CHAPTER 5: CHINA AND INTERNATIONAL
133. The EU adopted Guidelines on the EU's Foreign
and Security Policy in East Asia during the 2005 UK Presidency,
which added a security policy dimension to the EU's relations
in East Asia. They demonstrate the EU's interest in fostering
China's emergence as a "responsible global player" (p 270).
However, the EU-China security relationship is not well-developed
and the EU relies on its relationship with ASEM (see Chapter 4).
Dr Gill told us that the EU had no alliances or traditional
security commitments in the region. Individual Member States (UK,
France, Germany) had a regular security dialogue with China, but
the EU should try to establish a more formalised effort to engage
China on energy and environmental security. Any EU dialogue should
be placed in a broader East Asian context and include consultations
with the US, Japan, South Korea and Australia (Q 608). The
EU and its Member States had the potential to make a great contribution
within China on "soft security questions" in helping
China to become "more open, more pluralised, more just, more
equitable and that that process unfolds in a stable way"
(QQ 617-9, 620).
134. Dr Gill did not believe that the EU
took the regional dimension sufficiently into account. The EU
should consult partners with experience of dealing with the Chinese,
such as the US, Japan, Australia and South Korea, if it wished
to engage on security issues. "The risk is that we see China
as some sort of unique and overwhelmingly important actor
in the region to the detriment of maintaining important relationships"
(Q 621). Patrick Child supported an increased EU presence
in discussions of hot security issues in Asia to influence how
EU funds and other instruments were used (Q 344). However,
Professor Godement did not believe the EU had the leverage
of the US in the region (QQ 589, 590). Dr Wacker agreed:
the US had strategic interests in the Asia-Pacific region, a strong
military presence, alliances and commitments; the EU had none
CHINA'S ARMED FORCES, CAPABILITY
AND POWER PROJECTION
135. Dr Gill told us that the Chinese military
were far more capable now than they had been 10-15 years previously
and were the largest standing army in the world.
The Chinese threat perception had changed from its land borders
(Soviet Union, India, Vietnam) to the East (the US, a more robust
Taiwan independence movement and Japan). This had caused a rethink
on doctrine and types of weapons and technologies required. Their
aim was "active defence" or the achievement of a capacity
where a potential adversary would wish to avoid a confrontation
that might escalate, particularly over Taiwan (QQ 601, 603,
605). Ambassador Chen
told us that a declaration of independence by Taiwan would force
China to take military action even if the US were to intervene.
136. China's military modernisation is transforming
its capacity to project force in East Asia and beyond.
In time this might be interpreted by China's neighbours, and by
the United States, as a challenge to regional stability. Stephen
Lillie commented that the lack of transparency in China's defence
expenditure was a concern to many countries but defence was not
an area of EU competence and was not much discussed (QQ 22-25).
Ambassador Chen told
us that the only goal of China's military modernisation was to
sustain national unity. It was possible that China would favour
transparency when it was strong enough.
137. The EU does not have a direct security
role to play in East Asia, except on environmental and energy
security issues, on which it should establish more formal discussions
with China. On other security issues the EU will have to exert
its influence through other regional actors, such as the USA and
Japan, and through ASEM.
138. We support regular dialogue between the
EU and the United States on East Asian strategic and security
Science and Technology collaboration
and China's space and cyber programmes
139. Dr Gill told us that the Chinese were
putting significant resources and effort into cyber security and
interference. In some ways this reflected conventional weakness
rather than an aggressive offensive capacity or intention, but
was of increasing concern, especially for the US military (Q 607).
Professor Callahan added that China saw cyber warfare as
an internal issue. Their expertise in developing the so-called
Great Firewall of China to keep foreign websites out had helped
them to develop the capability to attack sites outside China (QQ 167,
140. The relationship between internal political
control and external cyber security was further revealed in January
2010 after US corporation Google reported "a highly sophisticated
and targeted attack on our corporate infrastructure originating
from China," aimed at the email accounts of human rights
activists in China. The US State Department called on the Chinese
government to investigate the sources of the attack. There have
also been allegations of industrial espionage.
