is that of Chinese dualityand European diversity, which makes Sino-European relations even morecomplicated.

Chinese Duality and European Diversity

Accompanying the re-emergence of China is the increasing divide in its foreignrelations. The basis of all the gaps dened below is the dual identity of the present

China as both a developing country and a potential world power (Zhang Tiejun2004: 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 Europein particular. It immediately implies a gap in China’s foreign relations betweendeveloping-country reality and world-power aspiration. This gap implies thatChina should be responsive not only to developing countries, as the champion ofthe developing world (or as the Chinese leaders repeatedly say in more modestterms, the largest developing country in the world), but also to the developedworld as a global force.

3 The most frequently cited statement in this regard was made by Zhang Zhidong, arepresentative 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 exemplied in Deng

Xiaoping’s famous proposition of constructing “socialism with Chinese characteristics.”




Parallel to this is the second gap in China’s foreign relations, namely that between its increasing need for international cooperation and its sovereignconcerns. Chinese engagement with Africa is a case in point. Thirdly, on a deeperlevel, there is a gap between national interests and foreign-policy principles, themost hotly debated of which is non-interference in domestic affairs (a direct linkto the concern with sovereignty).

The fourth gap is between China’s issue-oriented national interests (suchas energy needs) and its relational national interests (such as Sino-Europeanrelations). In many cases the two are in conict, 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 betweenthe increasing external expectations and the Chinese capacity to fulll 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’ ve-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-ve 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 ofChina responsibility’. Friends have affection towards China and hope that thecountry will be more inuential. Developed countries want China to take more

responsibilities that are beyond the capacity of the country. (Cheng 2007)4

China feels an almost equal amount of pressure as under the “thesis of Chinathreat,” although from a different and more positive direction.5 The peaceful risedoctrine was a delayed response to the thesis, but what will come out as a responseto the thesis of responsibility? In the years to come, we will see a gradually moreresponsive Chinese posture in different issue areas. This may not be to the fullsatisfaction of Western powers, but nonetheless it will take Western concernsseriously.

4 Many other Chinese civilian and military commentators have also commented on the

thesis. Song Xiaojun, a famous military critic and editor of the inuential military magazine Jiancun Zhishi (Ship Review), argued: “The reason that the US imposes responsibilities onChina is for maintaining an Americanized international order” (Song 2006: 6).

5 As Lin Limin, editor-in-chief of Xiandai Guoji Guanxi (Contemporary InternationalRelations), argued: “The thesis of responsibility is a double-edged sword. When dealingwith 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).




As it is now, Europe has increasing expectations and demands with regardto China. There are frequent and distinct signals, some reecting China as a

developing country and others more as a developed one. This suggests that thedual identity is not only a constructed “reality” of China, but is also to a certainextent, acknowledged by the outside world, Europe in particular.

While the EU member states share some basic visions and interests in areas suchas human rights and sustainable development in their dealings with China, theydiverge in many other areas. Generally speaking, different European countries havedifferent stakes in their relations. The more inuential states, especially Germany,

France and the UK, are very cautious about the impact of China’s re-emergenceon Europe, while the smaller EU members (the Nordic countries and Ireland, forinstance) tend to be more relaxed. There are three reasons for this difference inattitude. First, the stronger European countries tend to have greater political stakes

in terms of a global shift in decision-making power. Secondly, they often feelgreater concern about Chinese engagement in other parts of the world, such asAfrica, simply because they feel that they have greater international responsibilityand more extensive political and economic investments there. Last but not least,these countries tend to have a more comprehensive industrial structure, some partsof which (sunset industries) are facing increasing challenges related to importsfrom 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, dueespecially to the close relations between the UK and the US, and those with Francethe closest, while Germany was in between. China–UK relations are currently ona rather stable course, while there are conicts 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 betweenFrance and Germany, when Merkel met the Dalai Lama in Autumn and Sarkozyvisited China at the end of November 2007.

In terms of Sino-European relations it could be argued that duality in Chinawould very likely make the country act internationally in a dualistic manner,sometimes closer to European expectations, and at other times far from that. Adiversied Europe would, on the one hand, hinder progress toward the possible

“Europeanization of China” policy, and on the other hand would make Chinaconfused 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 anddiversities, and thus of the difculties involved in the process of building up the

partnership.




China and Europe: Whither Strategic Partnership

Criteria

China and the EU both claim to be forming a strategic partnership, and both expecta lot from each other, but neither denes what form it should take or what the

criteria are. A partner is “one who shares,” and partnership denotes “a relationshipusually involving close cooperation between parties having specied and joint

rights and responsibilities” (Webster’s Ninth New Collegiate Dictionary 1987:859). “Strategic,” in turn, signies high importance.

The EU ofcial line on the strategic partnership is thus: “The EU, as a global

player on the international stage, shares China’s concerns for a more balancedinternational order based on effective multilateralism, and wants to engage

China as a responsible power in the management of global issues” (EuropeanCommission 2003). On the other hand, in his speech on “Vigorously developinga 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-operationto be based on “equality, mutual benet 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, long-term and stable nature, transcends the differences in ideology and social systemand is free from the interference of a single event that occurs in a certain periodof time.” The question is whether differences in ideology and social systems can be transcended in order to implement a genuine strategic partnership (Berkofskyand Stumbaum 2009: 20). How could win-win results be achieved in the face ofcompetition 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 relationshas yet to catch up with political reality” (Berkofsky 2006: 104). What is more,contrary to China’s earlier expectations that Europe would be a counterbalanceto the US, there has been increasing convergence between the two sides of theAtlantic concerning the re-emergence of China. François Godement, directorof the Asian Center in Paris, even goes as far as to argue that in Sino-Europeanstrategic partnership “the term ‘strategic’ refers more to the absence of divisiveissues than to a joint strategy in the traditional sense” (Godement 2006: 63).

A genuine strategic partnership should certainly entail more than that. In orderto 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 sufcient number of shared interests,

which should outweigh the divergent interests, otherwise the partnership would break up.




Secondly, a true strategic partnership should be distinguishable from eitheran alliance or normal inter-state relationship. This narrows the range of this kindof special relationship. What distinguishes it from normal inter-state relations isthat it inherently carries critical implications, albeit of a mutually benecial and

cooperative nature,6 both for the constituent parties and for the wider world. It isdifferent from an alliance in that it does not necessarily target a third party, and ifit does, certainly not in the form of an alliance.

Thirdly, strategic implies a long-term orientation, the potential being asimportant 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 theinternational 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 rst two. This relationship

is critical for both parties, and its evolution will have a signicant impact on the

current world, which is why David Shambaugh of George Washington Universityreferred 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 (andarguably more) in its future potential. China is still not strong enough to be a fully-edged global player, and Europe is still not sufciently united to be one either.

Thus it is only natural that both lay great emphasis on the future potential of eachother, and seek a long-term partnership (the third criterion).

China and Europe do share some basic values concerning how the worldshould be organized, especially in terms of opposing unilateralism and promotingmultilateralism, although they may have different visions and interests with regardto multilateralism. It is partly because China has become more and more condent

in terms of regional multilateral cooperation, and is increasingly appreciative ofmultilateralism in international relations, and both parties wish to play a larger roleon the world stage.

However, we should be careful not to exaggerate the extent to which Chinaand Europe share basic values. In fact, it has to be admitted that they do not havethe same worldviews, in that Europe has more or less settled in a post-Westphalianworld and China is virtually still in the Westphalian world, as far as sovereignissues are concerned. Moreover, there is strong divergence of values on how

6 Gudrun Wacker, senior researcher in the Asian Group of the German Instituteof 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 cooperativeway” (Wacker 2008).




domestic society should be organized: Europe believes that both the internationaland domestic societies should be democratized, while for the time being Chinaonly accepts the desirability of the former (the fourth criterion).

Although the leaders on both sides claim they are basing bilateral relationson mutual equality, there is still insufciency here, specically with regard to the

arms embargo. This also has a lot to do with the divergent views on human rightsand sovereignty.

Of the ve criteria, therefore, China–Europe relations are a long way short of

the fourth, and are far from satisfactory with regard to the fth.

Sino-European Relations: From the Height to the Width

The focus in this section is on the dynamics of Sino-European relations sincethe Cold War. In its immediate aftermath and throughout the 1990s China hadvery high expectations of Europe, hoping that it would constitute one of the polesin the Chinese conception of an emerging multipolar world. In Chinese eyes theUnited States was always in the background and at the same time the biggesttarget. When he visited European capitals the then Chinese President Jiang Zeminrepeatedly asserted that China and Europe should see their relations from the“strategic height,” the most signicant message clearly being his vision of world

multipolarity. He received some applause from certain European leaders such asChirac, but only a few.7

Time has passed but the United States remains the only superpower, and theworld is still not multipolar. What is more, the greatest background gure and

biggest target (the United States) is not sitting idly.8 It is acting proactively to

7 In the 1990s Chinese experts conceived of the stage of international relations atthe time as an era leading towards multipolarity, in line with the ofcial view. It should

be noted, however, that the ofcial and the academic views varied between the period before the Kosovo war and the one following it. Before the war and NATO’s bombingof the Chinese embassy in Belgrade, former president Jiang Zemin, claimed in a speechdelivered in Moscow in 1994 that, “After the Cold War was over, the bipolar structure hasno longer existed, … and multipolarization is evolving with increasing speed” (Jiang 1994).After the Kosovo war, in August 1999, he admitted, “the process towards multipolarizationwould be marked by zigzags and be complicated,” while at the same time claiming that thetrend was irreversible (Jiang 1999). The ofcial 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 towardsmultipolarization has not been changed. … The process towards multipolarity might bemarked by zigzags, be very long and full of struggles, it is, however, a historical trendunchangeable with anyone’s will. It ts the common will and benets of most countries and

is benecial to world peace and security” (MFA 2000).

8 Kay Moeller, a researcher from the inuential German think tank (The German

Institute of International and Security Studies), even went as far as to argue thus: “In view




prevent its European allies from getting too close to China, exemplied in particular

in its lobbying activities in European capitals to persuade European countries notto lift the arms embargo against China.

The Chinese, after all, are pragmatic. Given its futile efforts to create amultipolar world, its increasing national needs and its growing economy, Chinais making a tactical change away from the promotion of world multipolarity toconcentrate on more tangible issues and needs. Its new engagement with Africaand its outsourcing of natural resources are two cases in point.

This time it is the turn of Europe to have higher expectations of China ona wide range of issues, seen from the Chinese perspective. Commenting on the6th EU policy paper on China issued in 2006, Hu Dawei, deputy director of EUStudies at the China Institute for International Studies (CIIS), said that it

… reected the rising anxiety of the EU toward China. Meanwhile, people from

some EU member states had also shown increasing disappointment with theSino-European strategic partnership. Politically they thought that the dialogueswith China had not led to concessions on so-called human rights, the rule oflaw and democracy, and they did not see the changes in China that Europe hadwished for. They believed that China had gained a great deal in economic termsfrom joining the WTO, but had not lived up to the promises it made when it joined, and the EU had not gained enough benets from trade with China. This

kind of feeling had made them request the EU to reconsider its approach towardsChina on dialogues and coordination. (Hu 2007: 16)

Similarly, the EU Project Group (EPG) from the China Institute of ContemporaryInternational Studies (CICIR) reported that in recent years with the increasingtrade imbalance between China and the EU, “though there are different viewswithin the EU concerning the rise of China, in general, there are growing worriesabout the competition coming from China, even including Germany, a country thatoften 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 ofthe future of European integration, at least in the short and medium term.9 The

of diverging capabilities and ambitions, the multipolar world does not actually exist inreality, China, the European Union, and others have chosen instead the makeshift solutionof ‘strategic partnerships,’ where the partners may be dissatised in theory with the unipolar

world but draw no immediate consequences from this dissatisfaction, apart from symbolicdebates such as the one over the lifting of the EU arms embargo of 1989” (Moeller 2006:69).

9 The EPG argued that “after the constitutional crisis, the EU has encountered aserious setback in integration and had to experience the period of ‘re-contemplating’”(Oumeng Ketizhu 2007: 27). Yan Xuetong, director of the Institute of International Studiesat Qinghua University, referred instead to the “setback” of EU integration as far as the close




Europeans expected China to show more sustainable and responsible behaviorin Africa, and on environmental and energy issues, for example. The rationalewas that, given the rapid progress in China the country should be treated as moreof an equal, and equality brings with it more responsibilities. From the Chinese perspective, however, some of the expectations could only be met by a developedcountry. The EPG argued that although the demands from the EU on energy,climate change and labor standards were “problems that China needed to deal within the process of development, the EU’s consistent questioning of China’s status asa developing country and requesting China to shoulder unrealistic responsibilitieswill not be conducive to the stable development of Sino-European relations”(Oumeng Ketizhu 2007: 45). In my view, to some extent, the Europeans expectChina 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 evendisputes. Europe is becoming more assertive and demanding. In terms of itseconomic policy towards China, it has been changing its stance from the defensive(protecting the European market) to the offensive (urging the further opening ofthe Chinese market). In terms of their political and security policies the EU andmany of its member states have begun seriously to contemplate the kinds anddegrees 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 Europeis a multifaceted phenomenon and touches on areas such as bilateral economicrelations, China’s role in East Asia, and engagement with regions beyond EastAsia - particularly Africa where Europe has had decades of substantial economicand political investments.

As far as bilateral economic relations are concerned, many European expertsacknowledge the presence of both threats and opportunities. John Humphrey, headof the globalization program of the Institute of Development Studies (IDS) at theUniversity of Sussex and Dirk Messner, director of the German DevelopmentInstitute (DIE), for instance, argue that with respect to the European goal ofmaintaining and increasing economic prosperity, the growing Chinese economy poses “simultaneously competitive threats and market opportunities” (Humphreyand Messner 2008: 2). Bilateral economic relations were and remain the single

most important and substantive dimension of China–EU relations and manyofcials and researchers on both sides describe them as the basis of the Sino-

European 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).




controversies, exemplied in the increasing trade imbalance between China and

Europe and the consequent EU trade protectionism. Several years ago, althoughrealizing that the Sino-European trade disputes were costly, a prominent Chineseresearcher on European affairs argued that they were not all entirely negative, forthey kept China and Europe in communication with each other (Song 2004).

At present, for good or bad, there are certainly many more matters drawingChina and Europe into engagement with each other. In the last few years, fromthe perspective of Chinese foreign policy, there have been two “dark areas” inSino-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 upthe EU’s agenda. This is also why Humphrey and Messner argue that not only

does the growing Chinese economy represent “simultaneously competitive threatsand market opportunities”; but the country’s re-emergence also affects “Europe’sstance towards global governance and multilateralism,” since the Chinese are “bothcontributors to the problems that global governance needs to solve and essentialcontributors 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 mainlyon the two “dark areas” in the bilateral relations, and on the Chinese and Europeanengagement 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 thesubjects of the most heated debate in Sino-European relations, especially since thetwo sides announced that they would form a strategic partnership.

In the context of the EU’s foreign-trade policy MES is usually connected toanti-dumping. For example, if the EU granted China full MES, the domestic priceof certain goods and the relevant cost calculations provided by Chinese enterpriseswould be applicable in anti-dumping cases, otherwise the prices and costs of thesame goods in a third country such as Japan or the US would apply. In the lattercase Chinese enterprises would be in a disadvantageous position. China hasrepeatedly argued that it should be given MES on the grounds that it has beencarrying out market economic reforms for decades (and with remarkable success),and that most Chinese goods exported to Europe originate from private companiesand companies with foreign shareholders. The non-granting of MES is frequentlyattributed (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 andthe relaxation of RMB exchange rates, especially in view of the fact that Chineseexports to the US are on a stable course (partly as a result of the devaluation ofthe USD), and exports to the EU are still on the increase. However, given China’s




dual economy (a relatively advanced coastal and urban economy vs. a backwardinland and rural economy) and the fact that many people (although the numbershave reduced substantially in recent years) still live in or near to poverty, thecountry’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 (whichhas enormous domestic social and political implications), its economy would stillneed to be substantially dependant on overseas markets, including the Europeanmarket.

In the years to come, therefore, we will no doubt observe even harshernegotiation processes between China and Europe on the subject of opening up themarket 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 GermanChancellor Schroeder and the former French President Chirac strongly supportedthe lifting of the embargo at one time, which was the most convincing evidence ofthe so-called Sino-European “honeymoon.” Since 2005, however, the tide has beenturning. 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 theEuropean point of view several factors have contributed to this reversal. The most

signicant 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 Europeansshould not break out of the common front with the US on this issue” (Wacker2005: 31). As the prospect of armed conict over Taiwan involving the US (an ally

of many EU members) is still not ruled out, the US emphasizes that it is extremelyunwilling to see weapons and military technology from its NATO allies being usedagainst the US army. The second factor is the insistence on the EU side that Chinaneeds 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. Europeansoften argue that China’s “Anti-Secession Law” in early 2005 came at a wrongtime, when the Europeans were seriously considering the possibility of lifting theembargo, and led to a situation in which a giant non-democracy was threateninga little democracy.

From the Chinese perspective, the two last factors are just excuses for notlifting 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 nosubstantial 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 moretangible issues such as Chinese and European engagement with Africa.

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




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 USis the only remaining superpower and intends to prolong its “unipolar moment”,and it is the strongest power among the three as far as the inuences 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 anda 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. Therelationship with Washington is much more signicant to both China and Europe

than the relationship between the two of them, while Washington, at least inthe Bush era, has frequently adopted a unilateral approach in dealing with bothChina and Europe in order to promote its own agenda. China and Europe bothhave comprehensive relationships with the US. On the other hand, although a

comprehensive relationship is emerging between Beijing and Brussels, for variousreasons,12 Europe still plays a minor role in crucial issues such as Taiwan, whichChina considers as one of its core national interests, while Washington plays anindispensable role.13 China is still not strong enough to be a fully-edged global

player, and Europe is still not sufciently united to be one either. Thus it is only

natural that both lay great emphasis on the future potential of the other, andseek a long-term partnership. In this case, both parties’ engagement with Africa,making them competitors in a sense, could constitute an opportunity for the twoto coordinate.

In the Africa–China–Europe triangle, on the other hand, Africa is the weakestof the three parties. There are major differences between China and Europe onhow to engage Africa, the Chinese approach being more pragmatic, and the

11 Although it may not be intentional, China’s new engagement with Africa whichchallenges the traditional Western sphere of inuence 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 itsneighboring areas than on more remote lands, and Europe, unlike the US, does not havedirect 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 oftenappreciates American pressure on the former Taiwanese president Chen Shui-bien againsthis push for independence. No equivalent European role has been accepted by China.




European approach being more value-laden. Europe clearly makes frequent useof soft power tactics (especially in its development-aid programs), while, inrecent years, China has been taking both hard and soft lines in its regional andglobal strategies, including in its African policy. It is worthy of note that there isa perception of soft power: for the African countries that appreciate it, China’semphasis on non-interference is an exhibition of its soft power,14 although fromthe European perspective, it is probably considered “soft weakness.” By thesame 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 adifferent view.

The signicance and changing dynamics of the Africa–China–Europe triangle

have never been as clear as at present. For the rst 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 inuence in a variety of issue areas, notleast in its engagement with Africa. Late in the Cold-War era Europe took Chinarelatively seriously, mainly for third-party reasons such as the Soviet threat and theso-called US–USSR–China strategic triangle. In those circumstances the China– Europe relationship was secondary in nature, but the rise of China is changingthis.15 At the same time, for the rst time in its history Africa is so signicant for

China for China’s own sake: toward the end of the Cold war Chinese engagementwith Africa was more of a form of competition with the Soviet Union.

David Shambaugh claimed in an article for the International Herald Tribuneand on several other occasions, that the China–EU “honeymoon” was over, andthat the relationship was showing signs of tension.16 If there is a marriage betweenChina and Europe, what is its nature? Is it based on affection, or is it merely amarriage of convenience? Are China and Africa on “honeymoon”? Are they nowsettled in the early stages of marriage?

I do not believe there was a “honeymoon” (nor a marriage) between China andEurope as a whole. Chirac’s France/Schroeder’s Germany and the Chinese governmentdid have a sort of “honeymoon” period, but it was based on self-interest rather thanaffection, 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 principleto enhance its soft power in Africa. In an article in the International Herald Tribune, JimYardley (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 currenttransformation of the bilateral relationships, see Yahuda 2008: 13-32.

16 As Shambaugh (2007) argued: “for Europe, the ‘China honeymoon’ is over. As the10th European Union-China summit meeting convenes in Beijing this week and after 15years of rapidly and dramatically developing ties, there are numerous indications of newstrains emerging in the relationship.”




China’s relations with some African countries are different in that there areshared basic values concerning how international and domestic society should beorganized. These African countries are in favor of the so-called Beijing Consensus promoting domestic authoritarianism and, most importantly, appreciate China’sforeign-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 Chinesegovernment appears to be relaxing its stand on “non-interference”, and is showingsigns of experimenting with “persuasive intervention” (or what ofcials from the

Chinese foreign ministry have referred to as “constructive engagement”) in itsforeign policy. This is evident in the Chinese approach to the Darfur issue and itsmore 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). Sincethen, however, there have been increasing research efforts and policy analyses onthe subject in the West and particularly in Europe.

Are China’s increasing activities in Africa a major challenge to the Europeancountries that have long been engaged in the continent? How competitive are theChinese and the Europeans on this matter?

Here there is a need to distinguish between “good governance” and “effectivegovernance.” The former is a value-based and sometimes idealized judgment,

more a question of imposing the democratic governance of Western democracieson all other countries. The foreign-aid policies of Europe in Africa generally reect

this approach. Effective governance is end-oriented, a case in point being Chineseengagement in Africa.

In my view the differences between effective governance and good governanceare as follows. Effective governance, in principle, denotes the functioning of anefcient governing system. Good governance in the conventional sense, on the

other hand, is always connected to Western rules and norms, and is associated withthe 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 toensure political stability and to maintain a suitable environment for economicdevelopment. The governing system of Singapore is an example.

