social europe journal vol. 3 no. 3

Volume 3 • Issue 3

Spring 2008

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Contributions byWill HuttonLinda Yueh

Mark LeonardAndrew Cottey

Jörn-Carsten GottwaldNiall Duggan

Olli RehnHerbert Schmalstieg

Europe and China– Emerging Rivalsor Partners?

Social Europe Journal • Volume 3 • Issue 3 • Spring 2008

Editorial BoardDetlev Albers Chief Editor

Giuliano Amato Former Italian Prime Minister

Karl Duffek Director Renner Institute

Elisabeth Guigou Former FrenchEurope and Justice Minister

Zita Gurmai President PES Women

Stephen Haseler Chief Editor

Poul Nyrup Rasmussen President of the PES

Angelica Schwall-Dueren Vice Chair SPD Bundestag Group

Giuseppe Vacca President Gramsci Foundation

Jan Marinus Wiersma Vice President SocialistGroup European Parliament

Henning Meyer Managing Editor

Editorial team

Jeannette Ladzik Assistant Editor

Ben Eldridge Design & Layout

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Editorial

Henning MeyerManaging Editor

THE RISE OF China ininternational politics andeconomics has been evi-

dent for 30 years now. Andthere is little doubt that sincethe 1990s, this process hasaccelerated. But there are verydifferent views as to whatChina’s ascendancy means andwhat the likely consequencesfor global politics will be.This latest issue of Social

Europe Journal brings togethersome of these different pointsof view and tries to make acontribution to the continuingeffort to conceptualise theemergence of a new majorpower on the world scene.The Director of the Work

Foundation and leading Britishcolumnist, Will Hutton, is thefirst contributor to our essaycollection on EU-China affairs.Hutton sets out why hebelieves that the Chinesepolitical course needs tochange fundamentally if thecountry really wants to play aleading global role.Following this, Linda Yueh

presents her economic argu-ment on the state of EU-Chinarelations from a Chinese per-spective, before Mark Leonard,in a very stimulating article,gives some rare insights intoChinese political thinking.Our primary subject matter

is concluded by two contribu-tions – dealing with thedynamics of EU-China rela-

tions and the Tibet riots of lastMarch – authored by academ-ics from the Irish Institute ofChinese Studies at UniversityCollege Cork.But the spring 2008 issue of

Social Europe Journal hasmore on offer. We also con-ducted an exclusive interviewwith EU EnlargementCommissioner Olli Rehn aboutthe future of the EU 27+. Andfinally the former Mayor ofHanover, Herbert Schmalstieg,forcefully argues for an appre-ciation of the role of munici-palities in Europe’s system ofmulti-level governance.As always, we hope we have

put together an interestingjournal that is informative andthought-provoking. Please donot hesitate to contact us [email protected] if youwould like to voice criticism,praise or suggestions.


ContentsWill China Dominate the 21st Century?Will Hutton

Reflections on the EU-China Economic RelationshipLinda Yueh

China’s New IntelligentsiaMark Leonard

The European Union and the People’s Republic of China:Who’s Changing Whom?Andrew Cottey and Jörn-Carsten Gottwald

Tibetan Riots, March 2008: Causes and ConsequencesNiall Duggan

Interview with EU Enlargement Commissioner Olli RehnOlli Rehn

Cities and Municipalities are Europe’s StrengthHerbert Schmalstieg

Click on the flags for links to foreignlanguage versions

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http://www.isg-london.org/fileadmin/user_upload/journals/Vol3-Issue3/schmalstieg_de.pdf

CHINA IS A CONTINENTALwide country whose land areais eerily close in terms of

square miles to that of the USA – andwhose geography has the same eerypattern. The Himalayas, Manchuria,Beijing, Shanghai and the Yangtzehave their almost exact counterparts inthe Rockies, industrial New England,Washington, New York and theMississippi. The difference is thatChina is a country of 1.3 billion peo-ple and a civilisation more than 3000years old. If those numbers ever com-bined with China’s continental poten-tial, as Napoleon once famouslyremarked, it would shake the world;the USA times four.That is what now seems to be hap-

pening. Since 1978 China has burstback onto the world scene in a manneronly paralleled in scale and speed inworld history by the rise of the USAbetween the Civil War and First WorldWar in 1914. The open question iswhether the twenty-first century isgoing to be the Chinese Century in the

way the twentieth century wasAmerican and the nineteenth centuryBritish. Is the baton of global leader-ship going to pass from Anglo-Saxonhands, who held so many values incommon, to Chinese? If so the implica-tions could not be more profound, asthe world is beginning to recognise inChinese repression in Tibet. A Chinesecentury would imply a wholly differentcivilisation and values; the character ofglobal institutions, our culture andobviously the primacy of the Englishlanguage would be challenged. If Chinaremained communist there would besubstantial implications for the organi-sation of Western economies and soci-eties. The answer to this question isone of the most important of our age.My argument is that China is not

coming to take us all away. Nor is itstealing millions of jobs in the West,squeezing our middle class – the greatpreoccupation in the US – or about tobecome our economic master. In factChina, for all its breathtaking growth,has not managed to change the rules ofglobalisation which are still massivelyskewed to benefit the West. They arevery difficult, even for China, to over-turn. Instead of using China as anexcuse either to close our markets ordismantle our welfare states, the truthis more complicated. Our political andbusiness class should stop terrorisingus about its rise; and instead try tounderstand it. This is an ancient civili-sation with chronic problems that fromthe environment to inflation havebecome ever more obvious. If we over-

Will China Dominatethe 21st Century?

‘China is not coming to take us allaway. Nor is it stealing millions ofjobs in the West, squeezing ourmiddle class – the great preoccu-pation in the US – or about tobecome our economic master’

131 Social Europe Journal Spring 2008

Will HuttonChief Executive of TheWork Foundation anda Columnist for theObserver newspaperin Britain. Author of anumber of bestsellingand widely reviewedbooks on politicaleconomy, notably TheState We’re In (1995),The World We’re In(2001) and TheWriting on the Wall(2007).

exaggerate its threat, we could scareourselves into dismantling the world’sopen economic system – and start aslide into mutual suspicion whichcould end in war. If ever there is athird world war, our antagonist is like-ly to be China.This analysis may seem contrarian,

even maverick. After all China hasgrowth rates that are the envy of all,has succeeded in taking 400 millionpeople out of poverty, is set to becomethe world’s leading exporter before2010 and whose foreign exchangereserves have broached the $1.5 trillionlevel. Critics have been predicting theend of its boom for more than fifteenyears, but still China’s communistrulers continue to keep one step aheadof any political instability and drivethe economic reform programme for-ward. The consensus in the Westbelieves that the system they havebuilt will continue to flourish. Myview is very different. I argue that theeconomic model that has taken it thusfar can not take it much further, andnow the numbers are so large thatChina’s capacity to fudge and hidereality is rapidly fading. As a conse-quence there are profound implicationsfor authoritarian communism, the USand West’s policy in Asia and the waywe portray globalisation.China is everywhere broaching the

limits of its capacity to continue as ithas. It is reaching the limits of howmuch longer its banks can carry ondirecting billions of dollars of savingsinto investments that produce derisoryreturns and on which interest is irregu-larly paid. It is reaching the limits ofhow much longer its very poor peas-ants can carry on saving to fuel theinvestment. It is reaching the limits ofthe capacity to increase its exports ofnow one trillion dollars by 25 per centa year, in any case largely made by for-eign companies. It is reaching the lim-its of acquiring foreign exchangereserves which in 2007 grew at anastounding $650 billion without gener-

ating colossal inflation. Even theChinese cannot insulate their financialsystem from the impact of printing$650 of renminbi and so fuelling infla-tion – now at a twelve year high.Nor are the limits solely economic.

200 million people out of a workingpopulation of nearly 800 million aremigrants, chafing at their lowly statusand rotten wages. Inequality is breath-taking. Corruption is epic – whether inits banks, its legal system or the leader-ship of its cities and provinces.Environmental degradation is scarcelycredible; 400,000 people a year die ofrespiratory diseases caused by pollutedair. And to cap it all there is a firstorder internal ideological crisis overhow a communist party that proclaimsit remains the trustee of the 1949Revolution can claim monopolypower when it has also declaredclass war over.Behind all these problems lies

China’s only half conversion to capital-ism. It is more accurately a system ofLeninist corporatism. Everything inChina – from enterprises to theremotest village club – is subject to thepervasive direction and control of theparty. Politics intrudes China’s everynook and cranny. The impact is perni-cious.Enter an overwhelming paradox.

Capitalism is much more than the prof-it motive and the freedom to set priceswhich China’s reforms have permitted.It also hinges on multiple decisionmakers free to make judgement calls asthey see them and the capacity,through the independence that proper-ty ownership and citizenship confers,freely to change individual strategiesand policies. But more important stillthe effective use of resources dependsupon a whole network of independentprocesses of scrutiny, justification,transparency and accountability ofwhich democracy, in the sense of rep-resentative government, is but one, ifcrucial, element. Whistle blowing, forexample, as much as judges who rule


on the evidence and newspapers whoreport what is happening, are crucial tothe operation of Western capitalism.They keep it honest.It is this soft, what I call in the book

‘Enlightenment infrastructure’, that theChinese communist party cannot allowbecause it would challenge their hege-mony. And thus the explanation forChina’s ills. It is the lack of independ-ent scrutiny and accountability that liebehind the massive waste of invest-ment and China’s destruction of itsenvironment alike. The reason why sofew people can name a great Chinesebrand or company despite its exportsuccess is that there are none. Chinaneeds to build them; but doing that ina one party authoritarian state, wherethe party second guesses businessstrategy for ideological and politicalends, is impossible. In any case morethan three fifth of its exports and near-ly all its high tech exports are made bynon-Chinese, foreign firms – anotherexpression of China’s weakness. Themiracle has depended upon the moun-tain of debt lent by the banking systemto state owned enterprises, cities andprovincial governments. If ever interestrates rose or growth slowed, the conse-quent non-performing loans wouldoverwhelm the banks – and bringdown the economy. Yet China andWestern business alike turn a blind eyeto the risks. Buyers paid an astonishing$21 billion for a fifth of the shares ofthe Industrial and Commercial Bank ofChina in October 2006, making it oneof the most highly valued banks in the

world. If all goes well the price mightbe justified, but if there were ever ahiccup….China needs to become a more nor-

mal economy, but again the partystands in the way. Chinese consumersneed to be less paranoid, save less andspend more; but consumers with noproperty rights or welfare system arecorrectly highly cautious. To put thatright in a serious way means taxing tofund a welfare system and concedingproperty rights. That will mean creat-ing an empowered middle class whowill ask how their tax renminbi arespent. The political implications areobvious.The party’s challenge is to create a

market economy that can continue tocreate the vital 20 million or so jobseach year the country needs for socialstability. China has to build the institu-tions that are beginning to spreadthrough the rest of Asia – an independ-ent legal system, independent audit, afreer media, proper shareholder rights,independent trade unions, free scientif-ic inquiry and accountable govern-ment. This is an economic as much asa political imperative. But it means ineffect that the communist party has tosurrender the means of authoritariancontrol.The American strategy should thus

not be too close to China, but stayopen and to lead by example. Thismeans ensuring that the panoply of theUS’s own institutions are in goodhealth; they are not. This not only mat-ters in the US’s relations with China;America’s system of social support,however frayed, is vital as a shockabsorbers for change – helping the dis-advantaged get by and maintaining thepolitical consensus in favour of open-ness. It means respecting the interna-tional rule of law on which interna-tional governance depends. It has not.It means getting the threat to

American jobs in perspectiveAccording to the US Department ofLabor’s survey of extended mass lay-


‘Chinese consumers need tobe less paranoid, save less andspend more; but consumerswith no property rights orwelfare system are correctlyhighly cautious’

offs, between 2004 and 2006, onlyaround a total of 28,000 jobs (out of 1.7million) have been lost due to out-of-country relocations. The British figureis even lower. It is the onward marchof technology, the wave of Wall Streetinspired takeovers, the weakness oftrade unions and America’s own con-sumers who spend more on servicesand less on manufactures whichtogether are driving change in theAmerican economy – just as the samephenomena are working in Britain. Thestagnating incomes of the Americanmiddle class is largely home grown. Inshort the Chinese should not beblamed for problems they have notcaused.But anti-China sentiment is rife in

Washington and with the widerAmerican public. There are currently20 anti-China trade bills in Congress,threatening swingeing tariffs againstChinese imports unless the govern-ment stops rigging the renminbi.Despite the dollar falling so that ittakes as little 7 renminbi to buy a dol-lar, American political hostilityremains intense. The US standsbehind both Japan and Taiwan, and isindulging both the rise of its ownnationalism and those of its Asian pro-tectorates. Meanwhile the Chinese,intensely nationalistic themselves andstill smarting from the humiliations ofthe nineteenth century when the coun-try signed more than 20 treaties withthe West all giving up sovereignty, areno less ready to play the nationalistcard. There is a dangerousgroundswell of resentment to the agi-tation over the Olympics. Their mili-tary build-up only makes sense in thecontext of a potential invasion ofTaiwan, although the election of thenationalists has eased tensions for thetime being. Raw materials and energygrow scarce; competition for securityof supply more acute. Asia is a tinder-box waiting to catch fire. It should behandled with care.But the Chinese have huge problems

– not quite a paper, rather a veryflawed dragon. It is not trade war orshock and awe military strategies thatwill convert them to democracy. It willbe by practicing what the West preach-es. Which is why Iraq was such a deba-cle. And why Western protests overTibet must be backed by making surethat our own house is in order.Whether climate change or the move-ment of goods, the world needs to findways of acting for the wider publicinterest – especially as a global creditcrunch looms. For China, for the USand for the world system the messageis clear. The Writing is on the Wall.


