Martin Jacques - When China Rules the World

As a consequence, the levels of concern in Europe about the economic repercussions of China ’s rise have been relatively muted; but with increased anxiety about the value of the renminbi and the growing trade deficit, there have been signs that this might change. [1138] [1138] Patrick Messerlin and Razeen Sally, ‘Why It is Dangerous for Europe to Bash China ’, Financial Times , 13 December 2007. The predominant view in most countries has been that China ’s rise has on balance been beneficial because of its negative effect on consumer prices, though in the less developed European countries like Portugal and Greece, together with the new entrants — all of which compete in varying degrees with China — the attitude has been more mixed. [1139] [1139] European Commission, ‘The Challenge to theEUof a Rising China’, in European Competitiveness Report (Luxembourg: 2004). However, the credit crunch and the onset of a depression has kindled a mood of anxiety in many European countries, perhaps especially France and Italy, about the effects of globalization and the impact of China’s rise. [1140] [1140] In the Italian general election in 2008, growing fears about globalization, amongst other things, were reflected in very big increases in the vote for the anti-globalization, anti-immigration Lega Nord in Milan, Turin, Venice, Bo logna and Florence; Erik Jones, ‘Italy’s Bitterness Could Blight Berlusconi’, Financial Times , 16 April 2008. The result has been increased economic tension with China, raising the possibility of limited forms of action, such as anti-dumping duties and anti-subsidy tariffs, against Chinese imports. [1141] [1141] Charles Grant with Katinka Barysch, Can Europe and China Shape a New World Order? (London: Centre for European Reform, 2008), especially pp. 10–13; also Chapter 3. While previously China ’s economic rise was seen as largely benign, and for the most part beneficial, the mood has become less sanguine amid growing concern about its possible consequences for Europe. A further factor fuelling this anxiety is the fear of investments by Chinese multinationals and by the Chinese Investment Corporation in key European industries.

In the longer run, as Chinese companies progressively move up the technological ladder and develop brands which compete head-on with those from Europe, the number of losers could escalate considerably and fuel a demand for protection against ‘unfair’ competition from China, perhaps culminating in Europe steadily raising protectionist barriers against China, a move which would have profound political repercussions. [1142] [1142] Ibid., pp. 38–40; James Kynge, China Shakes the World: The Rise of a Hungry Nation (London: Weidenfeld and Nicolson, 2006), pp. 82–92, 118-9, 213. At this stage, however, it is premature to predict what the likely political effects of China ’s growing competitive challenge to Europe might be in the future.

The lack of any serious European diplomatic or military presence in East Asia means that, unlike the United States, which remains the key arbiter of security in the region, Europe has no major geopolitical conflicts of interest with China. When it comes to Taiwan, the Korean Peninsula or the US-Japanese alliance, all critical issues of US concern, Europe is no more than a spectator. It has no involvement in the United States ’ bilateral alliance system in the region. As a result, Chinese-European relations are unencumbered by such considerations. [1143] [1143] Barysch, Grant and Leonard, Embracing the Dragon , p. 67. The nearest such issue has been the European embargo on the supply of arms to China, which was introduced after Tiananmen Square and which China has lobbied hard to get lifted. Although the European Union eventually obliged in 2005, it rapidly reversed the decision in response to huge pressure from the United States, which turned the issue into something akin to a vote of confidence in the Atlantic Alliance. Only by making it an article of faith in the West did the US manage to hold the line, suggesting that Europe may, up to a point, be prepared to think for itself when it comes to its relations with China. [1144] [1144] Ibid., pp. 60–65. This is not to suggest that in the long run Europe is likely to detach itself from the United States in favour of China — that is virtually inconceivable — but the reaction of key European nations like Germany and France to the American invasion of Iraq showed that much of Europe was no longer prepared slavishly to follow the US. It is reasonable to surmise that relations between the US and Europe are likely to improve significantly during the Obama presidency, though they are unlikely to return to the intimacy of the Cold War period. With the rise of China and the importance of the Middle East, the transatlantic relationship is no longer pivotal for the US in the way that it once was: rather than being a universal relationship in the mould of the Cold War, the nature of cooperation is likely to vary according to the issue involved. [1145] [1145] Shell, Shell Global Scenarios to 2025 , pp. 126, 144; François Heisbourg, ‘Eu rope Must Be Realistic about Life After Bush’, Financial Times , 6 February 2008; Philip Stephens, ‘A Futile European Contest for Obama’s Ear’, Financial Times , 10 November 2008. As the focus of global affairs shifts towards the relationship between the United States and China, there is a possibility that Europe might become a freer spirit than previously, and not necessarily always prepared to do the US ’s bidding. But it is important not to exaggerate any such scenario. Europe is far more likely to take the side of the United States than China ’s in geopolitical arguments, whether it be Darfur, trade talks or climate change. For a variety of reasons, historical, cultural, ethnic and economic, Europe is likely to remain very closely wedded to the US in the world that is unfolding.