What, then, are the main reasons why China seeks to promote effectivegovernance 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 insociety, which would certainly be harmful to Chinese business and other interestsin Africa. Yang Fuchang, former Chinese vice foreign minister, commenting onthe recent kidnapping of Chinese workers in Ethiopia and Nigeria, indicated thatinsecurity would not be good for Sino-African economic cooperation because manyChinese companies would not choose to invest in Africa (2007: 8). Lastly, one of




the prerequisites for a sound investment environment is an efcient governing

system. Zhou Xiaochuan, head of China’s central bank, spoke of the Afro–Asiancooperative partnership at the press conference following the Annual Conferenceof the African Development Bank in Shanghai in May 2007, and proposed threekey ways of promoting it. One of these was to foster an investment environmentthat required “enhancing governmental governance.”17

The Western media often paint a mercantilist picture of Chinese policy inAfrica, according to which the only concerns are with resource extraction and prot, 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 Chinais actively assisting African countries to reach UN Millennium Goals and intraining people for public administration. China’s promotion of African effectivegovernance 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 theChinese and European approaches to Africa, but they are not totally irreconcilable.The European approach emphasizes good governance and seeks to build a bettergovernance framework on the continent, while China stresses effective governanceand 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 thesurface. There should be more dialogues between China and Europe on variouslevels, and policy and activity coordination of various kinds are necessary. Chinais still very inexperienced in its new engagement with Africa. Learning fromEuropean 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, rst

of all, that Chinese and European engagement in Africa is not and should not bea zero-sum game for either party. Secondly, coordination between the two sidesshould start from relatively simple issues, such as minimizing the duplication inthe respective infrastructure projects, and then move on to more difcult 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, forinstance writes: “In all of Europe, the rise of China is seen as a challengeAND 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 <http://nance.sina.com.cn/g/20070517/10093601880.shtml>.




of opportunity and challenge vary among different EU member states, for thereasons spelt out above.

On the other hand, for many in China’s international relations circles andamong the political leadership, the refusal of the EU to lift the arms embargo andthe convergence between Europe and the US on the rise of China, together withthe ever closer (and at the same time more controversial) economic relations, areindicative of the ambiguity with regard to the future direction of Sino-Europeanrelations. China has much to worry about in this respect, especially in view ofthe US engagement-plus-hedging (if not engagement-plus-containment) policy.China’s concerns are most evident in its nervousness about trans-Atlantic dialogueon 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 ofthe common responsibilities involved in developing better and more effectiveglobal governance.

Differences in values cannot be ignored. The issue must be confronted, andthere is a need for continuous dialogue. In my view, China will become moredemocratic, although it will be a gradual process. Internationally, while Chinais still sticking to the principle of “non-interference,” there is a slow process ofrelaxation underway, as discussed earlier. Very often post-modern Europe expects

China to act in a post-modernist way, especially in areas concerning sovereigntyand 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 Chineseview 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 certainextent the differences, so that each would have lower expectations of the other. Inother words, if they are to construct a genuine strategic partnership, post-modernEurope needs to go some way toward meeting modern China half-way so that thetwo would be better able to deal with issues of mutual concern.

As in many other modernist countries such as India, the foreign policy inChina could be described as focused on national interests. In this case Chinaneeds to achieve a balance between its issue-related national interests such as itsenergy needs, and its relational interests such as the forging links with Europeancountries.

With specic 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 andculture … The African Union is a loose organization. And African countries cannot dealwith emerging powers like China as a coherent group, nor can they speak with one voice




China could use its increasing inuence, especially in resource extraction in

Africa, and European concerns about Chinese engagement with “failed” resource-rich African states as leverage to persuade European countries to collaborate withChina on energy matters – a consumers’ petroleum cartel would be an option. Atthe same time, China needs to further exploit its powers of persuasive interventionto promote political stability in Africa, as it has been doing (in a limited way) onthe Darfur issue.

Generally speaking, the construction of the strategic partnership has beenconsidered a matter of “high politics.” It nevertheless requires the mobilizationof 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 thatwin-win outcomes are achieved on the basis of perceived need and the likelihoodof 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 Chinaand 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 UnionBates Gill

Background and Salience

It is obvious and well-understood that as China re-emerges as a major regional andworld power, it will be critical to assess how it will employ its growing resourcesand inuence on the international stage. However, two other key factors make

its growing role all the more important. First, its re-emergence comes at a timeof (and is in part driven by) the uid 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 noneof these complex transnational challenges can be addressed – growing the globaleconomy, alleviating poverty, meeting resource shortages, mitigating climatechange, stemming proliferation, controlling infectious diseases – without Chinaas an active and constructive participant at the negotiating table. Hence, beyondacknowledging China’s growing role in world affairs, we should ask how it willexercise its power and inuence 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 ofmultilateral institutions to address the fundamental issues of stability and peace,development and prosperity, growth and sustainability. The EU’s own experiencewith multilateralism, and Europe’s broader success in employing multilateralmechanisms in addressing both internal and external challenges, only reinforces itscentral role in multilateralism to the continent’s overall approach to world affairsin the past several decades. As Europe and China deepen their engagement and

seek to build a “strategic partnership,” China’s views on multilateralism and globalgovernance likewise must be of strategic interest to European policymakers.

This chapter illuminates some of these issues by examining China’s evolvingapproach to multilateralism and global governance. It begins with an overview ofChina’s past and current positions on these issues, then turns to the question of howthe 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 thesematters. The chapter concludes with some broad guidelines and recommendationson how the European Union could strengthen China’s commitment to responsibleand effective multilateralism.

China’s Past Approach: Understandable Suspicion and Ambivalence

In reviewing China’s historical experience with security partnerships and othermultilateral institutions – both as a partner in and a target of them – it is easy tounderstand the country’s traditional ambivalence and suspicion.1 For most of its post-war history as the People’s Republic, China has eschewed the entanglementsof 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 difcult to identify a major alliance, quasi-alliance, or other multilateral

arrangement in which China participated during the rst 70 to 80 years of the

twentieth century that ended well for the country. It was one of 27 countriesgathered to help build the post-World War I international system at the ParisPeace Conference of 1919, but could only look on helplessly as, in order toensure Japanese participation in the League of Nations, the conference acceded

to Tokyo’s demands for Japanese authority over the former German holdings onChina’s Shandong peninsula, in blatant disregard of Chinese sovereignty. Theinternational community was later powerless to respond to Chinese calls to invokethe Nine Power Pact of 1922 or the Kellogg-Briand Pact of 1928 (China was asignatory to both) as a means with which to resist Japanese aggression in China.2

Moreover, China’s status as a founding member of the League of Nations madeno difference in terms of repelling the encroachments of Japan, rst in Manchuria

and then in all-out war in the late 1930s. The most successful alliance for Chinain the twentieth century was in concert with the United States and other powersin opposition to the Axis Powers in World War II, and in particular in defeatingimperial Japan. Even this experience proved bitter for the communists who cameto lead mainland China in 1949, however. Following World War II the UnitedStates ultimately threw its support behind Chiang Kaishek and the Chinese Nationalists, did not accept Chinese communist claims to legitimately representChina internationally, and even wound up establishing an alliance with Japan,

1 This overview of China’s past and current approaches to multilateralism is drawn in part from Gill (2007), especially Chapter 2.2 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 UnitedKingdom, and the United States, afrmed China’s sovereignty, independence, and territorial

integrity. The Kellogg-Briand Pact, a US initiative, sought to renounce war as an instrumentof national policy. China and some 61 other nations were party to this treaty.



China’s Evolving Approach to Multilateralism and Global Governance 141

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 withthe Soviet Union and North Korea, neither of which went well, particularly theformer. As for the latter, China eventually recognized Pyongyang’s rival, Seoul, in1992, and while it continues to provide considerable material and nancial support

to sustain the economically-faltering regime in the North, the alliance tainted by blood and joint sacrice 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 asBeijing 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 as170,000 troops ghting alongside their Vietnamese comrades during Vietnam’s

war against the United States – had collapsed into hostility and war by the end ofthe 1970s. Even China’s short-lived strategic alignment with the United States inthe late 1970s and into the mid 1980s – involving intelligence-sharing, US armssales to China, and close cooperation to defeat the Soviet Union in Afghanistanand the Vietnamese in Cambodia – was a eeting and ultimately fragile expediency

that collapsed entirely with the Tiananmen Square crisis of 1989 and the fall of theSoviet 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 withPakistan. Nevertheless, these close connections with and military assistance toPakistan came back to haunt Beijing in the late 1990s as India–Pakistan rivalryescalated 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 signicant support of Pakistan’s nuclear weapons and ballistic program,

Beijing faced a destabilizing nuclear-weapons build-up on its borders with SouthAsia. It watched from the sidelines as US-Pakistan political and military ties weresteadily revitalized as a result. In recent years, as concerns have increased aboutthe 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 BandungConference – soon fell apart as border clashes erupted with India in 1962, and Indonesiaunder Suharto violently curbed Chinese inuence in his country in the mid-1960s.

Not only has China’s experience within various arrangements been bitter andtroubled, the country also often found itself the target of various multilateral

arrangements. At the very outset of the twentieth century, during the BoxerRebellion of 1900, China declared war on and was in return assailed by a loosecoalition of foreign powers seeking to expand their inuence over the decaying

Qing dynasty. The Qing government was forced to pay an indemnity of 450 millionounces 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




People’s Republic was a year old, Beijing found itself the target of United Nationsforces on the Korean peninsula, and later of American bilateral and multilateralalliances around its periphery: Japan (1954), the Republic of Korea (1953), theRepublic 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 Pacic Economic Cooperation(APEC) forum in 1991. A more important step was its decision to join theAssociation of Southeast Asian Nations (ASEAN) Regional Forum (ARF). Priorto joining, China harbored two principal concerns. The rst of these was that the

ARF might be utilized by major powers in the region (such as the United Statesand 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 andterritorial 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 thatthe potential benets 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 nancial 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 todepreciate 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 andSouth Korea. Chinese leaders and strategists now look upon the ASEAN+3 process as the preferred vehicle for developing free trade areas in the region, andfor 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 signicant 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 conict in thedisputed areas. Critically, the parties expressed a commitment to “resolve theirterritorial and jurisdictional disputes by peaceful means, without resorting to thethreat or use of force … in accordance with universally recognized principles ofinternational 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




escalate disputes and affect peace and stability” (China–ASEAN Summit 2002).In order to achieve these objectives they agreed to set up consultations addressingthe disputed claims, provide voluntary notice of military exercises in the area, andengage in joint cooperation in marine science, environmental protection, search-and-rescue, and crime prevention. The South China Sea agreement with ASEANwas a critical step forward from previous Chinese positions. Prior to 2002, Chinahad 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 notonly decided to join regional multilateral institutions, but also chose to form andlead such institutions. For example, while initially reluctant to take an active rolein resolving tensions on the Korean peninsula, Beijing agreed to take part in andhost 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-partytalks (China, the United States, and North Korea) that began in April 2003, andexpanded into the Six-Party Talks on Korean peninsula security (with Japan andRussia joining the other four). This resulted in a series of critically importantmeetings starting in mid 2003.

An even better example of China’s increasing proactivity is its role in organizingand leading the “Shanghai Five” process in the early to mid 1990s (with Russia,

Kazakhstan, Kyrgyzstan, and Tajikistan), which later in 2001 became a formalmultilateral body, the Shanghai Cooperation Organization (the original ve plus

Uzbekistan). This process began as a vehicle for resolving outstanding borderdisputes among the parties, but in the ensuing years has become an active andincreasingly institutionalized multilateral body, carrying out a range of jointdiscussions and activities across a full range of political-, economic-, and security-related issues, including joint military exercises.

Most recently, China has taken a more active role in the development andinitiation of the newly-established “East Asia Summit” (EAS). Its role has beensomewhat controversial. It preferred to keep the EAS centered on the ASEAN+3grouping, a view shared by Malaysia, but others – such as Japan, Singapore, andIndonesia – favored an expansion to include neighbors such as Australia, India,and New Zealand. In April 2005 ASEAN announced three criteria for EASmembership: having close relations with ASEAN, being full-dialogue partners withASEAN, and being signatories of the ASEAN Treaty of Amity and Cooperation(TAC). Because Australia, India, and New Zealand fullled 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 directionand contributions of the EAS to regional development, but it is another exampleof China’s changed approach: seeing the value of multilateral activities in supportof its foreign-policy goals.

Beyond its regional activities, China has also become far more proactivesince the mid-1990s and has been engaged multilaterally on the global level. It




is fully engaged across the United Nations system, including being a permanentmember of the Security Council, and joined the WTO in 1999. On arms control andnonproliferation matters, China has joined and is a member in good standing in allthe major treaties in this eld, 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 difcult questions

around the world, including those related to Sudan, Iran, and Burma. Over the past10 years it has initiated new multilateral dialogue mechanisms, such as the Forumon China–Africa Cooperation and the China–Arab Summit. It has furthermore helddialogues with the North Atlantic Treaty Organization and has taken part in theAsia–Europe Meeting (ASEM) since its inception in 1996. China has also become afar more active contributor to United Nations peacekeeping activity.

On the ofcial policy level China strongly supports the United Nations, and calls

for its “central” role in international affairs. In this, the European Union and Chinaofcially share common ground, both declaring the need to enhance the role of the

United Nations and other multilateral approaches to global challenges (China–EUSummit 2007). In the words of one of the most prominent Chinese specialists onforeign affairs, “From the early 1990s to the early 2000s China’s attitude towardregionalism evolved from passivity to proactivity, and its multilateral behaviormoved 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 threekey national interests that motivate China’s diplomacy more broadly. First, by proactively embracing multilateral security mechanisms Chinese leaders hopeto dampen tensions in its external security environment so they can focus ondomestic economic, political, and social reform. Secondly, active engagement inmultilateral security mechanisms helps China extend its inuence and power, but

in a way that reassures its neighbors of the country’s “peaceful rise” and “peacefuldevelopment.” Thirdly, its active involvement in multilateral security mechanismscontributes to countering, co-opting, or circumventing US (and other countries’)inuence and “hegemony” around the Chinese periphery, while avoiding overt

confrontation with the United States.3

Assessing China’s Approach

It is clear that China is currently far more active as a participant and even a leaderof 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 knowthat China is increasing its commitment to effective multilateralism, moving frommere cooperation in order to serve its own narrow national interests toward a shared

3 These arguments are spelled out at length in Gill (2007).




sense of integration, joint responsibility, and “stakeholdership” in upholding andsustaining regional and international order?4

The following pages identify a number of challenges to the international system,and briey examine China’s approach to them. Considering these key issues as

indicators gives some sense of how to “measure” China’s ongoing approach tomultilateralism.

International Institutions and Public Goods

One way of measuring this, as noted above, is to track Chinese behavior ininstitutions such as ASEAN, ASEAN+3, ARF, APEC, SCO, EAS, and the SixParty talks. However, the focus in evaluating China’s progress should not be onthe 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 regionaland global strategic architecture right will require Chinese engagement and presence (just as it will require US engagement and reinforcement from its alliancestructures), and Chinese absence, likewise, will be noticeable and signicant.

China’s position as a permanent member of the United Nations SecurityCouncil (UNSC) gives it international prestige. Its willingness to follow the UNSCline on challenges such as Sudan, Iran, and Burma, similar to its approach to theDPRK, will provide a key indicator of its future direction and trajectory within

the international community, whether it is a China truly engaged with upholdinginternational order or only interested in its own position, power, and inuence.

Likewise, China’s orientation toward UNSC reform and enlargement debateswill provide an indication of its comfort levels with its own international position,and its recognition of the truly interdependent nature of today’s globalizedworld. A China that recognizes the need to draw in and work alongside other keystakeholders such as India and Japan, even at potential cost to its own direct short-term interests, will be a China that has internalized the lessons on what it takes to bea responsible great power and to be supportive of more effective multilateralism.

The China of the twentieth and the initial years of the twenty-rst centuries

has been, despite its great power aspirations, a net taker of public goods, be itnavigation and maritime rights, international humanitarian response or developmentassistance. A China that adopts a functional, problem-solving orientation towardthe maintenance of the regional and global order will be a China that starts tocontribute 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’swillingness to act as an upholder of the public good. China’s willingness in May2009 to let Taiwan join the World Health Assembly as an observer is a good sign. Agreater commitment is needed for China to become a net contributor to the global

4 The following discussion draws in part from Gill and Schiffer (2008).




ght against emerging and re-emerging infectious diseases – such as HIV/AIDS,

tuberculosis, malaria, and the highly-pathogenic avian inuenza. 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 initialcover-up of the emergence of Severe Acute Respiratory Syndrome (SARS) ledto its further deadly spread. The country currently accounts for some ten percentof the world’s cases of extremely drug-resistant tuberculosis (XDR-TB), and is a perennial source of widespread outbreaks of avian inuenza. Given its integration

into a globalizing world, outbreaks of infectious disease within the country couldquickly spread far beyond its borders. As such, how China chooses to addressthese problems within its own borders will suggest its appreciation of its role as aresponsible power willing to protect the international system from which it has so

greatly beneted.

Humanitarian Assistance and Developmental Aid Another indicator of China’ssupport for effective multilateralism will be the extent to which it contributes itsincreasing resources to humanitarian-assistance and development-aid programsthrough cooperative and coordinated measures. It has traditionally been a major benefactor of countries in the developing world, providing assistance particularlyin the form of education and training, the deployment of doctors and other public-

health ofcials for longer-term stints in Asian and African countries, and in the provision of public buildings and other basic infrastructure. Its work in this areaappears to be expanding, increasingly encompassing the provision of low-costor interest-free loans and other grants. During the 2006 Forum on China–AfricaCooperation in Beijing, for example, China offered, among other things, to send100 senior Chinese experts on agriculture to Africa and to set up 10 agriculturaldemonstration sites on the continent; to set up a China–Africa DevelopmentFund eventually amounting to ve billion USD to support “well-established and

reputable” Chinese rms investing in Africa; to provide three billion USD of

preferential loans and two billion USD in preferential export credit to Africancountries; to train 15,000 professionals from African countries between 2006 and2009; to establish 100 rural schools and double the number of scholarships forAfrican 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 alsolook to Beijing to be more transparent in terms of amounts and methods in itsdonor policy, to consider and take on board emergent “best practices” within theinternational donor community, and to coordinate more closely with other donorsto leverage resources more effectively, avoid redundancy and waste, and exchangelessons and ideas.




Peacekeeping China has dramatically expanded its contributions to United Nations peacekeeping activities since the turn of the millennium. Up untilthe late 1990s it had typically contributed approximately 50 observers to UNmissions such as in the Golan Heights and on the Iraq–Kuwait border, but asof mid-2009 it had more than 2,000 soldiers, observers and police working inUN peacekeeping missions. China is most active as a participant in Africanmissions, including its most recent contribution to the deployment in the Darfurregion of Sudan.

China could take a number of steps that might indicate its interest instrengthening the current approach to peacekeeping activities. One simpleindicator would be continuing expansion in the number of persons it contributesto UN missions. Another step would be to increase its commitments to the UNStandby 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. Accordingto the Chinese defense white paper of 2002, this “Level 1” commitment means itis “ready to provide the UN peacekeeping operations with engineering, medical,transportation and other logistical support teams at appropriate times,” and “isable to provide these operations with 1 UN standard engineering battalion, 1 UNstandard 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 exibility over peacekeeping when the Taiwan issue is involved. For example, China has used itsSecurity Council veto on peacekeeping activities to protest at the establishmentof diplomatic ties between member states and Taiwan. Moreover, when Haitiinvited Taiwan’s vice-president to its presidential inauguration in 1996 China heldup a subsequent peacekeeping operation in the country for several weeks. WhenGuatemala recognized Taiwan in 1997 China vetoed a proposed UN peacekeepingmission to the area, although it subsequently reversed this decision. Macedoniaestablished diplomatic relations with Taiwan during the Kosovo crisis in January1999, and China subsequently vetoed a proposed resolution to extend the UNforce (UNPREDEP) then safeguarding Macedonia’s borders. However, in 2004,in a striking reversal of past practice, China chose to dispatch a civilian policeofcer to the UN Stabilization Mission in Haiti (MINUSTAH), even though Haiti

had ofcial diplomatic relations with Taiwan. China dispatched the rst 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 constructiveapproach to nonproliferation since the early-to-mid 1990s. It has steadily reducedits exports of conventional and unconventional weapons, put in place a moreeffective domestic export-control system, and joined and complied with nearly




all the major global nonproliferation treaties and many of the supply-side export-control regimes. It has also entered into a number of bilateral agreements with theUnited States – such as stopping further nuclear cooperation with Iran – whichgoes beyond its international commitments.

Some indicators for the future might include the further reduction of its sensitiveexports to countries such as Iran, Pakistan, and North Korea. In particular, Chinacould bring greater pressure to bear on Iran to fully comply with the demandsof the international community regarding its nuclear capabilities and intentions.Furthermore, it could show greater concern over the situation with its long-standing ally, Pakistan, and for the safety and security of its nuclear programs andmaterials.

A new window of opportunity for arms control may be opening in the comingtwo 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 includeworking to ensure a successful Nuclear Nonproliferation Treaty review conferencein 2010, supporting for the idea of a fully safeguarded multilateral enrichmentfacility, and taking demonstrable steps to further reduce the salience of its nuclearforces.

Climate Change Given that China will in all probability be the world’slargest carbon emitter by mid-century, unless it is fully engaged nationally and

internationally, including taking within-governance actions on greenhouse-gasemissions, then it will be impossible for the world to deal effectively with climatechange. In fact, capping greenhouse-gas emissions (in recognition of developmentand growth trade-off) could be the acid test of China’s new global role.

International debate largely hinges on how China addresses the demands andneeds of its own people. Divisions between the rich and the poor, the need tomaintain economic development, and the need to either license or develop cleanenergy and efciency technologies are tough issues for Beijing to deal with. How

China chooses to structure these difcult trade-offs will be indicators of how it

looks to multilateralism for solutions.

