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UNIVERSITY OF LONDON A critical analysis of European Union Foreign Policy towards China (1995-2005) Nicola Casarini London School of Economics and Political Science Department of International Relations A thesis submitted to the University of London for the degree of Doctor of Philosophy in International Relations May 2006 UMI Number: U221954 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U221954 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 Intish 1_ ibrarv of Political III C Table of contents Table of contents 1 Preface 4 List of Tables and Figures 6 List of Acronyms 7 Introduction Summary 11 Aim and contribution 14 Assumptions 16 Research design 38 The scholarly literature on EU-China relations 45 Structure of the thesis 49 Chapter 1 European Union foreign policy and China 1.1 The European Union as a global actor 52 1.2 EU foreign policy 54 1.3 Europeanisation 55 1.4 The large EU member states’ strategies towards China 58 1.5 The instruments of EU foreign policy 61 Conclusion 65 Chapter 2 From secondary relationship to post-Cold War partnership: EU-China relations in the period 1975-1995 Introduction 65 2.1 Europe-China relations during the Cold War 68 2.2 Tiananmen 74 2.3 Developments in Europe and China at the beginning of the 1990s 76 2.4 The relations between the large EU member states and China 80 in the first part of the 1990s 2.5 A turning point: The adoption of the policy of 84 constructive engagement Conclusion 90 Chapter 3 The interregional level I - The economic dimension: The EU’s China policy in the context of the New Asia Strategy and the Asia-Europe Meeting in the 1990s Introduction 93 3.1 The making of the EU’s New Asia Strategy 95 3.2 The Asia-Europe Meeting (ASEM) 96 3.3 Behind ASEM: the emergence of a tri-polar economic order 101 3.4 The flip-side of East Asia’s success: “economic orientalism” 107 3.5 The discourse of the “Asian values” 111 1 3.6 The Asian financial crisis and the EU’s response 115 3.7 The emergence of China as the cornerstone of the EU’s Asia policy 119 Conclusion 121 Chapter 4 The EU’s policy of constructive engagement towards China: the trade-off between economic security and human rights Introduction 124 4.1 The new significance of the Chinese market for Europe’s economic 127 security in the post-Cold War era 4.2 Europe’s significance for China’s economic security 133 4.3 EU-China commercial relations 139 4.3.1 EU member states’ competition for China’s market shares 142 4.4 Human rights and the Taiwan issue in EU-China relations 146 4.5 The EU-China Human Rights Dialogue 148 4.6 The Nordic countries’ development cooperation with China 153 4.7 The emergence of China as a financial and banking power and the 155 role of the UK and its financial community 4.8 At the heart of constructive engagement: the European Commission 158 support for China’s integration in the international community and transition to an open society Conclusion 162 Chapter 5 Strategic partnership I: Galileo and advanced technology transfers Introduction 164 5.1 The discourse of “strategic partnership” 166 5.2 The Galileo satellite network and China 173 5.2.1 The commercial side of Galileo 175 5.2.2 The political side of Galileo 177 5.3 Behind Galileo: the development of an independent European 181 aerospace sector in the post-Cold War era 5.4 EU member states’ space policies and the role of France 189 5.5 Behind China’s participation in Galileo: fostering Beijing’s 194 space program 5.6 Galileo and the GPS 201 5.7 Pragmatic engagement: When Europe’s commercial interests meet 204 with China’s desire to acquire Western technology Conclusion 209 Chapter 6 Strategic partnership II: The arms embargo issue and East Asia’s strategic balance Introduction 211 6.1 The debate on the arms embargo 212 6.2 European arms export control policies and the EU Code of Conduct 217 6.3 The European defence sector 219 6.4 US opposition to the lifting (and to China’s participation in Galileo) 222 6.5 East Asia’s strategic balance . 