ASIS APPROPRIATEgiven its size as thelargest economy in the

world exceeding even theUnited States, the EuropeanUnion is also the largest tradingpartner of the fastest growingmajor economy in the world,namely China. The EU overtookboth Japan and the UnitedStates in 2004, while China isthe EU’s second largest tradingpartner after the US. Moreover,China is the largest importerinto the EU. Since market-ori-ented reforms began in China in1978, the EU has seen trade vol-umes with China increase bymore than sixty-fold. In 2003,total trade had been growing ataround 17 per cent per year toan impressive €135 billion witha trade deficit of around €55billion. At present, trade vol-umes are nearly double that fig-ure at around €254 billion andthe trade deficit has more thandoubled to approximately €128

billion – the largest that the EUhas with any other country.The 2000 EU-China bilateral

treaty was one of the corner-stones of China’s accession tothe World Trade Organisation(WTO) in December 2001 after15 years of negotiations. WithWTO accession and the currentsigns of increased EU-Chinatrade, the bilateral linkages willundoubtedly strengthen. TheEU has highlighted three priori-ties in its relations with China:social and economic reforms;the environment; and the ruleof law. But the EU also identi-fied a range of concerns relatedto China’s compliance with itsterms of accession. These areprimarily in terms of marketaccess in the manufacturing andservices industries, such as con-struction, banking, automobiles,as well as improving intellectu-al property rights enforcement.Opening the economy to com-

petition and bolstering the foun-dations of a market economythrough fortifying the rule oflaw are notable aims of the EU-China agenda. Although this isnot different from the statedgoals of the Chinese govern-ment, which is keen to decen-tralise its economy and improveits legal and institutional foun-dations, the tension witnessedover the past few years attests tothe difficulty of achieving these

Reflections on theEU-China EconomicRelationship

Linda YuehFellow in Economics at St.Edmund Hall, University of Oxford,and Associate of the GlobalisationProgramme of the Centre for EconomicPerformance at the London School ofEconomics and Political Science

‘Opening the economy to competi-tion and bolstering the foundationsof a market economy through forti-fying the rule of law are notableaims of the EU-China agenda’


tains are high, and the emperoris far away’, often seems apro-pos for characterising the auton-omy of particularly the moremarketised southern coastalprovinces.Chinese economic reforms are

often described as ‘crossing thestream while feeling the stones’.In a sense, China is muddlingthrough. This is not as discour-aging as it sounds since manyreforms, economic and legal, cancome about in response to theneeds or crises experienced byan economy. Few regimes are allencompassing even in the West,which has had many more yearsof experience with regulatingand supporting a market econo-my. However, the pace of reformof China is often criticised, assome measures lag despite gov-ernment pronouncements.The Chinese perspective is

thus one that is steeped in thememories and history of its, inmany ways, improbable devel-opment. In 1980, economic pre-dictions squarely put the SovietUnion as the economic super-power to watch vis-à-vis theUnited States and not the poor,primarily agrarian China withless than half of the world’saverage of arable land sustain-ing the world’s most populousnation. At the same time, theChinese are keen to learn thebest practices and lessons fromother countries – whether it isthe regulation of financial mar-kets or how to improve energyefficiency. This eagerness doesnot, though, extend to acceptingunsolicited advice that appearsto be derived more from self-interest than concern for thechallenges that China faces.This line is difficult to demar-cate and in many ways is a facetof the complex and sometimes

economics versus ‘socialismwith Chinese characteristics’,as it is that there is not a singleeconomic model for economictransition to address the issueswhich arise in the developmentprocess. Although the long-runendpoints are clearer, the man-ner of progressing toward theultimate aim differs a great dealamong economies. For a countryas large, complex and heteroge-neous as China, this is undoubt-edly true and underscores thechallenges of reform faced bypolicymakers.Few countries have faced the

challenges that confront theChinese economy. Economictransition has taken place forthree decades with aspects ofthe state-owned sector still inexistence and indeed nationalchampions yearning to be globalplayers acting like rather thanbeing shuffled toward privatisa-tion. At the same time, Chinastill confronts the difficulty ofrural development that plaguesdeveloping countries. For therural areas are where the major-ity of its population dwell.Opening and globalisation havehastened the reform of the insti-tutional foundations of its mar-kets, both because of interna-tional expectations built upafter China’s WTO promisesand also because the lack ofsuch foundations will lead tomacroeconomic instability andcrises such as was seen in theAsian financial crisis of the late1990s. Such foundations willrequire reform of not only therule of law, but also improvingthe effectiveness of laws, aswell as the policy implementa-tion apparatus that is dauntingfor a country that is as decen-tralised and populous as China.The Chinese saying, ‘the moun-

aims – both as a matter ofdomestic policymaking and as areaction to what has been per-ceived to be Western pressure(mainly from the United States)in criticising the progress in thisrespect. Recent attention to theenvironment has arguably beenprompted by the BeijingOlympics perhaps more thanany other single factor.There is less unhappiness

with the Europeans than withthe Americans on the part of theChinese, though that looks like-ly to change with the recentshift in tone regarding allegedviolations of anti-dumping rulesby Chinese firms into the EU.The diversified economies ofthe EU, where countries such asGermany and France sell hightech and capital goods to China,while Italy and Spain feel thepinch in terms of their manu-facturing workers in textiles andclothing, have moderated theEuropean position vis-à-visChina. The United States hasbeen more adamant and vocifer-ous, particularly on account ofits high consumption andimports over the past few yearsthat has left it with high levelsof internal and external indebt-edness. Attention has accord-ingly turned to the role playedby the Chinese currency.

The Chinese PerspectiveOne often hears that it is the‘Chinese way’ when discussingan aspect of China’s develop-ment that stands at odds withexpectations derived from eco-nomics. In a sense, the fact thatChina is a marketising but notyet a marketised economyexplains quite a lot of theChinese perspective.The issue is not so much a

dichotomy between Western


from bases in emerging markets;and international trade as wellas investment flows increasedrapidly during the 1990s.This structural shift in the

global economy coincided withthe remarkable 9 per centgrowth experienced by Chinawhere it quickly overtook mostmembers of the G7 to be nearlythe size of the German econo-my, making it the world’s fourthlargest economy after only theUnited States, Japan andGermany. More importantly,perhaps, with its low level ofper capita GDP and high growthrate, China has been as much adriver of global economicgrowth as the United States inthe past two decades. The riseof China affects all countries,including those in the EU, notonly as a trading partner butinsofar as it is an engine of theworld economy alongside theUnited States.

The Difference in World ViewsThis world view of the rise ofChina, however, differs some-what within and outside China.China is a paradoxical economywhich is one of the largest andmost important in aggregatesize, but also one which stillhas an estimated 100 millionpeople living in abject povertyand a per capita GDP that is buta fraction of the OECD average.It is therefore a major economy

when China’s ‘open door’ policytook off. At the same time,India, after decades of inward-looking policies such as importsubstitution-industrialisationundertaken since independencein 1947, experienced a majorbalance of payments crisis in1991 which also caused its poli-cies to shift to become moreopen to the world economy.Finally, the early 1990s alsomarked the re-emergence ofEastern Europe and the otherstates of the former Soviet blocas they re-joined the globaleconomy after shedding theirplanned economy for a marketone which would also propelmany of them to become mem-bers of Europe once again.These changes transformed theglobal labour force and byextension the returns to capital.The global labour force ofaround three billion peopledoubled since the early 1990s asthese new workers ‘joined’ theworldwide labour pool throughinternational trade/investmentand through migration in someinstances. This effectivelyhalved the global capital/labourratio, driving down costs andincreasing the productivity ofcapital. The growth of off-shoring followed as multina-tional corporations looked tocapitalise on the cheaper labourand other costs of producingand servicing their customers

paradoxical nature of China’sopening to the rest of the world– it is the most open economy(measured by the ratio ofexports/ imports to GDP) for aneconomy of is size, while simul-taneously placing numerouslimitations on internationaltrade and investment into andout of its domestic market thatfrequently frustrate Westerngovernments such as the EUmember states.

The Rise of ChinaTo understand the EU-Chinarelationship, the rise of China asa global economic power is cen-tral to the picture as is thedevelopment of the EU as aneconomic entity. The Europeanexperiment in the post-War peri-od may have been politicallymotivated, but the single markethas given the smaller but richnations of Europe the potentialfor scale in its markets and theproduction of its firms. Indeed,intra-EU trade accounts for thebulk of European trade. This hasenabled its firms to competewith the United States andincreasingly China and Indiawhere their firms achieve scaleon the basis of large domesticmarkets and then branch outinto the global marketplace hav-ing achieved a sufficient degreeof economies of scale. With apopulation that is larger thanthe United States, albeit notnearly as large as that of Chinaor India, the EU as a bloc and itsleading nations on their own area competitive economic powerin a rapidly changing world.The economic transformation

of China heralds a change in theglobal economy that started inthe early 1990s. Although mar-ket-oriented reforms began in1978, it was not until 1992


‘With its low level of per capitaGDP and high growth rate, Chinahas been as much a driver of globaleconomic growth as the UnitedStates in the past two decades’

Japan or Germany where statecontrol and cross-holdingsamong conglomerates involvethe state. The Chinese view isdriven by both the powerretained by the state as it seeksto hold onto strategic assets andby the realisation that mostmultinational corporations fromdeveloping countries tend not tobe competitive against estab-lished ones from developedcountries due to their late starts.The key will be when to let go,as early success such as inJapan can be followed quicklyby inertia if such firms are insu-lated from competition. ForChina, it is a more difficult situ-ation as these firms are alsostate-owned or controlled enter-prises generating revenue forthe state. Thus, the call forgreater emphasis on competitivemarkets outside of so-calledstrategic industries is wellplaced. At the same time, entic-ing foreign investment andknow-how will continue to be afocus of policy, whereby mar-quee international firms will begiven access to equity marketsand enticingly to China’sdomestic consumers inexchange for sharing of knowl-edge. How far the door is openand how to hang onto expertisein the face of quick Chineselearning will continue to bechallenges, as many Europeanand other multinational firmshave already realised.The rapid development of the

legal system, includingimproved emphasis on protect-ing intellectual property rights,is the other major facet of theChinese complexion. For quite along time, imitation rather thanrespect for intellectual propertycharacterised utilisation of for-eign know-how in China. For

Recently, the Chinese authorities(at least in Europe) have begunto appreciate the benefits ofexplaining their views and con-cerns. These centre on empha-sising the developmental chal-lenges of China and the obsta-cles to implementing policy inan under-developed state. TheEuropeans for their part havelaunched high level talks mod-elled after those held with theUnited States to discuss eco-nomic issues with China. Thissharing of world views is prom-ising and is superior to protec-tionism and retaliatory actions,even though the bi-annual US-China strategic economic dia-logues have not been as fruitfulas many in the United States(especially Congress) had hoped.

The Future for the EU andChinaTo assess the future of this bilat-eral relationship, the complex-ion of China’s economy isimportant to anticipate andassess. Its intentions are notapparent – probably becausethere is still a great deal of‘muddling through’. The signsso far suggest that the state willcontinue to be an importantplayer in the economy. State-owned enterprises after years ofdecline from accounting forover 90 per cent of GDP in 1978to less than half in the 2000s,have recently increased theirpresence primarily through fast-growing, large state-ownedenterprises such as banks(Industrial and CommercialBank of China) and energy com-panies (China National OffshoreOil Corporation). This suggeststhat China is not going to endup with a US-type of modelwhere the private sector pre-dominates but may be more like

but also still a developing coun-try. The former tends to domi-nate the view outside China,while the latter drives the poli-cies within China.As such, China’s view of itself

is dominated by the need toachieve better and more sus-tainable development, includingmore infrastructure such as itscurrent road and rail buildingproject (which is the largestsince the Western economiesundertook the same during theirperiod of industrialisation) aswell as securing the energy andraw materials needed to fuel itsgrowth. The conflict in worldviews arises in several places,but notably where China dealswith regimes such as in Sudanand Iran. The Chinese viewthese investments as enhancingtheir energy security which iscrucial for a developing countrywhile the West sees the lack ofadherence to the internationalcommunity’s stance on sanc-tions against nations which vio-late international norms to beunacceptable for a powerfulnation that is economicallystrong and holds a permanentseat on the UN SecurityCouncil. As a fervent adherentof the doctrine of non-interfer-ence, China does not take astance on how other countriesconduct their internal affairs.Nowhere is the difference inworld views more apparent thanwhen it concerns Tibet orTaiwan. Not for economic butterritorial sovereignty reasons,China views these as internalmatters concerning which exter-nal pressure is not welcome.This difference in world

views colours the relationshipbetween the EU and China, as itdoes with other Western powers,notably the United States.


to mould the relationship to suitboth the goals of China and theaspirations of the Europeans.Given the stature and needs ofthese economies, this should bethe most important bilateralrelationship for the EU in the21st century. The United Stateshas made such a claim vis-à-visthe Chinese; the Europeans can-not afford to lag behind.