Regional Hotspots

As China’s global inuence 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–Pacic region that a shift in China’s foreign policy would be most immediately and acutely felt; indeed, its shift from a traditionallyinward-directed to an engaged power is already being seen in its deployment ofits economic and diplomatic inuences. However, its approach to developments

further aeld – such as in Sudan and Iran – will also indicate how prepared Beijing

will be to engage effectively and responsibly within the international system.




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’snuclear test in October 2006 stand out as the kinds of actions one could expect froman engaged and responsible nation. Its active role in pursuing the shared agenda of anuclear-free Korean Peninsula is a positive leading indicator of a China that accepts,internalizes and upholds international norms on the prevention of the spread ofweapons of mass destruction, while also realizing its own important national securityinterests. 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 generallywill 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 reunicationdynamic between North and South Korea. Moreover, if China takes an active andconstructive approach to the development of a future North East Asian Peace andSecurity Mechanism, it would be a very good example of a China seeking to contributeto the maintenance of regional and international order.

Burma China’s choices regarding Burma will also indicate to the outside worldhow and whether it intends to play a more proactively responsible role in securing

a more peaceful, prosperous and stable future for the Burmese people. Indicatorsof such an approach will include stepped-up efforts to bring differing parties withinBurma together for constructive dialogue, working with other partners such asASEAN 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 communityto 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 othermajor challenges on the international agenda, including the situations in Sudan andIran. How China orients itself on these issues in the years ahead will be crucial. Ithas invested heavily in Sudan, for example, in part to safeguard the security anddiversity of its energy supply. Moreover, despite Sudan’s record as a state sponsorof terrorism and the genocide in Darfur, China continues to serve as a major sourceof 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 AfricanUnion action rather than seeing it stalled, and to show responsible and genuineconcern for the security, prosperity, and dignity of the people of Darfur.

Iran China’s interests in and relations with Iran are complex, and involve morethan simple access to energy. Nevertheless, as a permanent member of the UN




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 nuclearnon-proliferation regime. The support China gives to multilateral efforts – in theUN, the International Atomic Energy Agency (IAEA), and in the dialogue groupinvolving 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 insightinto 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 ofits 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 indenitely. Its long-standing border disputes

with its Central Asian neighbors, including Russia, have been almost entirelysettled under the auspices of the Shanghai Five, and later the Shanghai CooperationOrganization. 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 inresponsible and effective multilateralism.

Military Affairs

China’s rapid military build-up in line with its economic re-emergence has givenconsiderable worry to some who see in these military modernization efforts aChina positioning itself to re-make East Asia, and the globe, by force. The criticalquestion is not one of specic 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 willingnessto commit fully to developing a robust series of condence- 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 formof more detailed, comprehensive, and regularized open-source “white papers”and other formal publications, as well as reciprocal ofcial exchanges of defense-

related information and briengs between China and its principal security partners

in multilateral settings. Other steps, which are also potentially multilateral innature, should include increased military-to-military exchanges, defense-college




exchanges, port visits, joint exercises, and senior-level dialogues between bothuniformed and civilian counterparts on military and security matters.

Some Concluding Thoughts and Recommendations

This chapter argues that China’s approach to multilateralism and global governancehas signicantly changed over the past 10 to 15 years. In general, these changes

mean that Beijing is more open to participation in multilateral institutions, moresupportive of their aims, and more demonstrably active in their activities. This isespecially true with regard to its activities in regional multilateral organizations, butless so regarding multilateralism on the global level. Overall, these developmentshave meant some convergence in policy and practice between the European

Union and China on questions of multilateralism and global governance, but thatconvergence has notable and signicant 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 Chinain ways that will strengthen the country’s commitment to responsible and effectivemultilateralism and global governance.

Five strategic understandings should frame any approach that seeks greaterChinese 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, itsformer imperial glories, and a strong sense of cultural identity, China shares withits people a sense of its unique character and “differentness” from the dominant political West of today. This is not necessarily an insurmountable obstacle togaining greater Chinese commitment to effective multilateralism and globalgovernance, but any approach to do so must accept this reality concerning thecountry’s self-image of its place in global affairs.

Secondly, there must be a willingness to acknowledge and work with thecurrent one-party Chinese political system. This does not mean in any way that theinternational community has to accept specic practices of the Chinese government

that violate its norms or conscience, or to refrain from criticizing perceived defectsand shortcomings in the Chinese system. Nor does it exclude the possibility thatthere will be those who hope for and seek to work with China to effect real andsustained change that will lead to the evolution of its system and the developmentof greater pluralism, justice, equitability, and rule of law in the country. It is anapproach that is built on the realistic assumption that any expectation of genuine

international partnership can only begin with an acknowledgement of andwillingness to work with the political arrangements of the other players in thesystem.

Thirdly, it has to be accepted that China’s sheer size and weight in contemporaryworld affairs – economic strength, population size, territorial breadth, and ethno-cultural heft – give it the right to a substantial and respected presence at the table of




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 inweight and inuence 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 signicant 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, anddestructively in the face of open hostility. This does not mean accommodating aChina that exploits its (often-too-easily) wounded pride, but it does imply the needto realistically recognize that it is far less likely to take on a more responsible roleif it believes it is being bullied, coerced, or confronted with ultimatums. It will be critical to avoid fanning the ames 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 andresponsive way. A China that is plagued by domestic instabilities, or is incapableof meeting the increasingly high expectations of its people, will likely be a farmore 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, andeffective problem-solving multilateralism that would contribute to upholding theregional and global order. These areas for multilateral cooperation – which is notan exhaustive list – could be placed in three broad categories.5

On global economic growth and development:

strengthen common approaches to global development challenges,especially harmonizing best practices and coordinating developmentassistance and nancing in Africa, including engagement of the China

Development Bank, the China Export–Import Bank, the China InvestmentCorporation, and other nancing and investment bodies;

encourage China to take on a greater role within global economic, trade,and nancial institutions and mechanisms, including the World Bank and

the G8 process;work within the United Nations and other global mechanisms, such as theG8 process, to reach a stronger consensus on the need for and capacity

of the Great Powers to coordinate overseas development aid as well asresponses to natural disasters and the provision of humanitarian relief.

5 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 recognizingand addressing emergent transnational security issues, and particularlyso 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 accountabilityand transparency, recalibrating the balance of membership dues andcontributions, and further empowering the United Nations to addressregional 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 statesare active (such as the ARF and ASEM) to reach a stronger consensuson action by multilateral bodies, and on the need for and the capacity ofthe Great Powers to manage, alleviate and, if necessary, contain regionalconicts;

strengthen the capacity of the United Nations and other multilateral bodiessuch as the African Union to foster effective conict prevention and post-

conict 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 addressregional challenges – including regional tensions, money laundering andthe illicit trafcking of goods and people – through preventive diplomacy,

conict resolution, and law enforcement, and including opening the SCO

and its Regional Anti-Terrorism Structure in Tashkent to outside exchangesand consultations with European and other national authorities;increase consultations and consensus regarding the international responseto developments in countries such as North Korea, Burma, Sudan, and Iran,including the possibility of stronger and more cohesive United NationsSecurity Council action;encourage greater military-to-military ties and defense-related exchangeswith China, especially regarding the observation of and participation in peacetime military exercises, defense-college exchanges, and peacekeepingtraining;strengthen global norms on arms control and nonproliferation withinthe bodies in which European countries and China share membership,

including the Nuclear Nonproliferation Treaty, the Chemical WeaponsConvention, the Comprehensive Test Ban Treaty, the Australia Group, theZangger Committee, and the Nuclear Suppliers Group;expand cooperative programs aimed at strengthening China’s export-control system and related to the protection, control, and accounting of itssupplies of ssile materials.

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On China’s domestic challenges:

strengthen and expand cooperation with China to assist the country inaddressing its domestic developmental challenges, with a particular focuson the rule of law, administrative reform, regulatory capacity, social welfareand the efcient provision of public goods, government accountability,

transparency and responsiveness, poverty alleviation, environmental protection, energy efciency, health care, and education.

In conclusion, the EU and China share an interest in improving regional stabilityand economic development, especially in Asia. They also share an interest inencouraging a greater and more responsible role for China across a range of globaland regional issues. Such an approach would help to build in China a greater

awareness of its responsibilities as a growing global power, would involve andgive it a bigger stake in global and regional stability, and would draw Beijing awayfrom a more insular, narrow, and potentially dangerous overemphasis on regionalrivalries and problems – especially with Taiwan but also with Japan, the UnitedStates, and other Asian neighbors. Beijing’s leaders have come to recognize the benets 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 yearsto come as a more politically open, socially just, economically prosperous,and developmentally sustainable country. Such an outcome would likely bringenormous benet to global development and security.

It is also true that addressing the world’s principal challenges cannot be donewithout engaging China, or without more effective Europe–China cooperation,and more committed and effective Chinese multilateral engagement overall. At thesame time, the challenges facing these power centers and the world more broadlyare becoming more complex, difcult, and transnational in nature, demanding

an effective and multilateral response. They include the negative fallout fromglobalization, increasing nationalist and protectionist tendencies, unsustainableglobal scal 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 potentiallydestabilizing ows 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 directlyrespond to them. Gaining a deeper Chinese commitment to effective multilateralismand improved global governance will be critical in this task.

•



Chapter 8

Scrutinizing China’s Quest for

Energy Security Abroad1

Linda Jakobson

Introduction

China’s energy security is of interest to the European Union for three primereasons. First, its growing demand for oil has an immediate as well as a long-term economic impact on the rest of the world. China is already a major actorin world energy markets and its oil imports have grown markedly in the pastdecade. As a consequence, there have been disquieting estimates of how muchoil China (and India) will need to import 20 years from now. In the mid 1990sChina was self-sufcient 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 ve mbd).2

If China’s rapideconomic growth continues it will need to import 60 to 80 percent of its totaldomestic oil consumption by 2020, anywhere from six to 11 million barrels perday (Downs 2006: 9-10). Its increasing need for foreign oil has also been blamedfor uctuations 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 ofenergy conservation, energy efciency, and energy supply diversication are

questions in which the rest of the world also has a stake in. China will not choketo death alone. Despite the Chinese government’s efforts to improve energyefciency 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 furtheraway. Furthermore, attempts to curb global warming will be fruitless if China doesnot 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 Unionconcerning the type of behavior that can be expected from China as it expands its

1 The author is grateful to Gao Shan and Alex Luta for their research assistance duringthe writing of this chapter.

2 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 ofChina’s increasing economic, political, and in some cases military inuence in

other parts of Asia, Africa, Latin America and the Middle East will undermineEuropean interests in these areas. How will Beijing’s energy-related commercialinterests abroad affect its foreign-policy thinking and actions in the internationalarena?

In sum, China’s energy security matters to the EU because of its effect on theglobal oil market, the global environment, and international relations. This chapterfocuses on the third facet mentioned above, namely the presence and activitiesof an increasing number of Chinese actors in energy-rich countries, described by some analysts as China’s “energy diplomacy.” Although this popular term ismisleading because energy security is only one variable in the evolution of China’sstrategic foreign-policy thinking, China’s global reach does have implications for

its strategic partnership with the European Union. Consultation and coordinationon 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 andCentral Asia are also of signicance 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 towardBeijing’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 activitiesabroad. Which actors in China are making the decisions with regard to securingenergy overseas? What is the degree of coordination between these actors? Afteran examination of these issues, two further questions are posed. What effect canenergy security be expected to have on Chinese ofcials’ evolving perceptions of

the usefulness of Beijing’s non-intervention policy in the light of the other strategicnational interests that China pursues? To what degree do China’s policies to secureenergy abroad run counter to the strategic interests of the European Union?

The chapter ends with a discussion of the sub-strategies that could enhancecooperation between the European Union and China in energy-rich countries inwhich their interests converge and, potentially, collide. In addition to the ofcial

EU–China energy dialogue that has taken place since 1994 and the recently agreed-upon ofcial 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 tosecure the country’s growing need for imported oil and gas by diversifying their



Scrutinizing China’s Quest for Energy Security Abroad 157

overseas energy supplies. The three major NOCs (CNPC, Sinopec and CNOOC)3 have signed long-term contracts for the supply of crude oil and liqueed 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 inoverseas oil sites (so-called physical control over oil supplies). In addition, Chinesecompanies providing oil services ranging from exploration to rig management anddrilling equipment have expanded their overseas operations, and are competitivein the international market.

Chinese government ofcials have supported the overseas activities of the

NOCs by cultivating strong bilateral ties with the governments of oil- and gas-richcountries, granting trade advantages, promising investments, and providing aidand 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 bygovernment ofcials who direct the overseas activities of NOCs. This is not the

case, especially with regard to coordination, and further examination reveals amore nuanced and multi-faceted picture. Secondly, the term “energy diplomacy” portrays Chinese diplomacy as solely geared to the country’s energy needs. China’sforeign policy is in a state of ux. 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 itsincreasing economic, political and military weight on a global scale. The dramaticincrease in activity by Chinese government ofcials 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 acomprehensive policy plan, rst devised and then enacted by government ofcials,

there is conicting evidence with regard to which party is in the driver’s seat.

On the one hand, a symbiotic relationship undeniably exists between the Chinesegovernment 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 forlarge overseas investments. On the other hand, the government is dependent onthe NOCs. The three major ones are powerful and wealthy entities that employhundreds of thousands of people and provide the government with substantialtax revenue. In 2006 their net prots accounted for about one-third of the total

net prots of state companies (Qi 2007). In order to succeed in the internationalmarket they have had to increasingly operate as market-driven companies, seeking prots and maximizing efciency. Their executives maintain good ties with high-

3 China National Petroleum Corporation (CNPC), China Petroleum & ChemicalCorporation (Sinopec), China National Offshore Oil Corporation (CNOOC).




ranking government ofcials in order to operate effectively, just as oil-company

executives do the world over.4 Business delegations that accompany politicalleaders abroad with the aim of maximizing the goodwill gained from an ofcial

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 makefor commercial reasons. The wording of most government edicts in China is solacking in specicity that it is usually possible to nd 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 developtheir international competitiveness (Wang 2007). It provides a useful umbrellaunder 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 formultiple interpretations and makes it possible for initiative-taking individuals andenterprises to follow numerous different routes. The objective of an NOC topexecutive is to expand his business empire. When government assistance is deemed benecial, it is sought; when government help is not needed, the NOC operates

alone. For example, Chinese oil companies have not always secured approval forlarge overseas investments before committing to them, and the investment decisionhas only later been reported to the State Council (Downs 2006: 24).

China’s energy bureaucracy is weak and fragmented. There are severalgovernment agencies overseeing energy policies that are not subordinate to eachother in terms of political power but have overlapping areas of authority. This hasled to intense rivalry and ineffective management. There is no single governmententity with authority over all of the stakeholders. Consequently, effective policyformulation is not forthcoming, nor is there a comprehensive national plan foracquiring energy assets abroad. Despite the Chinese government’s restructuring inMarch 2008 the country’s “fractured energy bureaucracy [impedes] formulation ofa long-term national energy strategy accepted by all stakeholders (Downs 2006:24).”

Moreover, if China did have an “energy diplomacy” it would require not onlysubmission by the NOCs to government policy but also close cooperation betweenthe NOCs in the name of national interest. The three major NOCs basically regardeach other as rivals. They occasionally make joint bids when it is in their interest,

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




but they have also bid against each other despite the admonitions of Chineseofcials to avoid competition.5 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’smany national interests to gain a more comprehensive understanding of its questfor energy security abroad and the implications for strategic foreign-policythinking 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 fromconstraining its rise while at the same time avoiding conict with Washington (or

any major power) so that it is also able to maintain its stability and concentrate onits modernization drive. Economic growth and stability constitute the foundationupon which the legitimacy of the Chinese Communist Party is based. Furthermore,as the economic, political, and military power of China grows, an increasinglysignicant fourth national interest is to ensure that its rise to international pre-

eminence evokes respect rather than hostility. This goal is reected in Hu Jintao’s

call in 2005 for a “harmonious world”, and his assurances that China will continueon its path of “peaceful development” by upholding “multilateralism, mutually benecial 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’sdomestic policy doctrine, which portrays China as striving toward a harmonioussociety (Zheng and Tok 2007).

Taiwan’s unresolved future political status is still of overriding importancein the formulation of Chinese foreign policy. Consequently, the vast Africancontinent – not only the oil-rich African nations – that wields 49 votes in favour ofBeijing in the United Nations and other multinational organizations is important(Xinhua 2008a).6 Another major national objective of the Beijing leadership

5 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 ZengQinghong was a member of the Standing Committee of the CPC Central CommitteePolitical Bureau, and Vice-President of the PRC. The journal Xuexi shibao is published bythe Chinese Communist Party School.

6 There are 53 African countries in the United Nations (see <http://www.un.org/Pubs/CyberSchoolBus/infonation/e_i_count.htm>, accessed 19 May 2008). On 27 December2007 Malawi established diplomatic ties with the PRC, reducing to four the number ofAfrican countries maintaining formal diplomatic relations with Taiwan: Burkina Faso,Gambia, Sao Tome and Principe, and Swaziland. In addition, the Taiwan governmentoperates four quasi-ofcial liaison missions in Africa: one in Nigeria (Abuja) and three in

South Africa (Pretoria, Cape Town, and Johannesburg).




is to manage its complex relationship with Washington. China seeks to avoidconfrontation with the United States, but is simultaneously intent on deterringWashington from containing China and impeding its modernization efforts. Theconverging 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 atthe same time Americans, Europeans, and Chinese would stand to benet from

cooperation. The US, the EU and China share a range of common interests inAfrica, from combating infectious diseases (HIV/AIDS, malaria) to counteringterrorism and preventing instability and humanitarian crises (Gill, Huang andMorrison 2007: 14-16).

Especially in the quest for oil, the United States and China – the world’stwo largest consumers – are becoming erce competitors (Jakobson 2008b: 16-

17). Securing energy is obviously a key national interest in both Washingtonand Beijing. Imported oil currently accounts for about two-thirds of US oilconsumption, and about half of Chinese consumption. Although China’sreliance on coal will remain high (currently around 70 percent of primary energyconsumption), the International Energy Agency expects oil imports to triple by2030 (International Energy Agency 2007a: 7). Africa has been described as the“frontier of competition” between China and the United States in the oil sector inthat 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).7 Of China’s oil imports 34 percent came from Africa in 2007 (42 percent from theMiddle East).8 Chinese academics often describe United States policies in Africaas aimed toward containing China’s growth (He 2007: 27; Zhang Xiangdong2007: 53). Some Chinese analysts have suggested that China should be preparedfor a potential conict 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 globaloil market as undesirable because of their perception that Western countries, andthe United States in particular, are able to manipulate markets (Jiang Wenran2006). Moreover, the voices of the Chinese policy makers who see Westernersas wanting to impede China’s growth were strengthened by the unsuccessfulattempts by Chinese NOCs to join an international consortium led by BritishGas to buy a stake in the Kashgan oil elds and to acquire shares in Unocal

7 Calculated from data from the Energy Information Administration 2008.8 Calculated from data from the General Administration of the Customs of China,

details of data received from Reuters, Beijing ofce (2008). The data contained in this news

article was incomplete; the author is grateful to the Reuters Beijing ofce staff for providing

the full list of countries that export oil to China.




(Jakobson and Zha 2006: 67).9 Rhetoric about the need to contain China and the“China threat” in statements by US Congressmen and other Western politicianshas been recurrent since the mid 2000s in Chinese discussions about energysecurity, especially since the Unocol bid (Zhang Shirong 2007: 36; Zhang andGuan 2007: 28; Zha Daojiong 2006: 47).

Given the scepticism concerning the existence of a level playing eld in

the global oil business the Beijing government is expected to continue to backChinese NOCs in their acquisition of stakes in overseas oil elds (Downs 2006:

35). However, there is a growing realization among mid-level ministry ofcials

in Beijing that this will not substantially enhance China’s energy security.10 Theoriginal notion of the importance to national security of overseas oil equity has proven over-optimistic. As Trevor Houser notes, Chinese NOCs would muchrather 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 governmenttook the rst 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 wouldhave 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 ofcials in Beijing acknowledge that China’s energysecurity would be better served if the country became more active in strengtheningcoordinated international efforts to keep the world oil market stable, as well asstringently enforcing national measures to drastically increase energy efciency

and the use of alternative sources.11 Saving more energy and further relying onnon-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, inother 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 economicgrowth and stability as tax-revenue providers and employers, they will continue toexpand their overseas oil-equity portfolio.12 At the same time, China will continueto diversify its sources of oil imports, build pipelines, pursue a higher degree ofenergy efciency and reliance on alternative fuels, and participate in international

9 The Kashgan oil eld bid took place in 2003; the Unocal bid in 2005.

10 The author’s discussions with ofcials working for the Ministry of Finance, theMinistry 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 (“PetroChina eyes foreign push,” Financial Times, 20 March 2008).




efforts to keep the world oil market stable (see, for example, Zhang, Tao and Liu2007: 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 sectionis on the effect energy security could have on the evolution of China’s strategicforeign policy, especially on Beijing’s principle of non-interference in anothercountry’s domestic affairs. This long-standing pillar of Chinese foreign policy iswhat ofcials 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 governmentsand international human rights because the Sudanese government is strengthened both by oil revenues from Chinese NOCs and by the weapons it purchases fromChina. Beijing also uses the principle of non-interference in the domestic affairs ofanother country to defend its stance that it does not, as an aid donor, demand even aminimum standard of labor protection or anti-corruption practices. It is as if it doesnot acknowledge that an economy of its size inevitably interferes in the affairs ofanother country merely on the basis of its economic engagement.

Since 2006 Chinese researchers have laid the groundwork for the acceptanceof a more “exible” 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 haveoften 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 othercountries has become more and more related to our rights and interests in thosecountries, including the security of our overseas organizations and civilians.Therefore, China will contribute to the construction of a harmonious societyin other countries through diversied means of cooperation, consultation, aid,

communication and so on.

