chapter  9
The EU and China: the politics and economics of strategic diplomacy
ByMICHAEL SMITH
Pages 18

Introduction The EU’s relationship with China has been a constant focus of attention in EU diplomacy in recent years (see for example Barysch et al. 2005; Callahan 2007; Casarini 2013; Crossick and Reuter 2007; Geeraerts 2013; Pan 2012; Scott 2007; Shambaugh et al. 2008; Wiessala et al. 2009; Zaborowski 2006). Not only has the EU pronounced at several points in the past two decades new phases in its own ‘China strategy’, it has also pronounced China to be one of its key ‘strategic partners’; it is common in the utterances of EU and Chinese leaders to refer to the relationship as a ‘comprehensive strategic partnership’ covering a wide range of issues in ‘three pillars’ – economic, political and civil-society related. In late 2013, the two partners committed themselves to a wide-ranging plan of action based on these three areas for the period up to 2020, and openly referred to as a ‘strategic plan’ for that period (European External Action Service 2013). In early 2014, the new Chinese President, Xi Xinping, visited all three of the major Brussels institutions to reaffirm Chinese interest in the partnership. Yet in some respects, the EU-China ‘strategic partnership’ is evidently incomplete, the most obvious example of this being the fact that despite a decade of negotiations, the two partners have failed to agree a Partnership and Cooperation Agreement (PCA) to supersede the 1985 Trade and Cooperation Agreement (Men and Balducci 2010; EEC-China 1985). At the same time, and reflecting some of the difficulties encountered in the PCA negotiations, the relationship reflects not only the pursuit of partnership and cooperation, but also elements on the EU side of defensive ‘containment’ and of day to day management, which can create tensions and contradictions (Smith and Xie 2010). Most importantly for the purposes of this chapter, the relationship seems to be characterised by a marked imbalance between the political element and the economic element, representing the clear dominance in both orientation and action of the economic and commercial elements and the relative marginalisation of political concerns (Smith 2014a). This imbalance is the analytical starting point of the enquiry in this chapter. As noted in Chapter 7, the ideal of ‘strategic diplomacy’ as applied to the relations between the EU and its key international partners entails the development of a coherent narrative, the mobilisation of resources to support the pursuit of

agreed aims, and the adaptation of both the narrative and the application of resources to reflect changes in the context and the relationship itself. It also implies the maintenance of a balance between the key elements of the diplomacy over time, and adjustments to this balance to reflect changing conditions. In Chapter 7, it was argued that rather than a single integrated ‘strategic diplomacy’, in many areas the EU had generated a differentiated strategic framework, and that this might be a more appropriate means of evaluating EU external actions vis-à-vis its major strategic partners. This is the analytical context within which this chapter will proceed. In the EU-China relationship, the focus has historically been very largely on the economic issues between the partners, and thus arguably on ‘economic diplomacy’ both in terms of the development of EU-China relations and in terms of their links to broader issues of global governance and norms (Smith 2014a; see also Woolcock 2012). This reflects the fact that EU-China trade has grown very rapidly, with bilateral trade in goods totalling €428.4 billion in 2013, whilst trade in services and foreign direct investment were growing rapidly albeit from a lower base (European Commission DG Trade 2014). Whilst the EU ran a large deficit on its trade with China overall, the potential of China as a market for European goods and services is recognised by the EU institutions and also by EU member states; not only this, but the potential for finance and investment in the context of financial crisis within the Union has been evident in recent years (Grevi and Renard 2012). At the same time, the potential for political and security dialogue between the EU and China appears more limited, reflecting both geopolitical and normative factors (van der Putten 2013). If this predominance of economic considerations is the case, then it has important analytical and policy implications not only for the content of EU diplomatic strategies, but also for the diplomatic actions through which these strategies are pursued. A focus on this issue thus enables us to address some of the key issues identified by this volume. Issues of deliberation (who frames strategy?), representation (who articulates strategy?), communication (who conveys the message?) and negotiation (who negotiates on behalf of the EU?) are clearly likely to be different if the key concern of strategy is economic and commercial from what they might be if the central focus is on politics and by extension security. This is the case whether the concerns are material or normative, since the prevailing concerns in economic and commercial diplomacy are distinct from those encountered in the realms of politics and security. The chapter starts by assessing the challenges faced by the EU in the context of its relations with China. It then proceeds to explore two key elements of the framework for ‘strategic diplomacy’ identified in Chapter 7: the development of a strategic framework by the EU, and the application of resources to strategic diplomacy. The concluding part of the chapter explores the adaptation of EU diplomacy to changing conditions, relating this to questions of the effectiveness of EU diplomacy and thus to the initial proposition about the dominance of economic and commercial diplomacy. In all of these areas, issues of balance, coordination and linkage will be at the centre of the argument.