EU's China Policy and Possible Impact on Taiwan

Prof. Dr. Yachung Chang
Director, Institute of Asia-Pacific Studies, Nanhua University, R.O.C.

I. EU-China relations and significance

(I) Characteristics of the EU's China policy

The EU's recent China policy can be summarized in the following three documents: "Toward a New Asia Strategy " published in 1994, "A Long Term Policy for China-Europe Relations" published on July 5, 1995 and "Building a Comprehensive Partnership with China" published on March 25, 1998.

According to the documents, the new EU-China partnership will aim at: Engaging China further in the international community; supporting China's transition to an open society based on the rule of law and the respect for human rights; integrating China further in the world economy; bringing China into the world trading system; supporting China's economic and social reform; making Europe's funding go further; raising the profile of the EU. (EU's proposed initiatives, see appendix)

To sum up, the EU's new China policy is characterized by the following three points:

The first, the EU has adopted a more positive attitude toward China's domestic development and international status. The cooperation framework with China proposed by the EU shows that the EU has considered China as a major target country in its expansion of partnership in international politics and economy. It expects to urge China to take international responsibilities and duties and lay the ground for bilateral relations in the 21^st century through equal and regular dialogue mechanism.

　　The second, the EU adopts a practical and low-key principle in dealing with human rights, Tibet and other issues that would affect bilateral relations. It indicates that the economic factor remains a main axis in the EU's consideration of its relations with China.

The third, on the issue of China's participation in the WTO, the EU tends to be more flexible and supportive. This indicates that politically it will urge China's continued engagement in the international society. And economically, it will act to integrate China into the world's economic system through an international regime. On bilateral cooperation, the EU will support a transformation on the part of China toward an open society based on the rule of law and that respects human rights. Thus, it will help achieve the goal of transforming China in a gradual and peaceful way. In addition, the EU will strengthen cultural and scientific exchanges to guarantee Europe's interests in China.

(2) Significance of the EU's new China policy:

The first, in view of both political and economic efficiency, China has become a major partner for the EU, without any peer in Asia, as targeted in its "Toward A New Asia Strategy,"

The second, "Enlargement and Engagement" is the main axis of the EU's China policy. "To promote change through engagement" has become a major strategy in the EU's seeking to expand its economic interests in China.

The third, "Dialogue instead of Conflict" is the principle for the EU in dealing with disputes with China. The principle also applies to its request of China to improve its human rights condition.

II. Possible Impact of the EU's China Policy on Taiwan

The first, in Cross-Strait affairs, the EU adopts differentiated political and economic policies toward Taiwan. Politically, it follows U.S. position, supports the "Three-No's Policy,"[1] and calls for a peaceful solution to Cross-Strait conflicts. However, as the EU and Taiwan have not reached any agreement comparable to "Taiwan Relations Act (TRA)," it is foreseeable that the EU would be less willing as well as capable to interfere with Cross-Strait affairs. In simple words, the EU tends to be "conservative" in Cross-Strait issues, with U.S. position as the basic consideration.

The second, the European Parliament adopts a stronger stance toward China's human rights issues and Cross-Strait conflicts, compared with the European Commission or European Council. However, as the European Parliament is not the highest-level policy-maker, any resolution passed by the organization will have limited effects.

The third, The EU's trade and investment in China has seen a significant growth. The bilateral trade hit US$55.7 billion in 1999, up 14% from the previous year. Despite the impact of Asia's economic crisis, the EU's investment in Mainland China saw a hefty increase to nearly US$22 billion in 1999, compared to an average of US$5 billion in previous years. The investment concentrates in capital-intensive and high-technology sectors.

The fourth, the EU differentiates in its political and economic policies toward Taiwan. As developing economic and trade relations with Taiwan is a consensus among EU countries, there is no disagreement whatsoever concerning Taiwan's setting up of a representative office in the EU. The European Parliament has passed a resolution to urge the administrative unit to process the case. The administrative unit, however, still suspends the opening of the representative office due to the lack of funds. Taiwan should speed up its pace in exchanging representative office with the EU. If the EU's administrative unit currently has financial difficulty, Taiwan should still go ahead to open its representative office first, in order to help promote bilateral trade and economic relations.

III. Future Directions of EU-China Relations

The first, the EU holds a positive and optimistic view of China's future status and role in the international society. Judging from the EU's declaration to call for China's sooner participation in the WTO, and also German Chancellor Gerhard Schröder's active support for China's participation in G8, the EU has looked at China as a rising power. The fact necessitates a more active move by the EU to develop relations with China.

The second, if China maintains its economic growth and social stability, the EU will keep its current policy. After China joins the WTO, economic and trade issues such as anti-dumping, general system of preference (GSP) and opening up of the Chinese market will be dealt with under the WTO regime, which will help promote the EU's relations with China.

The third, the EU-China dialogue mechanism includes "institutional dialogue" conducted by foreign ministers and ambassadors, high-ranking official visiting and taking turns to hold summits (every half a year since 1998) in the UN, Beijing and capital city of The Presidency of the Council. These dialogue channels will remain a major role in future EU-China relations.

The fourth, the EU needs China's support to its global role. Maintaining friendly relations with China will help the EU in increasing its say on global affairs. It will also help increase the EU's presence in the Asia-Pacific region and expand its economic interests in the area. China also expects to strengthen ties with the EU, in a move to attract foreign capital and European technology, as well as to reduce the U.S.' hegemonic power in the international society.

The fifth, the current biggest controversy between the EU and China is human rights and Tibet issues. Due to the consideration of economic and trade interests, EU officials are probably to maintain a discreet and conservative stance and encourage "dialogue instead of conflict" in dealing with the issues.

The sixth, generally speaking, there are no factors in EU-China relations that would lead to potential conflicts. The two sides also recognize the need to deepen and expand bilateral relations. If no major events occur, the two sides will see a smooth development of their relations.

Appendix: Proposed initiatives of EU's China policy