While the domestic debate in the United States might often suggest the contrary, ever since the Mao-Nixon rapprochement of 1972 and the subsequent establishment of full diplomatic relations in 1979, the relationship between China and US has been characterized for almost four decades by stability and continuity. [1146] [1146] James Mann, The China Fantasy: How Our Leaders Explain Away Chinese Repression (New York: Viking, 2007), p. 40. Although it has been through many phases — the axis against the Soviet Union, the reform period and modernization, Tiananmen Square and its aftermath, China’s rapid growth and its turn outwards in the late 1990s, the rise of Chinese nationalism, and of course a succession of US presidents from Nixon and Reagan to Carter and Clinton — the relationship has remained on an even keel, with the United States gradually granting China access both to its domestic market and the institutions of the international system, and China in return tempering and dovetailing its actions and behaviour in deference to American attitudes. The rationale that has been used to justify the US position has been through various iterations during the course of these different phases, but there has been no shrinking from the underlying approach. It may not be immediately obvious why the US ruling elite has been so consistently supportive of this position, but the key reason surely lies in its origins. The Mao-Nixon rapprochement was reached in the dark days of the Cold War and represented a huge geopolitical coup for the United States in its contest with the Soviet Union. That created a sense of ongoing loyalty and commitment to the relationship with China that helped to ensure its endurance.

China ’s relationship with the United States has remained the fundamental tenet of its foreign policy for some thirty years, being from the outset at the heart of Deng Xiaoping’s strategy for ensuring that China would have a peaceful and relatively trouble-free external environment that would allow it to concentrate its efforts and resources on its economic development. [1147] [1147] Shambaugh, ‘Return to the Middle Kingdom?’, in Shambaugh, Power Shift , p. 28; Bates Gill, ‘China’s Evolving Regional Security Strategy’, in Shambaugh, Power Shift , p. 248. After Tiananmen Square, Deng spoke of the need to ‘adhere to the basic line for one hundred years, with no vacillation’, [1148] [1148] Quoted by Joseph Y. S. Cheng and Zhang Wankun, ‘Patterns and Dynamics of China’s Strategic Behaviour’, in Zhao, Chinese Foreign Policy , p. 196. testimony to the overriding importance he attached to economic development and, in that context, also to the relationship with the United States. [1149] [1149] For example, Liu Ji, ‘Making the Right Choices in Twenty-first Century Sino-American Relations’, in ibid., p. 248. It was, furthermore, a demonstration of the extraordinarily long-term perspective which, though alien to other cultures, is strongly characteristic of Chinese strategic thinking. The relationship with the United States has continued to be an article of faith for the Chinese leadership throughout the reform period, largely unanimous and uncontested, engendering over time a highly informed and intimate knowledge of America. [1150] [1150] For example, David M. Lampton, Same Bed, Different Dreams: Managing US - China Relations, 1989 - 2000 (Berkeley: University of California Press, 2001), pp. 372-3.