I may have mentioned before that I used to work for the vice chair of the European Parliament’s foreign affairs committee. As such, I got a fairly useful (though now outdated) snapshot of China’s evolving opinions of the EU.
At the outset Beijing were very favourable to the project, partly because it thought the EU would be a political counterweight to the US and partly because of a more general affinity with, ahem, unification projects, rooted in both communist ideology and in the wider discourse of Chinese nationalism.
Actually dealing with the EU caused more than a little disillusion to set in. In particular, there were complaints that the EU never seemed to operate as a coherent institution. When European politicians arrived in Beijing with their EU hats on, for instance, they would constantly talk up their own country’s businesses and national level agendas. There were constant complaints about this.
So you had a dawning perception in China that the EU was just a convenient vehicle for its member states to scheme for advantage against each other and that its political and economic institutions were both cover for this and means of facilitating something which bore rather a resemblance to Communist Party factional struggle.
As I say, this is old news. But it does provide potentially useful context for the debate over whether China is going to join the big Euro bailout and on what terms:
Any Chinese support would depend on contributions from other countries and Beijing must be given strong guarantees on the safety of its investment, according to Li Daokui, an academic member of China’s central bank monetary policy committee, and Yu Yongding, a former member of that committee.
“It is in China’s long-term and intrinsic interest to help Europe because they are our biggest trading partner but the chief concern of the Chinese government is how to explain this decision to our own people,” said Professor Li. “The last thing China wants is to throw away the country’s wealth and be seen as just a source of dumb money.”
He added that Beijing might also ask European leaders to refrain from criticising China’s currency policy, a frequent source of tension with trade partners. The US argues that an intentionally undervalued renminbi unfairly supports Chinese exports.
This has been tweeted about as ‘China blackmails Europe’, but apart from not being supported by the content of the article else, that perception is just the wrong way of looking at things. As Prof Li points out, Europe is China’s biggest trading partner. On the other hand, it has to deal with an EU structure that it believes to be institutionally untrustworthy. From Beijing’s perspective, China has become far too economically dependent on a politically ramshackle entity.
It follows from this that the price of Chinese support won’t be marginal stuff like lifting the EU arms embargo; though I wouldn’t be surprised to see that offered from the EU side as an item of good faith. What Beijing may be interested in are changes in the way that Europe functions as an entity which guarantees its loans and which ensure that more loans won’t have to be made – and maybe more widely as an entity that makes sense from Beijing’s point of view. If you’re going to stunt up $100 billion odd to bail out a company, you’re going to want a seat on the Board, if only through one or more nominees. You're going to want to have ongoing influence over how it functions. Perhaps this is what Professor Li is hinting at.
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