In an article about China’s energy diplomacy, published in 2008 in an inuential

Chinese-language journal supervised by the Central Committee of the Chinese

Communist Party, Li Geqin advocates adjustment of the denition of what could be considered the domestic affairs of another country. He points out that domesticissues sometimes spill over borders, which has implications for global securityand stability. Political, economic and governance crises often threaten China’senergy security in Africa, Central Asia and other regions. Li suggests that Chinashould incorporate these threats into its international crisis-management system,




so that crisis management would become an important component of its energydiplomacy (Li 2008: 56-57).

Some researchers have directly alluded to humanitarian crises in analyses ofChina’s policies of non-intervention. For example, in an article about the Darfurcrisis published in “Encyclopaedic Knowledge,” a Chinese-language journal, ShiXianze (2007: 35) writes:

China has always emphasized non-intervention in another country’s domesticaffairs, and has been opposed to any form of intervention, based on the principlethat ‘sovereign rights are superior to human rights.’ However, as its views aregradually converging with the international community’s mainstream values,China recognizes the existence of a ‘humanitarian crisis,’ and believes thatintervention 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’saccepting a role that entails interfering in the affairs of other countries, from itsactive participation in recent years in UN peace-keeping operations to Beijing’shosting of the six-party talks on North Korea’s nuclear program. When PresidentHu Jintao met Sudanese President Omar Hassan Ahmed al-Bashir in February2007 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 Liu2007). Chinese diplomats have been praised by several Western leaders for havingtaken a more active role since early 2007 in trying to persuade the Sudanesegovernment 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 moredamaging than decisiveness” (Ahlbrandt and Small 2008: 46).

As it strives to protect the overseas investments and commercial interests ofits NOCs and many other large state-owned companies the Chinese governmentwill nd it increasingly difcult to adhere to its long-standing principle of non-

interference in another country’s domestic affairs. China’s fast-growing economywill continue to need more energy and other resources, and more markets, andconsequently Beijing will have to engage more deeply with supplier and customercountries, especially fragile states. The slaying and kidnapping of Chinese oil

workers in Ethiopia and Nigeria in 2007, and in Sudan in 2008, were all remindersthat China will have to deal with a growing number of non-traditional threats incountries in which it has commercial interests.

Commenting on the principle of non-interference at the 2007 China–EURoundtable in Beijing, a Chinese participant observed that “in Chinese foreign policy practice, when there is a conict between national interest and principle,




national interest will prevail.”13 A senior foreign-policy specialist who consultsthe country’s leading policy makers went a step further in January 2008, statingthat China is moving toward a policy of “constructive interference.”14 Analyses bya 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 Africaand 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’srapidly expanding role in Africa’s energy sector is of particular signicance to

countries such as France and Germany, where oil imports from Africa in 2006accounted for 1716 and 18 percent 17 of all oil imports, respectively. Oil and gaswill continue to meet over half of the EU’s energy needs. Import dependencyis high and is expected to increase from 82 to 93 percent for oil, and from 57 to84 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 werefrom Russia (Öljy ja kaasualan keskusliitto 2007: 5), and almost all of Finland’soverall oil consumption relies on imports (Forfás 2006: 19). A strategic decisionin Russia to sell more oil and gas to China and other countries in Asia wouldaffect Finnish energy security in the long-term because of the uncertaintysurrounding Russia’s oil and gas reserves, and above all the condition and scopeof the infrastructure needed to extract them. In reality, Russia is not expected tosubstantially diversify its exports to Asia because of the higher price it chargesEuropeans compared to Asian countries.

Iran and Saudi Arabia are China’s two most important energy suppliers in theMiddle 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 ChinaInstitute 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, Industryand Employment].

17 Compiled from monthly gures obtained from Amtliche Mineralöldaten

(Bundesamt für Wirtschaft und Ausfuhrkontrolle 2006).




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 elds as well. Iran is China’s

biggest overseas market for large products and labor (Aarts and van Rijsingen2007: 32-33). The extent of current Chinese–Iranian cooperation in militaryapplications and nuclear technology is not precisely known, but between 1992 and2007 China had seven separate licensing agreements providing Iran with variousweapons, such as infantry ghting 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 Chinacan be expected to increasingly strive to protect its substantial overseas oil andgas investments by intervening in other countries’ domestic affairs. In Africa in

particular, where the EU views its position as “privileged,” China’s more activeand multifaceted role may challenge the European Union’s interests (EuropeanCommission 2007b: 3). About one-third of Chinese oil imports currently comefrom 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 from5.7 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). Thetrend is indicative, even though the value of China’s trade with Africa in 2008 wasless than half the 2007 value of EU–Africa trade (230 million USD in 2007).18 Oilis the critical factor. Four of the ve African countries from which China imports

the most (Angola, Sudan, Congo, and Equatorial Guinea) sell their oil almostexclusively to China, and these are also the African nations that have shown themost robust economic growth during this period (Sandrey 2006: 8).19 The three topcountries (Sudan, Algeria, Nigeria) in which China invested in 2004-2006 wereall oil producers. Each one recorded an average annual investment inow of over

50 million USD while China invested less than ve 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 ve high-

prole 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. Since1990 the People’s Republic of China (PRC) has participated in nine peace-keepingoperations in Africa, and is currently (2009) the second largest contributor among

the United Nations Security Council members to UN peace-keeping operationsworldwide (Zhao 2007: 67; Gill and Huang 2009).

18 Calculated from monthly EUROSTAT data from January to December 2007 onEU imports and exports per partner country (52 in total).

19 South Africa is the nation among the top ve that is not a major oil exporter.




While China benets from its relationship with Africa on account of the

economic opportunities and diplomatic support on offer, it is simultaneouslyrunning the risk of antagonizing the European Union because of its closeties with dictators and its disregard for transparency or accountability when providing aid. Television footage of China’s president warmly welcomingZimbabwe’s Richard Mugabe, and numerous public statements by Chineseofcials that low-interest loans and development aid are granted to Africa with

“no strings attached” reinforce the image of a Beijing government with littleregard for human rights among Europeans as well as among segments of theAfrican population. Outsiders’ views of China are colored by accounts of loans

being granted by the China Export–Import Bank or the China Development Bankto Chinese companies for projects in Africa on the basis of recommendationsgiven by provincial government ofcials who have received bribes from the

companies.20 The European Commission targeted the need for transparency inChina’s aid policies in Africa in the Commission’s “Communication” on Chinain late 2006 (European Commission 2006b).

Since 2007 China’s international credibility has been a recurring theme ininternal discussions involving ofcials, 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 internationalcommunity through enhancing the transparency of its governmental and

commercial activities” (Zha 2005: 10). Ministry ofcials have admitted in researchinterviews that Chinese oil companies’ operations in Sudan in particular, but alsothe nonchalant attitudes of some Chinese companies toward working conditionsand workers’ safety more generally in Africa, have damaged China’s internationalstanding.22 Chinese academics have spoken and written about this problemopenly: Ge Zhiguo of Hebei Normal University refers to the “poor behaviour” ofChinese companies in Africa and “their lack of social responsibility,” which havenot only caused obstacles to the “Go out” strategies of the enterprises, but “havealso hindered the great efforts made by the Chinese government to maintain goodChina–Africa relations” (Ge 2007: 33-35). Zhu Feng of Beijing University wasquoted 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 spokeabout decisions regarding Chinese low-interest loans for projects in Africa (the author’sdiscussions with ofcials 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 ofcials at the Ministry of Foreign

Affairs of the PRC and Chinese researchers at universities and research institutes in Beijingin October and November 2007.

22 The author’s off-the-record research interviews during 2007 and 2008, see note4.




However, most Chinese ofcials 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 Chinaas an exploiter of Africa, or worse yet as a modern-day colonizer, pointingout that the Chinese, regardless of whether they are government ofcials 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 wasspreading prosperity and delivering concrete benets in Africa, and that roads

and radios were more urgent needs than human rights and freedom (Reuters2007).

Chinese researchers and ofcials also point out that Africa remains poor and

undeveloped despite decades of European aid, indicating the failure of Western policies to genuinely benet 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 inthe rst decade of the twenty-rst century: its assistance consists of concessional

loans (with little or no interest) granted by the China Export–Import Bank andthe 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 observersstate that the Chinese approach leads to tangible results that benet the African

populace. The Chinese leadership stresses the importance of equality in itsrelationship 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 othercountries has also been questioned by non-Chinese academics, who note that themore important China has become as an economic power the more the issue ofhuman-rights abuses within China has taken a back seat in relations with Westerncountries. Ian Taylor writes:

23 The OECD denes Ofcial Development Assistance (ODA) as follows: Flows

of ofcial nancing administered with the promotion of the economic development and

welfare of developing countries as the main objective, and which are concessional incharacter with a grant element of at least 25 percent. Lending by export credit agencies –with the pure purpose of export promotion – is excluded (OECD <http://stats.oecd.org/glossary/search.asp>).

24 The author’s research interview with He Wenping, Director of the African StudiesSection at the Institute of West Asian and African Studies, Chinese Academy of SocialSciences, on 26 February 2008 in Beijing.




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

Moreblessings Chidaushe of the African Forum and Network of Debt andDevelopment remarks that only time will tell whether China is indeed a better partner than the West, and whether Western concerns are justied (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 contrastwith the exploitation and heavy-handed top-down relationship which has typied

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, withregard to Saudi Arabia, where ARAMCO and Sinopec are jointly investing in the petro-chemical industry, Professor Tim Niblock, a Middle East specialist at ExeterUniversity, sees a clear difference in the nature of cooperation between the Saudisand 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 theAmericans’ constant reminder that the United States wants to decrease its relianceon Saudi oil.25

In future years China will undoubtedly continue to stress this gentle approach,emphasizing sincerity and mutually benecial cooperation in its relations with

other countries. Furthermore, although Beijing states that it is not trying to promoteits development model and defends the right of each nation to choose its owndevelopment path, it can be expected to subtly use any possible progress made bydeveloping countries, especially on the African continent, to defend its own pursuitof economic development without meaningful political reform. If African nationsare able to follow a similar development path as China and would succeed in raisingsignicant portions of the populace out of poverty without expanding the political

decision-making process, it would place China in an advantageous position in theinternational governance debate on authoritarianism versus democracy.

African government ofcials have been conspicuously vocal in their praise

of China’s approach to investment in Africa and its policy of aid with “no stringsattached” ( Xinhua News 2006a, 2006b, 2007a, 2007b). Given the fact that in 2006almost half of the EU’s collective Overseas Development Assistance (48 billioneuro) was intended for Africa, it is understandable that European policy makersare wary of the degree of goodwill among African governments that the vastly

more modest investments and aid contributed by the Chinese government andChinese companies have generated (the value of Chinese investments and aid toAfrica 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 attendedthe lecture).




The European Union is well aware of the challenges that China’s increasing presence in Africa poses to European interests. The 2007 European CommissionCommuniqué on EU–Africa relations acknowledges China’s role as Africa’s new partner and outlines the objectives of the new political partnership between theEU and Africa. It calls, among other things, for a willingness to “reinforce, andin some areas reinvent, the current (EU–Africa) relationship – institutionally, politically and culturally” (European Commission 2007b: 3).

The European Commission’s “Initiative on trilateral cooperation” betweenthe EU, China and Africa, made public in October 2008, is testimony that Africais moving toward center-stage in the EU–China strategic partnership. Both theEU and China have a strong shared interest in promoting stable and sustainabledevelopment in Africa. In the 2008 EU Initiative the Commission proposes thatAfrica, China, and the EU work together in a exible and pragmatic way to identify

and address a specic number of areas that are suitable for trilateral cooperation(European Commission 2008).

There are numerous ofcial dialogues between the EU and China in which the

need for more policy coordination on the practical level and mutually benecial

initiatives with regard to relations with African countries can – and presumablywill – be encouraged (China–EU Summit 2007; European Commission 2006b).However, there is an urgent need to expand and substantially increase forumsfor Track II dialogues, informal meetings, and concrete joint projects involving

Europeans, Africans, and Chinese.Chinese ofcials 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 conicting interests of the

numerous Chinese actors in Africa.26 This has been discussed in the presence offoreigners in research interviews and seminars in the PRC. Foreigners are oftenreminded that the Chinese government is experiencing a steep learning curve inAfrica because activities on the ground have progressed with such speed that it isstruggling to keep up with developments. This has applied to many phenomenain China during the past 20 years; the speed with which change has taken placesurpasses 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 theEU and China concerning the different approaches of European governmentsand the Beijing government toward investing in and granting aid to Africa willnot disappear. However, more knowledge and a more sophisticated level ofunderstanding within the EU regarding China’s multifaceted activities in Africa

could help to somewhat defuse tensions and minimize misunderstandings. Inspecic areas, such as the environment, cooperation between China and the EU

in Africa could lead to the pursuance of similar goals. Chinese ofcials are likely

26 The author’s research interviews during 2007 and 2008, see note 4.




to welcome the opportunity to benet from European expertise and thus to avoid

funding projects that are environmentally unsustainable.

Conclusion

China’s energy bureaucracy is fragmented. No single overarching ministry orcommission dictates energy policy. As a result, energy companies – the nationaloil companies in particular – are powerful entities. The chief executives of the NOCs owe their positions to the Organizational Department of the ChineseCommunist Party Central Committee, and the Party relies on the oil companies tocontribute to stability and economic growth as providers of jobs and tax revenue.Because NOCs want to expand their prots and become competitive world-class

oil conglomerates, they will continue to invest in oil assets globally even thoughthese investments do not markedly enhance China’s national energy security. Theyearn more money selling oil pumped from their overseas investments on the worldmarket than from Chinese consumers.

China will continue to make efforts to improve energy efciency and to expand

its reliance on alternative energy. These are both areas in which China’s and the EU’sinterests converge, and more extensive collaboration is possible. However, China’sdependency on imported oil will grow as the standard of living in China rises, and it

will be increasingly difcult for it to diversify its overseas oil suppliers: in 2007 overthree-fourths of its imported oil came from just two regions, Africa (34 percent) andthe Middle East (42 percent).27 China’s energy-related investments in Iran and acrossAfrica in particular pose challenges for the European Union. As China’s foreign- policy thinking evolves to adapt to the changing needs of Chinese society and thechanging 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 inuence the domestic politics of African countries. For this

reason, trilateral dialogues and joint aid projects involving the EU, the PRC andAfrican nations should be encouraged and supported.

On the other hand, as pointed out by the European Commission in an annex toits Green Paper (European Commission 2006a), “It would be a mistake to pay toomuch attention to the geographical or national origin of today’s oil imports.” Thestability of the global market is still crucial to the energy security of all importingcountries, China and the EU included. As the Commission paper notes, major oilimporters depend on a global oil market “where available resources are beingdistributed worldwide by a number of more or less globally operating oil companies

which try to maximise their prots through a global distribution of crude oil and products in a way that minimises cost of transportation and maximises the valueof crude oil against specic renery capacities and market demands for products.”

27 The author’s research interviews during 2007 and 2008, see note 4.




The Commission does not predict a change in this state of affairs over the next 20years (European Commission 2006a: 19).

It is in the interests of oil-importing countries to attempt to curb the erce

competition that would decrease the value of oil as a geo-strategic commodity.The current situation in which all the major importing countries pursue theirrespective overseas oil-supply-security strategies by trying to outdo each other isunsustainable 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 andwithin 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 purposeof 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 UnionRajendra 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-rstcentury, EU indifference seemed to change somewhat as it began to increase itsengagement in India and to hold annual summits. A consistently growing economyof a billion-plus people, the acquisition of nuclear weapons, and its steadilyimproving relations with the US led to the recognition of India’s growing statureand inuence regionally and globally. Within the European Commission, External

Affairs Commissioner Chris Patten was behind the decision to give greater priorityto India, which was then no longer “hyphenated” with Pakistan, but with China.

Since 9/11 the Union’s engagement with South Asia has grown signicantly.Interest was further heightened with the Goldman Sachs report (2003) predictionthat 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 USeconomies because of its market size and economic dynamism.1

The Indian elite’s perceptions of the European Union continue to be essentiallyconditioned by the Anglo-Saxon media, which impedes a more nuancedunderstanding of the processes and dynamics of European integration as well asthe intricacies and roles of EU institutions. Relations with India are driven by “verysmall circles” in Brussels. In the rst 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 memberstates. The second circle includes member states with interests in certain sectors, but which do not quite t 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 isne with them.

1 The report also predicted that India will witness annual growth exceeding 5 percentin 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 rst 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 prole as a norms entrepreneur. Section three

assesses the nature of the enhanced political dialogue and examines the potentialfor security cooperation. The discussion turns in the fourth section to Indianapproaches toward climate change and energy security, and in the fth 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 amodel for South Asia, and the chapter ends with some policy recommendations.

Building a Strategic Partnership

The term “strategic partnership” entered the vocabulary of international politicsin the late 1990s. Some tend to refer to it as an “honorary degree” conferred bythe Union on certain countries, whereas others consider a political declaration ofintent. There is no “ofcial” denition of the term, which remains an elusive and

elastic concept.2

The India–EU strategic partnership was rst mentioned in the inaugural India– EU summit (June 2000), which resolved that the two sides would build “a newstrategic partnership” in the twenty-rst century founded on shared values and

aspirations. The Union’s rst-ever Security Strategy (December 2003) advocatedcloser cooperation with half a dozen “key international players,” including India inaddressing the challenges and objectives identied in it (Council of the European

Union 2003a: 21).The strategic partnership was endorsed at the fth India–EU summit (2004).

The following summit adopted a new Political Declaration and a Joint Action Plandivided into four sections (politics, trade and investment, economic policy, andcultural and academic matters) covering issues of mutual concern. Apart from anumber of sectoral initiatives, a High Level Trade Group was launched to studyand explore ways and means of intensifying and extending the bilateral trade andinvestment relationship. It was decided to launch a security dialogue at the seniorofcial level.

All of the Union’s strategic partnerships have a common template in terms ofannual 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. Intime the partnerships were expected to evolve their own unique internal dynamicsand momentum.

2 CFSP High Representative Javier Solana candidly admitted that there is “nodenition” of a strategic partnership (China Youth Daily 2004).



Engaging the European Superpower 175

India perceives its strategic partnership with the EU as a series of “strategic”dialogues wherein one can discuss just about anything, including bilateral, regionaland global issues. Brussels, in turn, denes “political cooperation” with India as “a

constructive, open and equal dialogue based on common values.” However, manyobservers in India consider it to be a misnomer to call the India–EU partnershipstrategic because there is no security dimension, meaning that only the partnershipwith the US qualies.3 Nevertheless the so-called strategic partnership with theUnion is one amongst more than a dozen similar partnerships it has with Russia,France, Germany, the United Kingdom, Brazil, Japan,4 South Africa, and evenChina, Iran, and Saudi Arabia!

Global Governance

In this era of globalization and an increasingly integrated world economy,international institutions are playing a signicant 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 thatglobal governance must be made more democratic, representative, and legitimate by extending the participation of developing countries. The increasing share of thedeveloping and emerging economies in terms of world output and trade must be

reected in the redistribution of power in international nancial institutions suchas the International Monetary Fund (IMF) and the World Bank in order to allowfor genuine dialogue on the governance of the global economy.5 “Treating theworld as a single global constituency,” Joseph Nye (2001: 4) argued, “in whichthe majority ruled would mean that the more than two billion Chinese and Indianscould usually get their way.” Europeans see a patchwork of existing institutionsof varying scope and often overlapping in terms of competences, principles,

3 A “strategic relationship,” according to Lalit Mansingh, former Foreign Secretaryand Indian Ambassador to the United States, must have ve 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) mutualconcern 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 partnertoday, with Russia coming a distant second (Mansingh n.d.).

4 In 2005 India and Japan agreed on a “global partnership.” A year later this was re-named a “strategic and global partnership.”

5 The US has a 17 percent voting share (a controlling share in that 85 percent approvalis necessary for action) and the EU has a major say in the appointment of 10 of the 24members of the board. Indian Finance Minister P. Chidambaram, said at a press conferencein Sydney that the IMF’s representation “must be revisited, and countries or groups ofcountries which are obviously over represented must yield part of their share in favor ofcountries which are clearly under represented.” According to Meraiah Foley, “FM says hewill push IMF reform at G20 meeting” ( Hindustan Times, 17 November 2006).




and governance structures, most of which have limited compliance or weakenforcement mechanisms that they would like to strengthen. Although Europeacknowledges the need to restructure international institutions and possibly broaden the membership and power base at the World Bank and the IMF, “theassumption is that the rising powers will simply be accommodated within theexisting system – a small adjustment here, a tweak there and everything will bene 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 failuresof its past leadership have robbed it of its rightful place at the high table in theinternational system” (Mohan 2007a: 46). The emerging powers will be able toshape and inuence global agendas and decisions to a greater extent than in the

past, but this will happen in an increasingly contested environment since theseemerging powers seek to change the prevalent order to facilitate their preferredoutcomes. India realizes that a radical restructuring of international institutions isnot possible, and that change will only come about incrementally.6

Multilateralism

The European Union has been placing considerable emphasis on “effective

multilateralism.” Multilateralism is ingrained in the DNA of Europe’s politicalelite (Grant 2008: 4). India generally endorses it, but does not wish to rely onmultilateral diplomacy pivoted on the United Nations, which it feels continuesto be an instrument of nation states. It seeks a seat in the United Nations SecurityCouncil, but its emphasis is on the classic balance of power. India is opposed tothe aspirations European liberals have nurtured since the end of the Cold War totransform the United Nations into a supranational organization or a sort of “worldgovernment” that could interfere in domestic affairs to either uphold collectiveinterests or deal with the new challenges to peace and security. According to oneobserver, India is “for the UN everywhere, except in its own neighbourhood”(Mohan 2006: 260).