141. In its 2006 policy document on China,
the Commission recognised that scientific and technological cooperation
was one of the flagship areas in EU-China relations. Dr Nicola
Casarini (European University Institute, Florence) noted that
the EU was now "China's most important source of scientific
expertise and advanced technology". For example, the Galileo
satellite navigation programme, in which China was the largest
non-EU contributor, was intended to benefit both sides by sharing
costs, facilitating the entry of European businesses into the
Chinese aerospace market, and allowing Chinese companies to obtain
know-how and advanced space technology. However, the EU should
be concerned that China's interest in collaborative projects such
as this had served to advance its own strategic capacity.
142. In 2007 the Chinese government unveiled
plans to build a Chinese competitor to Galileo for both civilian
and military purposes. The EU countered by limiting the tendering
process for the second phase
of Galileo to States party to the WTO Agreement on Government
Procurement (GPA), effectively excluding China. This had been
a "slap in the face" for the Chinese, who had always
regarded space and satellite navigation cooperation with the EU
as a model for their large-scale international S&T cooperation.
143. Thanks to domestic programmes and international
cooperation, particularly with the EU, China has succeeded in
closing the scientific and technological gap with developed countries
and Beijing is now in a position seriously to challenge the EU
in high-tech sectors such as satellite navigation. Dr Casarini
argued that EU policy-makers were faced with "the challenge
of how to develop further cooperation with China in science and
technology and, at the same time, seek to manage China's emergence
as a strategic competitor in high-tech sectors." The Europeans
were increasingly concerned at China's lack of progress on the
protection of intellectual property rights (IPR) and the risk
that the Chinese would use European advanced space technology
to develop their own satellite system and challenge Galileo itself.
The Chinese system ("Beidou") was now expected to be
completed before 2015. Moreover, the Chinese satellites currently
in orbit seemed to be using frequencies previously allocated to
Galileo by the International Telecommunication Union (ITU) (pp 243-5).
EU-China Science and Technology Cooperation
|Sino-European cooperation in S&T has a long history and has improved significantly in recent years. In 2004 the EU-China Agreement on Scientific and Technological Cooperation was renewed; it aims to link research organisations, industry, universities and researchers in the framework of projects supported by the EU budget. In 2005 the two sides further strengthened these ties by signing a Joint Declaration on EU-China Science and Technology Cooperation, with the aim of building a "knowledge-based strategic partnership". More recent initiatives include European participation in Chinese projects and the possibility of joint European and Chinese funding for research, especially in areas of mutual interest.|
At the same time China has made huge progress in S&T: in its 2020 S&T Plan, adopted in 2004, China set the objective of catching up with the developed countries by 2020; and in 2008 it invested 1.45% of GDP on research and technological innovation (Casarini pp 241-3).
144. Dr Gill thought that Chinese investment
in its space programme had resulted in remarkable achievements.
The programme was military, primarily operated by the PLA, and
had a strategic purpose beyond the political and economic. However,
technology of high intellectual property value, high financial
value and potential military value being developed for Galileo
was being "black boxed" and was not available to the
Chinese for either military or commercial reasons. The PLA's action
in shooting down one of its satellites
was their effort to demonstrate their ability to do so and "signal
to countries who are very reliant, like the United States, upon
space-based assets for their military activity, that in relatively
inexpensive ways China can counteract some of the advantages that
more powerful countries could have" (QQ 628-9).
145. European companies had sold telecommunication
satellites and other space technologies to Beijing. European remote
sensing companies had sold spatial imagery to China, as had their
American counterparts. France had sold some low-resolution micro-satellites
to China (Casarini p 244). The Government told us that the UK
had sold a small satellite to China through Surrey Satellite Technology
Limited to operate part of a global disaster management constellation.