have followed. However, legaldevelopments take time to takehold and must develop in a waythat organic acceptance by thepopulace takes place as well.Transplanted laws do not workas was seen in other transitioneconomies. But China’s progresshas certainly been informed bytheir experiences.The picture of China is rapid-

ly shifting, but the complexionof its economy is one that isincreasingly competitive andinnovative while encased in astill fragile legal and institution-al foundation. There are areaswhere pressure from the EUwould be warranted, but otherswhere a lack of understandingof the Chinese intent will leadto conflict. For the most part,the EU-China agenda reflectsfairly closely the developmentalaims of China. The key will be

China, this process of learningallows them to cheaply ‘catchup’ with the technological fron-tier and the weak legal systemwas not in a position to domuch enforcing in any event.However, the recent push inChina to protect intellectualproperty coincides with a majorgovernmental agenda for domes-tic firms to secure their ownintellectual property. AsChinese firms mature and inno-vate, the self-interest of Chinanow coincides better with thoseof foreign firms, and enforce-ment of such rights shouldaccordingly improve. The rapidadoption of a number of laws,such as a Mergers andAcquisitions law in 2004, and abankruptcy law in 2007, as wellas efforts to improve clinicallegal education to enhance legaland regulatory enforcement,


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IWILL NEVER FORGET myfirst visit, in 2003, to theChinese Academy of Social

Sciences (CASS) in Beijing. Iwas welcomed by Wang Luolin,the academy’s vice-president,whose grandfather had translat-ed Marx’s Das Kapital intoChinese, and Huang Ping, a for-mer Red Guard. Sitting in over-sized armchairs, we sipped cer-emonial tea and introduced our-selves. Wang Luolin noddedpolitely and smiled, then toldme that his academy had 50research centres covering 260disciplines with 4,000 full-timeresearchers.As he said this, I could feel

myself shrink into the seams ofmy vast chair: Britain’s entirethink tank community is num-bered in the hundreds, Europe’sin the low thousands; even thethink-tank heaven of the UScannot have more than 10,000.But here in China, a single insti-tution – and there are anotherdozen or so think tanks inBeijing alone – had 4,000researchers. Admittedly, the

people at CASS think that manyof the researchers are not up toscratch, but the raw figureswere enough.At the beginning of that trip, I

had hoped to get a quick intro-duction to China, learn thebasics and go home. I had imag-ined that China’s intellectuallife consisted of a few unbend-ing ideologues in the backrooms of the Communist partyor the country’s top universities.Instead, I stumbled on a hiddenworld of intellectuals, think-tankers and activists, allengaged in intense debate aboutthe future of their country. Isoon realised that it would takemore than a few visits to Beijingand Shanghai to grasp the scaleand ambition of China’s internaldebates. Even on that first tripmy mind was made up – I want-ed to devote the next few yearsof my life to understanding theliving history that was unfold-ing before me. Over a three-yearperiod, I have spoken withdozens of Chinese thinkers,watching their views develop inline with the breathtakingchanges in their country. Somewere party members; otherswere outside the party and suf-fering from a more awkwardrelationship with the authori-ties. Yet to some degree, theyare all insiders. They have cho-sen to live and work in main-

China’s NewIntelligentsia

Mark LeonardExecutive Director of the first pan-European think-tank, the EuropeanCouncil on Foreign Relations(www.ecfr.eu). Previously, he wasDirector of the Foreign Policy Centre

‘We are used to China’s growinginfluence on the world economy –but could it also reshape our ideasabout politics and power?’


This article was first publishedin Prospect, and is based onLeonard’s new book What DoesChina Think? published by FourthEstate in 2008.

ed, Western style of discoursemay be emerging as a result ofthe 1m students who have stud-ied outside China – many in theWest – since 1978; fewer thanhalf have returned, but thatnumber is rising. However, oneshould not forget that the for-mation of an ‘intellectual’ inChina remains very differentfrom in the West. Education isstill focused on practical contri-butions to national life, anddespite a big expansion of high-er education (around 20 percent of 18-30 year olds nowenrol at university), teachingmethods rely heavily on rotelearning. Moreover, all of thesepeople will be closely moni-tored for political dissent, with‘political education’ classes stillcompulsory.Zhang Weiying has a thing

about Cuban cigars. When Iwent to see him in his office inBeijing University, I saw half adozen boxes of Cohiba piledhigh on his desk. The cigarboxes – worth several times aChinese peasant’s annualincome – are fragments ofWestern freedom (albeit prod-ucts of a communist nation),symbols of the dynamism hehopes will gradually eclipse andreplace the last vestiges ofMaoism. Like other economicliberals – or members of the‘new right’ as their opponentscall them – he thinks China willnot be free until the public sec-tor is dismantled and the statehas shrivelled into a residualbody designed mainly to protectproperty rights.The new right was at the

heart of China’s economicreforms in the 1980s and 1990s.Zhang Weiying has a favouriteallegory to explain thesereforms. He tells a story about a

gate for politics – if onlybecause it is more personal,aggressive and emotive thananything that formal politicscan muster. While it is truethere is no free discussion aboutending the Communist party’srule, independence for Tibet orthe events of TiananmenSquare, there is a relativelyopen debate in leading newspa-pers and academic journalsabout China’s economic model,how to clean up corruption ordeal with foreign policy issueslike Japan or North Korea.Although the internet is heavilypoliced, debate is freer herethan in the printed word(although one of the most free-thinking bloggers, Hu Jia, wasrecently arrested). And behindclosed doors, academics andthinkers will often talk freelyabout even the most sensitivetopics, such as political reform.The Chinese like to argue aboutwhether it is the intellectualsthat influence decision-makers,or whether groups of decision-makers use pet intellectuals asinformal mouthpieces toadvance their own views. Eitherway, these debates have becomepart of the political process, andare used to put ideas in playand expand the options avail-able to Chinese decision-mak-ers. Intellectuals are, for exam-ple, regularly asked to brief thepolitburo in ‘study sessions’;they prepare reports that feedinto the party’s five-year plans;and they advise on the govern-ment’s white papers.So is the Chinese intelli-

gentsia becoming increasinglyopen and Western? Many of theconcepts it argues over – includ-ing, of course, communismitself – are Western imports.And a more independent-mind-

land China, and thus to copewith the often capriciousdemands of the one-party state.We are used to China’s grow-

ing influence on the worldeconomy – but could it alsoreshape our ideas about politicsand power? This story ofChina’s intellectual awakeningis less well documented. Weclosely follow the twists andturns in America’s intellectuallife, but how many of us canname a contemporary Chinesewriter or thinker? Inside China– in party forums, but also inuniversities, in semi-independ-ent think tanks, in journals andon the internet – debate ragesabout the direction of the coun-try: ‘new left’ economists arguewith the ‘new right’ aboutinequality; political theoristsargue about the relative impor-tance of elections and the ruleof law; and in the foreign policyrealm, China’s neocons arguewith liberal internationalistsabout grand strategy. Chinesethinkers are trying to reconcilecompeting goals, exploring howthey can enjoy the benefits ofglobal markets while protectingChina from the creative destruc-tion they could unleash in itspolitical and economic system.Some others are trying to chal-lenge the ‘flat world’ of US glob-alisation with a ‘walled world’Chinese version.Paradoxically, the power of

the Chinese intellectual isamplified by China’s repressivepolitical system, where there areno opposition parties, no inde-pendent trade unions, no publicdisagreements between politi-cians and a media that exists tounderpin social control ratherthan promote political account-ability. Intellectual debate inthis world can become a surro-


vast number of workers fromthe countryside, which helddown urban wages. And thewhole system was laissez-faire –allowing wealth to trickle downfrom the rich to the poor organi-cally rather than consciouslyredistributing it. Deng Xiaopingpointedly declared that ‘somemust get rich first’, arguing thatthe different regions should ‘eatin separate kitchens’ rather thanputting their resources into a‘common pot’. As a result, thereformers of the Easternprovinces were allowed to cutfree from the impoverishedinland areas and steam ahead.But life today is getting

tougher for the economistsbehind this system, like ZhangWeiying. After 30 years of hav-ing the best of the argumentwith ideas imported from theWest, China has turned againstthe new right. Opinion pollsshow that they are the leastpopular group in China. Publicdisquiet is growing over thecosts of reform, with protests bylaid-off workers and concernover illegal demolitions andunpaid wages. And the ideas ofthe market are being challengedby a new left, which advocatesa gentler form of capitalism. Abattle of ideas pits the stateagainst market; coasts againstinland provinces; towns againstcountryside; rich against poor.Wang Hui is one of the lead-

ers of the new left, a loosegrouping of intellectuals who

Under this approach, somegoods and services continued tobe sold at state-controlled priceswhile others were sold at mar-ket prices. Over time, the pro-portion of goods sold at marketprices was steadily increaseduntil by the early 1990s, almostall products were sold at marketprices. The ‘dual-track’approach embodies the combi-nation of pragmatism and incre-mentalism that has allowedChina’s reformers to workaround obstacles rather thanconfront them.The most famous village of

zebras was Shenzhen. At theend of the 1970s, Shenzhen wasan unremarkable fishing village,providing a meagre living for itsfew thousand inhabitants. Butover the next three decades, itbecame an emblem of theChinese capitalism that ZhangWeiying and his colleagueswere building. Because of itsproximity to Hong Kong, DengXiaoping chose Shenzhen in1979 as the first ‘special eco-nomic zone’, offering its leaderstax breaks, freedom from regula-tion and a licence to pioneernew market ideas. The archi-tects of reform in Shenzhenwanted to build high-techplants that could mass-producevalue-added goods for sale inthe West. Such experimentalzones were financed by drawingon the country’s huge savingsand the revenues from exports.The coastal regions sucked in a

village that relied on horses toconduct its chores. Over time,the village elders realised thatthe neighbouring village, whichrelied on zebras, was doing bet-ter. So after years of hailing thevirtues of the horse, they decid-ed to embrace the zebra. Theonly obstacle was convertingthe villagers who had beenbrainwashed over decades intoworshipping the horse. The eld-ers developed an ingeniousplan. Every night, while the vil-lagers slept, they painted blackstripes on the white horses.When the villagers awoke theleaders reassured them that theanimals were not really zebras,just the same old horsesadorned with a few harmlessstripes. After a long interval thevillage leaders began to replacethe painted horses with realzebras. These prodigious ani-mals transformed the village’sfortunes, increasing productivi-ty and creating wealth allaround. Only many years later –long after all the horses hadbeen replaced with zebras andthe village had benefited frommany years of prosperity – didthe elders summon the citizenryto proclaim that their communi-ty was a village of zebras, andthat zebras were good and hors-es bad.Zhang Weiying’s story is one

way of understanding his theoryof ‘dual-track pricing’, first putforward in 1984. He argued that‘dual-track pricing’ would allowthe government to move froman economy where prices wereset by officials to one wherethey were set by the market,without having to publiclyabandon its commitment tosocialism or run into the oppo-sition of all those with a vestedinterest in central planning.


‘After 30 years of having the best ofthe argument with ideas importedfrom the west, China has turnedagainst the new right’

they promised an end to arbi-trary taxes and improved healthand education. They alsopledged to reduce energy con-sumption by 20 per cent.The 11th five-year plan is a

template for a new Chinesemodel. From the new right, itkeeps the idea of permanentexperimentation – a gradualistreform process rather thanshock therapy. And it acceptsthat the market will drive eco-nomic growth. From the newleft, it draws a concern aboutinequality and the environmentand a quest for new institutionsthat can marry co-operationwith competition.In February 2007, Hu Jintao

proudly announced the creationof a new special economic zonecomplete with the usual combi-nation of export subsidies, taxbreaks and investments inroads, railways and shipping.However, this special economiczone was in the heart of Africa –in the copper-mining belt ofZambia. China is transplantingits growth model into theAfrican continent by building aseries of industrial hubs linkedby rail, road and shipping lanesto the rest of the world. Zambiawill be home to China’s ‘metalshub’, providing the People’sRepublic with copper, cobalt,diamonds, tin and uranium.The second zone will be inMauritius, providing China witha ‘trading hub’ that will give 40Chinese businesses preferentialaccess to the 20-member statecommon market of East andSouthern Africa stretching fromLibya to Zimbabwe, as well asaccess to the Indian ocean andSouth Asian markets. The thirdzone – a ‘shipping hub’ – willprobably be in the Tanzaniancapital, Dar es Salaam. Nigeria,

country toward market reforms,but China’s development mustbe more balanced. We must notgive total priority to GDPgrowth to the exclusion of work-ers’ rights and the environment.’The new left’s philosophy is a

product of China’s relative afflu-ence. Now that the market isdriving economic growth, theyask what should be done withthe wealth. Should it continueaccumulating in the hands of anelite, or can China foster amodel of development that ben-efits all citizens? They want todevelop a Chinese variant ofsocial democracy. As Wang Huisays: ‘We cannot count on astate on the German or Nordicmodel. We have such a largecountry that the state wouldhave to be vast to provide thatkind of welfare. That is why weneed institutional innovation.Wang Shaoguang [a politicaleconomist] is talking about low-price healthcare. Cui Zhiyuan [apolitical theorist] is talkingabout reforming property rightsto give workers a say over thecompanies where they work. HuAngang [an economist] is talk-ing about green development’.The balance of power in

