Euro, Eurozone, EU, Europe.
Taking the Dragon’s share of headlines, debate, crisis meetings and fears of the undetermined future. Following the daily commotion in the EU, the UK’s recent veto on EU reforms and its consequent self-appointment to the far periphery of Europe, the EU and the UK’s relations with China are set to take a new direction. Sino-European relations hold crucial importance as China significantly increased its investment in European sovereign debt earlier this year. Today, in what seems to be an almost hopeless situation around the euro, looking East for help is not only a wise option, but perhaps the only solution.
For decades now, there has been considerable effort to strengthen and enhance Sino-European ties, with diplomatic relations with China being formally established in 1975 and governed by the 1985 EU-China Trade and Cooperation Agreement. This rapprochement between the two powers culminated in the setting up in 1988 of a European delegation in Beijing. Despite persistent tensions on human rights issues, relations with China have continuously deepened including support for China’s accession to the WTO in 2001. By launching a ‘strategic partnership’ in 2003, the EU clearly acknowledged China as a key player in the global arena.
China’s increased buying of Eurozone debt tied with China’s rise to a global economic giant and the extremely bleak outlook of many European economies today have put these relations at a pivotal point. Wen Jiaobao’s visit to the UK earlier this year followed the signing of trade deals between European countries and China but there was a distinct air of Chinese superiority in face of a weakened Europe.
Whilst it is easy to realize China cannot be ignored amidst European turmoil, just what is at stake, and how could the current European situation affect future relations?
First, the argument that European relations with China have been damaged by national interests, is very likely to be strengthened. The boom in business is undeniable Beijing EU-China trade relations expanded from €4 billion in 1978 to €296 billion in 2009. However, not only is this highly comparable to France, Germany and the UK’s individual relations with China, their strong ties have also often led them to compete with each other for China’s business, therefore undermining collective EU-China relations. The competing of the French TGV train company with the German ICE and Japanese Shinkansen for the building of the Beijing-Shanghai high-speed railway is an example of how such competition allows China to play states off against each other, something which could be crucial especially at a time when Europe is desperately holding onto its unity.
Secondly, certain British newspapers claimed that as China buys Europe’s debt, it is buying Europe’s silence on its human rights policies too. There was proof of this before but the case is almost certainly likely to be proven now. With the bigger countries happy to breach human rights sanctions in favour of commercial interests (France was able to sign unprecedented business deals with China in 2004 after President Chirac showed his support for the lifting of the arms embargo imposed on China), the EU appears to have no real leverage to enforce human rights upon the Dragon, and this is especially likely to be the case if Europe asks for more help from China.
Interestingly, if collective European relations with China are fragmented as a result of national business interests, what is to become of the Sino-UK relations as we pull away from Europe? If the UK wants to distance itself from Europe, and with the US having enough of its own problems to deal with, China is surely the biggest, most viable and strategic partner for the UK. Examples such as last year’s £5.8 bn sale of the UK’s EDF networks to a Chinese billionaire show that whatever happens in the EU will greatly impact the future of, and is likely to strengthen, UK-China ties.