China-EU Relations Why Europe needs a Hedging Strategy

Global Centre Stage

The so called 'scramble for China' was the dominant feature of European diplomacy regarding China in the 19th century. A diplomacy, which was driven by economic expansion, scientific racism/chauvinism and last but not least, internal European competition.

Constructive cooperation with China is indispensable and can lead to fruitful results, as the world witnessed in Paris with the conclusion of the historic UN climate change agreement. In the past also, cooperation with Beijing has been quite beneficial. The anti-piracy mission in the Gulf of Aden in 2008 is a paramount example. With the ascendancy of a more global active China, one can even recognise China’s leading role in international critical issues such as Afghanistan, where China has the power to let the rival parties – the Afghan government and the Taliban – sitting around one table.

Pursuing a constructive cooperation with China, however, does not necessary mean to ignore issues of contention. Most European leaders have seemingly taken a different view on this. Only one out of 28 EU member states – Germany – has along with the USA and Canada openly criticised the Chinese leadership on the United Nations’ Human Rights Day due to the detainment of the human rights lawyer Pu Zhiqiang. The European Union merely underlined the global importance of human rights, but failed to mention Pu Zhipiang explicitly. “Business as usual”, one may say ironically, the British government did not criticise China at all and was even praising Beijing’s alleged ‘progress’ in its human rights records.

Where is Europe’s comparable value-based foreign policy in the face of China’s rising global money machine? Indeed, October and November, 2015 – saw with the visit of the ‘Big Three’ (Germany, France and Great Britain) to China, the dawn of a questionable European China diplomacy.

From a ‘Scramble for China’ to a ‘Begging for China’

When the Chinese emperor Qianlong in 1793 refused the request by the British George Macartney to establish a trade mission within the self-declared ‘Middle Kingdom’, no Chinese knew that this was the starting point of a huge confrontation between Europe and the Far East. The so called ‘scramble for China’ was the dominant feature of European diplomacy regarding China in the 19th century. A diplomacy, which was driven by economic expansion, scientific racism/chauvinism and last but not least, internal European competition.

Two elements of Europe’s China diplomacy remain up to today driving forces, namely internal European competition and the striving for economic gains, though by other tools. However, these two elements occur under completely different circumstances. In the meantime, China has gained the initiative in the bilateral relationship with EU, as the Global Times remarks. The underlying reasons for Europe’s current weak position are relatively clear: In the light of the still weakening European economy, the call for Chinese investment, the hope for investment opportunities within China along with the goal to profit from the internationalisation of the RMB, major European capitals have become more passive in their China approach. Additionally, Europe lacks any comprehensive strategic vision which would be comparable to China’s ‘One Belt, One Road’ initiative and the EU’s attention is consumed with the refugee challenge. Therefore, it is no surprise that neither Francois Hollande nor James Cameron raised human rights issues during their encounter with Xi Jinping. The British even enthusiastically welcomed the world’s most powerful autocrat in the world’s oldest parliament, which is a symbol for civil and political rights. Surprisingly, the Lord speaker praised Deng Xiaoping enduring wisdom of his proposed ‘One country, Two systems’ doctrine without referring to Hong Kong’s ongoing struggle for more freedom and the effective safeguarding of ‘One country, Two systems’. Once again, only the German Chancellor Angela Merkel mentioned, though carefully, issues of NGO repression in China. Furthermore, she also met with human rights activists.

In particular, the visit of Xi Jinping to England evoked serious debates about the British conservative government’s policy approach towards China. In a debate on ‘China File’, the majority of experts were highly critical of London’s China diplomacy. For instance, Isabel Hilton stressed Britain’s foreign policy is made by the Treasury instead of the Foreign Office. Jonathan Fenby regarded Napoleon’s view of the British as ‘nation of shopkeepers’ as confirmed. The only expert who did not float with the current was the President of the Berlin-based think tank MERICS, Sebestian Heilmann. Heilmann argued that London is simply following a ‘bold strategic positioning’ by turning towards China and is using a ‘smart hedge’ against increasingly troublesome political conditions within the European Union. Uncontroversial is the observation that every European state wants to have closer relations with China in the context of an evolving competition among European countries for Beijing’s attention, as some Chinese authors pointed out.