6 It is not easy to radically re-order existing international economic and securityinstitutions. 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 notsurprisingly, in many institutions these procedures tend to be highly conservative. They aredesigned 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 organizationalinterests and mission, will also develop decision rules and norms that prevent erosion ordilution of their power and mission” (Johnston 2003b: 23).




Ever since the 1990s India has been steadily expanding its linkages andinteraction with multilateral institutions and regional groupings in Asia.7 It has been energetically and proactively looking at any and every meaningful emergingtriangle and growth quadrangle. It has cooperated in the establishment of newregional organizations.8 It has contributed to the establishment of alternativestructures of emerging powers such as India, Brazil and South Africa. It hasrecently started participating in OECD trade ministers’ meetings and is willingto join OECD panels as an observer, participant or member depending on therelevance and need. India’s delight at joining the world’s elite at the G8 seemsto have worn off. It considers it inappropriate that the G8 meets for two days andthe G8 + Outreach 5 (China, India, Mexico, South Africa, and Brazil) for justtwo hours. “We have come here [at the Heiligendamm summit],” Prime MinisterManmohan Singh remarked, “not as petitioners but as partners in an equitable, just

and fair management of the global comity of nations.”9 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 responsibilitieswithout reaping any perceptible and tangible benets in return. EU leaders are

now conscious that both “the focus and the locus of debate over the future ofmultilateralism are shifting away from them” (Gowan 2008: 50). “Effectivemultilateralism” will continue to be elusive because it cannot be reduced to “legalregulation 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 – whereit can serve our interests, we should pursue it and build that way. But in a lot ofimportant areas it won’t serve our interests best, and we have to craft a differentkind of policy” (Khilnani 2006: 543).

7 As part of its “Look East” policy, it has over the years become more integrated withthe ASEAN and has participated in the East Asian Summit since its inception in 2005. Italso became an Observer at the Shanghai Cooperation Organization (SCO) in the sameyear. New Delhi joined the ASEM in 2006 – a decade after its establishment. However, itsefforts to gain membership of the Asia–Pacic Economic Community (APEC) have not

borne fruit so far since it has not lifted its moratorium on new members.8 India has set up the Indian Ocean Rim Association for Regional Cooperation

(IORARC), and established BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka andThailand – Economic Cooperation) in 1997 (now rechristened the Bay of Bengal Initiative

for Multisectoral Technical and Economic Cooperation) and the Mekong-Ganga Cooperationin 2000.9 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 ourconcern before the G8 meeting so that our point of view can be reected in the thought

processes of the G8” (Madhavan 2007).




Multilateral Trade Negotiations

The traditional conict of interests between the rich North and the poor South has

acquired new forms in the twenty-rst century. The WTO has ceased to be a body

in which the US and the EU have almost complete control over the scope, contentand direction of multilateral trade negotiations. Ever since the Cancun Ministerialin 2003 the developed countries have been consistently challenged in multilateraltrade negotiations by emerging powers such as China, India, Brazil and SouthAfrica, which have become increasingly proactive in the debates.

Senior EU ofcials have generally expressed a preference for and approval

of China’s low prole and its general caution about assuming a leadership role

inside the WTO in sharp contrast to the higher prole 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 andan Indian negotiator to stop talking” (Dutt 2007). Some European thinktankerseven wondered why China had “bizarrely allowed Brazil and India to speak forthe developing world” in the on-going Doha Round (Grant and Valasek 2007:30). However, the world witnessed a vocal and assertive China, which like Indiaasserted at the Geneva mini-ministerial in July 2008 that it had already made asmany concessions as it could on important issues such as special products andspecial safeguard measures affecting millions of its poor farmers. India realizes

that the rules of the WTO may be skewed against developing countries, but it isconvinced that having rules is better than not having them.

Postmodernist Europe and its Norms

Postmodernist Europe has increasingly become a norms entrepreneur and exporterwith a missionary zeal to propagate and reexively impose social, economic and

ideological norms that have been so successful on the global level. This is to bedone according to the principle of sovereignty-sharing in the management ofglobal public goods. The Europeans have come to believe that their transcendenceof power holds lessons for others, and they have “a civilizing mission” (Mohan2007a: 40) in the modern and pre-modern states irrespective of their stage ofdevelopment.

In the post-Cold War era India has shed its moralpolitik 10 in favor ofrealpolitik . It has emerged as a far more pragmatic power, more willing to serveits fundamental economic and trading interests and less engaged in sanctimoniousmoralizing. 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 thatis 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 onits shoulder, almost always moralistic, needlessly arrogant, argumentative, mistaking suchattitude as being an assertion of national pride” (Singh J. 2006: 276-277).




Enhanced Political Dialogue

Even though India was one of the rst countries to establish diplomatic relations

with the European Economic Community in 1962, it took another 34 years to takethe rst step toward ministerial-level political dialogue with the troika representingthe European Union. Since then, institutional mechanisms for bilateral discussionshave grown in both scope and number.11 In fact, India–EU bilateral consultationscurrently cover around 45 of the 100-odd items mentioned in the Joint ActionPlan.

On most issues of high importance to India, such as enlargement of the UNSecurity Council and civilian nuclear power, the EU either has no common policyor is unable to formulate one now or in the near future. Because of differences overwhether 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 givento Germany, it is rather unlikely that a common EU position will evolve any timesoon. Similarly, given the strong differences amongst the EU member states on theneed for civilian nuclear power, it will be difcult 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 boardand 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 Indianaspirations, and using the new global norms being created by the war againstterrorism to force an end to the Pakistani sponsorship and sustenance of cross- border 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 worldwas more or less irrelevant” (Ruet, Chowdhury and Vasudevan 2004: 103). Indianstakeholders wondered how EU espousal of human rights and its promotion ofdemocracy could be reconciled with political expediency and the hugging ofmilitary rulers responsible for ousting democratically-elected rulers simply because of the contributions Islamabad could make in the ght against terrorism

and because it was adjacent to Afghanistan, where a NATO-led operation wasunder way. The Union did not share Indian characterizations of Pakistan as eithera failed state or the epicenter of terrorism.

Although there was a concerted Western position in response to Indiancoercive 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 since2000, there are annual foreign ministers’ meetings and a dialogue between senior ofcials.

There is improved cooperation, engagement, exchange and interaction in multilateral forasuch as the United Nations. The Senior Ofcials Dialogue currently focuses on migration,

and there are working groups on consular affairs and terrorism, and more recently a securitydialogue (the rst meeting was held in May 2006).




(13 December 2001), EU statements were usually “extremely calibrated, as perdiplomatic craft” and seemed to be dened by the search for “a delicate balance

between the two competing neighbours” (Racine 2004: 150). For years Indianofcials had been urging the EU to engage in “a frank and honest dialogue” on

terrorism, but they realized that the effectiveness of cooperation in proscribingterrorism and its sources of nancing would continue to be hampered by “a

difference in perspective” (Saran 2005: 4). After repeated requests, the EUeventually declared three of the 26 terrorist outts on the Indian list to be terrorist

organizations in May 2002, and added another one in November 2005. However,there are major difculties in regularly updating the list since the organizations tend

to change their names quite often, and because EU member states are extremelyreluctant to get into a rather demanding, time-consuming, permanent process ofnegotiation. 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 itsown in tackling the problem of cross-border terrorism.

Growing realization that it might not always resolve regional crises in its difcult

neighbourhood on its own has led India to overcome its traditional opposition toexternal involvement in South Asian affairs. In recent years it has started taking thetrouble to explain its positions on South Asian issues to the EU. India coordinatedwith the Union (along with Britain and the US) in dealing with Maoist insurgencyand 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 (Mohan2005).

Limited Security Cooperation

That the India–EU security dialogue began as late as in May 2006 and that onlytwo 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-TerrorismCoordinator 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 ofsecurity cooperation between India and the EU are rather limited because bothIndia and Europe face different security contexts. Whereas India confrontstraditional threats that impinge on its territorial integrity, related to bordercontrol, insurgencies and separatist tendencies, the EU, which is more of a securecommunity, mainly confronts non-traditional threats such as organized crime and

terrorism. Because of the disparate priorities most EU member states do not sharethe 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 halfwayround the globe. Initial steps are more likely to be in “soft” areas of cooperationsuch as money laundering, technical cooperation, and information exchange. The




prospects of practical, ground-level, hard-core security cooperation are ratherlimited as this falls within the competence of member states, not the EU. Indiais providing valuable intelligence to NATO countries without any quid pro quosince it is keen that NATO forces remain militarily engaged as long as possibleto prevent the resurgence of the Taliban in Afghanistan. India and the EU areworking together on the common task of reconstructing Afghanistan, where NewDelhi has committed nearly one billion USD in development aid.

Climate Change

India, like China, argues that the West has a “historic responsibility” for cumulativeemission 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 ofcarbon emissions (Saran 2008). There is both a “stock” and “ow” problem of

global warming. When most people think of greenhouse-gas emissions they thinkof the ow 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 sincethe Industrial Revolution (Mahbubani 2008a: 187-188).

The International Energy Agency estimates that China and India will becomethe largest and the third largest emitters of carbon dioxide, respectively, by 2015

(the US being the second largest). The World Energy Outlook 2007 estimatedthat China and India would continue to account for about 45 percent of the totalincrease in energy demand. While this will push up per-capital emissions in bothcountries, it will still be lower than in the OECD countries. Before 2050 India willovertake Japan as the world’s third largest net importer of oil, after the US andChina.

India is willing to take voluntary measures to curb carbon emissions, but it isunwilling to accept any mandatory limits because only continuous growth offersthe real possibility of lifting millions out of poverty. Indian policy makers feel thatthe West is seeking to wriggle out of its commitment under the UN FrameworkConvention on Climate Change and the Kyoto Protocol by arguing that unlessand until “major emitters” such as China and India remain outside the reductionregime their own efforts will not be likely to make much of a difference to theglobal goal of reducing CO

2 emissions.

India stresses the need to maintain a distinction between the “lifestyle emissions”of the West (targeting afuent 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 Indiamay 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




emission levels are taken as the baseline (cited in Sethi 2007).12 The West seemsto be adopting a kind of “NPT Approach to Climate Change – that is, I get to keepwhat I have because I got here rst. 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 needsto be shared generously and easily without the stringent constraints of intellectual property rights. Unless this is done, climate change is likely to become the nextWTO-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 possiblecompetition for increasingly scarce resources. As Chinese (and to a lesser extentIndian) companies purchase overseas assets and lock up preferential access toraw materials and energy, the West perceives China as a competitor, not least because its commodity diplomacy and policy of non-interference in the internalaffairs of authoritarian regimes in resource-exporting countries such as Sudan,Uzbekistan, Myanmar and Zimbabwe makes it difcult 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 ofhuman rights and democracy and on which the West has imposed sanctions.

There is likely to be more competition and less cooperation between Chinaand India in the scramble for oil and gas. Neither is willing to allow the West toconstrain its autonomy in determining its developmental priorities and ensuringcontinued 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 Statesthan to the EU largely because the former will remain the dominant player in theforeseeable future and because how it builds that relationship will inuence its

relationships with other countries in the region and in the wider world. The US hasthe capacity to act in ways that are more benecial to India than the long European

declaratory statements.

12 According to Amit Mitra, Secretary-General of the Federation of Indian Chambersof Commerce and Industry, “If we are to control pollution on a war footing, we desperatelyneed the transfer of clean technology from the West … The developed nations, who pollute10 to 20 times more, must put their money where their mouth is” (Mitra 2007).




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 staunchdefender of the current order. Europe appears increasingly as “a conservativeforce: protectionist, in relation to markets but also much else, hoping to keep whatit has; it seems cornered by, on the one hand, a triumphant US, and on the otheran emerging Asia” (Khilnani 2006: 490-491). A quantum leap like the Indo–UScivilian nuclear cooperation agreement (July 2005) would have been inconceivablewith the EU, many of whose member states have remained wedded to the theologyof nuclear proliferation and have tended to view India as part of the problem ratherthan 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 aboutmanaging the challenges of a re-emergent China apart from the economic

difculties it poses. The Europeans have a more benign view of China, whereas theUnited States and India have more in common with the country. The EU talks ofa multipolar world, but not a multipolar Asia given a rising India and an assertiveJapan. A key difference between EU and American documents on India’s strategic partnership with them is that while gradual incrementalism through dialogue anddiscussion is the hallmark of the Union, the American approach is more practicaland direct, focusing on vital issues such as geopolitics, energy and technology.

India also nds it comparatively easier to deal with the United States on a one-

to-one basis. It is characterized by effective leadership whereas decision-makingin an increasingly heterogeneous EU-27 driven by committees and compromisesis inherently time-consuming.

India’s interaction and institutional engagement with the European Unionis less intense and less dense in terms of both visits and consultations, and lessextensive 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 hasall the advantages of “great power exceptionalism” (Ikenberry 2008: 32) (whichIndia does not). Both China and India remain inuential in the resolution of

many global problems, but because of its Security Council membership Beijingis crucial: in 2007 it became the largest trading partner of Iran, North Korea, andSudan and the second-largest one of Burma and Zimbabwe. In the view of mostIndians, a Sinocentric Europe has been more willing to accommodate China ratherthan India, which, as former Commissioner Mandelson said, “is getting there, butnot quite arrived” (Cited in Rao 2007). China is perceived to be in the OlympicsLeague 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 ofits political clout and economic potential – Indian trade with the EU in 2007 wasworth around €55 billion, whereas trade with China was worth over €300 billion.

To a great extent, the size of the economic stake tends to dene the degree of

political interest that the EU and its member states take in certain countries.




India’s strategic partnership is unlikely to reach the same level as the partnershipwith China, even though India does not have the same problems concerning humanrights and the arms embargo, for example. India’s democratic polity and sharedvalues do not necessarily earn it any brownie points in Europe.

Senior EU ofcials express a preference for and approval of China’s low prole,

and do not exactly relish the more vocal approach of an increasingly inuential

India and its condent and articulate elite. People in Brussels often argue that,

unlike China, India has been neither proactive nor entrepreneurial enough to availitself of existing opportunities or to make the requisite efforts to understand theirworking. 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 obsessedwith the United States.

Is the EU a Model for South Asia?

Since the turn of the twenty-rst century, Indian leaders have time and again

appreciatively referred to the European Union as an example that could be emulatedin South Asia, which remains one of the least integrated regions of the world. Aformer Indian prime minister even proposed a common currency. Whereas theEU has “a natural interest” in propagating the “gospel” of regional integration

worldwide, there is no desire within the South Asian region for European-styleintegration primarily because of the different socio-economic and geopoliticalenvironment, a refusal to share sovereignty, and the wish not to replicate costlyEU institutions − the SAARC Secretariat being an ofce with no executive or

implementation powers, for example (for a more detailed discussion, see Jain2003 and 2008).

The experiences of a particular organization are “unique” and “may notnecessarily be replicated” in another regional organization. No two regions canever be similar with regard to the motivations, imperatives and strategies forregional cooperation in view of the differences in their history and socio-economicand geopolitical conditions. The differences in the origins and the evolution ofSAARC and the European Union illustrate the fact that regionalism acquires itsown specic 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 inthe rst 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 closingsessions of the summit and may make a four-minute statement in the presence of the headsof 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 briefstatements. In these circumstances, the EU External Affairs Commissioner Waldner did not




several modest projects are currently in the pipeline.14 The draft of the EU’s rst

regional strategy for South Asia considered by the Heads of Delegation in theregion at a meeting chaired by External Affairs Commissioner Ferrero-Waldnerin Mumbai in March 2007 was a mere compilation of bilateral issues. However,Brussels has apparently concluded that prospects of developing interregionallinkages with South Asia will be limited until there is more meaningful cooperationin the region.

Policy Recommendations

India no longer regards the European Union as a mere trading bloc, and sees it moreas an emerging political actor in world politics with a growing prole and presence.

Strategic partnership does not mean identical interests. Even if there is completeunanimity on objectives, there may be very different means of achieving them. Anemergent India not only presents intellectual, technological, organizational, and political challenges to the West, it also provides opportunities in that the growingconsumerist middle class (estimated to be around 250 million) is fuelling a growingdemand for European goods, technology, and services. The eventual India–EUFree Trade Agreement (FTA), which, it is hoped, will be concluded by the end of2009, is likely to considerably enhance bilateral trade, which in turn could make

political differences more manageable because the overall relationship very oftentends to be affected by differences in the WTO.15 More extensive engagementwith the European superpower has intrinsic value even if it does not narrow thedifferences or produce immediate results since it does facilitate greater clarityand understanding of each other’s perspectives and approaches toward bilateral,regional and global issues. Most stakeholders in the Union have to revise theirmental maps of a changing India and China in an emerging Asia. The drivingforce 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 bothsides to take the relationship forward, but in the nal analysis, it will be shared

consider it worthwhile attending. The Delhi-based Ambassador of Germany, which heldthe 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 andinfrastructure; a nancing 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 implementationof the bilateral trade and investment agreement could increase two-way trade to €120

billion.




interests rather than shared values that will determine the scope and content of theIndia–EU strategic partnership.

Strengthening the India–EU Strategic Partnership

Identify and focus on a smaller number of long-term strategic priorities(such as climate change and energy) rather than on the mere mushroomingof dialogues and consultation mechanisms.India should intensify its engagement in EU institutions, especially theEuropean Parliament (including inter-parliamentary exchanges) and theCouncil.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-makingsystems.Explore the possibilities of establishing joint development-cooperation projects in Africa and Latin America.Begin consultations on peacekeeping operations and peace-building underthe UN multilateral umbrella.The changing demographic prole and the graying population is compelling

the European Union to address the advantages and disadvantages of in-

sourcing highly skilled immigrants, and of outsourcing services. Becauseskilled immigrants are seeking better locations and conditions, Europeancountries are now increasingly willing to conclude social securityagreements with India. The easing of labor movement among professionalsand skilled workers will be high on the agenda in the negotiations on anIndia–EU FTA. Sustained efforts on both sides could turn this into a mutualwin-win situation.

Civil Society Dialogue

Broaden, deepen and intensify the dialogue in order to dispel persistentstereotyping and to increase the visibility and prole of the EU in India,

and vice versa.Foster research and the study of India and India–EU relations within theEuropean think-tank community, and strengthen academic networks andlinkages.Encourage and attract Indian elites and students in larger numbers to study

in Europe.Foster greater intercultural and interreligious dialogue with India, includingdialogue on Islam.Strengthen the role of think tanks in Europe, which have for too long beenxated on China.

Increase the number of Indian cultural centers in Europe.

1.

2.

3.

4.

5.

6.

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2.

3.

4.

5.

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Climate Change

Enhance access to advanced, cleaner and affordable technologies whenthere is a pressing need to share technology generously and easily.

Scientic and Technological Cooperation

Forge more partnerships in cutting-edge technologies so as to combineIndia’s strengths and European capabilities.Intensify dialogue and the sharing of information on the activities ofEuropean centers of excellence and innovation, and nding out about

European best practices in terms of managing innovation processesand technical collaboration, and joint ventures in renewable energy,

biotechnology, pharmaceuticals and the social sciences.

1.

1.

2.



Chapter 10

The Ambiguities in the

China–India RelationshipClaudia Astarita

Introduction

The rise of both China and India is capturing the world’s imagination. Takentogether, the economic emergence of both countries represents a seismic eventthat promises to alter the global economic, geopolitical, social, and environmentallandscape. It is still unpredictable whether their developmental paths will leadthem to interact as rivals or as partners, and this chapter therefore focuses onthe recent evolution of their relationship. The chapter starts with an historicaloverview 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 mutualresponsible 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, andconsiders whether this economic cooperation represents a turning point in theirrelationship. The symbolic value of the recent re-opening of the Himalayan border pass of Nathula is assessed, and the patterns of broad economic integration areanalyzed from three different perspectives: import-export uxes and their impact

on both countries’ balances of payments, foreign direct investments (FDIs), andthe state of the bilateral Free Trade Area (FTA).

Finally, the chapter underlines how the rush for growth and industrialization isopening 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 indeveloping joint strategies, in reality their behavior is shaped by the need to pursuetheir national interests, and cooperation is usually achieved only when no otheroption is available and coordination generates a mutually benecial outcome.

Secondly, given the fact that China and India are attempting to deal separatelywith their environmental problems, the question arises of whether or not they areinterested in learning from each other’s past experiences and exploring cooperativeinitiatives.

In conclusion, the potential role of the European Union in terms of active helpor consultative support is assessed.

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History and Politics

1950s-1960s: From Brotherhood to War

India was among the rst countries that chose to recognize the People’s Republic

of China in the post-World War II period, and established diplomatic relations on 1April 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 ofthe Non-Aligned Movement of developing states. In 1955, China attended theimportant Bandung conference at the invitation of India. Indeed, China’s FivePrinciples of Peaceful Co-existence (also known as Panchsheel ) were based notonly on domestic policy but also on the processes and ideas surrounding Bandung.

These ve principles included mutual respect for sovereignty and territorialintegrity, mutual non-aggression and non-interference in each other’s internalaffairs, equality and mutual benet, 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 Indiaon Trade and Intercourse Between the Tibet Region of China and India,” andhave since been quoted in several bilateral and international documents. Duringthis early period the Sino-Indian relationship was frequently encapsulated in the

expression “Indi-Chini Bhai Bhai” (India and China are brothers), reecting thedepth of their common cultural and intellectual history.

China and India also share a longstanding tradition of rivalry and their relationswere deeply strained between the late 1950s and the 1970s. The problems stemmedfrom two new developments, the Chinese “liberation” of Tibet and the borderdispute. In addition, the increasing inuence 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, andthis de facto takeover has never been accepted by the Tibetans (Garver 2001: 32-78). China considered the annexation the nal stage in its unication, and when

Tibetans started demonstrating and demanding the end of Chinese rule, Chinesetroops were sent to stop the revolt, killing thousands of protesters. Fearing arrest by the Chinese authorities, the Dalai Lama ed to India in 1959, where he was

offered asylum. This issue of asylum continues to be the cause of tension betweenChina 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 borderareas were and remain the Askai Chin plateau in the West and the so-calledMcMahon Line in the East, the line drawn by the British in 1914. India disputedChina’s occupation of the Askai Chin Plateau, which was critical to China’scontrol of Tibet, whereas China challenged the legitimacy of the McMahon Line because the Chinese government had never accepted the authenticity of the British



The Ambiguities in the China–India Relationship 191

deal (Garver 2001: 32-78, Sidhu and Yuan 2003: 9-21). This disagreement led toa short war in October 1962, when India suffered a humiliating defeat. In October1964, exactly two years later, China became a nuclear power, and this furtherfuelled the distrust between the two countries.

