EU-CHINA ARMS EMBARGO: A Trans-Altantic Crisis Foretold

spiegel.de ^ | March 18, 2005 | Daryl Lindsey

[Destro]

March 18, 2005

EU-CHINA ARMS EMBARGO

A Trans-Altantic Crisis Foretold

By Daryl Lindsey in Berlin

China's military is already full of European technology. The lifting of the EU arms embargo may soon mean more. But not if the United States can help it; America is worried about eventually having to face those weapons in a clash with China over Taiwan. The imbroglio is threatening to become the next trans-Atlantic crisis.

War has just broken out in the Taiwan Straight. Taipei 101, the world's tallest building, has sustained major damage in a horrendous bomb raid on the Taiwanese capital and Chinese war ships are steaming full speed ahead toward the island. As American aircraft carriers and warships veer into the straight, they are attacked by Chinese fighter jets.

But the fight is not just the US against China. The Chinese fighters find their targets using British radar and electronics. The People's Liberation Army fires missiles and helicopters designed by the French. The Chinese track the movements of both sides using satellites built with the help of Germany and Britain.

Sound unrealistic? It's not. Nor is it some scenario dreamed up by conservative American hawks. It comes from an article in the Far East Economic Review taken so seriously by politicians that it was submitted into the official United States Senate record during a 2002 hearing. The article also didn't peer into the crystal ball for a glimpse of the future -- it referred to the European technologies Beijing already has in its military arsenal. It may soon have more.

Later this year, the EU is expected to lift the self-imposed embargo prohibiting weapons sales to China -- a ban originally triggered by the Tiananmen Square massacre in 1989. The United States is far from pleased at the prospect. Indeed, the easing of the arms ban is setting the stage for the next major diplomatic row between Europe and Washington.

Plenty of hints have already been made. In Brussels last month, US President George W. Bush said he feared weapons sales would "change the balance of relations between China and Taiwan." And a recent Congressional vote suggests that quite a few Washington politicians lose sleep over fears American GIs might one day have to face off against European weapons in the hands of the Chinese army. In February, the House of Representatives passed a resolution 411-3 pleading for Europe to maintain the embargo. Democrats and Republicans alike have threatened to retaliate by severely limiting technology sales to Europe if it begins selling arms.

"The US wants to make sure the Chinese don't get a hold of things like sophisticated jamming equipment, sensors, quieter submarines and better radar," said David Mullholland, a business editor at Jane's Defense Weekly in Britain. "Today's radar equipment is incredibly sophisticated and software driven. The technology is very closely held and the Chinese are at least 20 years behind the Europeans and Americans on this." It would take years, Mullholland said, but with enough will power and a massive team of scientists, the Chinese could reverse-engineer almost anything sold to them.

Scratch our backs and we'll scratch yours

But here in Europe you can practically see the hypnotising effect of Chinese yuan in the eyes of leaders as they talk about removing the ban. German Chancellor Gerhard Schroeder, French President Jacques Chirac and British Prime Minister Tony Blair all know that if this final EU political scarlett letter on Beijing is removed, China will repay them for their loyalty through lucrative business contracts. Though the discussion is on lifting the weapons ban, it's unlikely arms sales would increase dramatically -- the jump in business would come in other sectors, giving companies like Airbus or Volkswagen a leg up on their American competitors. During a visit to Beijing in December, Schroeder said he would vote to lift the ban because China had become a "different country" since 1989. China, meanwhile, has sought to help Europe lift the ban by saying it isn't interested in purchasing any weapons from Europe. Nobody's really buying that -- in fact, China is eager to get its hands on French fighter jets and German tanks.

"The embargo hurts China," explained Siemon Wezemann, a researcher at the Stockholm International Peace Research Institute in Sweden. "Not just because it makes getting access to technology a major problem for them, but also because it presents a psychological-political problem. It causes them to lose face."

Schroeder and other EU leaders have sought to assuage Washington critics by saying the lifting of the ban is mostly symbolic and that the real teeth can be found in the EU's Code of Conduct. Created in 1998, the voluntary code has strict requirements overseeing the export of military and dual-use goods outside the EU. But the code is also filled with loopholes -- including national discretion on its interpretation -- and the million dollar question is the extent to which it will be strengthened, as EU leaders have promised to do.

Most politicians in Europe, it seems, are sticking with a strict definition of the term "arms." Critics, however, say the real problem isn't lethal weapons -- anyone, they say, can build a bomb. It's the sales of equipment which can be used to help modernize the People's Liberation Army that gives them pause.