Discussions on the sale of a second satellite had begun. The Government
would welcome the Commission "setting out how they might
oversee interaction with China on space issues" (p 273).
146. The EU's engagement with China in the
field of science and technology, including projects such as the
Galileo satellite programme, is to be commended. EU-China S&T
cooperation has brought benefits to both sides through, for example,
the sharing of expertise and joint research. However, the
EU should be aware that China is probably collaborating to compete.
This is particularly the case for dual-use projects with both
military and civilian potential, of which the space and satellite
programmes are the most significant. The EU should be cautious
about sharing technology with China that might involve commercial
or strategic risk for the EU and its partners in the future.
147. The development by China of a cyber capability
has potentially serious commercial and communications implications
for EU Member States.
The attack on the Google corporation exemplifies the rising capacity
in China to use technology for political control at home and cyber
attacks internationally. When attacks emanate from China the EU
should make strong representations to the Chinese government and
be prepared to take strong counter-measures including the curtailment
of collaborative technology programmes. The EU should begin by
engaging the Chinese authorities in discussions on the proper
development and employment of cyber capability. This is an area
where the EU should work closely with the United States through
NATO and other relevant organisations.
The arms embargo
148. The EU imposed an "arms embargo"
following the brutal repression of pro-democracy demonstrations
in Tiananmen Square in June 1989. However, it is not an arms embargo
in the traditional sense, and does not include a list of proscribed
technologies or weapons which would normally form part of a serious
embargo (Dr Gill Q 623). It consists of two lines in a European
calling for the "interruption by the Member States of the
Community of military cooperation and an embargo on trade in arms
" It is not legally binding and each country
applies it differently.
149. The scope of the embargo is limited to goods
that might be used by the Chinese for internal repression, and
it has not stopped arms sales by EU Member States to China (FCO
pp 273-4) (see Box 2). In addition, the UK Government does not
permit the export of goods if there is a clear risk that the export
could be used for external aggression or to introduce new capabilities
into the region (Lord Mandelson, footnote to Q 738).
150. The embargo is an acutely sensitive and
symbolic issue for the Chinese and a constant irritant in EU-China
relations. The Chinese feel humiliated to be treated in the same
way as Sudan or Zimbabwe. They do not understand why the EU refuses
to lift the embargo and regularly raise the issue (Lord Patten
of Barnes Q 563). Professor Song believed, however, that
the Chinese should not allow the embargo to be a major issue (Q 523).
151. Most of our witnesses commented that the
embargo was not in fact the main instrument for regulating arms
exports to China. While lifting the embargo would be politically
symbolic (Lillie Q 27), the EU has more effective legislation
in a Common Position on arms exports,
which is legally binding on all Member States. It applies to exports
to third countries and does not therefore single out China (Cooper
Q 413). The EU also has a Dual-Use Regulation
which controls the export of sensitive technologies to China and
other countries. James Moran in Brussels thought this Regulation
was "extremely significant," although difficult to implement
152. Former deputy defence minister of Taiwan
Professor Chong-Pin Lin of Tamking University believed the
embargo had slowed down China's attempts to acquire "critical
technologies" for its military modernisation. This was "vital"
for regional security (p 246).
THE 2003 ATTEMPT TO LIFT THE EMBARGO
153. In 2003, the French President, Jacques Chirac,
and German Chancellor, Gerhard Schröder, indicated to the
Chinese that they favoured lifting the embargo, even though there
was no consensus within the EU. This caused alarm in the US, where
many feared the lifting of the embargo would lead to a surge in
arms sales and the transfer of sensitive, including American,
technology to China. The embargo was not lifted, and Lord Patten
of Barnes attributed this to American pressure (Q 563). Robert
Cooper, on the other hand, thought the EU had not arrived at a
situation where the US exerted pressure "because we never
got very close to lifting the arms embargo" (Q 413).