The China–India alignment changed in the 1960s, and not only because ofthe direct military confrontation and the Chinese achievement of nuclear status power. It was during this decade that China and the Soviet Union also ended theiralliance when Moscow decided to adopt a neutral position in the India–China border dispute. Further, 1,600 Russian engineers, technicians and scientists whomoved 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 theChinese forces deployed along the Ussuri River (Musso 1989; Smith 2007: 44-

45). In 1971 the Soviet Union de facto protected India during the liberation war inBangladesh (at that time the Eastern part of Pakistan), defending Bengali againstPakistani occupation (Landi 2007: 32). However, the Sino-Soviet split paved theway for Sino-American realignment, formalized during President Richard Nixon’shistoric trip to China in 1972 (Garson 1995: 122, Bevin 1992: 213). Consequently,during the same decade India was geopolitically pushed into Soviet arms, andup until the end of the Cold War China–India relations inevitably mirrored thetensions of Soviet–American confrontation.

China–India Relations and the Problem of Pakistan

Ever since the British partition of the Indian subcontinent in 1947 Pakistan hasrepresented India’s long-standing enemy. Even though the two countries share acommon history and culture, their diplomatic relations are dened by numerous

military conicts and territorial disputes over the states of Jammu and Kashmir.

Their rivalry dates back to the time of their independence, when Pakistan wasestablished as a religious Muslim nation and India was set up as a secular countrywith a Hindu religious majority. They are separated by an International Borderand a Line of Control in the region of Kashmir, which is ofcially divided into an

Indian-administrated Kashmir, a Pakistan-administrated Kashmir and a Chinese-controlled Kashmir.

As far as China is concerned, Pakistan is a problematic but useful friend. Priorto the terrorist attacks on September 11, 2001 Pakistan was a supporter of radicalIslam, including Islamic terrorism, and China was worried that the Pakistan-basedIslamist groups may have had links with separatist movements in Xinjiang (Garver

2001: 216-242). Furthermore, Pakistan is involved in nuclear proliferation. Chinasecretly helped Pakistan to build its nuclear arsenal and its missile capabilitiesin 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 whetherPakistan began its nuclear program development in response to India’s nuclearstatus, there is evidence supporting this supposition: it was in 1998, to be precise




just a few days after India had conducted its own nuclear tests, that Pakistan carriedout its rst nuclear tests in the north of the Province of Beluchistan.

Pakistan’s track record in supporting Islamic terrorism and nuclear proliferationdoes not t in with China’s new diplomacy, which is based on presenting itself as

a responsible power. Moreover, because of Pakistani proliferation China now hastwo 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 withPakistan. The future scenario of the area is still unpredictable, and the potentialrole of Pakistan as a valuable partner cannot be ignored. Pakistan could act as acounter-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 isa leading investor in Pakistan and it is also its major weapons supplier.

From the Indian point of view, Beijing’s statement of neutrality is alsoambiguous. However, ofcial declarations supported by the implementation of

joint projects such as the construction of an Iran–Pakistan–India pipeline, thedetails of which are discussed below, would seem to have the potential of partiallyappeasing this complicated bilateral-trilateral relationship.

China–India Relations: Changes after the Cold War

The geopolitical scenario changed signicantly at the end of the Cold War, sothat even China and India had to rethink their bilateral relationship. There was anoticeable improvement between 1988 and 1998. In December 1988 the IndianPrime Minister Raijv Gandhi visited Beijing, where he agreed, together with hisChinese counterparts, to create a joint working group to discuss the border issue,starting a new era of gradual but potentially peaceful co-existence.1

May 1998 heralded a new setback, as India declared her willingness to conductve nuclear tests (Pokhran II). Before explaining the consequences of these tests,

it is worth mentioning that the decision was taken by the new Bharatiya JanataParty (BJP) government, elected in 1998 and ofcially oriented at promoting

nationalism and self-reliance.2 In a letter to the then US President Bill Clinton,Indian Prime Minister A.B. Vajpayee explicitly linked the nuclear testing toa perceived nuclear threat from the People’s Republic of China. Obviously,

1 This was the rst 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).

2 As far as the BJP economic agenda is concerned, it is interesting that, after winningthe elections, the pragmatic wing of the party took power. Opposition to the WTO processwas consequently abandoned, import duties and barriers to foreign ownership werereduced, and swadeshi was redened: 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 tothis evolution that China–India relations were quickly restored despite the explicitly anti-Chinese nuclear test conducted in 1998 (Smith 2007: 90).




China considered this declaration a betrayal of the spirit underpinning the recentimprovements in relations between the two countries (Garver 2001: 32-78; Smith2007: 221-2). However, Pakistan’s role in all this cannot be underestimated. Itwas in the late 1980s that the Indian government became aware of its neighbor’snuclear-weapons project, leading the Prime Minister Rajiv Gandhi to support astepping-up of India’s own program. While China formally protested, it decidednot to take any real counter-measures against India, and bilateral relations werequickly brought back on track in 1999 to continue the process of condence

building (Lei 2004: 399-422; Sidhu and Yuan: 9-12).This strategic choice was also inuenced by the position the US assumed in

the region. Whereas Indo–US relations were strained throughout the Cold Warand New Delhi was a key member of the Non-Aligned Movement, by 1998 anemerging India–US relationship was clearly recognizable. Consequently, the

Chinese leadership realized it was potentially dangerous to further stretch tensionswith India. This dynamic is still relevant in that the better the India–US relationshipis, the stronger will be the relationship that China will have to seek to build withIndia.

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 announcedthe Chinese threat as justication of his decision, visited Beijing in June 2003.

During this meeting negotiations on the border dispute were speeded up, Indiaofcially 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 forPeace and Prosperity” afrming 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’sconcerns and aspirations, and equality; [provide] a sound framework for an allaround and comprehensive development of bilateral relations based on mutual andequal security, development and prosperity of the two peoples; and [contribute] to jointly addressing global challenges and threats” ( People’s Daily 2005; Lancaster2005). Apparently, both sides wanted to openly show their willingness to go backto the entente cordiale of the 1950s (Landi 2007: 11). Indeed, in appreciation ofIndian recognition of Chinese sovereignty over Tibet, China ofcially recognized

Indian sovereignty over Sikkim, a region in the Himalayas, on the Indian Eastern border which ofcially became the 22nd state of the Indian Union in May 1975,

when India abolished the monarchy. The Chinese had also claimed their sovereigntyover 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 ina similarly positive manner (Landi 2007: 11-12). In November 2006, a couple of




days before Hu Jintao visited India, the Chinese Ambassador in New Delhi, SunYuxi, reported to American CNN that, according to the Chinese position, “thewhole of Arunachal Pradesh is Chinese territory and Tawang is only one placein it” (Outlookindia.com 2006). Arunachal Pradesh (AP) is a state in North-EastIndia, and Tawang is a small territory between AP and Sikkim that China occupiedin 1962 and reclaims as part of Tibet. The next day, the Indian External AffairsMinister Pranab Mukherjee reassured reporters in New Delhi that “Arunachal isan integral part of India” ( RediffNews 2006). This incident conrms that when

strategic interests are at stake, China is not interested in compromise. With theTawang region under its sovereignty the People’s Republic will be able to openup a faster link with Bangladesh and the Bengal Gulf, and exploit local miningresources (Landi 2007: 127). Further, Tawang hosts the Galden Namgey LhatseTemple, the most important Tibetan monastery after Potala in Lhasa. Controlling

this temple is crucial for Beijing because the absence of direct Chinese inuencein the area has progressively transformed the monastery into a base of operationsfor the Tibetan government-in-exile (Huchet 2008).

Aside from these details, in the light of the China–India cooperative orientationit seems that the strength of the political relationship between the two countriesis still developing, as the November 2006 visit of Chinese President Hu Jintaoto India clearly demonstrates. This was the most senior in a series of visits andexchanges that were organized in 2006, designated the year of Chinese–Indian

Friendship. Since then there have been frequent bilateral and multilateral meetingsto be scheduled frequently. The two countries promoted the “China–India Yearof Friendship through Tourism” in 2007, and in January 2008 Wen Jiabao andManmohan Singh signed several documents promoting cooperation “in areasof economic engagement, defense cooperation, anti-terrorism efforts, culture,science, railways, traditional medicine, geological surveys, climate change adenergy, including civilian nuclear cooperationten” (China Daily 2007). It was alsoagreed 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 consolidatinga trend of increasing mutual trust and respect and a high and broadening level ofcooperation. However, a deeper and multilevel analysis reveals that even thoughthe two countries have already signed dozens of memoranda of understanding, andeven if the negotiations over the border dispute are making some progress, therehave 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 apparentlyneither of them is disposed to accept any compromise on this issue.




Economic Issues

It is often stated that China and India are the fastest growing developing economiesin 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 potentialmarkets for any international company (The Economic Times 2008; Deccan

Herald 2008; The Hindu 2005b; Dharam 2007). This section highlights issuesthat 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 inJuly 2006 was nothing more than a symbolic gesture from the two countries inthat 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 ableto accommodate their bilateral relationship. Thirdly, and in conrmation of these

aforementioned conclusions, the rationale behind China’s and India’s signing ofFree Trade Agreements (FTAs) with the Association of Southeast Asian Nations(ASEAN) and between themselves are explained, together with the obstacles thatare 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 fasttheir bilateral trade is growing. In connection, the re-opening of the Nathula Passhas been highlighted as one of the most signicant achievements in recent years

(BBC 2006a; Xinhua News 2006c; The Hindu 2003). The Nathula Pass is locatedin the Himalayas, at a height of 4,000 meters, and was reopened in July 2006after having been closed for 44 years as a consequence of the 1962 war. In its rst

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 totrade during the non-winter months, the early gures 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 toredene their expectations (The Hindu 2007).

It would perhaps be more appropriate to consider the border trade in Nathulain terms of its symbolic rather than its concrete meaning. The re-opening of whatIndia’s Frontline magazine dened 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 (Choudhury2003; Smith 2007: 219-20). The Indian scholar Iftekharul Bashar expressed hishope that “the re-opening of border trade will help ease the economic isolation ofthe region. Nathu La border trade markets will not only benet border inhabitants

in both countries and promote local openness and development, but also furthermotivate and open up a new channel for the blooming China–India trade relations”




(Iftekharul 2006). The 2006 forecasts have not come true. However, in weighing upthe potential of bilateral trade in Nathula it should be borne in mind that, accordingto the treaty, only 29 items can be exported from India, and 15 imported fromChina. In addition, because of bad weather conditions, the pass remains open onlyfrom 1 June until 30 September. Finally, neither of the two governments has as yetdecided to approve massive investments in border infrastructures. “While Chinais 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 rebuildthe roads every year. Without improving the infrastructures-and without enlargingthe tradable goods list-it is impossible to boost trade.”3

Problems of Unbalanced Bilateral Trade

In terms of bilateral trade, China–India economic power is apparently onlystronger. The development is impressive: China’s growth rate was 9.5 percent in2004, 9.9 percent in 2005, 11.1 percent in 2006, and 10.9 percent in 2007, whilethe respective Indian rates were 6, 8, 7, and 9. It is signicant 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 economistRaj 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.4 However, for scholars such

as Angus Maddison this developmental trend was no surprise, rather a return tothe 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 nd 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 newdevelopment path.

It is not the intention here to assess the successes and failures of the twocountries’ economic reform choices. What is interesting is that economic growthled both leaderships to implement a more export-oriented trade system that pushedthem to look for potential partners. It was in September 1978 that the then ChinesePremier Deng Xiaoping “argued for actively developing relations, includingeconomic and cultural exchanges, with other countries” (Smith 2007: 56-7). Sincethen China and India have tried to strengthen their economic ties.

3 Interview with Prof. Swaran Singh, Jawaharlal Nehru University, New Delhi, 21January 2008.

4 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 thecountry registered during the 30 years before independence (Smith 2007: 39, 76, 80).




Bilateral trade has expanded rapidly in recent years, from USD 200 millionin 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 Indiaagreed to raise the annual volume of their bilateral trade to USD 40 billion by2010. This target was increased to USD 60 billion in 2008 because the previousone was surpassed in the same year ( Xinhua News 2006g; People’s Daily 2008;Landi 2007: 43). Despite these remarkable results, the Sino-Indian commercialrelationship cannot be considered balanced. While half of the exports from Indiato China consist of primary products, Chinese exports to India are much morediverse, and high-value-added products are predominant, as Table 10.1 shows.

Table 10.1 Major items of bilateral trade in 2006-2007

From a commercial point of view, India is much more dependent on China thanvice versa, its bilateral exports of manufactured goods in the nancial year ending

March 2006 being USD 71 billion, compared to 713 billion for China, and eventhough in absolute values both gures are growing, the gap has not decreased

(BBC 2006b). In 2007, iron ore, other ores and minerals, raw cotton, non-ferrousmetals and plastic and linoleum products together accounted for 70 percent ofIndian exports to China, whereas the Chinese exports to India was dominated byelectronic goods (29 percent of the total), followed by non-electrical machinery,iron and steel, project goods, articial resins, plastic materials, and manufactured

fertilizers (Government of India 2008a and 2008b).

During Hu Jintao’s November 2006 visit China showed a strong commitmentto encouraging Indian development. Of the 13 accords signed, most were designedto 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, bothcountries stressed the need to build new land routes in order to improve transportand trade networks (Government of India 2006a).

Major exportsValue

(USD mn)Change

(%)Major imports

Value(USD mn)

Change(%)

Iron ore 3323.1 -0.3 Electronic goods 4990.9 43.9Other ores and

minerals665.0 111.6

Non-electricalmachinery

1841.9 84.9

Raw cotton 656.3 65.8 Iron and steel 1487.1 351.2 Non-ferrous

metals

591.1 391.6Organic

chemicals

1288.3 33.6

Plastics andlinoleum

502.2 57.5Coal, coke and

briqt.1101.3 61.1

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




It is questionable whether growth in China–India bilateral trade is sustainable.While some think that increasing the quota of import–export uxes is always

positive, others argue that imbalance in trade diversity de facto conceals someof the problems Indian politicians have not been able to face yet. Exchanging primary products for secondary goods highlights the deciencies of national

industries, and this composition of trade balance is forcing India to accumulate,year after year, a signicant decit.5 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 peopledirectly and 6.5 million indirectly. In absolute terms this is a large workforce, but it is not that signicant in a country with a working population of more than

402 million. These data conrm that India’s comparative advantage in softwareand IT services is not enough to ll the gap in terms of development with other

countries, and investing only in IT cannot guarantee balanced growth for thewhole country.6

According to Indian economists, who agreed on a sort of roadmap to bilateraleconomic integration synthesized in the Report of the India–China Joint StudyGroup 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, harmonizecommercial procedures, and increase banking and nancial cooperation. Finally,

the two countries should sign agreements aimed at facilitating bilateral investments,and joint infrastructure projects should be explored in order to improve borderconnectivity (Government of India 2005). Thus, China–India bilateral connectionswill be strengthened and bilateral trade will cover more items, consequently becoming more balanced, sustainable, and protable.

These are the reasons why it was argued at the beginning of this section that, interms of bilateral trade, China–India economic power is only apparently stronger.It is evident from the above analysis, however, that these two countries’ economicrelations are neither balanced nor sustainable. China is strengthening its leading

5 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 NehruUniversity, 28 January 2008; Mira Sinha Bhattacharya, Institute of Chinese Studies, 20February 2008; Aradha Aggrawal, The University of Delhi, 12 February 2008; ChandraRajes, National Council of Applied Economic Research, 22 February 2008.

6 It is interesting that IT in India owes its success mainly to the many post-1991reforms 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.




conning 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 tariffand commercial tax rates, it is also true that this policy has been limited to SpecialEconomic Zones (SEZs), so designated in an attempt to test the economic impactsand political implications of reforms. Further, even though tariffs and taxes werehalved in the 1980s, the average rate in 1992 was still 43 percent, and dropped to15 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 theStatement of Industrial Policy was approved, cutting tariffs and taxes from 100 to25-30 percent on average, ending the public-sector monopoly in many elds, and

creating some Export Processing Zones (similar to the Chinese SEZs), but withoutachieving notable results. One of the reasons for the different outcome in Chinaand India concerns their political systems: while Beijing can effectively implement

its policies, New Delhi has to face an open political debate before approving anyreform. The availability of foreign direct investments (FDIs) also played a criticalrole7. Chinese growth has been nanced by huge ows of FDIs (taking advantage

of the country’s low costs), which has also helped in terms of accumulatingtechnologies. The same did not happen for India: the political turmoil the countryhad experienced since the 1980s not only suggested to foreign corporations thatIndia was not a suitable destination for their investments, it also slowed down theimplementation of any reform package. However, since October 1992, when the

Party Congress declared that China was a “socialist market economy,” the countryhas regularly attracted USD 50 billion or more FDIs annually, averaging ten timesthe amount collected by India (Smith 2007: 59-60, 193-5).

Some Indian scholars argue that it will be impossible for India to interact withChina from an equal position unless all the obstacles that are hindering nationalgrowth are removed. Political achievement has been useful in terms of boosting bilateral trade, but now another “revolution” is needed in order to achieve moresignicant breakthroughs and to cement bilateral relations on a sustainable basis8.

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

7 Interestingly, ever since India’s independence, any time the government has agreedon an economic-reform package not only has it not been able to implement it because theopposition parties have always managed to get their amendments approved, it has also lost power following the approval of any such package.

8 Interview with Professor Alka Acharia, Jawaharlal Nehru University, New Delhi,21 January 2008.




enough raw materials and energy resources to boost their explosive economicgrowth. “Energy intensity is higher in poorer, fast-growing economies becausethey have more heavy industry, use older technology and are less efcient in their

use of energy” (Smith 2007: 216). What this section demonstrates is that Chinaand India are adopting a competitive rather than a cooperative approach in othergeographical 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 itseconomic growth started, it was a net exporter of raw materials and oil], cameto account for a fth of consumption of many industrial commodities”: cement,

aluminium, copper, zinc, iron, and steel. In addition, according to the InternationalEnergy Agency, in 2000-2005 oil demand rose globally by 7.9 million barrelsa 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-sufcient

in coal, it needs to import two thirds of the oil it consumes. “In 2005 the Indiangovernment signed a $40-billion deal to annually import 7.5 million tonnes of

liqueed natural gas from Iran over twenty-ve years,” and an Iran-Pakistan-India

pipeline has been under discussion since 2000.9 In terms of raw materials, India isrich 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 economicgrowth in the advanced economies averages 50 percent, in developing countriessuch as China and India it is as high as 120 percent. This conrms why India’s

oil consumption has risen by 5.5 percent a year during the last 15 years whereasChina’s has increased between 7 and 8 percent. However, a more realistic imageof how oil-consumption trends are changing globally emerges upon considerationof the fact that the oil-demand per head is currently averaging 1.7 barrels a yearin 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 inChinese demand” (Smith 2007: 215).

9 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 atimproving 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 environmentalconsequences will be serious, the government has recently started to explore the nuclearoption in order to diversify energy resources (Landi 2007: 80).




India and China as Competitors in Asia and Africa

India has always seen itself as the major power in Asia. It is unwilling toacknowledge that China might also have an interest in South Asia and in theIndian 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 prole in Central and

East Asia, even if ofcially 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 SouthAsia. In Southeast Asia, India is strengthening its ties with Myanmar, expandingcooperation in the energy and trade sector in order to prevent Yangon from

falling completely under Beijing’s inuence. According to Amit Kumar, there arefour countries in which China and India are harshly competing, these being thenations that could guarantee the maintenance of an “arc of inuence” in South

and Southeast Asia: Bangladesh, Myanmar, Maldives, and Sri Lanka (Kumar2006). In Bangladesh, China traded natural gas for investment in infrastructures,in Myanmar, it guaranteed energy cooperation in the form of joint ventures, eventhough India managed to keep the development of the port of Sittwa within itscontrol. Moreover, as China already has control of the strategic Gwadar port in

Pakistan, India and China are competing to obtain access to the Bengali portof Chittagong. In addition, China recently set up a naval base at Marao in theMaldives, and has gone into the oil-exploration business in Sri Lanka, therebyforcing India to intensify its pace of cooperation with countries in the Indian Oceanlittoral and beyond (Maitra 2005; Sud 2008; Kumar 2006; Aneja 2006; Malik2006). Generally speaking, it is safe to say that while South Asian countries seeminterested in reinforcing their connections with China in order to counterbalanceIndian inuence 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 isvery important for energy resources, and apparently it is a context in which Chinaand India can deepen their cooperation. Both countries are already cooperatingwithin the Shanghai Cooperation Organization (SCO), an intergovernmentalforum founded in 2001 by China, Russia, and the Central Asian countries, to whichIndia, Pakistan, and Iran have recently been admitted as observers. Established asthe 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 politicalorganization founded in 1985 by the eight countries of Southern Asia. Its members includeIndia and Pakistan, whereas China, the European Union, Japan, the Republic of Korea, andthe United States are observer countries ( Xinhua News 2006f).




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 areheavily reliant on imported oil from the Persian Gulf through the Indian Ocean.India is signing agreements with the Persian Gulf states. China is developing oilholdings in Iran, but India is catching up and in 2005 it signed the previouslymentioned agreement covering natural-gas imports. From a strategic perspectivethe war on terror and the Iraqi conict have further complicated the scenario. China

is more concerned than India over a potential permanent American presence in theregion. Further, as India has a more balanced relationship with the United Statesthan China, the links between the US and Pakistan on account of the war on terrormay thwart Chinese efforts to expand its inuence within this area.