Beijing is subtly shiftingtowards the left. At the end of2005, Hu Jintao and Wen Jiabaopublished the ‘11th five-yearplan’. their blueprint for a ‘har-monious society’. For the firsttime since the reform era beganin 1978, economic growth wasnot described as the overridinggoal for the Chinese state. Theytalked instead about introducinga welfare state with promises ofa 20 per cent year-on-yearincrease in the funds availablefor pensions, unemploymentbenefit, health insurance andmaternity leave. For rural China,

are increasingly capturing thepublic mood and setting thetone for political debate throughtheir articles in journals such asDushu. Wang Hui was a studentof literature rather than politics,but he was politicised throughhis role in the student demon-strations of 1989 that congregat-ed on Tiananmen Square. Likemost young intellectuals at thetime, he was a strong believer inthe potential of the market. Butafter the Tiananmen massacre,Wang Hui took off to the moun-tains and spent two years inhiding, getting to know peasantsand workers. His experiencesthere made him doubt the jus-tice of unregulated free markets,and convinced him that thestate must play a role in pre-venting inequality. Wang Hui’sideas were developed furtherduring his exile in the US in the1990s, but like many other newleft thinkers he has returned tomainland China – in his case toteach at the prestigious QinghuaUniversity. I met him last yearin ‘Thinker’s Café’ in Beijing, abright and airy retreat withcomfy sofas and fresh espressos.He looks like an archetypal pub-lic intellectual: cropped hair, abrown jacket and black polo-neck sweater. But Wang Huidoes not live in an ivory tower.He writes reports exposing localcorruption and helps workersorganise themselves against ille-gal privatisations. His groupingis ‘new’ because, unlike the ‘oldleft’, it supports market reforms.It is left because, unlike the‘new right’, it worries aboutinequality: ‘China is caughtbetween the two extremes ofmisguided socialism and cronycapitalism, and suffering fromthe worst elements of both… Iam in favour of orienting the


tions on political reform.Yu Keping is like the Zhang

Weiying of political reform. Heis a rising star and an informaladviser to President Hu Jintao.He runs an institute that is partuniversity, part think tank, partmanagement consultancy forgovernment reform. When hetalks about the country’s politi-cal future, he often draws adirect analogy with the econom-ic realm. When I last met himin Beijing, he told me thatovernight political reformwould be as damaging to Chinaas economic ‘shock therapy’.Instead, he has promoted theidea of democracy graduallyworking its way up from suc-cessful grassroots experiments.He hopes that by promotingdemocracy first within theCommunist party, it will thenspread to the rest of society. Justas the coastal regions wereallowed to ‘get rich first’. YuKeping thinks that party mem-bers should ‘get democracy first’by having internal party elec-tions.Where the coastal regions

benefited from natural econom-ic advantages such as proximityto Hong Kong, the Cantoneselanguage and transport links, YuKeping sees advantages for partymembers – such as their highlevels of education and articula-cy – which make them into anatural democratic vanguard.What is more, he can point toexamples of this happening. Athis suggestion, in 2006 I visiteda county in Sichuan provincecalled Pinchang that hasallowed party members to votefor the bosses of township par-ties. In the long run, democracycould be extended to the upperechelons of the party, includingcompetitive elections for the

by Chinese investors. Researchteams from middle-income andpoor countries from Iran toEgypt, Angola to Zambia,Kazakhstan to Russia, India toVietnam and Brazil toVenezuela have been crawlingaround the Chinese cities andcountryside in search of lessonsfrom Beijing’s experience.Intellectuals such as ZhangWeiying and Hu Angang havebeen asked to provide trainingfor them. Scores of countries arecopying Beijing’s state-drivendevelopment using publicmoney and foreign investmentto build capital-intensive indus-tries. A rash of copycat specialeconomic zones have been setup all over the world – theWorld Bank estimates that over3,000 projects are taking placein 120 countries. Globalisationwas supposed to mean theworldwide triumph of the mar-ket economy, but China isshowing that state capitalism isone of its biggest beneficiaries.As free market ideas have

spread across the world, liberaldemocracy has often travelledin its wake. But for the authori-ties in Beijing there is nothinginexorable about liberal democ-racy. One of the most surprisingfeatures of Chinese intellectuallife is the way that ‘democracy’intellectuals who demandedelections in the 1980s and1990s have changed their posi-

Liberia and the Cape Verdeislands are competing for twoother slots. In the same waythat Eastern Europe waschanged by a competition tojoin the EU, we could see Africatransformed by the competitionto attract Chinese investment.As it creates these zones,

Beijing is embarking on a build-ing spree, criss-crossing theAfrican continent with newroads and railways – investingfar more than the old colonialpowers ever did. Moreover,China’s presence is changingthe rules of economic develop-ment. The IMF and the WorldBank used to drive the fear ofGod into government officialsand elected leaders, but todaythey struggle to be listened toeven by the poorest countries ofAfrica. The IMF spent yearsnegotiating a transparencyagreement with the Angolangovernment only to be toldhours before the deal was dueto be signed, in March 2004,that the authorities in Luandawere no longer interested in themoney: they had secured a $2bnsoft loan from China. This talehas been repeated across thecontinent – from Chad toNigeria, Sudan to Algeria,Ethiopia and Uganda toZimbabwe.But the spread of the Chinese

model goes far beyond theregions that have been targeted


‘Scores of countries are copyingBeijing’s state-driven developmentusing public money and foreigninvestment to build capital-intensive industries’

of ‘deliberative polling’ todecide on major spending deci-sions. The brainchild of aStanford political scientistcalled James Fishkin, it harksback to an Athenian ideal ofdemocracy (see ‘The thinkingvoter’, Prospect May 2004). Itinvolves randomly selecting asample of the population andinvolving them in a consulta-tion process with experts, beforeasking them to vote on issues.Zeguo used this technique todecide how to spend its 40myuan (£2.87m) public worksbudget. So far the experimenthas been a one-off but Fishkinand the Chinese political scien-tist He Baogang believe that‘deliberative democracy’ couldbe a template for politicalreform.The authorities certainly

seem willing to experiment withall kinds of political innova-tions. In Zeguo, they have evenintroduced a form of govern-ment by focus group. But themain criterion guiding politicalreform seems to be that it mustnot threaten the Communistparty’s monopoly on power. Cana more responsive form ofauthoritarianism evolve into alegitimate and stable form ofgovernment?In the long term, China’s one-

party state may well collapse.However, in the medium term,the regime seems to be develop-ing increasingly sophisticatedtechniques to prolong its sur-vival and pre-empt discontent.China has already changed theterms of the debate about glob-alisation by proving that author-itarian regimes can deliver eco-nomic growth. In the future, itsmodel of deliberative dictator-ship could prove that one-partystates can deliver a degree of

opinion surveys or ‘citizens’juries’. The West still has multi-party elections as a central partof the political process, but hassupplemented them with newtypes of deliberation. China,according to the new politicalthinkers, will do things theother way around: using elec-tions in the margins but makingpublic consultations, expertmeetings and surveys a centralpart of decision-making. Thisidea was described pithily byFang Ning, a political scientistat the Chinese Academy ofSocial Sciences. He compareddemocracy in the West to afixed-menu restaurant wherecustomers can select the identi-ty of their chef, but have no sayin what dishes he chooses tocook for them. Chinese democ-racy, on the other hand, alwaysinvolves the same chef – theCommunist party – but the poli-cy dishes which are served upcan be chosen ‘à la carte’.Chongqing is a municipality

of 30m that few people in theWest have heard of. It nestles inthe hills at the confluence of theYangtze and Jialin Jiang riversand it is trying to become a liv-ing laboratory for the ideas ofintellectuals like Pan Wei andFang Ning. The city’s govern-ment has made all significantrulings subject to public hear-ings – in person, on televisionand on the internet. The author-ities are proudest of the hear-ings on ticket prices for the lightrailway, which saw faresreduced from 15 to just 2 yuan(about 14p). This experiment isbeing emulated in other citiesaround China. But an evenmore interesting experimentwas carried out in the smalltownship of Zeguo in WenlingCity – it used a novel technique

most senior posts. The logicalconclusion of his ideas on innerparty democracy would be forthe Communist party to splitinto different factions that com-peted on ideological slates forsupport. It is possible to imag-ine informal new left and newright groupings one day evenbecoming formal parties withinthe party. If the Communistparty were a country, its 70mmembers would make it biggerthan Britain. And yet it is hardto imagine the remote, impover-ished county of Pinchangbecoming a model for thegleaming metropolises ofShanghai, Beijing or Shenzhen.So far, none of the other 2,860counties of China has followedits lead.Many intellectuals in China

are starting to question the utili-ty of elections. Pan Wei, a risingstar at Beijing University, casti-gated me at our first meeting forpaying too much attention tothe experiments in grassrootsdemocracy. ‘The Sichuan exper-iment will go nowhere’, he said.‘The local leaders have theirpersonal political goal: theywant to make their namesknown. But the experiment hasnot succeeded. In fact, Sichuanis the place with the highestnumber of mass protests. Veryfew other places want to emu-late it’.Chinese thinkers argue that

all developed democracies arefacing a political crisis: turnoutin elections is falling, faith inpolitical leaders has declined,parties are losing members andpopulism is on the rise. Theystudy the ways that Westernleaders are going over the headsof political parties and pioneer-ing new techniques to reach thepeople such as referendums,


counterparts talk about respectfor sovereignty and the diversityof civilisations. Whereas US for-eign policy uses sanctions andisolation to back up its politicalobjectives, the Chinese offer aidand trade with no strings.Whereas America imposes itspreferences on reluctant allies,China makes a virtue of at leastappearing to listen to othercountries.But while all Chinese

thinkers want to strengthennational power, they disagree ontheir country’s long-term goals.On the one hand, liberal inter-nationalists like Zheng Bijianlike to talk about China’s ‘peace-ful rise’ and how it has rejoinedthe world; adapting to globalnorms and learning to make apositive contribution to globalorder. In recent years, Beijinghas been working through thesix-party talks to solve theNorth Korean nuclear problem;working with the EU, Russiaand the US on Iran; adopting aconciliatory position on climatechange at an international con-ference in Montreal in 2005;and sending 4,000 peacekeepersto take part in UN missions.Even on issues where China isat odds with the west – such ashumanitarian intervention – theChinese position is becomingmore nuanced. When the Westintervened over Kosovo, Chinaopposed it on the grounds thatit contravened the ‘principle ofnon-intervention’. On Iraq, itabstained. And on Darfur, in

tough guys of the Chinese for-eign policy establishment, buthis ideas on power go farbeyond assessments of the latestweapons systems. He arguesthat the US has created a ‘strate-gic siege’ around China byassuming the ‘moral height’ ininternational relations. Everytime the People’s Republic triesto assert itself in diplomaticterms, to modernise its militaryor to open relationships withother countries, the US presentsit as a threat. And the rest of theworld, Yang Yi complains, alltoo often takes its lead from thehyperpower: ‘The US has thefinal say on the making andrevising of the internationalrules of the game. They havedominated international dis-course… the US says, “Only wecan do this; you can’t do this.”‘One of the buzzwords in

Chinese foreign policy circles isruan quanli – the Chinese termfor ‘soft power’. This idea wasinvented by the American polit-ical scientist Joseph Nye in1990, but it is being promotedwith far more zeal in Beijingthan in Washington DC. In April2006, a conference was organ-ised in Beijing to launch the‘China dream’ – China’s answerto the American dream. It wasan attempt to associate thePeople’s Republic with threepowerful ideas: economic devel-opment, political sovereigntyand international law. WhereasAmerican diplomats talk aboutregime change, their Chinese

popular legitimacy as well. Andif China’s experiments withpublic consultation work, dicta-torships around the world willtake heart from a model thatallows one-party states to sur-vive in an era of globalisationand mass communications.China scholars in the West

argue over whether the countryis actively promoting autocracy,or whether it is just single-mindedly pursuing its nationalinterest. Either way, China hasemerged as the biggest globalchampion of authoritarianism.The pressure group HumanRights Watch complains that‘China’s growing foreign aidprogramme creates new optionsfor dictators who were previous-ly dependent on those whoinsisted on human rightsprogress.’China’s foray into internation-

al politics should not, however,be reduced to its support forAfrican dictators. It is trying toredefine the meaning of poweron the world stage. Indeed,measuring ‘CNP’ – comprehen-sive national power – hasbecome a national hobby-horse.Each of the major foreign policythink tanks has devised its ownindex to give a numerical valueto every nation’s power – eco-nomic, political, military andcultural. And in this era of glob-alisation and universal norms,the most striking thing aboutChinese strategists is theirunashamed focus on ‘national’power. The idea of recapturingsovereignty from global eco-nomic forces, companies andeven individuals is central tothe Chinese worldview.Yang Yi is a military man, a

rear admiral in the navy and thehead of China’s leading militarythink tank. He is one of the


‘One of the buzzwords in Chineseforeign policy circles is ruan quanli– the Chinese term for “soft power”.’

