China: EU retreats on lifting China arms embargo

Inter-imperialist power struggle in Asia

The plans of the European Union to lift its arms embargo against China have “hit upon several difficulties”, declared the EU’s foreign policy commissioner, Javier Solana’s spokeswoman, last week. A few days later, the European parliament, although it has no formal power in the matter, voted 431-85 against lifting the embargo.

Finally, the EU foreign ministers’ meeting on Friday 15 April confirmed that the plans were put on ice. What’s behind this retreat?

Asia China-led?

The confident declaration at last December’s EU summit to lift the embargo opened a broad debate about the strategic balance of power in Asia and the inter-imperialist struggle involving the US and the EU but above all China. That China’s growing power will clash with the interests of US imperialism is already clear. This debate is now a major theme for imperialist strategists. Will Asia “be increasingly China-led? asked The Economist, 26 March. Asia “is changing so quickly that judgments on regional politics risk being outdated as soon as they are made”. (Financial Times, 18 March).

Washington also aims to show the EU leaders who’s in charge. “It is the US, not Europe, that has defended the Pacific,” stated the US secretary of state, Condoleezza Rice, during her Asia tour recently. As with the Iraq war, the issue of China and the arms embargo increases tensions and contradictions between the US and the EU, as well as within the European Union. While the EU leaders all agreed in December, splits have developed over recent months.

No lifting of the embargo?

The retreat on lifting the embargo was discussed at this weekend’s meeting of the EU’s foreign ministers. The main reason for the turn is the pressure from the US. During his visit to Europe earlier this year, George W. Bush told the EU leaders that they had to convince not only him, but also the US Congress. The same Congress threatened to stop exports of US arms technology to Europe if the embargo with China is lifted.

Big European military industries have already pledged not to sell to China. The biggest, EADS, promises to sell only civilian products to the growing Asia power (EADS owns 80% of Airbus). The British BAE has stated that it will no not expand in China. These companies fear repercussions on the US defence market, the biggest in the world. Anyway, EU leaders planned lifting the embargo mainly as a symbolic decision.

The embargo is not legally binding and arms sales from EU companies have increased sharply over the last few years, from 54 million euros in 2001 to 416 million euros in 2003. In order to satisfy Washington, the EU is now promising, “Not to sell to China any items and technologies, which would help China acquire a capability it does not already possess and which may have a de-stabilising effect in the region”. (International Herald Tribune, 14 April).

Likewise, China promised not to buy extraordinary items from Europe. Formally, the French president Jacques Chirac, and Germany’s chancellor, Gerhard Schröder, are still in favour of lifting the embargo. But, as with the proposal in the first place, this is mainly for “good will”. Last year, the EU became China’s biggest trading partner and aims to keep that position.

Lifting the embargo would give EU-based big business advantages in the Chinese market. The politicians, however, pretend to have a democratic and humanitarian purpose behind the increased trade. This was formulated by France’s foreign minister Michel Barnier: “There is a real, fundamental difference of perception that we have about China on both sides of the Atlantic…” Barnier referred to “a political dimension” in relation to trade with China. (FT, 7 April).

Avoid a serious rift

This position has particularly irritated US hawks. The leader of the US International Relations Committee, Henry Hyde, attacked the plan to lift the embargo as, "The latest manifestation of a misguided European security policy championed not by all Europeans, but by a few vocal governments who believe it is Europe’s destiny to ’balance’ the interests of the US around the world, all the more in instances where there is money to be made" (FT, 15 April).

US imperialism has little sympathy for the fact that the EU has its own imperialist ambitions. The final straw that broke the EU plan, however, was the anti-secession law adopted by the National People’s Congress in Beijing. With the law, the Chinese dictatorship confirmed that they will never accept formal independence for Taiwan. This was seen as a confirmation by the US hawks that increased their pressure on the EU. In this way, the Chinese regime itself blocked the lifting of the embargo.

For the EU leaders the law enabled them to postpone lifting the embargo and avoid a serious rift in the transatlantic relationship. To cover up its own retreat, the EU leaders are also claiming that China has not improved human rights sufficiently. This was also a main argument in the European Parliament and from Germany’s foreign minister, Joschka Fischer.