China’s non Value-based Foreign Policy

A nation’s foreign policy can be differentiated into two approaches: A value-based foreign policy and an interest-based foreign policy. A value-based foreign policy can focus on the promotion of human rights and democracy, but also on the promotion of or defence of a religion. The Thirty Years’ War (1618-1648) in Europe is a striking example of the latter where Ferdinand II, the emperor of the Holy Roman Empire, zealously attempted to restore Catholicism as the sole religion in Europe. In contrast, an interest-based foreign policy is focused on the balance of power and the will to achieve the national interest. A perfect example for this approach to politics was Theodore Roosevelt. In the real world, both approaches are often intertwined. Actually, in connection with the latest Iraq war, where the geopolitical interests, the search for oil were likely dominant, one cannot ignore American voices for the promotion of democracy and the protection of human rights in the Middle East.

The Chinese leadership tries a lot to convince the world of its benign intentions and value-based foreign policy. Equipped with a strong rhetoric – ‘Win-win’, ‘Community of Common Destiny’, ‘New Type of Great Power Relations’ (to name just a few) – and huge expenditures in China’s soft power, the Chinese Communist Party shows a somehow ambivalent feeling of confidence in China’s rise and doubts of China’s global image. China’s goal to enhance its international discursive power (国际话语权) symbolises China’s intensified struggle for global recognition and influence.

One of China’s alleged guiding principles is the notion of non-interference. Principles such as non-interference are rather directly than indirectly associated with morality and normative elements in international relations. Being part of the Five Principles of Peaceful Coexistence, Mao’s China adopted the non-interference principle officially in 1955 at the Bandung Conference. Despite Mao’s strong focus on maintaining China’s sovereignty and holding high the right of independence of the developing world, Mao himself let China interfere in the internal issues of other developing states. In the wake of the ideological struggle with the Soviet Union, Mao supported communistic groups in Southeast Asia, South Asia, South America and Africa. As a matter of fact, the so called ASEAN Way, which mainly underlines the value of non-interference in the domestic affairs of neighbouring countries, has been partially formed as a defence against China’s constant interference in the internal affairs of its neighbouring countries.

With the rise of the pragmatist Deng Xiaoping, China’s foreign policy lost its ideological vigour. Henceforth, China was mainly concerned about its own economic construction and with the goal to keep low profile international affairs. However, things have changed dramatically. China has more globalised interests than ever before and its will to protect, among other things, its overseas interests has been expressed clearly in its first Defence White Paper about its military strategy. More importantly, this year’s White Paper does not make any reference to China’s non-interference policy nor to the Five Principles of Peaceful Coexistence, pointing out China’s only genuine guiding and non-value based foreign policy principle: The will to use every means to increase its comprehensive national power.

The new Chinese leadership seems to abandon one foreign policy ‘principle’ after the other. For a long time, the Chinese accused the United States of compounding US hegemony by spreading military bases around the globe. Furthermore, Beijing’s critique implied that it will not behave in a similar way. In defiance of these statements, China has a short time ago established its first overseas military base in Djibouti, located at the East Coast of Africa. More recently, rumours state that China is also negotiating with Namibia about a second military base in the African continent. In short: The more assertive leadership of Xi Jinping is, despite all the reassuring rhetoric, about to shatter every modest tool of China’s foreign policy since Deng Xiaoping.

Why should Europe worry about such a development? The flow of China’s money to European capitals does not come without a price. Today, China already interferes in democratic principles when Beijing demands that there should be no protests against its authoritarian leaders during their state visits. So far, China’s arm of interference is most tangible with respect to other states’ foreign policy. In 2012, Great Britain still welcomed the Dalai Lama. However, after being rebuked by Beijing, the British kowtowed three years later. Even more puzzling is the behaviour of the head of the South African democracy, Jacob Zuma. South Africa refused to issue a visa to the Dalai Lama and is taking the so called ‘China Model’ as an example of good governance, though Xi Jinping is attempting to revamp it due to massive shortcomings, such as endemic corruption. Other signs of Chinese diplomacy are not less worrisome. States, which are bought by China’s impressive pocket, usually function as an extended arm of Chinese interests. For example, Pakistan in SAARC, Cambodia in ASEAN, Iceland and Denmark within the Arctic Council. Will Britain serve Chinese interests in the EU? And if Britain resists, what about countries such as France or the Eastern European countries, which are already on their way to get more authoritarian?

There is nothing more wrong to believe that China strictly follows any principle of non-interference, in particular, with a future look on China’s growing power and ambitions. Finally, China is already using its more powerful position to promote globally its own authoritarian vision of global internet governance as the recently held Second World Internet Conference revealed. Furthermore, one may dare to raise the question: Does China already use or attempting to use its money to influence the behaviour of some European states within the United Nations?