China’s multilateral diplomacyand her own country’s after theSecond World War: ‘By bindingitself to international rules andregimes, the US successfullyestablished a hegemonic order.’The UN is also becoming an

amplifier of the Chinese world-view. Unlike Russia, which com-ports itself with a swagger –enjoying its ability to overtlyfrustrate US and EU plans –China tends to opt for a concilia-tory posture. In the run-up to theIraq war, although Chinaopposed military action, itallowed France, Germany andRussia to lead the opposition toit. In 2005 when there was adebate about enlarging the UNSecurity Council, China encour-aged African countries todemand their own seat, whicheffectively killed off Japan’s bidfor a permanent seat. Equally,Beijing has been willing to allowthe Organisation of Islamic Statesto take the lead in weakening thenew UN Human Rights Council.This diplomacy has been effec-tive – contributing to a big fall inUS influence: in 1995 the USwon 50.6 per cent of the votes inthe UN General Assembly; by2006, the figure had fallen to just23.6 per cent. On human rights,the results are even more dramat-ic: China’s win-rate has rocketedfrom 43 per cent to 82 per cent,while the US’s has tumbled from57 per cent to 22 per cent. ‘It’s atruism that the Security Councilcan function only insofar as theUS lets it’, says James Traub, UNcorrespondent of the the NewYork Times. ‘The adage may soonbe applied to China as well.’The debate between Chinese

intellectuals will continue toswirl within think tanks, jour-nals and universities and – onmore sensitive topics – on the

and employing double stan-dards.’ According to YanXuetong, China will have twooptions as it becomes more pow-erful. ‘It could become part ofthe Western ‘Wang’ system. Butthis will mean changing its polit-ical system to become a democ-racy. The other option is forChina to build its own system.’The tension between the lib-

eral internationalists and theneo-comms is a modern variantof the Mao-era split betweenbourgeois and revolutionary for-eign policy. For the next fewyears, China will be decidedlybourgeois. It has decided – withsome reservations – to join theglobal economy and its institu-tions. Its goal is to strengthenthem in order to pin down theUS and secure a peaceful envi-ronment for China’s develop-ment. But in the long term,some Chinese hope to build aglobal order in China’s image.The idea is to avoid confronta-tion while changing the facts onthe ground. Just as they aredoing in domestic policy, theyhope to build pockets of analternative reality – as in Africa– where it is Chinese values andnorms that increasingly deter-mine the course of events ratherthan Western ones.The Western creations of the

EU and Nato – defined by thepooling rather than the protect-ing of sovereignty – may oneday find their matches in theembryonic East AsianCommunity and the ShanghaiCo-operation Organisation.Through these organisations,China is reassuring its neigh-bours of its peaceful intent andcreating a new community ofinterest that excludes the US.The former US official SusanShirk draws a parallel between

2006 it finally voted for a UNmandate for peacekeepers –although Beijing is still underfire for its close ties to theSudanese government.On the other hand, China’s

‘neocons’ – or perhaps theyshould be called ‘neo-comms’ –like Yang Yi and his colleagueYan Xuetong openly argue thatthey are using modern thinkingto help China realise ancientdreams. Their long-term goal isto see China return to great-power status. Like many Chinesescholars, Yan Xuetong has beenstudying ancient thought.‘Recently I read all these booksby ancient Chinese scholars anddiscovered that these guys aresmart – their ideas are muchmore relevant than most moderninternational relations theory’,he said. The thing that interestedhim the most was the distinctionthat ancient Chinese scholarsmade between two kinds oforder: the ‘Wang’ (which literallymeans ‘king’) and the ‘Ba’ (‘over-lord’). The ‘Wang’ system wascentred on a dominant super-power, but its primacy wasbased on benign governmentrather than coercion or territorialexpansion. The ‘Ba’ system, onthe other hand, was a classichegemonic system, where themost powerful nation imposedorder on its periphery. Yanexplains how in ancient timesthe Chinese operated both sys-tems: ‘Within Chinese Asia wehad a ‘Wang’ system. Outside,when dealing with ‘barbarians’,we had a hegemonic system.That is just like the US today,which adopts a ‘Wang’ systeminside the Western club, where itdoesn’t use military force oremploy double standards. On aglobal scale, however, the US ishegemonic, using military power


perate to succeed that its leadersare constantly experimentingwith new ways of doing things.They used special economiczones to test out a market phi-losophy. Now they are testing athousand other ideas – fromdeliberative democracy toregional alliances. From this lab-oratory of social experiments, anew world-view is emerging thatmay in time crystallise into arecognisable Chinese model – analternative, non-Western path forthe rest of the world to follow.

internet. Chinese thinkers willcontinue to act as intellectualmagpies, adapting Westernideas to suit their purposes andplundering selectively fromChina’s own history. As China’sglobal footprint grows, we mayfind that we become as familiarwith the ideas of Zhang Weiyingand Wang Hui, Yu Keping andPan Wei, Yan Xuetong andZheng Bijan as we were withthose of American thinkers inprevious decades; fromReaganite economists in the1980s to the neoconservativestrategists of the 9/11 era.China is not an intellectually

open society. But the emergenceof freer political debate, thethrong of returning studentsfrom the West and huge interna-tional events like the Olympicsare making it more so. And it isso big, so pragmatic and so des-


For every insurgent killed in Iraq, 250,000 bulletshave been fired ~ IRELAND is the second richestcountry in the oecd, behind JAPAN ~ 11 out of

the 12 men to have walked on the moon were inthe Boy Scouts ~ windscreen wipers, laser printersand bulletproof vests were all invented by women ~there are five people under 18 in custody in FINLAND.in BRITAIN there are roughly 3,000 ~ spammers usuallyneed to send a million emails to get 15 positiveresponses ~ Isaac Newton invented the cat flap

Prospecmakes you think

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IntroductionChina’s rise is Europe’s chal-lenge. The growing economicand political strength of thePeople’s Republic of China hascaught the attention of policy-makers in European capitals.The European Union formallyrecognized the government ofthe PRC as the sole legitimaterepresentative of China in 1975and concluded a bilateral tradeagreement in 1985. Over theyears, the EU slowly emerged asthe most important trading part-ner of the PRC. Over the lastdecade or so, a series of pro-grammatic policy papers, partic-ularly on the EU side, and bilat-eral agreements have estab-lished an increasingly institu-tionalised relationship, with awide variety of diplomatic andother forums for dialogue. Atpresent, more than 24 policyareas are currently subject toregular meetings between repre-sentatives of the PRC and theEU. Clearly, European-Chineserelations have reached aremarkable level and density

compared to what was a decadeago described as a significant,yet secondary relationship.After the 10th EU-China sum-

mit, which took place in Beijingin November 2007, however,there is a stark contrast betweenofficial descriptions and publicopinion. In official declarations,the relationship between thetwo has successively beencalled a ‘maturing’ (EC 2006),‘comprehensive’, ‘strategic’(Wen Jiabao 2006) and ‘global’(EC 2007) partnership. But thecarefully designed and expertlystaged fall-out between the twomost senior trade representa-tives, Ms Wu Yi and PeterMandelson during a press con-ference the day before the offi-cial summit, stimulated a criti-cal stock tacking of the state ofbilateral ties, with some con-cluding that the EU and Chinawere entering a new era ofmutual ‘disillusionment’(Jonathan Holslog). Exaggeratedoptimism and political rhetorichave suffered a reality check.The growing tensions betweenthe Asian superpower and theEuropean non-state are hardlysurprising. Beyond what onesource within the Beijing for-eign policy communitydescribes as ‘EU arrogance’ inspreading European laws andstandards, a closer examinationof concepts and interests reveals

The European Union and thePeople’s Republic of China:Who’s Changing Whom?

Andrew CotteySenior Lecturer and Jean MonnetChair in European Political Integrationin the Department of Government,University College Cork

Jörn-Carsten GottwaldChina specialist and Lecturerat University College Cork

‘From the European perspective,China provides a major test of theEuropean strategy of constructiveengagement’


it with various forms of techni-cal assistance. The EU hasopened its market to Chinabecause of the benefits toEuropean citizens and in orderto obtain reciprocal marketaccess, but also to promote eco-nomic and political liberalisa-tion within China. TheEuropeans also consistently callfor China to play a more activerole in addressing global multi-lateral issues. Finally, the EU issupporting dual track meetingsin the context of the AsiaEurope Meeting (ASEM) processand within the bilateral rela-tionship. The extent to whichall this ‘constructive engage-ment’ is actually effective inachieving European objectiveshas, however, been subject toremarkably little serious analy-sis.

The Chinese ApproachEngagement is a two wayprocess: China is also engagingthe EU, but in addition tostraight forward economic inter-ests (such as market access),and in contrast to the EU’simplicit objective of shapingChina’s domestic transforma-tion, China is following a tradi-tional realpolitik strategy ofencouraging Europe to establishitself as a global power in orderto help counter-balance USdominance. The EU is perceivednot so much as a partner foraddressing global problems, butrather as a potential temporaryally in the race for globalsupremacy. The Chinese leader-ship consistently calls for amulti-polar world – includingEurope and China as core actors– in opposition to a unipolarone of US hegemony. Peacefulco-existence has been the mainprinciple for Chinese foreign

Merkel received the Tibetanspiritual and political leader, theDalai Lama, for a private visit inher Chancellor’s office. Only afew weeks after a state visit toBeijing, Chinese leaders tookthis as a clear signal of aremarkable shift in German poli-cy towards China. The PRCretaliated by cancelling high-level diplomatic meetings withGerman representatives. Thewarm reception of the newFrench President NicolasSarkozy and the high volume oftrade agreements signed with aFrench delegation only daysahead of the EU-China summitamounted to a form of retalia-tion against Germany. Ironically,even the sale of Airbus planeswas declared a French-Chinesebusiness deal ignoring the sub-stantial German stake in theEuropean aerospace corporation.

The European ApproachFrom the European perspective,China provides a major test ofthe European strategy of con-structive engagement. TheEuropean Union has been char-acterised as a civilian, norma-tive or soft power – an actorthat influences others not bycoercion but rather by theattractiveness of its model, byoffering them economic, politi-cal and cultural ties, and bypromoting multilateral norma-tive standards and agreements.3

This is exactly the type of strat-egy which the EU has sought todevelop in relations with Chinaover the last two decades: rela-tions between the two arestrongly institutionalised (fromtop-level meetings such as therecent summit to lower-leveldiplomatic ties); the EU has awide range of sectoral dialogueswith China, as well as providing

fundamentally contradictoryapproaches to the bilateral rela-tionship itself and to global pol-itics more broadly.On the surface, a set of trade

disputes overshadowed the 10thsummit. European governmentsand businesses are increasinglyconcerned about key aspects ofChina’s trade and economicpolicies: a growing trade imbal-ance between the EU andChina; China’s reluctance toopen its market to Europeangoods and companies; China’slack of respect for intellectualproperty rights and for productsafety standards; and Beijing’smaintenance of a low currencyexchange rate, which artificiallyreduces the price of Chinesegoods flowing into Europe andraises that of European produceexported to China. In the run upto the 10th EU-China summitEuropean Trade CommissionerPeter Mandelson called forChina to modify its policies inthese areas and warned that theEU would increasingly have totreat China as a ‘normal’ eco-nomic partner, as opposed to adeveloping country entitled toprivileged economic relationswith Europe. In particular threeareas dominated his agenda, thetrade imbalance, the protectionof intellectual property rights,and improving the conditionsfor trade in services and invest-ment.1 Mandelson barely dis-guised his threat of growingsupport within Europe for pro-tectionist measures againstChina if Beijing showed nosigns of accommodation.2

On a more fundamental level,China was enraged by what thePRC government interpreted asdeliberate interference inChina’s internal affairs. TheGerman Chancellor Angela


does not help the current situa-tion, but the roots of this imbal-ance lie deeper. China hasbecome a prime destination formanufacturers from all over theworld, including Europe.Companies from Japan, Taiwanand South Korea are increasing-ly producing their goods for theEuropean and American mar-kets in China. Europe’s growingtrade deficit with China is thuspartly the result of an intra-regional relocation of produc-tion. The fundamental chal-lenge, however, lies in aChinese government that pro-motes domestic enterprises atthe costs of international rivals.Even after China’s entry into theWTO and the formal implemen-tation of rules and regulationconcerning free trade andinvestment, Western businesseshave ample reason to complainabout piecemeal implementa-tion and weak enforcement – ifat all – of WTO commitmentsand standards in most ofChina’s provinces. Add inChina’s systematic disrespectfor intellectual property rightsand a series of high profilecases where the Chinese securi-ty services have been involvedin gathering sensitive informa-tion from European govern-ments and enterprises and thepicture is one of an increasinglyunfair playing field.

Below the Surface: HumanRights and Rule of LawThe People’s Republic of Chinastill has a dismal human rightsrecord. While the Chineseauthorities can rightfully pointout to progress in the fightagainst poverty and in the areaof social rights, individualhuman rights – above all politi-cal rights and equality before

behavior is broken, govern-ments face harsh reactions fromBeijing and a Beijing friendlybusiness community claimingpreference for smooth relationswith the Asian powerhouse overethical values – as ChancellorMerkel recently discovered.