154. According to Professor Godement, the
Chinese were disappointed by the EU's decision, and perceived
that the EU could not deliver on its promises. This was a turning
point in EU-China relations. China realised that the EU would
always side with the US (Q 591).
EU Member State arms sales to China
|Total value of sales
2005 : 113.2 million
2006 : 133.9 million
2007 : 91.6 million
THE CURRENT POSITION
155. Since 2003 the arms embargo has been under
review. The December 2004 European Council Presidency conclusions
"the political will to continue to work
towards lifting the arms embargo
It underlined that the
result of any decision should not be an increase of arms exports
from EU Member States to China, neither in quantitative nor qualitative
terms. In this regard the European Council recalled the importance
of the criteria of the Code of Conduct
on arms exports, in particular criteria regarding human rights,
stability and security in the region and the national security
of friendly and allied countries
156. Stephen Lillie said that the UK's position
was that the time was not right to lift the embargo but "it
should rightly remain under review". There was consensus
across the EU on this position (Q 27). Robert Cooper in Brussels
thought consensus on lifting the embargo unlikely unless there
was an improvement in China's human rights record; some Member
States believed that lifting should be linked to China's ratification
of the International Covenant on Civil and Political Rights (Q 413)
(see also Chapter 8 on human rights). A 2003 European Parliament
the lifting of the embargo to human rights and Chinese threats
against Taiwan. More recently, Resolution 2008/2031 said that
since the EU had not received any explanation about the "Tiananmen
massacre" there was no reason to lift the embargo.
157. The US, Japan and Taiwan oppose lifting
the arms embargo. Dr Gill thought the embargo was "a
woefully misunderstood aspect of EU-China relations", primarily
in Washington (Q 623). An official EU-US dialogue on China
had been initiated following the attempt to lift the embargo in
2003, and this had been at least one good outcome of the "arms
embargo imbroglio" (Q 619). The EU might be able to
persuade the US government and Congress that the Common Position
was "far more effective" than the embargo. If the EU
prepared the ground properly, it could achieve the lifting of
the embargo in a way that would receive concessions from the Chinese
on certain issues (Q 625).
158. Dr Wacker,
however, thought that the US, Japan and Taiwan were unlikely to
be convinced that the Common Position was enough (p 326).
The Taipei Representative Office to the UK commented that the
embargo should remain in place until China had met conditions
including: ratification of the ICCPR; removal of the 1,500 missiles
targeted at Taiwan; and the renunciation of the use of force against
Taiwan (p 317).
159. The EU arms embargo was imposed as a
symbolic sanction to express concern about human rights in China
following the suppression of the Tiananmen Square demonstrations
in 1989, and it still retains this character. The 1989 embargo
is limited in scope and has had little effect on the volume of
arms sales by EU Member States to China. These are regulated at
the EU level by a 2008 legally-binding Common Position on arms
160. The embargo is a sensitive and symbolic
issue for the Chinese and an irritant in EU-China relations. It
requires cautious and tactful handling by the EU. The Chinese
were disappointed that the EU did not lift the arms embargo in
2003, and they were seen to have lost face because of the confidence
they placed in European diplomacy to deliver the lift. The Chinese
perceived the EU decision as driven by the US, even though it
might have been derailed by European parliamentary and public
opinion on human rights grounds. The Chinese perception that the
EU is the weak partner in relation to the US, rather than a strong
partner for China, still affects EU-China relations. The EU must
avoid public division and policy reversals in future, which only
serve to undermine its credibility.
161. The embargo is understandably a sensitive
issue for the United States, Japan and other partners. The EU
must consult closely with these partners on any future proposal
to lift the arms embargo. Regional stability and security in East
Asia must be safeguarded. The EU would need to convince the United
States and its East Asian partners that the arms embargo is mainly
symbolic and that the Common Position on arms exports is sufficiently
robust and enforceable to prevent the export of offensive weapons
systems and sophisticated military technologies.
