Europe is Not a High Priority for China

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Credit: Wikimedia CommonsBy Jaya Ramachandran
IDN-InDepth NewsAnalysis

BRUSSELS (IDN) - China is keen to "create a win-win situation" and "raise the level of opening up" in the coming years until 2015, during which the Chinese Communist Party and the government will undergo an important leadership change, avers a study funded by the European Union, which however concludes that "Europe is not such a high priority for Beijing".

On the other hand, the Group of 20 (G20) major industrial nations, to which China belongs, are for Beijing "the primary mechanism for global economic governance". At the level of a diplomatic and trade policy that increasingly has global reach, the Chinese government will seek to look at the world in terms of regions – Europe, Africa, the Middle East etc. – but with a priority focus on neighbouring East and Southeast Asia.

These are the only regions mentioned by name in chapter on 'International Relations, with Particular Reference to the EU' of China's Twelfth Five-Year Programme for Economic and Social Development (12FYP), the latest in a series of five-year plans dating back to the early 1950s, says the study titled 'China, the EU and China’s Twelfth Five-Year Programme'.

Its authors – Professors Robert Ash, Robin Porter and Tim Summers – say that China's 12FYP "is not just rhetoric and that despite its lack of firm benchmark delivery targets in many areas, it needs to be taken very seriously as a statement of political intent."

In its discussion of innovation and social management, for example, the Programme shows the government's intention to act on the critical need for changing the Chinese economy to higher quality growth, dealing with sustainability and also addressing some of the inequalities and contention in a society undergoing rapid social and material change.

"The new leadership will meet its greatest challenges in these areas, and the Programme gives clues at least to how they intend to set up the right mixture of policy and administrative structure to deal with those challenges," says the 142-page study by 'Europe China Research and Advice Network' (ECRAN) published in March 2012.

The Programme was released by the National People's Congress in March 2011 after extensive discussion among China's provincial governments and its central ministries, and is due to run until 2015.

Unambiguous guidance

"The 12FYP is far more than a propaganda exercise, and should be taken seriously by all interested parties outside China. Whether or not its specific targets are fulfilled, it is a clear and coherent statement of intent and of the direction in which China seeks to travel. It offers unambiguous guidance to foreign governments and to the EU about China's strategic priorities," asserts the report.

The principal message conveyed in the Programme's chapter on 'International Relations, with Particular Reference to the EU' is encapsulated in the heading of Section 12: "Create a Win-Win Situation: Raise the Level of Opening Up".

Much of the material in that section is concerned with global trade and investment. But there is also a short section that refers to and examines China's "positive" participation in global economic governance, primarily through the G20 framework, and also considers issues related to regional cooperation.

"The immediate background to Chinese thinking on such issues is the recent global financial and economic crisis," notes the report. The dominant view that has emerged in China – no doubt strengthened by recurring US and Eurozone debt issues – is that such events may have marked the end of a post-war era dominated by Bretton Woods institutions and the G8 (Group of 8 major industrial nations).

G20 and global economic governance

The primary mechanism for global economic governance envisaged in the 12FYP is the G20. Says the report: "This is an attractive mechanism for Beijing, not only because it gives China a more prominent role than would be possible in the G8 framework but also because in the G20 China stands alongside other large countries rather than in front of them. As such, the arrangement accommodates China’s policy rhetoric of 'equality' (or 'democracy') in international affairs."

The study points out that though there has been talk about the possible emergence of a 'G2' of China and the United States, Premier Wen Jiabao has made it clear that China is not interested in the development of such a structure.

"This does not mean that global institutional mechanisms other than G20 are irrelevant. For example, there is nothing in the 12FYP to suggest any change in China's current policy of constructive engagement with the World Trade Organization (WTO) or the United Nations," the study maintains.

The use of the word 'positively' to describe China's participation in economic governance is also significant, Professors Ash, Porter and Summers say, adding that "it points to a more active role for China at a time when its foreign policy elite is becoming more aware of growing expectations vis-à-vis China throughout the world and suggests that more proactive approaches by Chinese policymakers will gradually emerge."

Chinese leaders have repeatedly stressed their intention to behave responsibly and to promote global financial and economic stability. "Recent support for the Eurozone through the announcement of an intention to make bond purchases can be seen as an example. Nonetheless, there is an element of gradual revisionism to the policy outlook, most evident in references to promoting reform of the international economic system in order to make it more 'just and rational'," the report cautions.

It notes that the discussion of regional cooperation is quite limited. China remains officially supportive of the Doha Round, but this is not mentioned in the 12FYP, where the emphasis is on the potential benefits of the further development of regional free trade arrangements.

Europe as one of the regions

The 12FYP "suggests that Europe will more and more be viewed from Beijing as just one of a number of regions of the world with which China deals, rather than be accorded the priority it might have enjoyed in, say, the 1990s, when a major goal of Chinese policy was to attract FDI (foreign direct investment) from developed countries and to prepare for admission to the WTO."

"Chinese approaches to Europe set out elsewhere emphasise the need to strengthen cooperation, but there is generally less detail than in corresponding material about China's relations with East Asia or the US," says the report.

But it maintains that the dynamics of China's steady integration into the global economy are likely to keep changing as China's relative economic and political weight in the world continues to rise. And this trend will be reinforced until 2015 by a gradually more proactive Chinese approach to the global economy and other global affairs. As this process takes place, Europe's ability to set and shape the agenda will decline.

The report's authors stress: "It is incumbent on the EU to maintain and develop proactive dialogue with China on issues of global economic governance, with particular attention to the role of the G20. Wherever possible, this should be backed up by efforts to define common positions within the EU, as China seeks to deal with the EU as a region in its pursuit of global economic governance." [IDN-InDepthNews – April 27, 2012]

2012 IDN-InDepthNews | Analysis That Matters

Picture: The city of Shanghai has become a symbol of China's rapid economic expansion since the 1990s. | Credit: Wikimedia Commons

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