China invested USD 200 million in Africa in 2005, for oil exploration anddevelopment projects, and 30 percent of China’s annual oil imports come from

Sudan, Nigeria, Angola, Algeria, Gabon, and Equatorial Guinea. Moreover, Africais an important source of raw materials: Chinese companies are interested inSierra Leone’s diamonds, Zambia’s copper, Congo’s cobalt, and the timber fromGabon, Equatorial Guinea, and Mozambique. In return, China usually buildsinfrastructures (roads, bridges and dams), which foster the receiving country’sdevelopment and facilitate goods transportation (Smith 2007: 126). Ignoring bothEuropean and American concern about the help given to corrupt regimes, Chinaseems more interested in ensuring for itself an adequate supply of energy and raw

materials, and creating some form of loyalty and dependence oriented at openingnew markets for national goods in Africa.12

In November 2006 the People’s Republic of China held the rst China–Africa

Summit in Beijing, where 53 countries gathered together to conrm their mutual

friendship and to boost multilateral relations. India replicated this initiative in April2008, but this time the representatives of only 14 countries ew to New Delhi to

discuss cooperation strategies, trade, and investments. As Anver Versi states, itappears “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 asfor Beijing” (BBC 2006b; Versi 2008: 14-15). Even in terms of country-to-countryinvestments India is doing less then China. It was only recently that New Delhistarted seeking advantageous agreements with Niger, Zambia, South Africa, andEthiopia (Teslik 2007).

Although it cannot be denied that there are examples of joint efforts in terms ofenergy cooperation, they do not represent the dominant trend. In December 2005the China National Petroleum Corporation (CNPC), the Indian Oil and NaturalGas 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 morethan 5 percent in 2005. However, it is open to question whether China’s help will benet

African countries in the long run. Indeed, Chinese competition has already had a negativeimpact on industries in Lesotho, Swaziland, Madagascar, Kenya, and South Africa, whosemain advantage is the low cost of labor (Smith 2007: 125-7).




majority of shares in the Syrian Al Furat Production Company. However, just afew months before, in May, while trying to build a consortium to explore oil andnatural gas reserves in the area around the Aral Lake, the CNPC had approachedthe Uzbek Uzbekneftag, the Russian Lukoil, the Malay Petronas, and the SouthKorean National Oil Corporation, ignoring the Indian ONGC (Landi 2007: 23-24).

In January 2006 the Indian Petroleum and Natural Gas Minister Mani ShankarAiyar signed ve energy-cooperation deals in Beijing covering scouting, oil-

rening, 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 Press2006, Landi 2007: 108-112). During his ofcial 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 asuccessful meeting among the main oil-producing and oil-consuming countries inAsia (China, India, South Korea, Japan, Saudi Arabia, Iran, Qatar, Oman, UAE,Kuwait, Malaysia, and Indonesia) in 2005 in order to plant the seeds of regionalenergy cooperation (Landi 2007: 110-111).

Although China and India have apparently been cultivating mutual cooperationsince 2006, it is doubtful whether this is, in fact, the case. According to a NorwegianReport 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 securityhas become a core issue on many countries’ foreign policy agenda”. Clearly, it isdifcult to achieve cooperation when national security is at stake unless joint actions

are considered mutually benecial (Tønnesson and Kolås 2006: 53-54). “Despite

the conclusion of energy cooperation agreements, China is likely to go solo inits quest for energy security; energy competition, rather than energy cooperation,will be the norm” (Malik 2006). Accordingly, it seems more consistent to arguethat 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 andIndia as big energy consumers.” During spring 2006, when a cloud of soot and poisonous chemicals moved from North China to America’s West coast, theinternational community became even more concerned about the environmentalconsequences of the growth of these two nations (Smith 2007: 200).

In developing countries, environmental problems and economic growth aredirectly proportional to energy consumption. Therefore, the more China and Indiagrow the more they have to think about how to address the environmental threatstheir economic development is creating, within and outside national borders. Theaim in this section is to ascertain the extent to which China and India are attempting




to deal with environmental problems separately, or whether they are interested inlearning from each other’s past experiences and exploring cooperative initiatives.

Recognizing that safeguarding the environment was one of the major challengesfacing China and India, during recent bilateral meetings the two countries startedsigning some agreements on environmental issues. In June 2003, Wen Jiabao andA.B. Vajpayee paved the way for bilateral cooperation:

China and India face special and similar challenges in their efforts to protect theenvironment while simultaneously forging ahead with rapid social and economicdevelopment of their countries. In this context, the two sides agreed to worktogether in a practical manner to co-operate on preserving the environment andensuring 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 whenthe two countries drew up the Memorandum for Enhancing Cooperation in theField of Oil and Natural Gas in which they agreed to promote environment-friendly fuels (China Daily 2006). A few months later, they signed the Agreementon Forestry Cooperation in order to foster cooperation and joint development inforestry-related elds 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 sincethe two nations already have Environment Protection Acts that are not respected,and ve-year plans for reducing energy consumption and pollution emissions, it

is questionable whether bilateral commitment will be any stronger than unilateralintent (Etienne 2007: 148-151).

China is aware of its environmental problems. Interviewed by the Germanmagazine 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 inour seven largest rivers is completely useless, while one fourth of our citizensdoes not have access to clean drinking water. One third of the urban populationis breathing polluted air, and less than 20 percent of the trash in cities is treatedand processed in an environmentally sustainable manner. Finally, ve [one year

before only two, according to Time’s 2007 report] of the ten most polluted citiesworldwide are in China. (Spiegel Online 2005; Walsh 2007)

China ordered factory shutdowns and the removal of most of Beijing’s twomillion cars from the street for the 2008 Olympics, but what it needs are long-termstrategies addressing its environmental problems (Smith 2007: 97). According tothe 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




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 ofenvironmental disasters caused by the implementation of big infrastructure projects.The Three Gorges Dam in Hubei province has been completed notwithstandingenvironmental campaigners’ complaints and concerns. The Dam, work on whichwas completed in May 2006 although the reservoir will be ready in 2009, is thelargest hydroelectric dam in the world. Its construction has changed the balance ofthe Yangtze River ecosystem: “When the area was ooded, it submerged factories,

mines and waste dumps, spreading their toxic contents down the river, [turned thearea into a] bog of efuent, silt, industrial pollutants and rubbish [that is impossible

to clean] (Smith 2007: 196). The dam is also damaging sh stocks in the East

China Sea, one of the largest sheries in the world, and the levels of pollution are

becoming so high that the water coming from a quarter of the tributaries of theYangtze river is “not even suitable for spraying on crops in elds.”13 Nevertheless,Chinese ofcials insist on emphasizing its main benet: 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 stillusing obsolete technology.14 Many factories keep on pouring waste waters intorivers and lakes. America’s Energy Information Administration conrms that

India’s big cities are among the most polluted in the world, and car emissions aremaking 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 recognizedthat current US consumption patterns and Chinese and Indian resource-intensivemodels of economic growth will not work in the twenty-rst century (Brown

2006). According to optimistic speakers such as Christopher Flavin, President ofthe American Worldwatch Institute, “China and India are positioned to leapfrogtoday’s industrial powers and become world leaders in sustainable energy andagriculture within a decade.”15 However, realism leads the majority of researchersto take a more cautious position. While the achievements have to be consideredimportant breakthroughs, they are not enough to produce signicant and long-

term improvements. Bilateral cooperation could further ameliorate the current

13 This is not a surprise in a country in which “ofcially, 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 in1984, which killed 15,000 people, injured 550,000, and is still contaminating the atmospherein the surrounding area.

15 According to the report, “China’s world-leading solar industry provides waterheating for 35 million buildings and India’s pioneering use of rainwater harvesting bringsclean water to tens of thousands of homes” (State of the World 2006).




As far as access to raw materials and energy resources is concerned, the EUshould be careful because the Old Continent also needs both of these to boost itsown growth. Once again, it seems that becoming actively involved in Chinese andIndian projects will be more rewarding than observing them from a distance. Thetwo countries are investing huge amounts of capital to build pipelines, ports, andinfrastructure in general. Co-participation in some of these projects may be usefulfor the EU in order not only to safeguard its raw-materials and energy supply andaccess 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 regularmultilateral meetings and frequent and wide-ranging exchange of information.

Finally, with regard to environmental cooperation, the EU has the skills tohelp 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 andcompetitiveness in the two countries. It has been estimated that pollution is losingChina between 8 and 15 percent of its gross domestic product, and India between 4and 8 percent, and it is by no means certain that the EU will be interested in helpingthem to achieve a 20-percent and a 15-percent annual growth rate respectively(Spiegel Online 2008). Nevertheless, because these gures cannot be estimated

with due precision, and in any case the emergence of the global nancial crisis at

the end of 2008 has forced economists worldwide to revise their calculations, the

EU may consider environmentally friendly joint ventures and green partnershipswith Chinese and Indian factories a way of facilitating economic recovery amongits member countries.

Conclusions

Indian and Chinese ofcials 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 arecompeting in order to protect their national interests. They are also competitivein their political and economic relations, and even in the new areas of cooperation(energy and the environment) identied 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 aseconomically powerful states, guaranteeing raw-materials and energy supply to

fuel their economic growth, and nding new markets in which to sell their industrialoutputs. It seems that neither nation can avoid copying the other, convinced that theone remaining behind will quickly lose all its advantages. China is more autonomousthan India in this game, and for this reason “the Chinese government pays ratherless attention to India than vice versa” (Smith 2007: 171). It is also relativelystronger than India, with “a formidable infrastructure to support manufacturing




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 hiringand ring regulations is not helping it to fulll its potential as a manufacturing

nation, and it is not even able to exploit its demographic advantage in that it seemsincapable of solving the problems of low literacy levels and skills mismatch, andof 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 preventsocial unrest, maintaining growth in the western part of the country, and reformingits banking and nancial system. Consequently, the strategies the two countries

adopt in addressing their internal challenges will signicantly 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 perspectiveof the EU’s strategic partnerships with China and India. Four key sets of issuesunderpinning strategic relationships dene the opportunities and challenges

embedded in these partnerships.1 The rst of these concerns the convergence or

divergence of values, norms and interests – related to political systems and humanrights, global governance and sovereignty, for instance. Different approaches tomultilateralism and regionalism constitute the second and related set of questionsshaping the relationships. Thirdly, the challenges related to energy and climatechange represent the main eld in which strategic interaction is needed. Finally,

the development of the mutual relationship between China and India should not be overlooked in dening 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 conrm the impression that European values are

less convergent with Asian values on issues of domestic governance, while thereare 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-stategovernance.

The European Commission, especially in its early policy papers on China,assumes the universality of political values supported by the EU, and entertainsambitions that cooperative relations China will help it to evolve into a more openand just society. Europeans, far more than Americans, have in the past tended tosee China’s emergence in terms of domestic reforms and transition, perceivinga 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:

1 The author gratefully acknowledges the comments and input of Bates Gill and TimoKivimäki 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 asan indispensable partner in resolving global issues. Juha Jokela explains how day-to-day EU policy-making in relation to China and India largely tackles economicand trade issues rather than human-rights or security concerns. He suggests thatthis indicates pragmatism and EU interests rather than normative concerns and EUresponsibilities.

In this context the paucity of results achieved in the EU–China human-rightsdialogue is not surprising. China has not ratied the International Covenant on

Political and Civil Rights (ICCPR), for example. Many human-rights organizationsestimate that conditions in China have deteriorated signicantly in recent years,

particularly in the case of persons considered politically threatening by theChinese government. The EU will face a normative challenge if China succeeds

with a model that maintains economic growth without meaningful political reformat home. It could cast doubt on the strong and widely shared belief in Europe thatthe 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 consistentwith European values and norms, in areas such as freedom of expression andacknowledging ethnic and religious diversity. In terms of the latter, Europe couldalso 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 anumber of human rights challenges, failing to more fully implement the rights ofchildren, religious minorities, those living with HIV/AIDS, and those belonging tovulnerable communities such as certain tribal groups. Therefore, many normativechallenges lie ahead in closer EU–India strategic partnerships.

While China and the EU do not share common views on democracy and humanrights, their partnership can still focus on issues related to global governance. Inmany respects Chinese and European norms and interests have tended toward agreater convergence in recent years, particularly as China has come to see the valueof presenting itself as a more responsible player in international affairs. Beijingregularly calls for a more “democratic international order” – in other words seekinga greater voice in international matters for emerging powers and developingworld countries – a point generally in keeping with EU aspirations. On the otherhand, due to its status as a permanent member of the United Nations SecurityCouncil, China has been slow to accept a greater role for countries such as Indiaand Japan as part of the Council’s reform and expansion. Indian policy also calls

for more democratic, representative, and legitimate global governance structuresthat allow for a higher level of participation among developing countries. As afounding member of the non-aligned movement India has been a strong advocateof democratic global governance. In line with this policy it seeks a permanentseat in the UN Security Council. Rajendra K. Jain points out how India and manyother emerging countries argue that an increasing share of the developing and




the near future decision-making and executive powers with regard to its externalrelations 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 commonglobal rather than exclusive EU interests. The focus of the day-to-day policiestoward China and India indicates the latter. This might constitute obstacles toeffective multilateralism.

On the other hand, China and India are increasingly showing an interestin multilateral engagement. China has rapidly emerged as a major player inmultilateral fora: membership in the WTO in 1999, increased China–Africacooperation including the Forum on China–Africa Cooperation, the China–ArabSummit, NATO dialogues, ASEM, and the China–EU partnership. Even so, thisview 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 givingup a certain degree of state sovereignty in order to achieve common purposes.Moreover, as suggested by Bates Gill, China’s future approach to multilateralismcan be judged by how the country seeks to address global and transnationalchallenges that will demand multilateral responses: health, humanitarian assistanceand development aid, peacekeeping, non-proliferation and arms control, climatechange, and resolving regional instabilities. The same applies to India.

Signicantly, China appears to be more active in regional cooperation (APEC,

ASEAN’s ARF) than on the global level, which might reect the priority given toits “friendly neighbourhood policy.” The earlier three- and four-party processeson the Korean peninsula, the current six-party process, the Shanghai Five processwhich led to the establishment of the Shanghai Cooperation Organization, and theEast Asia Summit are all good examples of China’s taking a proactive position inorder 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 itthe preferred vehicle for developing free trade areas in the region and for fosteringa broader and deeper East Asian Community in the longer term. The ShanghaiCooperation Organization was the rst 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 Helsinkisummit in 2006 illustrates its ambitions to become more involved in processes ofregionalism in East and Southeast Asia. The inclusion of India in ASEM offersa 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 statesto closer cooperation and preparation of their views in advance of meetings.Conversely, Asian region-building (ASEAN+3) and ASEM have inuenced the

EU states’ foreign policies in Asia. It is also signicant that civil society has been



Conclusions and the Way Forward 215

more closely aligned to the ASEM process, as this widens the opportunities for itsfurther 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 availabilityof raw materials and energy resources. China’s energy security matters to theEU because of its effect on the global oil market, on climate change, and oninternational relations. China is the world’s third largest importer of crude oilafter the United States and Japan, and the country is now the largest emitter ofgreenhouse gases. Some would go so far as to suggest that China’s foreign policyis 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 regionsand countries. This diplomacy is tuned to securing energy supplies, but alsoinvolves efforts to safeguard access to the latest energy-related technology, suchas through investments in European energy sector.

Linda Jakobson argues that Chinese policy makers are adjusting policiesand diplomatic efforts to changing international conditions and the country’sdevelopmental 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 partlysymbiotic, but due to ineffective governance the companies are applying theirown 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 instrumentalto their contribution to economic growth and stability as tax-revenue providers andemployers, China’s national oil companies will continue to expand their overseasoil equity portfolios. There is some discussion within Chinese society about the behavior of Chinese companies and their lack of social responsibility, but most ofthe international criticism is dismissed. Nevertheless, at the same time Chineseauthorities 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 wherecountries 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 aregiven without “political strings attached.” In contrast to the ideological, human-rights-oriented European concept of good governance, China’s conditions forengagement are based more on the idea of economically sustainable principlesof effective governance. From the EU’s point of view, China’s support of Iran’slegitimate right to nuclear energy is another challenge. Iran, Saudi Arabia, and




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 tothe ideological difference related to the Chinese perception of Iran’s equal rightsto nuclear energy, explain the differences in perspectives between China and theEU toward these countries.

India’s energy diplomacy is of equally high importance. Rajendra K. Jainemphasizes that India will not allow the West to constrain her autonomy indetermining developmental priorities and ensuring continued economic growth.Like China, India has signed important agreements with Iran and is aiming toexpand its links to West Asia. China and India are adopting a competitive approachin many geographical regions in order to safeguard their access to raw materialsand energy resources. When national security is at stake it seems difcult 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 strategicstandpoint is becoming a crucial spot.

Timo Kivimäki points out that there are many ways in which the EU couldtry to enhance dialogue on energy and climate change, and adjust the agenda inthe EU–China and EU–India dialogue by taking into account fundamental Asiandevelopmental priorities.

The China–India Relationship

It is important to recognize that the EU’s partnerships with India and China are inmany ways dependent on the relationship between the two countries. Overall, theEU has a strong interest in stable and productive relationships, and should do itsutmost to encourage both countries in this direction.

Indian and Chinese geopolitical spheres of interest already overlap, and willcontinue to do so across larger geographic, political, and economic spaces inthe years ahead. Geopolitical competition can already be seen in areas such asBurma/Myanmar, where the military government has been able to deect some

international criticism by playing India and China against each other. The EU willneed to account for this potential for competition between China and India as itassesses their respective inuence 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 inevitablymirrored the tensions of Soviet–American rivalry. According to Claudia Astarita

a more positive India–US relationship beginning in 1998 compelled the Chineseleadership to reconsider the value of an arms-length and potentially tenserelationship with India. This dynamic is still important: improvements in US–Indiarelations have paralleled improvements in China–India relations. Deterioration inrelations amongst China and India and their key partners, especially the UnitedStates, would not be in the EU’s interest.




China has been more active in increasing bilateral and regional cooperation withIndia, and has been pushing for a bilateral Free Trade Agreement since 2005.

China and India are at different developmental levels from both a policy andan economic perspective: China began implementing economic reforms in the1970s whereas India waited until the 1990s to start considering a new economic policy. ASEM meetings between the EU and ASEAN+3 celebrated their tenthanniversary, but as described above it was only in 2008 that India joined ASEM. AChina–ASEAN Free Trade Area should be in place in 2010 and once there it willinclude nearly two billion people. According to the analysis by Claudia Astarita,the China–ASEAN FTA has generated a domino effect, leading India, Japan, SouthKorea, and Australia to target nalizing 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 SouthAsia. 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 botheconomic but also military capability. Furthermore, both India and the EU will beaffected by the Chinese lead in institutional integration with the energy producersof Central Asia. China has allowed India, Pakistan and Iran to join the SCO asobservers.

There are increasing demands or expectations from the outside world on theemerging China and India, which puts pressure on modernization processes in both countries. The EU’s chances of exerting pressure are limited, however, giventhe discrepancy between its importance to China and India on the one hand, andChina’s and India’s importance to the EU on the other. In addition, the EU has amore benign view of China based on trade (it is China’s largest trading partner, andChina is the EU’s second largest), but it has less powerful economic grounds onwhich 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 threeBRIC states, namely Russia, China, and India. The recent “Report on theImplementation of the European Security Strategy” (Council of the EuropeanUnion 2008a) is rather vague regarding the future development of these strategic

partnerships. It states that the EU has substantially expanded its relationshipwith China, that relations with other partners, including Brazil and South Africahave grown in signicance since 2003, when the European Security Strategy

was adopted, and that there is still room to do more in our relationship withIndia. Indeed, despite shared values, a shared respect for diversity and a strongcivil society, India has lagged far behind China in its EU relations.




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 policymakers are proposed in the sections below.

Enhancing the Post-modern Approach

The EU’s relationship with China and India should move forward based on acommon interest to further develop effective multilateralism as well as regionaland interregional cooperation in order to gain win-win outcomes in economicdevelopment, but also in energy security and the ght 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 CouncilResolution 1674, adopted in 2006, which concerns the international community’s“responsibility to protect” citizens in states in which the ruling government isunable or unwilling to stop ongoing abuses of the citizenry, represents a newcommitment and an emergent norm within the international community to protect civilians from genocide, war crimes, ethnic cleansing, and crimes againsthumanity. Making good on this commitment will require a more exible 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 non-interference, which too often protect irresponsible and repressive governmentsinstead of the citizenry of the states concerned.

India is currently not able to counterbalance China, but it will probablychallenge China’s emergence as the unrivalled leader in Asia. The EU should moreclearly acknowledge and act on the increasing importance of India. Joint meetingsinvolving the EU, China, and India within the ASEM framework could form a newcontext to discuss issues of joint interest.

In addition to shaping international norms, the EU should also empower themodel of India in support of democratic norms. While a powerful and developedEU could be viewed with suspicion in its support of democracy in developingcountries, India as a non-interventionist developing country could attract theattention of nations determined to hold on to their uncompromising views onsovereignty. Furthermore, Indian experience of democracy could appeal tocountries that use national unity as their main argument for hesitating on the pathtoward 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 internationalsystem, its civilization and historical contributions to humanity’s development.In the same way India’s civilization, history and role as the leader of the non-aligned movement should be recognized. Any genuine international partnershipfor the EU can only begin with an acknowledgement of and a willingness to work




cooperatively with the political arrangements of the other players in the system,even as the EU supports bringing greater justice, equity, and prosperity to countriessuch as China and India.