Increased Exchange, GrowingTensionsThus, the expanding relation-ship between China and Europeis creating growing tensions intwo different but interrelatedareas: a series of economic dis-putes might seem to requirenothing more than better man-agement but in reality point to afundamental objective of EUstrategy: the EU calls for theestablishment of a rule of law, apluralistic society and the safe-guarding of human rights with-in the PRC, which wouldamount to a drastic change inthe political system – an out-come that is clearly impossibleunder the ‘democratic dictator-ship led by the working classand based on the alliance ofworkers and peasants’, i.e. theCommunist Party of China.4

On the Surface: Issues inEconomics and TradeThe trade gap between Chinaand the EU is alarming: theEuropean Commission estimat-ed that over the six days ofMandelson’s November 2007visit to China alone the deficitwould rise by €2.1 billion, fear-ing it will reach €170 billion forthe year 2007. The strong euro

policies ever since the earlyyears of the PRC. When itcomes to preserving the inter-ests of the Chinese leadership,however, Beijing does not hesi-tate to ignore it. When it comesto what the PRC defines as‘issues of national integrity’such as the situation of occu-pied Tibet or Taiwan, theauthorities in Beijing success-fully play hard ball with the EU.While they officially reject anylinkage between improvementsin human rights or the rule oflaw within the PRC or any offi-cial recognition of the maturemarket democracy that isTaiwan, China has made rela-tions conditional on Europeanpositions which are acceptableto Beijing. With regard toTaiwan, all member states of theEU as well as the EU haveaccepted the ‘one China’ policywhich means that Taiwan isconsidered to form an integralpart of the one Chinese staterepresented by the communistgovernment of the PRC. In thecase of Tibet, the EU accepts thedisputable Chinese claim ofTibet being an integral part ofChina, too. Despite serious andcontinuous violations of humanrights in Tibet, the bigger mem-ber states, as well as the EU,have carefully avoided officiallymeeting the leading representa-tive of the movement for anautonomous, not an independ-ent, Tibet, the spiritual andpolitical leader of TibetanBuddhism, the Dalai Lama.Once this pattern submissive


‘The People’s Republic of China stillhas a dismal human rights record’

could arguably do more on theissue. While the EU has consis-tently called for China to pursuea peaceful approach to the issue,it could enhance support forTaiwan and make clear to Beijingthat the use of force would incurvery significant long-term costsin terms of political and econom-ic relations with Europe. If theEU-China relationship is really amaturing strategic partnership itshould be able to survive moresubstantial European support forTaiwan.China’s ambitions in Africa,

its support for the dismalregime in Sudan, the unwilling-ness to put pressure on Iranover its nuclear programme andthe reluctance to join a succes-sor to the Kyoto agreement onglobal warming all raise furtherquestion marks over the EU-China strategic partnership.

The Fundamental Challenge:Changing China, ChangingEuropeThe European Union recognisesChina as an increasingly impor-tant global player across virtual-ly the full spectrum of interna-tional issues. In responding toChina as an emerging super-power, the EU also seeks toshape China’s internationalbehaviour and domestic evolu-tion according to Europeannorms and values. In otherwords: in addition to the officialagenda of supporting the inte-gration of the PRC into globalpolitics, the EU is also pursuinga not-too-implicit agenda ofchanging Chinese perceptionsand behaviour. The Europeanobjective of supporting China’sevolution towards a marketeconomy implies re-shapingChina’s domestic politicsbecause a full market economy

ing, at least to date, a very limit-ed security dimension. Thereare, of course, good reasons forthis – above all geography.Although China may be the eco-nomic superpower of the twen-ty-first century and its militarypower is growing significantly,its ability to project militaryforce beyond its immediateneighbourhood remains ratherlimited. Although someEuropean states, in particularBritain and France, retain resid-ual military ties in Asia and theEU has been developing itsCommon Security and DefencePolicy (CSDP) for nearly adecade, Europe’s ability to proj-ect military power beyond itsneighbourhood is also limited.Neither China nor the EU posesany direct military threat to theother. Nevertheless, the EU andChina are beginning to bump upagainst one another on a num-ber of political and securityissues.One sensitive issue is Taiwan,

a successful democracy and mar-ket economy but still viewed asa renegade province by theChinese government. China’sleadership is absolutely commit-ted to the ‘one China’ principle(which rules out independencefor Taiwan and seeks theprovince’s re-unification withthe mainland) and has made EUacceptance of this principle apre-condition for relations withthe European Union. TheChinese government also threat-ens military action if Taiwan for-mally declares independence.The US retains a commitment tothe defence of Taiwan and is thecentral external actor in this con-text. The EU, which has so farremained largely silent onTaiwan – with the notable excep-tion of the European Parliament -

the law – are ignored and sys-tematically abused. The EU hasrightfully been criticized forbeing too weak in its humanrights policies towards China.While most member states playa skillfull two-level game bymisusing the EU as a domesticexcuse for not being more activeon human rights themselves,they block efforts to establish astricter human rights policy atthe European level. The EUapproach is mainly confined toraising human rights issuesbehind closed doors and effortsto engage China in practical co-operation. A number of pro-grammes are designed toimprove the human rights situa-tion on the ground in China, forexample, through promotingconsistent application of therule of law as opposed to a legaland judicial system subordinat-ed to the Communist Party.Critics argue that the way inwhich the EU addresses humanrights issues at high-level politi-cal meetings is little more thanperfunctory, while the impact oftechnical assistance pro-grammes is very limited.

Rivals or Partners in GlobalSecurity?A second area where growingdifferences can be identified issecurity. These issues are usual-ly central to relations betweenmajor powers: the tendency ofmajor powers to define theirinterests broadly can easily gen-erate geo-political competitionbetween them; to the extent thatthey are able to project militarypower, the so-called securitydilemma pushes major powerstowards at least consideringworst case scenarios in relationswith peers. The EU-China rela-tionship is thus unusual in hav-


Endnotes

1 Commission of the EuropeanUnion (2007a), EU TradeCommissioner Mandelson inChina November 23-28. PressRelease.

2 Peter Mandelson (2007),Growing Trade, SharedResponsibilities. Speech at theEU-China Business Summit,Beijing, 27 November 2007.

3 Duchene, F. (1972) ‘Europe’sRole in World Peace’, in Mayne,R. (ed.) Europe Tommorrow:Sixteen Europeans Look Ahead,(London: Fontana), pp. 32-47;Nye, J. S., Jr. (2004) Soft Power:The Means to Success in WorldPolitics, (New York: PublicAffairs), pp75-83; Manners, I.(2002), ‘Normative PowerEurope: A Contradiction inTerms?’, Journal of CommonMarket Studies, Vol. 40, No. 2,pp. 235-58; and Mark Leonard,Why Europe Will Run the 21stCentury, (London: Fourth Estate,2005).

4 The Preamble of theConstitution of the People’sRepublic of China

5 Amply illustrated by debate inthe special issue of the Journalof Democracy on China in 2003.See Minxin Pei (2003),‘Contradictory Trends andConfusing Signals’, in Journal ofDemocracy, Volume 14, No 1(January 2003), pp 73-81.

know-how. All of these are vitalif the Chinese leadership is tofulfil its self-defined historicalmission of uniting and develop-ing the Chinese nation and lead-ing China to a position of globalleadership. In the short-term atleast, the Chinese governmentwould clearly prefer to have apolitically and strategicallymuch more mature politicalUnion. Even if a consensuswithin Europe emerges that theEU has should play a more lead-ing role in international rela-tions, it is highly unlikely thatthe policies pursued would meetthe preferences of the Chineseleadership. An EU which openlychallenges US supremacy seemsa very long way off. But even onless fundamental issues likeTaiwan and human rights, Chinais working hard to distance theEU from its own core values.If both partners continue to

pursue these agendas of chang-ing the value base and institu-tions of each other, the emerg-ing tensions in Chinese-European relations are likely toremain. Decision-makers inBrussels and Beijing should notmisinterpret the issues asteething problems of an emerg-ing Chinese market economyfinding its place in the glob-alised economy. They are theproduct of fundamentally differ-ent concepts of politics, interna-tional relations and democracy.Look out for the next round ofmutual disagreement!

requires a well-functioningindependent judiciary to guar-antee property rights, independ-ent intermediary organisationsto represent civil society, privateenterprises, free access to infor-mation, and a range of individ-ual freedoms to encourageentrepreneurial activity.From the implicit European

perspective, modernisation andmarketisation will inevitablylead to a pluralisation of society.Supporting China’s reformprocess thus turns into a subver-sive strategy to change China’spolitical and economic system.While the ruling CommunistParty of China has set out theaim of establishing a ‘socialistmarket economy’, economicreforms were introduced withthe explicit aim of strengtheningthe Communist regime. Whilethe effects of economic reformsin China are still subject tointense academic debate,5 so farthe CCP has avoided a systemictransformation or deconstructionof the PRC while at the sametime overseeing the country’srise to international prominence.In essence, the Communistregime has so far avoided mak-ing the kind of domestic changeswhich are implicit in the EU’sapproach to China – whetherthis will continue to be the case,and what this means for the EU’sstrategy, remains to be seen.From the Chinese perspective,

the EU is a very valuable sourceof high technology, capital and


‘The Communist regime has so faravoided making the kind of domesticchanges which are implicit in theEU’s approach to China’

ASBEIJING CONTINUEDits final preparations toplay host to the 29th

Summer Olympic Games, riot-ing and protests ignited acrossthe Tibetan region(s) of Chinathroughout the second half ofMarch, the severity of whichhave not been seen since 1989.At least 25 instances of protestsby ethnic Tibetan groups havebeen reported across Tibet andneighbouring provinces inWestern China. Estimates claimthat up to 160 people have beenkilled, and another 200 peopleimprisoned as a result of theirinvolvement in the protests.There are many socio-eco-

nomic, historical, cultural andethnic reasons for the riots.Tibet has had a tumultuous his-tory: it has spent some periodsfunctioning as an independententity and others ruled by pow-erful Chinese and Mongoliandynasties. Tensions have beenescalating since China, ruled bythe Chinese Communist Party(CCP), retook control of Tibet in1951. China deployed thou-sands of troops to enforce itsclaim on the region in 1950.Some areas became the TibetanAutonomous Region (TAR) andothers were incorporated intoneighbouring Chineseprovinces. The Dalai Lama, thespiritual leader of TibetanBuddhism and by tradition

Tibet’s absolute political ruler,led a failed anti-Chinese upris-ing in 1959, after which he fledTibet and set up a governmentin exile in India. The majorityof Tibet’s monasteries weredestroyed in the 1960s and1970s during China’s CulturalRevolution. It is believed thatChinese forces killed thousandsof Tibetans during various peri-ods of repression and martiallaw. However some catalysts forthe March riots, such as culturaland religious repression, as wellas increased inequality due tothe side effects of China’s mod-ernisation process, belong to themodern era. The timing of theseprotests is particularly impor-tant, as the CCP had been hop-ing to use the Beijing OlympicGames to create a new image ofthe People’s Republic of China(PRC).

Re-Launching ChinaThe 2008 Olympic Games inBeijing are considered by manyto be China’s ‘re-launching par-ty’: re-launching itself as a glob-al leader and world power, astatus that it enjoyed through-out history, a status lost aroundthe mid-1800s. The OlympicGames provide the ideal show-case for the Chinese govern-ment, as well as the Chinesepeople, to present China as amodern vibrant state on the cut-

Tibetan Riots, March2008: Causes andConsequences

Niall DugganDoctoral researcher at the IrishInstitute of Chinese Studies,University College Cork


held nearby. Although 10 March2008 is the 49th anniversary ofthe failed Tibetan uprisingagainst Beijing’s rule, few peo-ple expected the scale ofprotests, which began on 10March and escalated on 14March. The demonstrations andprotests spread throughoutGreater Tibet, which covers theTAR, the whole of Qinghaiprovince, Western parts ofSichuan province, areas ofYunnan province and someareas of Gansu province. Theresulting crackdown by Chinesesecurity forces has left a num-ber of people dead, although theexact number remainsunknown: the exiled Tibetangovernment claims as many as160 people were killed, whileBeijing disputes this, allegingthat only 19 people, predomi-nantly Han-Chinese, were killedby rioters. A number of govern-ment and human rights groupshave expressed strong disap-proval regarding the Chinesegovernment’s reaction to theprotests in Tibet, with somegroups calling for a boycott ofthis summer’s Olympic Games.

The Chinese ReactionThe Chinese government hasresponded to their critics byclaiming that any democraticgovernment would have reactedto the violent rioters in Tibet inthe same fashion. If we look atthe reaction of the British gov-ernment to the civil rightsmovement in Northern Irelandin the 1960s and 1970s, and theUS government’s reaction to theAfrican-American civil rightsmovement in the same period,we can see there is some validi-ty to the Chinese government’sclaim. As the UK and the USare considered the backbones of

perceptions of China, whileconcurrently maintainingChina’s image as an ancient cul-tural centre, with which we arealready familiar. Branding atthis level has successful prece-dents: the ‘I heart New York’campaign being a prime exam-ple of such a marketing cam-paign. The successful launch ofthis national brand will be ofgreat economic benefit, as itwill lead to the influx of foreigndirect investments (FDIs) andwill increase tourism, as well asproviding a positive image ofChina abroad.