162. The EU should be prepared to lift the
arms embargo only when the international conditions above have
been fulfilled and if the Chinese government makes progress on
human rights and regional security. Specific conditions should
include ratification of the International Covenant on Civil and
Political Rights, greater transparency on military modernisation
and the removal of the military threat to Taiwan.
163. China's desire to reunite Taiwan with the
mainland, and opposition to the independence movement there, steer
a number of Chinese policies, including political and economic
relations with third countries and how its armed forces are deployed.
Chinese extreme sensitivities about Taiwan were demonstrated in
their strong protest about US arms sales to Taiwan and their threat
of retaliatory measures in January 2010. Stephen Lillie thought
that China's purpose in projecting power was to use the threat
of military intervention to deter a Taiwanese declaration of independence
and to defend their territorial claims in the South China Sea
164. Isabel Hilton told us in March 2009 that
China's relations with Taiwan were in "rather a good phase".
The recent Taiwanese elections had brought to power Ma Ying-Jeou
of the Kuomintang (KMT) who saw the Taiwan issue in the same way
as Beijing on the "one China" issue. The Chinese had
"given themselves the right to invade Taiwan" if they
wished but, provided Taiwan did not do anything to change the
international legal order, the Chinese did not see it as in their
interests to go to war (Q 134). Dr Gill thought that
the US and China had reached an understanding over the heads of
the leaders and people of Taiwan to do everything possible to
avoid Taiwan taking steps which would lead to conflict (Q 612).
165. Stephen Lillie told us that the Commission
had a non-diplomatic trade office in Taiwan to maintain its interests.
He thought that the EU could play a role in supporting reconciliation
and dialogue across the Taiwan Strait. The EU-Asia Policy Guidelines
set out a basic approach for the EU, to support positive moves
between the two sides and express concern at moves which would
increase tension. He agreed that, since May 2008, the China-Taiwan
dialogue had increased substantially including direct flights
and shipping links which the EU had welcomed publicly (Q 31).
Lord Patten of Barnes commented that, following the conclusion
of discussions on Chinese and Taiwanese accession to the WTO,
China had reluctantly accepted the establishment of an EU office
in Taiwan, as well as in Beijing, as a necessary part of the trade
relationship. He had explained to the Chinese that this did not
constitute recognition of Taiwan's sovereignty (Q 556).
166. Dr Gill thought that in recent years
the EU had spoken more forcefully in stating its interest in a
peaceful solution on the Taiwan Strait: "diplomatic language
for letting China know that it should not use force to resolve
those differences". Neither side should take unilateral actions
that would disrupt the status quo. The EU had quietly supported
efforts to grant Taiwan greater international space, e.g. allowing
Taiwan to participate in various international organisations such
as the World Health Assembly as an observer. The EU should join
the US in encouraging China to be more flexible (Q 612).
Robert Cooper thought that the EU had a serious interest in cross-Strait
relations as the disruption of a conflict would be enormous and
one could never exclude being dragged in. The best insurance was
to develop political and commercial people-to-people exchanges,
which were currently going well (Q 415).
167. The Taipei Representative Office in the
UK commented that Taiwan was strategically important for the EU.
Taiwan could serve as a "role model and catalyst" for
China's democratisation. EU-Taiwan trade amounted to 40
billion, making it the EU's 13th largest trading partner.
Taiwan was a major contributor to China's economic modernisation,
with 5 million jobs in China created due to investments totalling
$76 billion. Taiwan was a unique partner for EU investors in China.