Strengthening the Region-to-Region Approach

In order to facilitate China’s and India’s access to European cooperation the EUshould have a common view on how to further engage both countries within theASEM framework. ASEM provides a useful forum in which to consult both Indiaand China on various political, economic, social and cultural issues, and to launch joint initiatives in the regional context. The EU needs to increase interregionalcontacts which would require from the EU a stronger approach on two levels. Onthe 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 itssecond-track approach to Asia, as this level of preparing the concepts and agendasof international relations is the natural European access point to Chinese, Indian,and Asian international policies. People-to-people exchanges and the involvementof civil society are areas that are particularly worthy of further endorsement.

The EU should give more attention to China’s regional initiatives, includingthe SCO. In general there is a need to acquire a better understanding of China’srelations 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 competitiveelements related to the SCO in particular. This institutionalization of the CentralAsian area includes engaging China in cooperation with major potential energysuppliers, while excluding the EU.

Interregionalism offers the opportunity for the EU to present itself as anormative power, and to increase awareness of human rights, democracy, therule of law, and good governance in Asia, as well as of global governance. Ifthe multilateral regional system could be strengthened, the EU as a normative power will be better placed to inuence its Asian partners. As a normative power

it should employ its diversity and rely on its common values in its strategies ofengagement 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 norm-setter is appropriate to the EU. China’s and India’s willingness to align withinternational norms gives the EU the opportunity to exert its inuence. The EU

should encourage both countries’ role as providers of global public goods, and intaking the responsibility for utilizing their expanding role and resources to shapecooperative, multilaterally-achieved outcomes in regional hotspots. In order toenhance the implementation of the norms the EU should work with China andIndia to deepen their commitment to multilateralism especially in three areas:




China and India, and on the regional level where the EU’s own experience givesit a credible role. Global, regional and national interests are not competitive orcontradictory, but go hand in hand.

At the same time it will be easier for Europe to “sell” its model, and to expectAsia to learn from it, if it is also prepared to learn from the Chinese, Indian andAsian models and values. While many of the European normative models arereceived with enthusiasm in Asia, the ideal of equality in Asian-European relationscreates an obstacle for the European model unless the EU is prepared to engage ina process of mutual learning. This approach does not compromise the obligationto respect fundamental human rights which are universal in nature as stated in theUniversal Declaration for Human Rights.

Enhancing Dialogue with the United States and Russia

The EU policy is inuenced 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 andto nd common approaches – and to avoid confrontation – in their relationships

with both states. The ongoing transatlantic dialogue on Asian affairs should beupgraded and sustained.

Finally, since Russia is an inuential 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 internationalcommunity a new type of approach that will integrate as many perspectives and asmany interests as possible to nd the way forward.



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Index

AfricaChina and energy sources in 203China and the EU in 133–6, 165–70

Agarwal, Anil 83–4Ahlbrandt, S. 163

annihilation scenario 84–5anti-dumping 107, 131anti-secession law in China 111arms control by China 147–8arms embargo on China 110–11, 114ASEAN Plus Three 22, 142–3ASEAN Regional Forum (ARF) 21, 22,

23, 142Asia, EU’s development of relations with

55Asia strategies, EU’s bilateralism and pragmatism in 61–2constructive engagement approach 60–1geographical focus of 59lack of comprehensive strategy 62 politics and security emphasis 59–60Strategic Framework for Enhanced

Partnerships (2001) 59–62Towards a New Asia Strategy (1994)

56–9Asia–Europe Meeting (ASEM)

as bilateral, interregional andmultilateral 69–71

China’s role in 63–5, 66 , 67 climate change focus 24–5creation of 63EU in 69–73further engagement of China and India

in 219future directions 72–3impact on foreign policies of EU

members 48India in 68–9institutionalization of 72–3

interregional component 72–373Association of Southeast Asian Nations

(ASEAN)Chinese and Indian FTAs with 199as driving force behind regionalism 72

EU as exemplar for 71–2institutional infrastructure 21–2institutional leadership of 16Treaty of Amity and Cooperation 28–9,

29Astarita, Claudia 32asymmetry in relations with China 122–5Audit Culture 88avoidance of conict 30, 32

Bangladesheconomic power 15

military expenditure 12

Bashar, Iftekharul 195Belgium, pragmatism in approach of 61–2Berkofsky, Axel 24 bilateralism

economic relations with China 130–1in EU’s Asia strategies, 61–2

border trade through Nathula Pass 195–6 bottom-up Europeanization 46–7BRIC concept 85–6Brown, Lester R. 206Bt cotton 90Burma 69, 149

Camroux, D. 62Central Asia

military expenditure 13, 13

normative and constitutive constructionof 34

Shanghai Cooperation Organization 19Chase-Dunn, Christopher 60Cheng Siwei 124

Figures are indicated by bold page numbers, tables by italic numbers.

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Chidaushe, Moreblessings 168China

acknowledgement of as regional power59

in Africa 133–6, 165–70, 215–16

anti-dumping 107, 131anti-secession law 111arms embargo 110–11, 114, 132and ASEAN Plus Three 142–3asymmetry in relations with 122–5attitudes 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 well118–19and Burma 149central role in multilateralism 139change in EU view of 102common ground between EU and 117–18competition with India over energy

202–4compromise between cooperation and

self-reliance 122–3, 123n3conict management 30–1constructive engagement approach

with 61criteria for strategic partnership with

126–8dark areas in Eu relations 131–2deepening commitment to energy

efciency 220denition of strategy towards 95developing country/potential world

power duality 123–5developmental aid from 146developmentalism 28development-policy goals of EU as

problem 103different approaches to by EU member

states 114–15divergent values of EU and 127–8economic issues with India 195–200,

197 economic power 15, 16emergence as powerful regional player

57as emitter of greenhouse gases 155

energy imports 164energy needs of 155, 201energy security 183energy supplies to 17, 164–5, 215–16environmental consequences of growth

204–7EU and deepening multilateralism of152–4

EU and relations with India 184–5,207–8

and EU values and norms 211–13EU/East Asia energy/environment

cooperation 23–4euro, status of 117

and European energy interests 164–70expectations on from outside 124–5,129–30

rst EU policy paper 99–100Five Principles of Peaceful

Coexistence 29, 190foreign direct investment (FDI) to 200foreign policy and energy needs 155–6form of EU policy documents 98

founding member of ARF 142FTA with ASEAN 199FTA with India 199–200functional work with international

institutions 145further engagement of in ASEM 219future strategy towards 119–20and global health issues 145–6government and oil companies 156–8and greenhouse-gas emissions 182history of relationship with India

190–4human rights 103–4, 167–8humanitarian assistance by 146and India’s nuclear testing 192–3institutions binding to East Asia 19integration into global structures 104intellectual property rights (IPR) 108,

113interests in common with EU 104and Iran 149–50, 164–5key factors in growing role 139key words in policy papers on 100–2,

101, 102

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Index 253

lack of strategic partnerships with USallies 116

market-economy status 105–8, 113–14,131–2

meaning of strategic partnerships for

116–17mechanism for regional securitycooperation 31

member states attitudes towards 125membership of SCO as driven by own

needs 25military expenditure 11, 12, 13, 13,

14, 84most recent policy paper in 2006 100

motivation for multilateralism 144multilateralismapproaches 118, 213–15global 143–4 past experiences of 140–2recent positive approach to 142–4

multipolarization 128, 128n7national interests, energy as one of

159–61

non-interference 162–4, 213non-proliferation approach 147–8and Pakistan 192 peacekeeping contributions 147 popular nationalism in 112 population 33–4quality of multilateral commitments

144–51relations with France 113relations with India 216–17relationship with US and EU 133role in ASEM 63–5, 66 , 67 role in East Asia Summit 143role in regional hotspots 148–50scarce references to in Asia Strategy of

1994 56–7sectoral cooperation 104similarities to EU and India 37split with Soviet Union 191strategic partnerships

with EU 217–21with India 193–4

and Sudan 149Taiwan 108–10, 114, 147territorial disputes 150

thesis of responsibility 124–5, 124n4,124n5

Tibet 111–13, 114, 190ties to Asia Europe Meeting 19transparency

in international activities 166in military strategy 150–1unbalanced bilateral trade with India

195–9, 197 understanding of strategic partnerships

116understandings concerning

multilateralism of 151–2US approach to 221

use of strategic partnerships concept115, 115–16values and EU strategy 97view of strategic partnerships 126

Clash and Civilization and the Remakingof World Order, The (Huntington)85

climate change. see environmentColquhoun, David 91

common positions 97–8competition between nation-states 96–7conict management 26, 29–31, 30n19

32-3constructive engagement approach 60–1,

69–70Cooper, Robert 122corruption 88–90, 166n20Council for Security Cooperation in the

Asia Pacic (CSCAP) 21

dark areas in EU–China relations 131–2De Prado Yepes, C. 48‘Declaration on the Conduct of Parties in

the South China Sea’ 142–3Denmark

Audit Culture 88corruption 89exodus from the countryside 84visions for the future 87–8

developmental aid and China 146developmental optimism 77–8developmentalism

and energy/environmental issues 31–2recognition of common interests 27–8

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Index 255

Lisbon Treaty, proposed changes in49–53

as model for South Asia 185–6as model-power 39–40, 220–1normative role 97, 178–9, 211–13,

218–19and regionalism 4role of 2similarities to China and India 37as single legal personality 49, 50staff involved in external relations 51view of strategic partnerships 126as superpower 38–9 see also international actor, EU as

European Union and Asian Countries, The (Wiessala) 81Europeanization

as adaptation and projection 47–8 bottom-up 46–7and relations with Asia 48top-down 46, 60use of concepts 45

Experts and Eminent Persons (EEPs)

register 23external forces, military dominance of 14

Finland 46, 47–8Five Principles of Peaceful Coexistence

29, 190Flavin, Christopher 206foreign direct investment (FDI) to China

and India 200France

constructive engagement approach 61relations with China 113

Free Trade Agreements (FTAs) 199–200fusion energy 20

Gaens, Bart 41Ge Zhiguo 166Gelb, Bernard A. 25gender and re-agriculturization 84genetic modication 90–1geographical focus of strategies 59Germany

and Asia vision at EU 58–9constructive engagement approach 60–1corruption 88–9

view of ASEM 70Gill, Bates 214global governance 2

EU, China and India 213radical change in institutions as India’s

preference 175–6, 175n6 see also multilateralismglobalization, changes in 44–5governance, good/effective 135–6Green, Stephen 107greenhouse-gas emissions 182–3

health issues, global 145–6Herring, Ronald 90–1

High Representative for Foreign Affairsand Security Policy 50, 51hotspots, China’s role in regional 148–50Houser, Trevor 161Hu Dawei 129Hu Jintao 163human rights

as central in Asia–EU relations 81as central in EU global policy 99–100,

103–4and China 167–8, 212constructive engagement 61

humanitarian assistance by China 146Humphrey, John 130, 131, 136Huntington, Samuel 85

identityAsian 58, 71–2China as developing country/potential

world power 123–5India

Abdul Kalam 86–7acknowledgement of as regional power

59advantages of partnership with 186–7annihilation scenario 84–5in ASEM 68–9 border trade through Nathula Pass

195–6China, relations with 216–17and China’s split with Soviet Union 191competition with China over energy

202–4corruption 89–90

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deepening commitment to energyefciency 220

developmental optimism 77–8developmentalism 28dominance of SAARC 16

economic issues with China 195–200,197 economic power 15, 16energy security 183energy supplies to 216environmental consequences of growth

204–7EU and relations with China 184–5,

207–8

and EU as norms entrepreneur 178–9and EU values and norms 211–13evolution of EU relationship with 80–3evolution of strategic partnership with

174–5Five Principles of Peaceful

Coexistence 29foreign direct investment (FDI) to 200Free Trade Agreement with China

199–200further engagement of in ASEM 219genetic modication 90–1and greenhouse-gas emissions 182–3growing EU engagement with 173history of relationship with China

190–4IT sector 198mathematics based scenarios 77–8merger scenario 88–93military expenditure 11, 12, 13, 84multilateralism

approaches 213–15 participation 176–7trade negotiations 178

non-interference 213nuclear testing 192–3and Pakistan 191–2 political dialogue with EU 180–1 population 33–4radical change in global institutions as

preference 175–6, 175n6radical developmental pessimism 84radical inversion scenario 85–8

recommendations for improvingrelationship 187–8

scarce references to in Asia Strategy of1994 56–7

security cooperation, limited 181–2

similarities to EU and China 37status quo relations with EU 83–4strategic partnership with China 193–4strategic partnership with EU 217–21unbalanced bilateral trade with China

195–9, 197 United States

approach to 221relations with 82, 183–4

universities 88visions for the future 87–8infectious diseases 146institutional realities of regionalism 19–26institutions, international 175–6, 176n6intellectual property rights (IPR) 108, 113international actor, EU as

Asia/EU–China/EU–India strategies 41and changes in globalization 44–5

economic relations with China/India asdominant 42, 43, 44European Security Strategy (EES) 40–1as model-power 39–40 paradigm shift in Asia strategy 41–2 passive/active actor 39–40, 44short/long term objectives 40strategic/routinized action 40, 44as a superpower 38–9two-fold analysis of 38

International Monetary Fund (IMF) 175,175n5

interregionalismChina’s role in ASEM 63–5, 66 , 67 creation of ASEM 63as diplomatic tool 62–3EU in ASEM 69–73India in ASEM 68–9

Iran 149–50, 164–5Ireland, view of ASEM 70IT Factory 89IT sector in India 198

Jaffrelot, C. 77, 82Jain, Rajendra K. 33, 80, 216

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Index 257

Jakarta Process 22–3Jakobson, Linda 213, 215Japan

and China 140–1economic power 15

military expenditure 12Jiang Zemin 128, 128n7 joint actions 98Joint Cooperation Committee (JCC) 21–2Jokela, Juha 58, 212, 214

Kalam, A bdul 86–7Kazakhstan, military expenditure 13, 14

Kearney, A.T. 25

Kivimäki, Timo 216, 217Koreaeconomic power 15

military expenditure 12

Kumar , Amit 202

Lenz, Tobiaz 39Li Geqin 162–3Lisbon Treaty, proposed changes in 49–53

long-term policy for China–Europerelations, A (European Commission1995) 99–100

Macaulay, T.B. 79Mahbubani, Kishore 44–5, 85Mandelson, Peter 103, 108, 178Manners, Ian 97Mansingh, Lalit 175n3market-economy status of China 105–8,

113–14, 131–2material realities of regionalism 11–18, 12,

13, 14, 15

Mattlin, Mikael 211–12member states

attitudes towards China 125different approaches to China by

114–15Europeanization of policies 45–8strategies for Asia 60

merger scenario 88–93Messner, Dirk 130, 131, 136military expenditure 11–14, 12, 13, 14

Milliband, David 39model-power, EU as 39–40, 220–1

modern states 122multilateralism

China 118approaches to 213–15central role in 139

deepening of commitment 219–20developmental aid 146global health 145–6humanitarian assistance by 146international institutions and 145non-proliferation approach of

147–8 past experiences of 140–2 peacekeeping contributions by 147

quality of commitments 144–51recent positive approach to 142–4role in regional hotspots 148–50territorial disputes 150transparency in military strategy

by 150–1understandings concerning 151–2

Indiaapproaches to 213–15

deepening of commitment 219–20 participation by 176–7multipolarization 128, 128n7

Nathula Pass 195–6nation states

competition between 96–7types of 122

nationalism in China 112 Naumann Report 91–2 Netherlands, trade with China 106 New Asia Strategy 56–9 Niblock, Tim 168non-interference 28–9, 162–4, 213non-proliferation approach of China 147–8normative/constitutive relevance of

regionalism 26–34norms entrepreneur, EU as 178–9, 211–13,

218–19 North Korea, alliance with China 141nuclear testing 192–3

oil supplies 17organizations, regional, roles taken by

China and India 16

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Pakistanand China 141, 192economic power 15

and India 191–2, 193military expenditure 12

Pan Yue 205 passive actor, EU as 39–40Patanchali, 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, 102development-policy goals of EU as

problem 103rst paper 99–100most 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 122President of the European Council 50–1, 52

radical inversion scenario 85–8re-agriculturization of First World 84r ecommendation for future strategy of EU 2Rees, Martin 84–5regional organizations, roles taken by

China and India 16regionalism

ASEAN as driving force behind 72in Asia, EU and 4importance of in world politics 3–4institutional realities of 19–26material realities of 11–18, 12, 13, 14,

15

normative/constitutive relevance of26–34

Rothermund, D. 77, 79routinized action of the EU 40Rüland, J. 20Russia

links with concerning China and India221

military expenditure 13, 14

Sanskrit 92–3

science, hybridizing with superstition 90–1sectoral cooperation, EU–China 104security

ASEAN institutional infrastructure21–3

drivers of in East Asia 21 see also energy

self-determination 28–9Shambaugh, David 134

Shanghai Cooperation Organization 19, 25,143, 202–3Shanghai Cooperation Organization (SCO)

14Shi Xianze 163Sino-European relations. see ChinaSjursen, H. 97Small, A. 163Smith, M.E. 47

Solana, Javier 98, 109, 117, 118South AsiaASEAN way 26developmentalism 26–7economic power 15, 15–16EU as model for 185–6institutionalization in 19military expenditure 12, 13normative basis of 28recognition of common interests 27–8

South Asian Association of RegionalCooperation (SAARC) 16, 19–20,185, 185n13

South China Sea 142–3sovereign equality 28–9Soviet Union 191staff involved in external relations 51strategic action of the EU 40

and competition between nation-states96–7

denition of 95and values 97

Strategic Framework for Enhanced Partnerships (2001) 59–62

strategic partnerships

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Index 259

China and India 193–4common ground between EU and

China 117–18criteria for with China 126–8divergent values of EU and China

127–8doubts about EU–China 117essential qualities of 175n3establishment of 3EU and China’s view of 126EU with China and India 217–21evolution of with India 174–5future potential for between EU–China

127

institutional realities of regionalism19–26lack of between China and US allies

116material realities of regionalism 11–18,

12, 13, 14, 15

meaning of for China 116–17normative/constitutive relevance of

regionalism 26–34

origin of concept 115shared values of EU and China 127as understood by Chinese leaders 116use of concept 115–16

strategies concerning Asia , EU’s bilateralism and pragmatism in 61–2constructive engagement approach

60–1geographical focus of 59lack of comprehensive strategy 62 politics and security emphasis 59–60Strategic Framework for Enhanced

Partnerships (2001) 59–62Towards a New Asia Strategy (1994)

56–9Stubb, Alexander 40Sudan 149superpower, EU as 38–9superstition, science hybridizing with 90–1

Taiwan 108–10, 111, 114, 147, 159, 159n6Talbott, Strobe 81Taylor, Ian 167–8territorial disputes, China’s approach to 150terrorism 180–1

thesis of responsibility 124–5, 124n4, 124n5Tibet 111–13, 114, 190Tiilikainen, Teija 70Tonra, B. 47top-down Europeanization 46, 60

Towards a New Asia Strategy (1994) 56–9trade balances with China 105–8, 106, 113–14multilateral negotiations, and India 178through Nathula Pass 195–6unbalanced bilateral between China

and India 195–9, 197 transparency

Chinese international activities 166

in military strategy by China 31, 150–1Treaty of Amity and Cooperation 28–9, 29

UN Security Council 100, 180, 212United Nations, India’s attitude towards

176United States

approach to China and India 221and the arms embargo on China 111, 132

and China’s economic and trade practices 107economics focussed approach to Asia 57energy security competition with China

160and EU relations with China 128–9military expenditure 14

military might of 13, 14

relations with India 183–4relationship with China and EU 133and strategic partnerships concept 115ties with India 82

universities, Indian 88

Vajpayee, A.B. 205values

abstract 97domestic security 127–8democratic 211–13

Vietnam 141visions for the future 87–8

Wacker, Gudrun 132, 136Wang Jisi 162Wen Jiabao 116, 126, 199, 205

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Europe-Asia Interregional RelationsA Decade of ASEM

Edited by Bart Gaens

Governing Regional Integrationfor Development

Monitoring Experiences,Methods and Prospects Edited by Philippe De Lombaerde, Antoni

Estevadeordal and Kati Suominen

Cruising in the Global EconomyProts, Pleasure and Work at Sea

Christine B.N. Chin

Beyond Regionalism?

Regional Cooperation, Regionalism andRegionalization in the Middle East Edited by Cilja Harders and

Matteo Legrenzi

The EU–Russian Energy DialogueEurope’s Future Energy Security

Edited by Pami Aalto

Regionalism, Globalisation and

International Order Europe and Southeast Asia Jens-Uwe Wunderlich

EU Development Policy andPoverty Reduction

Enhancing Effectiveness Edited by Wil Hout

An East Asian Model for Latin

American SuccessThe New Path Anil Hira

European Union and New RegionalismRegional Actors and Global Governance in a

Post-Hegemonic Era. Second Edition Edited by Mario Telò

Regional Integration and Poverty Edited by Dirk Willem te Velde and the

Overseas Development Institute

Redening the Pacic?

Regionalism Past, Present and Future

Edited by Jenny Bryant-Tokalau and Ian Frazer

The Limits of Regionalism NAFTA’s Labour Accord

Robert G. Finbow

Latin America’s Quest for GlobalizationThe Role of Spanish Firms

Edited by Félix E. Martín and

Pablo Toral Exchange Rate Crises inDeveloping Countries

The Political Role of the Banking Sector Michael G. Hall

Globalization and AntiglobalizationDynamics of Change in the New

World Order

Edited by Henry Veltmeyer Twisting Arms and Flexing Muscles

Humanitarian Intervention andPeacebuilding in Perspective

Edited by Natalie Mychajlyszyn andTimothy M. Shaw

Asia Pacic and Human Rights

A Global Political Economy Perspective Paul Close and David Askew

Demilitarisation and Peace-Buildingin Southern Africa

Volume III – The Role of the Militaryin State Formation and Nation-Building

Edited by Peter Batchelor, Kees Kingma andGuy Lamb

THE INTERNATIONAL POLITICAL ECONOMY OF NEW REGIONALISMS SERIES

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