The Wall Street Journal (Asia and Europe)

June 29, 1999

The Illusion of Chinese
Power Haunts Europe

By Gerald Segal, the director of studies at the International Institute for Strategic Studies in London.

You may have missed it, but the European Union seems to have acquired a new member--China. According to sources close to the decision, as the new European Commission President Romano Prodi was drawing up his list of commissioners, China strongly and successfully opposed the plan to appoint Christopher Patten as EU trade commissioner. It's no secret that Beijing loathes Mr. Patten, the last governor of Hong Kong, and was successful in scuppering efforts to get him a major position in the United Nations system. But it is astounding that China could veto an EU appointment.

When the new commissioners are announced this week, Mr. Patten is now expected to take the post of social affairs commissioner. The official line will be that nothing untoward has happened. But even Europeans who have turned acquiescing to Chinese demands into an art form should feel embarrassed at such kowtowing.

Now that Europe has many socialist governments proclaiming their "ethical foreign policy," one might expect a more robust defense of Europe's right to defy China and choose its own commissioners. Certainly a Europe Union that loudly trumpets its new single currency and a supposedly growing influence in the world should stand taller in defense of its new role. The EU would probably resist, for example, an American attempt to determine who should be the EU trade commissioner, but curiously it seems more than willing to bend to the will of an Asian country that still has little clout in the world economy.

British Prime Minister Tony Blair, friend and crucial ally to President Prodi, could have stiffened the former Italian leader's spine. But the "heroic" defender of humanitarian values in the recent Balkan war has turned out to be a pussy cat when it comes to standing up to Beijing. The nomination of Mr. Pattern as trade commissioner was Mr. Blair's personal idea and so the humiliation is his as well. But the prime minister is hardly breaking new ground. Britain's Labour government, perhaps because it came to power weeks before the handover of Hong Kong in 1997, has always run in fear of Chinese moods. Britain under Mr. Blair led the EU to abandon support for anti-China resolutions on human rights in the U.N. More recently, the U.K. has been remarkably low key in its protests about the Hong Kong government's efforts to circumvent the Court of Final Appeal and its undermining of the independent rule of law in its former colony.

The Italians, to give them their due, have long been honest that they have a "Marco Polo" approach to China--policy begins and ends with trade prospects. Germany under Chancellor Kohl was legendary for dismissing any political issue that might get in the way of Germany's rise to the status of China's No. 1 trade partner in Europe.

But this latest episode of groveling to China is especially surprising because it comes so soon after a vivid demonstration of China's international weakness and its irrelevance in European affairs. Following the mistaken bombing of the Chinese embassy in Belgrade, China's fury included solemn oaths to block a U.N. resolution that would authorize the deployment of NATO troops and allow NATO an indefinite stay in Kosovo. In the event, China's diplomatic hot air soon deflated. The U.N. resolution was crafted without granting China its conditions and in the end Beijing meekly abstained. It was obvious that once the Chinese paper tiger was tested, it proved to have little interest in influencing Europe.

The Belgrade bombing episode demonstrated a reality about Chinese power that extends well beyond security issues and yet is often forgotten: In truth, China is a middle power that does not matter very much, especially outside of Asia. Europeans who are caving in to China because they believe there is a vast China market that might be lost should look again at the basic economic statistics. China accounts for about 3% of world trade--about the same as South Korea or the Netherlands. It receives just 0.5% of U.K. exports--less than Malaysia. China takes 1.1% of French and German exports, about on a par with exports to Portugal. EU foreign direct investment into China is 5% of their total FDI and less than that to Brazil.

After Asia's economic crisis burst European illusions about vast markets for European exports, and given the recent and serious economic problems in China, Europeans should be more realistic about China's more limited role in the world. This is a middle power in a muddle and certainly not one that might be expected to have a de facto vote in internal EU Commission deliberations.

Beijing's success in stopping Mr. Patten's appointment has depressing implications for both Europe and China in the long term. For the EU, there is striking evidence of just how empty is the notion of a new and more powerful common European foreign policy. A Europe that runs scared of Chinese shadows is certainly no match for the much more real U.S. power. For Tony Blair, the shine has surely come off the well-burnished wartime image as Europe's strongest and most visionary leader.

But the most important message is the one about China's role in the world. So long as Beijing is given credit for being more important than it is, China will not be pressed to undertake the real reforms it needs before becoming truly interdependent with the outside world. Resisting China's efforts to throw its limited weight around is relatively easy, as demonstrated by the Belgrade bombing saga. Doing so would help China learn just how weak its strategic reach really is. But by letting China choose an EU trade commissioner, Europe encourages Beijing to think it can rewrite the rules of the global economy. So long as it lives with that illusion, it is less likely to undertake the kinds of real domestic and external reforms that will make it a truly more open and interdependent country.

--From The Asian Wall Street Journal