China still had 1,500 missiles targeted at Taiwan. However, Taiwan's
government sought improved ties with Beijing, and was willing
to learn from the EU's experience of gradual economic and then
168. Taiwan would like the EU to:
- maintain its arms embargo against China until
"relevant conditions" were met, including ratification
of the International Covenant on Civil and Political Rights;
- maintain a "balanced policy" on cross-Strait
relations; make no reference to the issue of Taiwanese sovereignty
in the PCA currently being negotiated between the EU and China;
and consult Taiwan before the EU conducts talks with China about
- continue to support Taiwan's "meaningful
participation" in UN Specialised Agencies, building on the
recent invitation to the World Health Assembly as an observer;
- recognise Taiwan as an "international legal
person" (but not a sovereign state), reflecting an arrangement
in the WTO in which Taiwan participates as a "separated customs
territory" but with full membership; and
- agree to negotiate an EU-Taiwan Free Trade Agreement
169. China's perception of the threat of a
unilateral declaration of independence by Taiwan has risen since
the 1990s due to democratisation on the island and rising nationalism
on the mainland. This has resulted in intense military preparation
to deter or confront a possible Taiwanese de jure independence.
Despite China's repeated claims that Taiwan is an internal issue,
it is a potential flash-point for the whole region, which could
bring the US and China into open conflict. Despite the EU's lack
of a defence capacity in East Asia, it would face serious consequences
from a conflict across the Taiwan Strait and its regional repercussions.
Close consultation with the US and Japan is needed on the subject.
170. Current policies in Taiwan and China
mean that the situation remains stable. However, the latest US
arms sales to Taipei have rekindled tension between Beijing and
Washington. The EU should state its support for the one China
policy but its rejection of re-unification by anything other than
peaceful means. It should discourage China and Taiwan from taking
any unilateral actions that would infringe these principles.
171. The EU should continue to support Taiwan
in areas which China would regard as non-threatening and should
encourage the Chinese to be more flexible, seeking to persuade
them that Taiwan's participation in some international organisations,
such as observer status at the World Health Assembly, will not
damage the Chinese case on reunification.
62 Dr Gill gave the numbers of the army as 2.185 million,
of which 1.6 million (about two thirds) are army (land-based forces);
navy 250,000; air force some 300,000. The remainder are domestic
paramilitary forces (Q 603). Back
Renmin University, Beijing, Appendix 4. Back
On March 5 2010 the official Chinese News Agency (Xinhua) reported
that China planned to increase its national defence spending by
7.5 percent to 519 billion yuan (about US $76 billion) in 2010,
according to a draft budget report. This would be a lower rate
of increase than in previous years. Back
Renmin University, Beijing, Appendix 4. Back
The Sunday Times, 31 January 2010. Back
European Commission, EU-China: Closer Partners, Growing Responsibilities,
Brussels, COM(2006) 632, 24 October 2006. Back
Phase two comprises the manufacturing, services and launch of
the remaining 26 satellites of the European satellite system. Back
In January 2007 China destroyed one of its weather satellites
using a ground-based medium-range ballistic missile. Source: BBC
News 23 January 2007 quoting Chinese Foreign ministry spokesman
Liu Jianchao. Back
See our 5th Report (2009-10) Protecting Europe against large-scale
cyber-attacks (HL Paper 68). Back
Presidency Conclusions, Madrid European Council, June 1989. Back
This is the 2008 Common Position Defining Common Rules Governing
the Control of Exports and Military Technology and Equipment,
which replaced the 1998 EU Code of Conduct on Arms Exports. It
applies to all countries outside the EU and does not therefore
single out China. Back
The Dual-Use Regulation 428/2009 sets out controlled items which
may not leave the EU customs territory without an export authorisation.
Goods and technologies are considered to be dual-use when they
can be used for both civil and military purposes. Back
FCO written evidence p 273. Figures for the EU as a whole. Back
The Code of Conduct was not legally binding and preceded the Common
Position on arms exports. Back
European Parliament Resolution on Removal of the EU embargo on
arms sales to China (P5_TA(2003)0599). Back
European Parliament resolution of 4 September 2008 on the evaluation
of EU sanctions as part of the EU's actions and policies in the
area of human rights (2008/2031(INI)). Back
Stiftung Wissenschaft und Politik (SWP), Berlin. Back
These include the Spratly and Paracel Islands, the Macclesfield
Bank and Scarborough Shoal. Back