224 Conclusion 230 Chapter 7 The interregional level II - The security dimension: Europe’s involvement in East Asia’s strategic balance and the Taiwan issue 2 Introduction 232 7.1 The evolution of the EU’s Asia strategy at the beginning of the 236 21st century: the inclusion of a security dimension 7.2 The T aiwan issue 241 7.3 The EU and the Taiwan issue 7.3.1 EU member states’ relations with Taiwan 244 7.3.2 The European Commission 248 7.3.3 The Council 249 7.3.4 The European Parliament 250 7.4 The EU’s Taiwan policy in light of growing EU-China relations 254 7.5 Conclusion 257 Conclusion The evolution of Europe-China relations 259 China in transatlantic relations 269 China as a test for the emergence of the EU as a global actor 274 Future research agenda 279 Bibliography 281 3 Preface “No man is an island, entire o f itself; every man is a piece o f the continent, a part o f the main ” John Donne It is only when you reach the end and look back that you realise how many people have supported your project. I have a great deal of respect and appreciation for the guidance provided by Dr Christopher Hughes and, in the first stages of the thesis, Professor Michael Yahuda. Dr Hughes, in particular, has provided generous comments, offered critical observations, and helped to keep the entire project in perspective, as well as focused on the goal. If this thesis has been finished in good time, it is because of Dr Hughes continuing support and encouragement. The International Relations Department at the LSE has been the ideal place for my research. Along with the invaluable expertise on China and East Asia mentioned above, my project has greatly benefited from the opportunity to engage with some of the best scholars of European foreign policy. In this context, Professor William Wallace and Professor Christopher Hill have been most generous in answering my questions and offering suggestions, even on topics that extend beyond simple PhD research. Among my fellow research students, a number have supported and commented upon my research project. I would like to thank: Michael Aktipis, Miriam Allam, Andreas Antoniades, Alexander Bukh, Stephanie Carvin, Alexandra Dias, Eva Gross, Robert Kissack, Padideh Tosti, William Vlcek, Reuben Wong. My gratitude also goes to the administrative staff of the International Relations Department, in particular Hillary Parker and Martina Langer. The research in this project has benefited from fieldwork in China. I wish to thank Professor Maria Weber, Chen Wenbing and Elisabeth Engebretsen for their support during my stay in Beijing. Moreover, a three-month fellowship at the EU Institute for Security Studies in Paris has also helped this research. I wish to thank Gustav Lindstrom and Marcin Zaborowski for having read part of the thesis and commented upon it. I had the opportunity to work as a Research Assistant to Henrietta Moore, Professor of Social Anthropology and Deputy-Director of the LSE (2002-2005). The work relationship quickly turned into one of intellectual exchange. I wish to thank Professor Moore for her support and her insightful comments on the methodological issues of my research. Special gratitude goes to Dr Costanza Musu, Assistant Professor of International Relations at Richmond American International University in London. This thesis owes a great deal to the conversations and intellectual inspiration gained by working alongside Dr Musu on a number of academic projects. I wish to thank Costanza warmly for all her support and friendship. This thesis has also benefited from the financial support of various institutions. I gratefully acknowledge the scholarships awarded by the Department of International Relations, LSE; by the Central Research Fund, University of London; and by the Italian National Research Centre. Most of my time in London was spent at the Goodenough College, a unique institution for post-graduate students in the heart of London. A number of people have supported my stay at the College and provided encouragement. I would like to thank the Director, Major-General Tim Toyne-Sewell; the Warden of London House, Chris Wright; and the Development Manager, Roger Llewellyn. Thanks are also due to my friends for their encouragement provided throughout: Robyn Bhoparai, Marco Cerini, Kevin Derbyshire, Anthony Duschell, Rino Gaeta, Adele Lobasso, Roberto Ravelli, Lorenza Rossi, Rudi Moffitt. In the end, however, I alone remain responsible for the content of this thesis and for any errors or misinterpretations contained herein. This thesis is dedicated to my parents, Ivo Casarini and Amalia De Chiara, and to Patrizio Paoletti whose teaching has provided me with a larger vision of the world, the people and the things. London, May 2006 5 List of Tables and Figures Table 1 The tripolarisation of world trade in 1996 105 Table 2 GDP growth rates 1991 -1995 106 Table 3 East Asia’s annual per capita GDP growth (%), 1965-1995 106 Table 4 East Asian economies 1996-1999 119 Table 5 EU FDI flows to China (1994-2002) in US$