There was no disagreement among the EU leaders when, last December, they decided on the plan to lift the embargo. Now, however, some governments, particularly the British, will be happy with the postponement. Blair had definitely underestimated the reaction from Washington and wants to avoid a major confrontation. In the second half of 2005, the government in London will hold the EU presidency. This means that any discussion to “replace” the embargo will not start until next year. The Chinese reaction to this broken promise remains to be seen. Beijing had described the embargo as “humiliating” and held high hopes that it would be revoked.

Chinese imperialism

Washington has over the last few months shifted its attention from an almost Iraq-only focus to include China and the Pacific. The CIA boss, Porter Gross, has warned that China is establishing an upper hand militarily in the Taiwan Strait. China now has 700 missiles near the coast facing Taiwan, a number that increases by 70-75 a year (up from 50 a year). In addition, China is conducting a big drive to upgrade its navy and buy new modern fighter planes from Russia. China’s military power, a US Pentagon official said recently, “Continues in every year to outstrip our projections as to where they will be in one year ahead”. (FT 7 April). The same article speculates that China’s military budget could be three times the official $30 billion (Other estimates range from $40 to 60 billion). Even if it is $100bn it is still less than a quarter of the US military budget, but the size and the pace of the increase is enough to frighten the US hawks.

Over the last few years – while Washington has been preoccupied with Iraq – China has gone into overdrive in diplomatic and economic initiatives worldwide. This has been motivated by the country’s need for natural resources, as well as by trying to improve China’s status as a world power.

In Asia, China has an agreement with the five original ASEAN (Association of South East Asian Nations) countries – Indonesia, Malaysia, Singapore, Thailand, the Philippines and Brunei – for a free trade zone. At the same time, trade with India is booming. And last week, China and India signed a framework deal to solve their border dispute dating from 1962. Through the Shanghai Cooperation Organization, China has built links with Central Asia – an important region for oil, gas and the strategic contest with the US and Russia. For the same reason, China also has developed relations with Iran and Sudan. The latter produces 10 per cent of China’s oil.

One of the most spectacular moves has been the increasing links with Latin America, which US imperialism regards as its own ‘back yard’. China has signed contracts with governments around the continent. Brazil’s President Lula has become China’s ally in the WTO and supports China’s claim to be recognised as a full ‘market economy’. In its first-ever United Nations mission, China sent 1,000 riot police to Haiti last year, cooperating with forces from Brazil, Argentina and Chile.

For the regime in Beijing these moves are necessary to keep up its frantic investment and export-led economic growth. But they also feature as part of its nationalistic “Great China” propaganda. As the current anti-Japanese demonstrations show, nationalism in China is a strong force, rooted in the imperialist occupations of the 1800s and up to the revolution in 1949.

Enter John Bolton

The issue of Taiwan is a cornerstone of this policy for Beijing, even if the cost of an armed conflict would be enormous. On Taiwan, Washington’s position is to maintain the ‘status quo’. That means to stop Taipei from declaring any change of the island’s formal status. But also to argue that Taiwan must respond to the arms race, in which the $18 billion purchase of US high-tech weapons is the most important ingredient. It now seems that most of this deal will be passed by Taiwan’s Legislative Yuan this year. The US, for the first time, has officially involved Japan in its promised defence of Taiwan.

The view among US politicians is that the US is guaranteeing security while the EU is just cashing in profits. Unilateralism is again in fashion in Washington, despite the outcome of the Iraq war. The new UN representative of the US, John Bolton, is well-known for his criticism of the UN and is staunchly pro-Taiwan. Both the neo-cons and the traditional conservatives are arguing for a tougher stand on China.

Beijing is ruled by “nationalistic militarists”, says John Tkacik of the Heritage Foundation ‘think tank’. (FT, 18 March). The US-China relationship is, at the same time, under strain as a result of Washington’s increasing demands that China must revalue its currency, the renminbi. Some in the US Congress want to go further and take protectionist measures against Chinese goods.

So far, Beijing has only made a general promise to change the peg to the dollar at some point. When it happens, however, the effects could be serious for both the US and the Chinese economies. China’s capitalist development inevitably creates new contradictions and crises. Western capitalism, lured by the prospect of fat profits, has given encouragement to the Chinese dictatorship. The arms race in Asia is one of the consequences. US and EU imperialism, which are a major part of the problem, have no answer.

The only force that can free Asia from dictatorships and the threat of war is the working class, by building its own independent organizations, and arming these with a clear socialist and internationalist programme.

From Rättvisepartiet Socialisterna, Sweden, first published on chinaworker.org

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