Courcy's Special Alerts

On 4 February we issued a Special Alert on rising tensions between China and Japan.  In parallel with this, relations between China and the US have also been deteriorating, not least because of outgoing Secretary of State Hillary Clinton’s reiteration that the disputed Senkaku/Diaoyu Islands fall within the remit of the US-Japan security pact.  With this as the background, the European Union’s attitude towards China is of considerable importance to Washington.

Back in March 2012 we highlighted a report from EU-funded Europe-China Research and Advice Network (Ecran) which argued that the European Union should take advantage of the US’s difficulties with China.  Inter alia, the report said:

“We should bear in mind…that China poses no military threat to Europe.  Nor is it an exporter of international terrorism.  Its sphere of influence is primarily East and Southeast Asia...where it seeks to protect its borders and to safeguard oil exploration projects in the South China Sea.  It also aspires to develop a second line of defence through a naval presence in the Indian Ocean and potentially the Pacific.  But in neither case are European interests directly involved – something that promises to benefit the EU in its engagement with China.”  [Our emphasis added.]

More recently, in December 2012, the EU-funded European Institute for Security Studies (EUISS) issued a report on the differing approaches between the EU and the US on the Asia-Pacific region.  While its headline conclusions were much more diplomatic than the earlier Ecran report, with the report specifically exploring the potential for closer co-operation between the EU and the US in the Asia-Pacific region, substantial differences were still apparent.

The report asks: “Are there concrete opportunities to ‘square the triangle’, so to speak, rather than move separately and work at cross-purposes, especially in times of economic crisis and stagnation?”

And, contrary to the earlier Ecran report, it concludes, “The rise of the East should not divide the West”.  Its central thesis is that while there are differences in approach between the EU and the US, “the European Union and the United States need to find a way to remain relevant in a world where the balance of power is increasingly shifting eastwards”.  “In such a world”, the report says, “leveraging individual components of ‘power’ (military and/or economic) unilaterally matters less than combining forces across borders and between like-minded actors (trade and/or military ties)”.

However, for all its fine-sounding conclusions, this report from EUISS is honest enough to highlight the drivers that are pointing in the direction espoused by Ecran, that is to say to the conclusion that US rivalry with China presents Europe with an opportunity.

For example, the EUISS report points out that some 28% of EU external trade in 2010 was with East Asia, “an impressive five percent more than across the Atlantic…”  And it adds that Germany’s export-led economic growth is increasingly dependent on China.

The final chapter of the report, authored by EUISS Research Fellow Nicola Casarani, points out that the development of EU-China relations has been “facilitated by the absence of conflict issues that could bring the two sides to a military confrontation – unlike the case of US-China relations where the Taiwan factor and US commitment to Asia’s security may lead to a military stand-off”.

And it goes on to emphasize:

* “China backs the eurozone…while the US is lukewarm…[T]he result is that support for the eurozone in the last few years has mainly come from China, while speculation against the peripheral members of the euro-area has been coming mainly from Wall Street-based banks and hedge funds.”

* “ China’s support for European integration has not been confined to monetary issues.  Beijing has also backed Europe’s space ambitions, lending both political and financial support to Galileo, the EU-led global navigation satellite system alternative to the American GPS.  When Galileo was launched, the US firmly opposed it for fear of a challenge to its space primacy and leadership in key strategic and high-tech industrial sectors.  China, instead, contributed to propping up the European project, committing tens of millions of euro and becoming Galileo’s most important non-EU partner.  It is noteworthy that most of the EU countries involved in the Galileo project are also members of the eurozone.”

* “For the EU – and in particular the core members of Central and Western Europe more active in promoting integration – China is not only a trade and political challenge, but also presents a strategic opportunity to enhance Europe’s role in world affairs and gain autonomy from the US.” [Our emphasis added.]

This is an interesting final emphasis for a report that is ostensibly so positive about the importance of US-EU collaboration on policy towards China.

JKC de Courcy
11 February 2013

Report details:

Title: Look East, Act East: Transatlantic agendas in the Asia Pacific

Issued by: European Institute for Security Studies

Authors: Edited by Patryk Pawlak

Link: http://www.iss.europa.eu/uploads/media/Final_Report_13LEAE.pdf