Forming a Hedging Strategy

Over reliance on an authoritarian regime is dangerous. Not just because of China’s slowing economy, but also due to Beijing’s ambitions to interfere into the order of democratic states, restrict their foreign policy options and to make international relations (more) undemocratic. From an economic perspective, China may at large remain an opportunity, but from a political point of view it is more a challenge. Especially, China’s idea of internet sovereignty – basically justifying the existence of a great firewall and undermining all essential democratic freedoms – may have some global appeal in the face of a rising global terrorism.

Throughout human history, the most powerful country was the one with the largest economic base. According to a study from PwC, China will be by far the largest economy in 2050 with a GDP of 61.079 billion dollar, before India (42.205) and the United States (41.384). If this is the future, the future will be a huge challenge for democracies around the globe. However, any attempt to implement a containment policy is senseless because China is part of the international system, its economy is too influential and China’s cooperation is needed in many international issues.

The question is - How to adjust Europe’s China policy? In general, Europeans should conduct a hedging strategy based on the dualism of using the opportunity of China’s economic rise and balancing against Beijing’s authoritarian cloud. Since Europe has until now basically overlooked the political challenge from a rising China, it needs to focus on the balancing element. Diversifying its economy away from China must have the highest strategic priority; otherwise China’s growing economic impact will most likely lead to the above mentioned negative consequences. This is not a hostile China policy. Actually, Europe would do nothing else than China which is trying to diversify its diplomatic portfolio by gaining influence in every region in the world. Although in every other region or country in the world, serious challenges for European companies exist as well, it is untrue that there are no other alternatives to China. India, the world’s largest democracy, is also rising fast and six out of the 10 fastest growing economies in the world are located in Europe’s direct neighbourhood - Africa.

Now is Europe’s greatest chance to concentrate on Africa. China’s FDI in Africa, although always comparably low, fell by more than 40 percent in the first half of 2015 and African imports from China reduced by nearly 43 percent during the same period. Of course, it is not easy to invest in African countries which often have a weak infrastructure, suffer under corruption and are lacking a well-trained workforce.

However, advantages to focus on the African continent are obvious. Europe can hit two birds with one stone: By developing Africa it can effectively hinder Africans to leave as refugees their home countries and it can reduce its growing dependence on China. Unfortunately, Europe’s current Africa policy is not mainly structured around the idea of increasing Africa’s development opportunities, but rather on the goal to secure European resources and to open up the not yet competitive African markets for cheap and often subsidised European products. Europeans need to comprehend that strong African states – many of them share democratic values and institutions – are much more in their strategic interest than a rising authoritarian power in the Far East. In addition, East Asia is not a one-country show: A democratic Japan is pursuing a more active foreign policy than before. It is time to realise that China is not Europe’s best friend in the Far East.

To be sure, positive EU-US relations are essential for a successful European hedging strategy. A final agreement of the Transatlantic Trade and Investment Partnership (TTIP) should only be achieved under transparent conditions and the total inclusion of all stakeholders, such as civil society actors. However, civil society actors who are strictly against any agreement on the TTIP seem to underestimate the possible positive economic effects for the weak European economies and last but not least, disregard an important pillar of a European hedging strategy. In contrast, being open towards China’s ‘One Belt, One Road’ initiative, while being hostile towards the TTIP is increasing, and not diminishing China’s authoritarian footprint.

After all, Europe’s foreign policy design needs to learn from the US. Apart from the described geopolitical/economical readjustment, the other important elements of an effective hedging strategy are tangible punishments. Diplomacy is absolutely ineffective towards Beijing, if it is not backed up by some kind of hard power, and the willpower to put a price on China’s misconduct. In terms of cyber security, the Obama administration has pursued a much more direct and coercive approach since 2014 and the results are positive. The NSA and the FDI reported that after the US indictments of five PLA officers in May 2014, the Chinese PLA has scaled back its hacks on the American industry.

Additionally, the US-China cyber agreement, concluded in September, also follows the logic of a potential punishment (sanctions) in the case of Chinese misconduct. On the contrary, European decision makers merely negotiate with the Chinese over cyber-agreements without putting enough pressure on them; hence China will not comply with them. Even more unrealistic are ideas to uphold any ideals of the freedom of investment for Chinese investors within Europe, while the Chinese side is harassing foreign companies by visa regulations, a huge negative list, a restrictive internet, the new national security law, the anti-terror law, etc. No wonder that some European diplomats stress that the EU is not taken as seriously as the USA. In conclusion, reasonable mistrust and a non-accommodating China policy have to become a truism of Brussels’ diplomacy vis-à-vis Beijing.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.