SWP Research Paper Stiftung Wissenschaft und Politik German Institute for International and Security Affairs David Shambaugh / Gudrun Wacker (Eds.) American and European Relations with China Advancing Common Agendas RP 3 June 2008 Berlin © Stiftung Wissenschaft und Politik, 2008 All rights reserved SWP Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Copy editor: Robert Furlong Ludwigkirchplatz 3−4 10719 Berlin Telephone +49 30 880 07-0 Fax +49 30 880 07-100 www.swp-berlin.org [email protected] ISSN 1863-1053 Table of Contents 5 Introduction David Shambaugh and Gudrun Wacker Macro Perspectives 11 Seeing the “Big Picture” in American and European Relations with China: Past, Present, Future David Shambaugh 24 Transatlantic Divergences on the Rise of China Eberhard Sandschneider Domestic Issues 31 Politics, Human Rights, and the Beijing Olympics Richard Baum 44 European Co-operation with China: Human Rights, Rule of Law, the Environment and Civil Society Gudrun Wacker Economic Issues 59 U.S. and European Approaches to China’s Economic Reforms Nicholas R. Lardy 65 The EU’s Policy towards China on Economic Issues: Between Disillusion and Dialogue Margot Schüller Security Issues 79 U.S. Policies and Views toward Eight Key Security Issues Involving China Michael D. Swaine 94 European Union–China Cooperation on Security Issues Bates Gill Foreign Policy Issues 109 China’s View of International Norms and Institutions Harry Harding 123 How Much Is China’s Foreign Policy Shifting towards International Norms and Responsibilities—And How Should China’s Partners Respond? François Godement 137 Concluding Perspectives on Transatlantic Policies towards China P. C. Hauswedell 141 About the authors David Shambaugh and Gudrun Wacker Introduction David Shambaugh and Gudrun Wacker This volume is the collaborative product of American and European specialists on China, a number of whom have been involved in transatlan- tic consultations concerning China over the years. With generous support of the German Marshall Fund of the United States, the German Institute for International and Security Affairs (SWP), and the China Policy Program of the Elliott School of International Affairs at George Washington Uni- versity, the contributors to this volume were joined by more than a dozen other European specialists on Chinese affairs and U.S.–Europe relations for a stimulating two-day conference at the SWP in Berlin on 21–22 February 2008. The discussions were rich, candid, and detailed. The draft contribu- tions to this volume were discussed and vetted at length and in depth. The conference agenda, and the organization of this volume were intentionally structured around parallel American and European papers on six topics (the “Big Picture” of China’s reform and opening, Chinese domestic issues, security issues, economic issues, and foreign policy issues),1 so as to clearly expose both similarities and differences in transatlantic perspectives and policies. While certain differences were apparent, the commonalities that emerged in the papers and discussions far outweighed the differences. This fact confirmed the conference organizers’ previous sense that transatlantic differences concerning China had been substantially narrowed in recent years and, as a result, that a new window had opened for transatlantic co- operation vis-à-vis China. This is encouraging news, both for transatlantic relations but also because so many global challenges in today’s world require common cooperation not only across the Atlantic but trilaterally among China, Europe, and the United States. Forging Consensus The Transatlantic Dimension Transatlantic relations experienced a very difficult period, both in general and specifically concerning China policy, from 2002 to 2007. Broadly speaking, the Atlantic alliance was buffeted by a series of events and mutual perceptions, including: 1 A separate session of the conference discussed broad areas of Western assistance to China (capacity building), although no papers were written on this subject. SWP Berlin American and European Relations with China June 2008 5 Introduction the deep divisions over the U.S.–U.K. invasion of Iraq; deep disenchantment among European publics with the strategy, style, and tactics of the George W. Bush administration abroad; a broader cleavage in worldviews between American “realists” and Euro- pean “multilateralists”;2 the inability of Europe to “speak with one voice” on the world stage and for one European official to be “on the end of the line” when Washing- ton called; the U.S. displeasure with the attitudes and positions of the Chirac and Schröder governments in France and Germany; trade disputes; and dilution of shared interests and identity.3 While there was an evident “crisis” in transatlantic relations during the middle of this decade, they have relatively stabilized and improved since 2005 (during the second Bush term). Both sides seemed to have “agreed to disagree” over Iraq, to strengthen NATO and particularly its operations in Afghanistan, and improve inter-governmental communications across the Atlantic. A changing of the political guard in Berlin, London, and Paris also improved the atmosphere. It is also increasingly apparent that the agenda of U.S.