Tomorrow, China’s Prime Minister Wen Jiabao will fly to Brussels to attend his last EU-China Summit on Thursday. He will formally step down in March after ten years in office. When he steps into the room of the Palais d’Egmont to face his counterparts Joao Manuel Barroso, EU Commission President and Herman Van Rompuy, European Council President, he may well reminisce about all the ground he covered since his first Summit in 2003 in Beijing's Great Hall of the People with then Commission President Romano Prodi and pre-Lisbon Treaty rotating European Council President Silvio Berlusconi.
Over the last ten years, EU-China relations have first gone through a period of warming, when the EU flirted with the idea of lifting the arms embargo it had imposed after the 1989 Tiananmen repression. David Shambaugh described the period between March 2003 and March 2005 as a honeymoon period between Europe and China. This started in the lead-up to the U.S. invasion of Iraq in March 2003 and ended with the adoption by China of the Anti-secession law, which declared that the People’s Republic of China would oppose democratic Taiwan’s independence by all means including by military force. During this time many European leaders were frustrated by U.S. actions in Iraq and saw a new pole of power in the world to which they wanted to align and balance against the U.S. Europe therefore declared China a “strategic partner.”
The “honeymoon” period was followed by China’s disappointment. Europe’s unfortunate timing to try to lift the arms embargo at the same time that China adopted the Anti-secession Law demonstrated to China that Europe was unable to deliver what some European leaders had promised and relations between the EU and China steadily deteriorated. China realized that it could not have a real alliance with the EU. The EU "lost face:" it appeared to China as internally fractious, as it could not agree on the embargo, and externally dependent on the U.S. that lobbied against the lifting of the embargo and effectively influenced EU foreign policy. European dreams of power-sharing with China slowly eroded away. Europeans later got a wake-up call in 2008 when the Chinese cancelled the EU-China Summit because of France’s President Sarkozy’s meeting with the Dalai Lama.
PM Wen will leave office without having succeeded in resolving two big issues he inherited when he started dealing with the Europeans. One is the lifting of the arms embargo. The other is the EU’s lack of recognition of China’s Market Economy Status, which has concrete significance for anti-dumping purposes as well as a symbolic significance as a stamp of approval of China's economic transformation. PM Wen may well feel some frustration towards the EU.
On the other hand, the EU made hardly any progress over the last ten years in its core areas of interest. These include the protection of Intellectual Property Rights, market access for European companies and respect for human rights in China. Despite persistent EU lobbying, China has not yet ratified the UN International Covenant on Civil and Political Rights. The EU has also failed to persuade China to take its side in climate change negotiations.
During Wen’s tenure China has grown economically beyond any expectation and has magnified its political influence in the international arena. 2008 was truly a coming out party for China when Beijing hosted a successful Olympics. Beijing’s memorable opening ceremony was remarked upon even four years later during this summer’s London Olympics. By contrast, Europe’s relative weight has declined.
2008 also ushered in the sovereign debt crisis and the focus and attention of European leaders naturally shifted. China multiplied its foreign direct investment (FDI) in the EU Member States, especially in Central and Eastern Europe, which allowed China increasingly to play some EU Member States against the others and to weaken EU policy.
Nevertheless, the EU remains important to China as its largest export market and source of technology transfer, as well as a symbolic counterweight to the U.S. in a multipolar world – hence recent Chinese rhetoric in support of the euro and of European integration. Concrete financial support for the euro, however, has remained limited despite repeated EU requests.
With hat in hand looking for financial help from China, Europe feels it has little political leverage or pride and practically no military sticks to wield in the geo-strategic hot spot of the South China Sea. In late 2011 the U.S. announced its “pivot” to Asia which many in Brussels assumed was a pivot away from Europe. The key phrase now used by the U.S. is rebalancing. With the explosion of change unleashed by the Arab Spring there is a great deal of instability on Europe’s periphery, a region that Europe is now expected to be more responsible for with U.S. attention more firmly focused on the Asia-Pacific. Austerity measures across Europe have meant budget cuts to member states’ military budgets which former U.S. Secretary of Defense Robert Gates complained were already underfunded.
Europe’s Asia policy has largely been China-centric and the relationship is anchored by trade with a distinct absence of common values. Europe has a strategic partnership with China but at the same time it has also had an arms embargo in place for over twenty years. However, lobbying efforts from other players in the region, as well as U.S. efforts to involve Europe more in Southeast Asia, are now slowly expanding Europe’s relations with other Asian countries. Europe, for instance, has the largest amount of FDI in the ASEAN member states.
At the EU-China Summit in Brussels, the EU will try to raise its concern for the risk of conflict and the threat to navigation in the East and South China Seas. It will encourage China to conclude a new, multilateral Code of Conduct on the South China Sea with ASEAN countries. But how persuasive can the EU be? What influence can it bring to bear? And can a Code of Conduct really avert conflict in East Asia?
The EU has seen the growth of a multipolar world but this development has not been on its terms. A strong advocate of multilateralism, it has instead seen an evolving multipolar world based on bilateral relationships. As Premier Wen returns to China and closes this chapter on EU-China relations he may reflect on the shift of power in this relationship, as he prepares to hand over the reins to Li Keqiang.
Theresa Fallon is a Senior Associate at the European Institute of Asian Studies.