China’s Role in The Future of Europe

Sino-European relations are not only mutually beneficial, but also mutually transformational By David Gosset

China’s Role in The Future of Europe

Sino-European relations are not only mutually beneficial, but also mutually transformational By David Gosset

CULTURAL APPEAL:A German girl practices Chinese calligraphy in Zhuji, east China's Zhejiang Province

The redistribution of global power has changed the relations between the great powers and invites them to reconsider their diplomatic priorities. In the aftermath of World War II, the future of Europe was proactively shaped by the United States, or more precisely, by a group of American “wise men.”But now China is in a position to have an unprecedented impact on European integration.As Beijing fully develops its immense potential and seems poised to become the world’s biggest economy in the coming decade, its capacity to influence will certainly grow.

With the euro debt crisis, Europe is arguably at its third main turning points since the end of World War II. However, as it did previously when confronting the most serious challenges,the continent will not de-Europeanize but, on the contrary, will deepen its union by transferring more sovereignty to its supranational authorities in the field of budgetary and fiscal policies. In that sense, for European federalists, the euro crisis is an opportunity and Brussels will subordinate the discussions on enlargement to the existential imperatives of a more cohesive fi rst circle of the EU—the euro zone.

In this rapidly changing context, the leaders of the EU and China should rethink the significance of trans-Eurasian links and open a new chapter in the relations between two of the world’s most ancient civilizations. The degree as well as the means of Chinese action in Europe compatible with the internal constraints of the world’s largest developing country and congenial with Chinese traditional principles of foreign policy will have to be seriously discussed by Beijing’s policymakers. In parallel, the realization and evaluation of China’s new ability to influence will occupy more and more space in the European public debates and stand as an issue of political campaigns.

The Chinese defense of the euro is also an instrument to consolidate multi-polarity and to pave the way for the internationalization of the renminbi, in other words, to enter a world where the U.S. dollar will have lost its absolute preeminence

Mutual reassurance

With mutual trade in goods and services reaching 432 billion euros ($552.7 billion) in 2010, the EU and China form the second largest economic cooperation in the world. This level of economic interdependence has been achieved in a very short period of time despite a Great Wall of mistrust separating two societies that have been evolving largely independently for millennia.And, as the speed of quantitative change exceeds the pace of qualitative transformation, time will certainly be needed to reduce the gap between trade and trust. Obviously, it is the Chinese people’s belief in the Chinese renaissance that conditions its success, and, similarly, the Europeans’ faith in the renewal of Europe will determine its outcome. But while self-con fi dence remains the most powerful internal force, mutual reassurance has the advantage to strengthen it,and it is in that perspective that both sides should not overlook what mutual trust can bring to the relationship. The Chinese renaissance should be seen by Europe as a source of synergies. At the operational level, it is time for European policymakers to build mechanisms to facilitate Chinese investment within the EU—China will invest abroad more than $1 trillion by 2020. The EU should also grant China market economy status,which will be, in any case, accorded to Beijing under World Trade Organization rules from December 11, 2016, and lift an inopportune and counterproductive arms embargo. In foreign affairs, Europe should systematically consult China on security issues such as the Middle East and nuclear proliferation, and implement ambitious Sino-European cooperation in third countries from Africa to Central Asia.

For decades, the West questioned the Chinese political system and its capacity to bring socioeconomic progress to the Chinese people. But, in a striking reversal, while the 2008 financial crisis exposed Western hubris,Chinese analysts are now trying to assess the nature and the signi fi cance of the Occupy Wall Street protests or the Indignants movement in Spain. In 2011, the Chinese media, academia and think tanks expressed serious concerns about the viability of the European project and the effectiveness of the EU’s leadership. At least two new elements characterize the current stage of the European construction: internally, the relative weight of Germany—both an effect of the reunification and of the positive impact of the euro on the German economy—and externally,the China factor. If the Chinese leadership resolutely opts for a strategic and targeted policy to support the present and future role of the euro in the world, if it encourages Chinese companies to invest and to create jobs within the EU, it will become a significant contributor to the success of the European project. The Chinese defense of the euro is an instrument to consolidate multi-polarity and to pave the way for the internationalization of the renminbi, in other words,to enter a world where the U.S. dollar will have lost its absolute preeminence. In March 2010 on the occasion of a speech delivered at Shanghai’s Lujiazui International Finance Research Center on “the role of the EU and China in the world’s fi nancial architecture of the 21st century,” former President of the European Commission Romano Prodi made the following remarks:

“When we started with the idea of the euro, the top Chinese leaders showed great interest. When I asked why the creation of the euro was so important for China while mentioning that the issue was not only about economics but also about politics, the then Chinese President Jiang Zemin said, ‘I want to live in a multi-polar world.’”

Paradigm shift

In this new historical phase Sino-European relations are not only mutually bene fi cial, but they have become mutually transformational.While explicit and tangible Chinese supportto European integration would help Europe defeat its fear of globalization, Europe’s opening to the Chinese renaissance would weaken Beijing’s Sino-centric re fl exes. Sino-European dialogue and solidarity cannot completely eliminate nationalism and populism from the public debates, but they can keep them at a relatively benign level.

The author is director of the Euro-China Center for International and Business Relations at the China Europe International Business School

Germany’s central position within Europe and the new role of Beijing in European affairs reinforce each other. In 2010, Berlin and Beijing issued a joint communiqué on “comprehensively promoting the strategic partnership between China and Germany,” officially elevating their relations to a strategic level. Already 5 percent of German exports go to the Chinese market. In 2010, Sino-German trade reached 130 billion euros ($166.2 billion), increasing by 35 percent from a year earlier and representing 30 percent of the EU-China total trade, and will be over 200 billion euros ($255.7 billion) within the next fi ve years.

In a eurosceptic posture, British Prime Minister David Cameron has already said the UK will not back the efforts of the EU countries aiming to transfer more power to Brussels.Consequently, while the euro zone will evolve toward more integration, the distance between London and the EU’s inner circle will increase.In these conditions, the “special relationship” between the United States and the UK, which has been in the past a limitative factor in the Sino-European synergy, will lose, to a certain extent,its capacity to affect the relations between the EU and China.

In the context of the Cold War, American aid to Western Europe was also an instrument to contain the Soviet Union and the spread of what was perceived as an antagonistic ideology. In the 21st century, the role of China as a catalyst for European integration should not be seen as a way to contain the United States, but as a longterm strategic action to create the conditions for equilibrium in a multi-polar and globalized world system. China’s readiness to contribute to the consolidation of the European construction could be the most appropriate answer to the U.S. “return to Asia,” whose intentions are not, according to Washington, the containment of anyone but only a renewed engagement in a region of the highest signi fi cance.