–Europe relations have increasingly become globalized—involving crises and situations outside the European theater, e.g. Iran, Sudan (Dar- fur), Africa broadly, Israel-Palestine, North Korea, China, nonproliferation and a broad range of non-traditional security issues. The internationaliza- tion of transatlantic relations is an important change in its character, and it has ironically added new “glue” to the relationship.4 While some observers argued that the transatlantic relationship had experienced a fundamental cleavage and would have difficulty recovering its post-war consensus (some pundits even predicted the proverbial “end of the West”), it now seems that such prognostications were premature. While the lingering impact of the “crisis period” and perceptual cleavages should not be dismissed, it does seem that transatlantic relations are effectively adapting in the face of the aforementioned challenges and are reconfirming and redefining their common values and policies.5 2 See Robert Kagan, Of Power and Paradise: America and Europe in the New World Order (New York: Knopf, 2003). 3 See, for example, Charles A. Kupchan, “The End of the West,” Atlantic Monthly (Novem- ber 2002), pp. 42–45. 4 One manifestation of this new characteristic is that the close(d) community of “trans- atlantic” experts (American Europeanists and European Americanists) must now begin to interact much more with other regional specialists on Asia, Africa, Latin America, and the Middle East (and vice versa). 5 See, in particular, the contributions by Henry Nau, John Ikenberry, Charles Kupchan, Michael Byers, and Thomas Risse in Jeffrey Anderson, G. John Ikenberry, and Thomas Risse (eds.), The End of the West? Crisis and Change in the Atlantic Order (Ithaca: Cornell Univer- sity Press, 2008). SWP Berlin American and European Relations with China June 2008 6 David Shambaugh and Gudrun Wacker The China Dimension With respect to China policy, the early and mid-2000s also exhibited significant strains in transatlantic relations. The most evident example was the public dispute over the EU’s movement towards lifting its “arms embargo” on China (which reached a zenith during 2004–2005). But beyond the arms embargo imbroglio, there were also a series of other indications that Washington and Brussels did not view China in the same way. The differences were nuanced rather than basic, and were largely the result of the European Union finally defining its own China policies. It was not until the 1995–2005 period that the EU and China really began to fashion their own relationship, autonomous of previous Cold War dynam- ics (in which Sino–European relations were derivative of broader super- power dynamics). In a series of official “Communications” during this period, the European Commission progressively outlined its own vision of China and its role in the world. The China–Europe relationship blossomed in multiple sectors.6 Washington paid little attention to this important new development in international relations.7 As the U.S. began to do so, though, a significant number of perceptual and policy divergences became apparent.8 While some of the luster has worn off China–Europe relations since 2006 and the romantic “honeymoon” seems to have turned into a complex “marriage,” at the same time U.S.–Europe perspectives and policies towards China have come closer together. After experiencing these policy differences and a period of acrimony over the potential lifting of the EU arms embargo earlier this decade, since 2006 it appears that the United States and European Union have grown much closer together in their views of and policies towards China. This period of convergence has come about as a result of several reasons: The mutual reflection, on both sides of the Atlantic, over the causes and consequences of the arms embargo imbroglio. This reflection has led to greater sensitivity on both sides of the other’s primary interests, equi- ties, and concerns about China. The arms embargo flap led to the institutionalization of semi-annual official dialogue on Asia (although it is really on China) between the European Commission and the U.S. Government—this official dialogue has improved communication and coordination at the inter-govern- mental