Tibet: An Opportunity to BeHeardHowever the 2008 SummerOlympic in Beijing is also theperfect opportunity for the dis-enfranchised of Chinese societyto voice their grievances on aglobal stage. Signs that Tibet’sindependence and civil rightsmovements would be particular-ly vocal in voicing their objec-tions came last year (2007) nearBeijing, when a group ofTibetans living in NorthAmerica and Europe hung asign from the Great Wall ofChina, which read, ‘One World,One Dream, Free Tibet 2008’.This image was beamed bysatellite around the world, as ithappened to correspond with aBeijing 2008 publicity event

ting-edge of technology, science,art, culture and sport; a countrythat boasts global cities withexciting modern infrastructure,state of the art tourism andbusiness; and a country that fos-ters companies, which lie at theforefront of the global economy.By projecting such an image,China’s government hopes to re-market the brand ‘Made inChina’, which is currently syn-onymous with low qualitygoods produced in mainlandChina under conditions thatviolate human rights. On thepolitical front, the Chinese gov-ernment is hoping to use theOlympic Games to alter Westernperceptions of the CCP, i.e. froman image of the suppression ofpolitical freedoms, (symbolisedby the solitaire student protesterconfronting a People’sLiberation Army tank duringthe crackdown on the 1989demonstrations), to an image ofhappy citizens living in a har-monious society, enjoying hugeincreases in their standard ofliving due to the enormous eco-nomic growth owing to achange, executed by the CCP, toa socialist market economy.Changing a country’s image ona global scale is akin to re-branding a major product. It ishoped that the Olympic Gameswill launch ‘Brand China’,which will modernise people’s


‘The Chinese government hasresponded to their critics by claim-ing that any democratic governmentwould have reacted to the violentrioters in Tibet in the same fashion’

Rapporteur, RadhikaCoomaraswamy, who stated:‘Women in Tibet continue toundergo hardship and are alsosubjected to gender-specificcrimes, including reproductiverights violations such as forcedsterilisation, forced abortion,coercive birth control policiesand the monitoring of menstrualcycles. There have been manyreports of Tibetan women pris-oners facing brutality and tor-ture in custody.’The Chinese government

claims that such transgressionsagainst human rights are eitheroutdated or untrue. Whetherthese claims of human rightsabuses are true or false is only apotential problem for theChinese government if they areunable to convince the majorityof the Tibetan population thatsuch claims are untrue. If theTibetans believe these humanrights abuses to be a reality, itwill galvanise their support forTibetan independence and maylead to a more violent Tibetanindependence movement.Tibet’s economy is relatively

poor and underdeveloped anddepends largely on agriculture,although tourism is becomingan increasingly important rev-enue earner. The territory is,however, rich in minerals, andmany Tibetans maintain thatthe exploitation of these miner-als to fuel China’s economicdevelopment is the real reasonbehind China’s determination tohold on to Tibet. Although thisargument is not without its mer-its, it does overlook the fact thatthe PRC have been in control ofTibet since the 1950s, whenpoor transport links limited theexploitation of these minerals.The rise of nationalism in Chinais a far greater motivator for

appealing for state contracts andlicences, is conducted throughMandarin Chinese. Other keyareas, such as education, arealso conducted throughMandarin Chinese. This forcesTibetans to neglect their ownlanguage and culture in order togain an education and competein the market place alongsidethe ethnic Han Chinese thathave relocated to Tibet. Tibetangroups have also reported thatthe Chinese government hasforced nomadic Tibetan tribes tosettle, and has given away theirlands. Once again, this is acrime of which many Westerndemocracies are guilty. Manygovernments have inflicted thesame offence on their ownnomadic peoples, claiming, asthe Chinese government does,to be helping these tribes todevelop. Cultural genocide is avery subjective issue. One mayclaim that economic develop-ment in an area is bound todamage traditions and cultures.However many Tibetans andhuman rights groups, such asAmnesty International andHuman Rights Watch, claim thatTibetans are under constantduress to conform to HanChinese culture, and are unableto express their ethnic identitiesoutside the realms of traditionalsong, dance and customs.Tibetans face arbitrary arrests,detention and torture or simply‘disappear’ when practicingtheir religion or otherwisearousing the suspicions ofChinese security. There are alsoclaims of enforced sterilisationson ethnic Tibetan women inorder to enforce China’s onechild policy, which legally doesnot apply to ethnic Tibetans.This claim is backed by theUnited Nations Special

liberal democracy, i.e. rule bylaw, freedom of speech and free-dom of assembly, both govern-ments’ actions during theseevents could be interpreted asfar more shameful and hypocrit-ical than the actions of theChinese government in Tibet, asfreedoms of speech and assem-bly are not rights the Chinesepeople enjoy. To a certainextent, the Chinese governmentis correct in claiming thatWestern governments wouldhave reacted in a similar fash-ion to China. However theChinese government shouldclosely examine the results ofviolent crackdowns on disen-franchised groups protesting forrights, autonomy or independ-ence. Frequently these groupsbecome more militant, turningto more violent forms of protest,often leading to the formation ofterrorist groups, or strengthen-ing the ranks of previouslyexisting groups. The Dalai Lamahimself has warned, for sometime now, that members of theTibetan community (particularthe younger members) werebeginning to stray from the pathof peaceful protests that he hasbeen advocating in public sincehis exile from Tibet in the1950s. The protests this Marchwere violent, even before thecrackdown of the Chinese secu-rity forces. Many ethnic HanChinese, who have moved toand settled in Tibet in theirdroves since the beginning ofthe reform era in the early1980s, have been attacked byTibetans who accuse the ethnicHan Chinese of cultural geno-cide. The protesters claim thatethnic Han Chinese inhabitantsenjoy a commercial advantageover their Tibetan counterpartsas all official business, such as


notable thus far has been India’sfootball captain, BaichungBhutia, who had been asked tocarry the torch through theIndian capital, Delhi, in April.Baichung Bhutia stated: ‘I sym-pathise with the Tibetan cause.This is my way of standing bythe people of Tibet and theirstruggle’.Whether the Games are, in

fact, boycotted or not, it is clearthat China has failed to fulfilmany of the criteria and condi-tions under which China hadbeen granted the right to hostthe Games, i.e. the improvementof human rights, freedom ofmovement throughout China forforeign journalists etc. This tar-nishes China’s reputation on theinternational stage regarding thefulfilment of future promisesand treaties.

What does the future hold?The exiled Tibetan spiritualleader, the Dalai Lama, advo-cates a non-violent, negotiatedsolution to the Tibet problemand claims to accept the notionof real autonomy for Tibetunder Chinese sovereignty.China has questioned his claimsthat he does not seek independ-ence and is suspicious that hemay use increased autonomy asa stepping-stone to independ-ence. It is very unlikely that apeaceful settlement that bothsides can agree on will be

stand to lose heavily in terms oftrade if relations with Chinawere to sour. However theMarch riots in Tibet and thesubsequent crackdown will nodoubt make it much harder forthe Chinese government to con-vince the EU to drop its armsembargo against China. Thehead of the EuropeanParliament, Hans-Gert Pöttering,issued an invitation to the DalaiLama to address MEPs, andpaved the way for a vote on apossible partial boycott of theOlympics. However the DalaiLama has called on the govern-ments of the world not to boy-cott the Games: he believes thepeople of China have earned theright to host the Games, andthey should be held, with allthe countries of the worldattending and participating.There seems to be a generaltrend amongst EU statestowards taking a harder stancetowards China’s human rightsviolations, particularly in termsof Tibet. This can be seen in themeeting between GermanChancellor Angela Merkel andthe Dalai Lama in 2007.However, due to the DalaiLama’s stance on an Olympicboycott, it seems highly unlike-ly that any state will boycott theGames. Despite this, many indi-vidual athletes have chosen toboycott the Games, as well asthe Olympic torch relay. Most

China’s continued control overTibet. This rise of nationalistsentiment is due in part to therelaxing of communist dogmaand the introduction of a patrioteducation system in the 1980s,coupled with the strong beliefamong the Chinese populationthat Tibet is historically part ofthe Chinese motherland. Thismeans that the Chinese govern-ment would face a strong back-lash from the Chinese generalpublic if they were to concedeTibet from Chinese rule.

How has Europe reacted?The Chinese government claimsthat the Dalai Lama himself isbehind the violence in Tibet,and that he is attempting to usemedia coverage of the BeijingOlympic Games for his ownpolitical agenda, which will tar-nish the summer Games. Themumbling of the word ‘boycott’is being heard in the halls andoffices of Western governments,as public opinion swingstowards this option. Publicopinion has been influenced byimages of Tibetan protestersbeing violently beaten by secu-rity forces, which have beencontinually broadcast across tel-evision screens across theworld, although in a number ofcases this is in fact Nepalesesecurity forces, rather thanChinese ones. A number ofEuropean countries have sug-gested that if China does notrestrain itself from further sup-pression of protesters, they will,at least, conduct a diplomaticboycott of the Games, i.e. headsof state and government offi-cials will not attend the Games.Heavier sanctions from Europeappear unlikely as manyEuropean states are majorinvestors in China, and would

‘There seems to be a general trendamongst EU states towards takinga harder stance towards China’shuman rights violations,particularly in terms of Tibet’


tion with negative marketingconducted by disgruntledgroups within Chinese society.It may also have long-term con-sequences on China’s relation-ship with the EU, which isbeginning to put more of anemphasis on human rights in itsdealing with China. Howeverthere is light at the end of thetunnel for the Chinese govern-ment: if the government recallsthe aftermath of the 1989Tiananmen Square massacreand, in particular, the reactionof the Western powers, they willnote that sanctions, introducedthen and beyond, have becomesofter over time as China hasgrown in economic importance.Money washes away all sins.

reached in the near future, andit seems that the status quo willremain. The effects the Marchriots in Tibet have on China’sfuture are numerous: ‘BrandChina’, which was meant to bere-launched by a successful andgrand Olympic Games in 2008,will now be associated, particu-larly by Westerners, with anoppressive authoritarian regime.What the Chinese governmenthas in fact achieved by its reac-tion to the situation in Tibetthis March has been to replacethe image associated with theCommunist rule in China fromthat of a student facing down atank, with that of the People’sLiberation Army attackingTibetan Monks. This may havelong-term economic ramifica-tions on China. It could damagethe marketing of Chinese prod-ucts abroad due to their associa-


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Independent Thinking from Polity

What’s Wrong with the EuropeanUnion and How to Fix itSimon Hix, Professor of European and Comparative Politics, London School of Economicsand Political Science

The European Union seems incapable of undertaking economic reforms and defining its place in theworld. Public apathy towards the EU is also increasing, as citizens feel isolated from the institutions inBrussels and see no way to influence European level decisions.

Taking a diagnosis and cure approach to the EU’s difficulties, Simon Hix tackles these problemswith distinct clarity and open mindedness. What the EU needs, Hix contends, is more open politicalcompetition. This would promote policy innovation, foster coalitions across the institutions, provideincentives for the media to cover developments in Brussels, and enable citizens to identify whogoverns in the EU and to take sides in policy debates. The EU is ready for this new challenge. Theinstitutional reforms since the 1980s have transformed the EU into a more competitive polity, andpolitical battles and coalitions are developing inside and between the European Parliament, theCouncil, and the Commission.

This indispensable book will be of great interest to anyone concerned with the future of theEuropean Union.

http://www.polity.co.uk

SE: In the last years, the number ofEU member states has almost doubledfrom 15 to 27 members. This majorextension has obviously had econom-ic, political and cultural conse-quences. How do you think thisenlargement was absorbed by theUnion? And were there any politicalconsequences?

OR: The fifth enlargement of the EU is agreat success. It has peacefully reunitedEastern and Western Europe. It is anextraordinary example of the EU’s softpower of democratic transformation. Wehave more and more compelling evi-dence of the economic benefits too. Weare trading today five times as muchbetween Western Europe and EasternEurope than ten years ago. The newmember states are the engine of econom-ic dynamism for Europe today, so impor-tant for job creation in the whole EU.There is no institutional gridlock in

the EU either. The adoption of theReform Treaty in Lisbon is the bestproof that the enlarged Union works.The new Treaty that adapts the EU tothis new reality reinforces our capacityto act: to deliver concrete results to ourcitizens and to make the EU a strongerglobal player.

SE: Slovenia was the first state of theformer Yugoslavia to join the EuropeanUnion in 2004. It has since developedvery positively, including the achieve-ment of becoming the first country tojoin the Euro after its introduction.Also, Croatia seems to be on the verge

of becoming the next European Unionmember state. But doubts remainabout Serbia and the newly foundedstate of Kosovo in particular. How doyou see the future development ofSerbia-EU and Kosovo-EU relationsafter key states recognised Kosovo asan independent state?

OR: Indeed, the countries of theWestern Balkans can be inspired bySlovenia’s example of successful acces-sion to the European Union. Croatia’sgood progress is also a positive bench-mark for the region.Serbia is central for regional stability

and good neighbourly relations in theBalkans. Serbia has the potential to bethe engine of the region and the EU isready to accelerate its EU course –including candidate country status. Butfor this Serbia needs to reaffirm itsEuropean choice and meet the condi-tions. The EU can set the road sign, butit is up to the Serbia to decide thedirection.This is a crucial choice to be made:

Serbia can either turn to the Europeanfuture or risk self-imposed isolation.The first option will take Serbia for-ward, towards stability, stronger free-doms and increasing prosperity – alongwith the other countries of the region.The other option is a road to nowhere.The EU remains committed to

Kosovo’s European perspective andpolitical and economic development.Kosovo on its part needs to ensure itscommitment to a democratic andmulti-ethnic society.

Interview with EU EnlargementCommissioner Olli Rehn


Olli RehnEuropean UnionCommissioner forEnlargement

SE: Another pivotal candidate state forEU membership is Turkey. It seemsunrealistic for Turkey to become a fullmember of the European Union with-out a permanent solution to the ques-tion of divided Cyprus. The resolutionof this particular problem obviouslyalso requires political changes fromexisting EU member states. How fardown the road to a permanent solutionof this key political issue is the EU?And at what stage are the membershipnegotiations with Turkey in general?

