Growing Closer:Explaining The Patterns Of Sino-European Rapprochement

This study has focused on defining and comprehending Sino-EU relations so asto get a better understanding of the issues and challenges they face so we can detectwhat policy adjustments or trade-offs are available to both actors in order to improvetheir relationship. What makes their relationship so important is not just the fact thatthey have both grown in power in the last several decades and entered into a strategicpartnership, but also because they have been at the forefront of multipolarization longbefore the end of the Cold War. In today's world, their relationship is as important asthe one between China and the United States if not more, as their economicrelationship is the backbone of the world economy. With the advent of the globaleconomic crisis, the importance of understanding the relationship between the EU andChina is all the more important as their actions have a global effect.Since their relationship cannot be adequately explained by either realism orconstructivism, this study uses a neoliberal approach, namely the theory of complexinterdependence formulated by Robert O. Keohane and Joseph S. Nye as it is broadenough to involve strategic, economic, diplomatic as well as economic factors into theequation. The first chapter offers a review of the theoretical framework which is beingused for the analysis. It begins by defining the role of power in interdependence-sensibility and vulnerability and their use to control outcomes in political bargaining,then moves to defining the three main prerequisites of complex interdependence: theexistence of multiple channels that connect societies, the absence of hierarchy amongissues, that is, military issues do not dominate the agenda and the use of military forceis irrelevant in relations of complex interdependence.Furthermore, it explores the models of regime change and provides a detailedanalysis of other elements such as issue areas, bargaining and the formation ofnational policy. In order to expand on Keohane and Nye's initial theory, a number ofstudies by other scholars who are concerned with interdependence has been presentedand analyzed so as to have a better understanding of all the elements that need to betaken into account for the main goal of the study–the analysis of the Sino-EUrelationship in its entirety.The second chapter focuses on the history of Sino-European relations fromancient times till today. Two pre-modern cases are presented to demonstrate the continuity of contacts between the two regions, secondly, to illustrate the effectsChina and Europe had on each other even before modern, industrial times which areusually connected with interdependence in the neoliberal sense. The first example isthe devastating effect that the Chinese silk trade had on the economy of the RomanEmpire, the second is set before, during and after the first Opium War when the saleof opium to China not only destroyed the Chinese monetary system but also had a sideeffect on the world trade in silver.The historical analysis continues from the period after the Opium War to theproclamation of the People's Republic of China and the formation of the EuropeanCoal and Steel Community, the predecessor to the European Economic Communityand the European Union. A significant emphasis was given to Sino-Europeanrelations since the period mentioned above as they are analyzed step by step in orderto emphasize the amity between the European states and China and to highlight theoverall flexibility of their policies to each other during the bipolar period. Politicaldevelopments in Europe and China are presented simultaneously with the sequence ofevents during the Cold War period in order to understand the driving force of theirrapprochement. In addition, special attention was given to the evolution of theirperceptions about each other and the world at large, including China's orientationtoward multipolarity and the perception of Europe as a pole. This also includes thebeginning of China's reforms and opening up and Europe's role in the process as asource of investment and technological transfers.The historical overview also presents a very detailed representation of all theagreements signed between the PRC and the EC (as it was known at the time) such asthe1978Trade Agreement between the European Economic Community and thePeople's Republic of China and the1985Agreement on Trade and EconomicCooperation between the European Economic Community and the People's Republicof China. The last part of this chapter is dedicated to the last phase of Sino-EUrelations following the end of the Cold War–from the deterioration of therelationship in1989until the rapid improvements of the1990s and2000s. Just likethe previous section covered the initial agreements, the last section provides a detailedanalysis of pivotal documents that have defined the Sino-EU relationship since theend of the Cold War like the1995A Long-Term Policy for China-Europe Relations,the1998Building a Comprehensive Partnership with China, the2001A maturing partnership-shared interests and challenges in EU-China relations and mostimportantly, China's2003EU Policy Paper.The third chapter is of particular importance as it tests whether Sino-EU relationsmeet the requirements that Keohane and Nye have established as a prerequisite thatmust be met if we are to talk of relations that operate under the conditions of complexinterdependence. The first element being tested is the prospect of militaryconfrontation between the two parties or whether they consider each other as threats.Because of geographical and historical reasons, European presence has disappearedfrom the East Asian region following World War Two so Europe is no longer a keysecurity player in China or in China's periphery.Furthermore, particular attention in this chapter has been given to the mutuallysatisfactory closure of the Hong Kong and Macao issues which is of great importanceto this prerequisite because without any European territorial possessions orstrongholds in the near East Asian region, Sino-EU ties now enjoy a previouslyincomprehensible status, a fact that has been acknowledged by the government inBeijing. Aside from security and high politics, additional attention was given to thepublic opinions in China and Europe. A series of surveys conducted in Europe suggestthat European peoples do not view China as a threat, and the same can be said basedon a survey conducted among Chinese students.The second element that was put to scrutiny was the existence of a number ofchannels and actors that formulate policy between the two. Since China is the EU'sopposite-it is a coherent, centralized state unlike the EU which is a looseconfederation at best, the analysis of the European dyad was given top priority. Fromthe smaller, less vocal members of the EU to the big three"(Germany, France andthe UK)–the European dyad displays a constant lack of unity and common