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A strategy paper calling for the European Union's relations with China to be revamped across the board was approved by EU Foreign Ministers at the General Affairs Council in Luxembourg on June 29. The six-page paper - based on a Communication originally adopted by the European Commission last March - says that the EU's approach needs to reflect the growing economic and political presence of China on the world stage (see European Report N 2303). The partnership strategy rests on five pillars: political dialogue, support for transition towards democracy, China's inclusion in the World Trade Organisation, making better use of the EU's resources, and raising the EU's profile in China. It calls for engagement by encouraging and bolstering reform, dialogue and openness in issues like market access, trade, social policy and human rights. The agreement comes as China is celebrating its new status as an emerging world power broker by hosting a historic summit meeting with US President Bill Clinton.

The EU's agenda with China is mainly focused on trade and investments: German Chancellor, Mr. Helmut Kohl has visited China three times in the company of businessmen who secured and signed lucrative deals. The policy paper calls on the EU to shake up its relationship by helping the country integrate into the world economy. The initiative, in the form of a Communication, 'Building a Comprehensive Partnership with China', argues that a more active EU policy is essential to match China's increasing assertiveness on the world stage.

It says the range of subjects discussed with China should be broadened to include such topics as arms control, the fight against crime, the environment, and the regional security of Asia as a whole. Drafted by Trade Commissioner Sir Leon Brittan's services, the paper says the focal point of the EU's strategy, "must be to ensure the successful and lasting integration of China as an equal partner in the world economy." But it adds there are still "serious shortcomings in China's human rights record," including suppression of certain ethnic minorities and political dissidents, use of enforced prison labour, and an under-developed system of rule of law.

At last year's key Communist Party Congress a bold five-year economic and social reform agenda was agreed, which the EU already sees as an irreversible signal by the Chinese leadership in favour of market reforms. EU officials have been impressed by the way China has resisted the temptation to devalue its currency, the yuan, despite sharing many of the same financial problems as its beleaguered Asian neighbours. This makes the policy especially timely as it backs China's move towards the free market while helping it to fend off financial turmoil of the kind currently hitting other parts of Asia.

Signal to bolster reform.

The new policy document now sends an important further signal to the Chinese leadership, Sir Leon said in a statement after the paper was agreed. "The realisation of China's potential as a leading power in Asia over the long term will hinge on its ability to match its domestic reforms with a commitment to open markets on a world scale", he said. "Europe must now work to strengthen its economic partnership with China, coupling these developments with an active commitment to encourage the creation of a strong and open civil society."

One of the key issues dominating China's relations with the EU - and indeed the US - is Beijing's long-standing bid to join the World Trade Organisation. The policy paper says the EU should assist the process of China's global integration through a mixture of trade policy and carefully targeted cooperation initiatives, and one key pillar of this is WTO accession. But it sets a few minimum thresholds for China to meet before joining the global trade watchdog - transparency, national treatment, non-discrimination and a meaningful degree of access to the Chinese goods and services market - while developing the concept of transition periods for relevant sectors. This includes helping China create an open and market-driven financial services sector by developing rules, supervisory mechanisms and prudential standards that will help it guard against structural weaknesses exposed in Asia during the financial turmoil. The EU should also draw on the expertise of the European business community in order to modernise Chinese economic practice, notably in areas where the EU has a clear competitive advantage. But the latest indications are that it will still be some time before these demands have been met (see European Report N 2323).

Clinton coincidence.

The policy agreement also coincides with President Clinton's visit to China, the fist by a US leader for over nine years. The paper also set in motion plans for regular summits: the first took place in London in April with Chinese Prime Minister Zhu Rongji, British Prime Minister Tony Blair and European Commission President Jacques Santer in the margins of the Asia-Europe Summit meeting. A second is due to take place in October when Mr Santer visits Beijing, Shanghai and Hong Kong, and meets Chinese leader Jiang Zemin.

But for now, the EU recognises that all eyes are on President Clinton's trip to China, and a common European perception is that whatever the outcome, the summit heralds a major shift in the geopolitical balance of power and influence in the Asia-Pacific region. Many Europeans, like the Americans also wonder who is manipulating whom as the US President is seen doing things mostly China's way.

There is a fear that in their rush to engage in China's potentially vast economy, the US, and indeed the EU, have tacitly agreed to forget the democracy protest in Tiananmen Square in 1989, brutally crushed by the authorities. Another human rights issue is Tibet, occupied by Chinese forces for almost forty years. An EU fact-finding mission to the region in May to investigate the plight of political prisoners visited Tibet's largest prison, Drapchi in Lhasa, but violent disturbances just days earlier were covered up by the Chinese authorities. The Tibetan Centre for Human Rights and Democracy in Dharamasala, India, even alleges that the Chinese authorities opened fire on prisoners. In Brussels Chinese dissident Wei Jinsheng recently told the European Parliament's Foreign Affairs Committee that both Europe and the United States, were taking "a big step backward" on human rights. Mr Wei, released last autumn after languishing almost 18 years in Chinese jails said it is a mistake to believe that the Chinese people had given up fighting for their rights.
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Copyright 1998 Gale, Cengage Learning. All rights reserved.

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Publication:European Report
Article Type:Article
Geographic Code:4EU
Date:Jul 1, 1998

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