OR: Concerning the Cyprus issue, Iwelcome the recent successful meetingbetween leaders of the Greek Cyprioteand Turkish Cypriote communities,and their agreement to take full respon-sibility for the future conduct of thenegotiations. I commend their decisionto meet again in three months’ time toreview the work of the working groupsand technical committees and, usingtheir results, start full-fledged negotia-tions under the auspices of theSecretary-General of the UnitedNations. The EU stands ready to sup-port the negotiations and both parties.As for Turkey’s EU accession course,

the accession negotiations are on track.Their pace depends on Turkey’s abilityto carry out the necessary reforms inorder to meet the tough conditions forEU accession.After successfully overcoming a dif-

ficult political and institutional crisisin 2007, the Turkish government hascommitted itself to the EU relatedreforms. I encourage Turkey now torevitalise the momentum of reforms, bytaking concrete decisions in key areas,such as freedom of expression andfreedom of religion.Turkey’s accession to the EU will be

a long and sometimes difficult journey,during which Turkey will have totransform itself, to make fundamentalfreedoms prevail in all corners in thecountry and in all walks of life.

SE: In the wake of the debate aboutTurkish EU membership, a fundamen-tal question has surfaced: What arethe borders of the European Union?And how should these borders bedefined? Is the European Union a geo-graphic, cultural or value-based enti-ty? What are your answers?

OR: The EU Treaty says that anyEuropean country which respects thevalues of democracy, human rights andthe rule of law may apply for EU mem-bership. However, this does not meanthat all European countries must apply,or that the EU has to accept all applica-tions. It is not an automatic process,but one where conditionality is the key.The EU has consolidated its enlarge-

ment agenda. Our energy now focuseson South-East Europe, ie. the WesternBalkans and Turkey. They have a clearaccession perspective, provided theyfulfil the necessary conditions. Wehave to be cautious of taking new com-mitments, at the same time I do notthink we should set in stone the EU’sfinal borders. The term ‘European’combines geographical, historical andcultural elements, which all contributeto the European identity. The sharedexperience of ideas, values, and histor-ical interaction cannot be condensedinto a simple timeless formula and issubject to review by each succeedinggeneration.


THE EUROPEAN integra-tion process has been anunprecedented success

story. It provided the basis forreconciliation among the peo-ples of Western Europe and withthe accession of the Central andEastern European states in 2004and 2007, it overcame the 40years lasting division of theEuropean continent. The unitedEurope brought peace, security,prosperity and progress. Sincethe nation states cannot meetthe challenges of our time ontheir own anymore, there is noalternative for Europeans to theEuropean Union despite itsmany little deficiencies. Wehave to pursue the objective tocreate a social Europe togetherwith Europe’s citizens and forEurope’s citizens.In the process of growing

closer together, cities andmunicipalities play an impor-tant role due to a number of rea-sons. After World War II,Europe’s cities and municipali-ties brought their people backtogether by establishing town

twinnings and cooperation.They so crucially contributed tothe reconciliation process inEurope. Following the fall of theBerlin Wall, many local authori-ties in Western Europe togetherwith state and social playersshared their experiences withthe Central and EasternEuropean countries, which hadonly established their democra-cies in order to support the cre-ation of local democratic as wellas local economic structures inthese countries.The role the more than

95,000 cities and municipalitiesare playing in the EU is alsooutstanding because they shapeand organise the immediatesocial environment of 490 mil-lion people. The EU’s cities andmunicipalities make sure thatthe essential basic conditions ofeveryday life are maintained forits citizens. Given the proximityto their people, local authoritiesform the basis of Europeandemocracy and society. In doingso, they preserve local andregional identity and maintainEurope’s cultural diversity inthe globalised world.In the light of these reasons,

the EU must more strongly con-sider the European cities andmunicipalities and pay moreattention to their interests.What counts for nation states,also counts for Europe: A state

Cities and Municipalitiesare Europe’s Strength

Herbert SchmalstiegFormer Executive Mayor of Hanoverand President of the Union of SocialistLocal and Regional Representatives inEurope

(German Version)

‘What counts for nation states, alsocounts for Europe: A state cannotsurvive without its cities. The sameis true for Europe’


http://www.isg-london.org/fileadmin/user_upload/journals/Vol3-Issue3/schmalstieg_de.pdf

state. This right significantlycontributes to integration and agrowing together of differentnationalities at local level.EU structural policy funding

programmes also affect thedevelopment of municipalitiesand regions. It is an act of soli-darity that the European familysupports structurally weakregions and cities by providingthem with money from thestructural funds programmes sothat their economic strengthand competiveness can beimproved. Projects, whichreceive EU money, are, forexample, the improvement anddevelopment of infrastructure,support of structural change inold industrial regions, creationof new jobs and qualification ofunemployed persons, restora-tion of city districts or projectsin rural areas. Although theEuropean Commission has paidmore attention to urban areasand rural regions in the pro-gramming period between 2007and 2013, due to the specialimportance of cities, theyshould be even more intensivelyfunded. With regard to ruralregions, more importance thanbefore needs to be attached tothe promotion of regional devel-opment of structurally weakrural areas compared to a ‘pure’funding of agriculture. Overall,it would be desirable for citiesand regions if application proce-dures for EU programmeswould be further simplified.Of course, we feel the dynam-

ic of globalised markets in ourcities. We recognise that theeconomic development of ourcities and regions also dependson decisions of globally actingcompanies. Given the objectiveof a social market economy, as itis codified in the EU Lisbon

not effectively handle matters.This concept also ensures thatprecisely tailored solutions,which address the needs of thepeople, can be found at locallevel. What goes well for a townin North Finland, does not haveto work out for a municipalityin Andalusia. Europe needsdecentralised structures in orderto be able to use its innovationpotential and cultural diversityin the best possible way for thebenefit of its people. Europe’sbig advantage and strength liesin the variety of its cities andmunicipalities. Therefore, thefollowing principle should beapplied: Integration wherever itis necessary and decentralisa-tion wherever it is possible.In Germany, we assume that

70 per cent of all EU regulationshave direct or indirect influenceon local action; for example, bysetting social and ecologicalstandards, through consumerprotection, through EU internalmarket rules (competition lawand public procurement law),and also through EU funding forlocal and regional projects.Human resource management,construction planning, waterpollution control, public trans-port, Sparkasse (savings bank),waste management, economicactions of local authorities,business development or publicprocurement are some of theareas of local politics, which areaffected by EU law.Furthermore the European cit-

izen’s right to vote in local elec-tions has to be mentioned.Every EU citizen (citizen of anEU member state) is entitled tovote and run for office in localelections, if he or she is a resi-dent in the municipality wherethe local elections are held – nomatter in which EU member

cannot survive without itscities. The same is true forEurope. Local authorities ontheir parts have to deal morethoroughly with the EU in orderto better use the chances the EUoffers.If one considers the relation-

ship between the European andthe local and regional levels,two questions come to the fore:‘How does the European Unionchange local government andaffect local policies?’ and ‘Howcan local authorities influencethe shaping of European poli-cies?’Since at least the creation of

its internal market in 1986,Europe has arrived in the townhalls and has increasinglyaffected local government. Weshould not make the mistakeand regard the European inte-gration process as obstructinglocal development and democ-racy. It is in fact an inevitableconsequence of the Europeanintegration process that the gov-ernmental manoeuvring room inthe member states becomessmaller due to the establish-ment of common rules and theprocess of harmonisation. Thisis also true for the local level.Yet, the right balance must bestruck.Given the number of duties

local authorities and regionsperform for their people, localself-government needs to bestrengthened. Local authoritiesneed to maintain their ability toact. Otherwise, they cannot ful-fil their functions for their peo-ple. According to the subsidiari-ty principle, the execution oftasks has to happen as close aspossible to the citizen. TheEuropean Union or the nationstate shall only take action ifthe local or regional level can-


knowledge about local condi-tions and problems, they areable to deliver an importantcontribution to the shaping ofpolicies close to the citizens.Local authorities are in a betterposition to assess to what extentlegislative projects meet theneeds of the people in theirimmediate social environment.It has to be said that in most

of the EU member states thepossibility of involvement inthe national legislative processis very limited for the locallevel. It is mostly restricted toinformal or institutionalisedconsultation. At the Europeanlevel, a similar pattern can berecognised.Since the Maastricht Treaty,

the regional and local authori-ties at least have had an institu-tionalised advisory body withinthe EU – the Committee of theRegions (CoR). This is anachievement, which in the lightof the restricted participationpossibilities of local authoritiesin most of the EU memberstates should not be disregard-ed. Although over the years theCommittee of the Regions hasbeen strengthened, it is still afact that it has only advisoryfunctions, which carry littleweight in the legislative deci-sion-making process. Theinvolvement of the Committeeoccurs in a relatively late stageof the legislative process and is

vidual that counts. For sometime, the Local GovernmentAssociations in Germany andthe Council of EuropeanMunicipalities and Regions(CEMR) have therefore demand-ed more legal certainty for localauthorities in the field of servic-es of general interest. The mem-ber states should keep the rightto decide who delivers whatkind of public services and howpublic services can be provided.In doing so, the historicallygrown structures of each EUmember state need to be consid-ered, according to the beforementioned subsidiarity princi-ple.The stronger European poli-

tics and the EU Commissionaffect local activities, the moreimportant it becomes that localauthorities on their part exertmore influence on the shapingof policies in Brussels. Theoften praised Europe of the citi-zens is not feasible without thevoice and involvement of localauthorities in the shaping ofEuropean policies. If theEuropean integration processsucceeds, local authoritiesshould not only be objects ofsuch a process, which have todefend their rights. Instead,they should assume an activerole in this process as a success-ful European integration needslocal authorities and regions.Thanks to their expertise and

Reform Treaty, the social dimen-sion of the European Unionneeds to be further enhanced.Whether people accept the EUessentially depends on theimprovement of working and, inparticular, living conditions.European legislative projectstherefore need to be checked upon their social consequences forEurope’s citizens.In many areas, the continent’s

economy has regained newmomentum due to the dynamicof the EU’s internal market. Ithas also provided new jobs. Theinternal market regulationshowever also bear problems. Forlocal authorities, the tense andrather difficult relationshipbetween the EU’s internal mar-ket and locally delivered publicservices is of particular impor-tance. Services of general inter-est, as public services are calledin the EU Commission’s lan-guage, are in general orientedtowards common welfare. Thescope of the services of generalinterest, which are mostly pro-vided by local authorities,ranges from basic water andenergy supply to public trans-port and areas like welfare,school, health care, housing,culture and care for persons indifficult living situations. Assoon as theses services haveeconomic character, they aresubject to European competitionlaw, public procurement lawand state aid law. The problemis that the division between eco-nomic and non-economic serv-ices is often unclear.Since the guarantee and the

improvement of these servicesis a fundamental condition forthe realisation of a socialEurope, we need to strike a bal-ance. Competition should neverbe an end in itself. It is the indi-


‘Local authorities are in a betterposition to assess to what extentlegislative projects meet the needsof the people in their immediatesocial environment’

95,000 cities and municipali-ties.European integration and

local self-government do notcontradict each other. Europeneeds the support of localauthorities and local authoritiesdeserve the attention ofEuropean politics. And for localpoliticians it is necessary toremember: European politics istoo important to leave it toEuropean politicians and thenational governments.

local and regional levels as wellas a strengthening of theCommittee of the Regions byproviding it with the right to goto the European Court of Justiceif it believes the subsidiarityprinciple has been breached.Furthermore, a reliable financialassessment process and the cod-ification of the local organisa-tions’ right to consultation with-in the EU are foreseen. After thecollapse of the ConstitutionalTreaty, we must now hope thatthe Lisbon Treaty will come intoforce. Then, the European citiesand regions need to consequent-ly use the opportunities theTreaty provisions bring about.The democratic structure of

the European Union with its 27member states and more than490 million people need a solidbasis. Such a basis is the locallevel that is our more than

restricted to the right of non-binding hearings. Besides theCommittee of the Regions, themajor European associations,such as the CEMR and Eurocities,as well as national local govern-ment organisations and to someextent offices of regions inBrussels represent the interestsof local authorities and regionsat the European level.The EU Lisbon Reform Treaty

contains significant improve-ments of the position of localauthorities and regions, whichhad been carried over from theConstitutional Treaty. Theexplicit recognition of local self-government as an integral partof the national identity of theEU member states is of utmostimportance. The Treaty alsoenvisages an explicit extensionof the definition of the principleof subsidiarity to include the


by Stephen Haseler

Bulldog to Lapdog:British Global Strategyfrom Churchill to Blair

Sidekick

Special offer £10 RRP £14.99Plus postage: £1 (UK), £1.50 (Europe), £2.00 (RoW)

SidekickISBN 978-0-9554975-1-3216 x 140mm Paperback

To order contact [email protected]

Why did Britain go to war in Iraq?Why did Tony Blair support PresidentBush at every turn? How has thebulldog become the lapdog? Andwill Britain, now we are in the post-Blair era, remain forever just a part ofthe American empire – a sidekick?

In his new book Sidekick Professor Stephen Haseler

answers these highly topical and urgent questions.

Sidekick is also a history of how a whole post-war British

political generation has turned Britain into what amounts

to a province of the American global system. He sug-

gests that the ‘special relationship’, based on depend-

ence, is not just undignified but also unhealthy – spawn-

ing an undercurrent of anti-Americanism.

And he argues that in the new political era we still have a

choice – between, on the one hand, continuing with the

‘special relationship’ and on the other making a real con-

tribution to the building of Europe and, through Europe,

towards a healthy and balanced transatlantic relationship.

NEWFROM

http://www.global-policy.com

social europe journal vol. 3 no. 3

Documents

social europe journal

social europejournalwww

issue orbecome

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