purposewhen it comes to dealing with China, hence it passes the test albeit not in a very goodway.The last section of the third chapter is quite significant as it tests the hypothesisthat no issue shall dominate the bargaining process. Although Keohane and Nye hadmilitary issues in mind when they were thinking of this element, it is not important inSino-EU relations as we have already confirmed, however, there is one other issuethat might claim the title, and that is the issue of human rights. Even though it is not amilitary nor an economic issue, human rights has been linked to a number of deals between China and the EU, so its origins and usage have been analyzed to understandwhy has it dominated the European side of the Sino-EU discourse for the past20years. European and Chinese perspectives on this matter have been taken into accountsince it is an issue that is defined by the cultural and political differences that existbetween the European and the Chinese civilization.The fourth chapter is dedicated to the profound sway of the United States, whichdo play an important role in the Sino-EU relationship, specifically in relations to amilitary issue that has been omitted from analysis in the previous chapter. This wasdone for two reasons-first, it is linked to an equally important, but much moreprofiled issue (human rights) that deserved a systematic analysis as it constitutes aprelude to the military issue in question, secondly, the military issue in question (thearms embargo) is further linked to a much wider subject, namely the still presentconstraining influence of the United States. Because of this, and other reasons that arealso connected to the element of US influence, the issue of the arms embargo has beenmoved to the fourth chapter as it represents the core of another layer ofinterdependence in the Sino-EU relationship-the role of outside actors.Although the end of the Cold War was supposed to bring independence to theSino-EU relationship which would finally be free from superpower constraints, the2005failure to lift the arms embargo was a painful reminder that Sino-EU relationsare not free from internal, as well as external hindrances. Joined by the mutualresentment toward America's new unipolar foreign policy, some EU membersanswered Beijing's call to react to the changed circumstances of the post-Cold Warworld and lift the arms embargo which was perceived by the Chinese as animpediment to further rapprochement. What ensued was a full scale diplomaticoffensive against the proposal by the United States and its Asian allies, namely Japanand Taiwan.Efforts have been made to show how Sino-EU relations operate on a number oflevels and are influenced by events from within each dyad and from outside actors.What started as a single event aiming to improve the political, and subsequently theoverall economic relationship between the EU and China developed into a series ofinterlinked sensibility and vulnerability linkages that subsequently escalated into anumber of more or less threatening diplomatic offensives from other actors who sawtheir positions changed as a result of the lifting of the arms embargo. The last chapter focuses on the economic side of the relationship and offers ananalysis of Sino-EU relations from the time when China was in a state of autarky untilcontemporary times when China is one of the leaders of the world economy. Specialfocus was given to specific cases and situations which display signs of sensitivity andvulnerability, particularly in the last decade when economic relations between the twostarted showing problems and have become a source of tension in the relationship.The economic history between China, the EU and its members has beenexplained by combining overall levels of trade, the legal agreements that underpin itand by its structure, and has been divided into several phases based on performance.The first phase can be described as one of limited contact and modest trade. However,during that time, China began to see the growing importance of Europe and itsintegration mechanism, first in terms of security and later in terms of economy andinitiated a series of reforms to improve its economic performance. In fact, theexpansion and development of Sino-European economic ties from that time to thisday is characterized by China's success story.The following sections analyze the gradual increase in mutual trade and alsofocus on the legal documents that eventually led to China's accession to the WorldTrade Organization (WTO). A significant portion has been dedicated to this event asit has, much like the arms embargo case, exposed the complex relationship betweenthe US-EU-China triangle as the differences between each of the sides had an effecton the outcome. Although the WTO negotiations were conducted in a much calmer,less aggressive atmosphere, the same mechanic prevails-bilateral relations (forexample, the Sino-EU relationship) are in effect, inseparable from the multilateral andthe other pair of bilateral relations (the Sino-US and, of course, the US-EUrelationship).Following the WTO accession period, the rest of the chapter focuses on the restof the last decade as relations between the two became increasingly sensitive with ahigh level of politicization of both sides. An analysis of the consequences of the EU's2004enlargement have been given in detail as it carried economic as well as politicalimplications. Furthermore, a detailed analysis of European FDI has been presented inorder to show its importance for China's economy and technology accumulation.Another case study presented in this chapter is the2005textile dispute. Fromlinkages and coalition building to leverages and politicization, the textile embargo, much like the WTO case, was a clear showcase of interdependent relations. Followingthe textile dispute, a reference to other cases is given as an introduction to the EU's2006Communication which marked the beginning of a more critical period in Sino-EU economic relations.Finally, the largest portion of the chapter is dedicated to the most importantissues beside the textile dispute. The first one is the European sensitivity toward therising trade deficit which has been the cause of politicization in the EU as no memberstate has a trade surplus with China. However sensitive it might be, efforts have beenmade to analyze whether it is also a source of vulnerability and the evidence suggeststhat it is not as most of the imports that come from China are not in fact China'sproducts.Apart from the deficit, other concerns from the EU have been addressed as wellas the concerns from the Chinese side, most of all, the Market Economy Status issueand China's sensitivity and vulnerability to anti-dumping charges. Lastly, the studyfinishes with an assessment of the latest developments and trends since the onset ofthe global financial and the European sovereign debt crisis like China's involvementin rescuing the Eurozone and its recent investments in the EU.