In truth, despite the current weapons ban, German and European companies are already helping China in its multi-billion euro efforts to close its military gap with the West. Sales of goods that required review under the Code of Conduct from Europe to China are still small. Nevertheless, they grew six-fold between 2001 and 2003, with licenses totalling €62 million issued in 2001 and €428 million only two years later, the latest year for which EU statistics are available. The majority of sales come from France, Britain, Italy and Germany and coincide with Beijing military spending increases of tens of billions of dollars in recent years. Much of that increase went to weapons and defense-related purchases from Russia, Israel and, albeit to a lesser extent, Europe.

European companies have exploited Beijing's ballooning defense budget through loopholes in national export policies, the arms embargo and a provision in the Code of Conduct that allows each EU country to determine on its own which technologies or products must be given licenses for export.

One of the most controversial examples is that of MTU, a DaimlerChrysler subsidiary in the southern German city of Friedrichshafen. The company builds diesel engines, which are not subject to licensing requirements. But they end up in the bellies of some Chinese "Song" submarines. Chinese Naval war ships are also equipped with MTU engines. There are a number of similar cases. Cologne-based Deutz builds engines that are used in Chinese tanks. Britain's Rolls Royce has sold Spey jet engines that are used in Chinese JH-7 fighter jets and the Racal Group, which now belongs to France's Thales has also sold long-range airborne radar systems that are used by People's Liberation Army Navy Aircraft.

Cracks in the code

Critics like Wezeman say these sales are proof that the current Code of Conduct and national export policies are too weak. "The engines Germany exports don't even need an export license," he said. "If you want to prevent countries from becoming military powers, then you have to really think about putting things like the engines for submarines on the control lists."

Governments here, it seems, have turned a blind eye -- in many cases because Europe's perception of China differs from that held by Americans. The US sees an awakening giant that could soon become a serious military threat. The Europeans, on the other hand, only feel threatened by China because of the number of jobs heading East.

"For Europe, there aren't many strategic issues," Wezeman says. "The United States is the biggest challenger to China's desire to become a regional superpower, but I don't think the Europeans really care if China becomes one." Still, he says, sales of European military equipment to China are helping it get closer to something it couldn't do in the past -- and that is the ability to invade Taiwan.

But despite Europe's lack of China-related strategic concerns, the issue of the arms embargo has deeply divided politicians in Germany and elsewhere in Europe. The German Social Democrats' junior coalition partner, the Greens, adamantly oppose lifting the embargo, as do the opposition Christian Democrats. Non-governmental human rights groups are also displeased by the idea. Critics have even dubbed Schroeder the "Panzer Kanzler" (or "tank chancellor") for his eagerness to export German weapons.

"The EU consciously imposed the weapons embargo as a political symbol following the brutal crushing of the Tiananmen Square protests in 1989," said Friedbert Pflueger, the foreign policy coordinator for the Christian Democratic Union. "To lift it would send the wrong signal and it would be a false move. The human rights situation in China has improved, but it doesn't justify a change of course." China continues to threaten Taiwan with violence, he added, and the anti-secession law passed by Beijing earlier this week gives it the permission to wage war against the island." The law's passage also forced the EU to delay the ban's lifting -- originally planned for the first half of the year. EU officials now say it could come later.

America's line of argumentation is another sensitive issue for European leaders: They believe Washington is pushing Brussels to maintain the embargo under a faulty premise. "It's there to stop human rights violations, not to stop China from developing into a military power," says SIPRI's Wezeman. "If they want that, then they must have a different discussion with Europe. And they need to be prepared to listen more closely."

Yet even if the embargo is lifted, few believe European arms sales to China will increase dramatically. "There won't be a strong increase, maybe just a slight one in certain technologies -- and they would mostly come from France," says Wezeman.

Companies here like EADS, Europe's largest defense contractor, say they are taking a wait-and-see attitude. "This is a governmental issue, not an industrial one," a spokesman for EADS said in a statement. "We suggest a common approach from the US and EU to find a solution at the political level. We will take business decisions once the legal framework is known."

Over at Jane's, David Mullholland offers an alternate theory: Could those yuan signs lighting up Schroeder and Company's eyes really be dollars?

"My hunch is that lifting the embargo is an effort on the part of the Europeans to push the US to open up its market to more European defense companies," he explains, noting that the Europeans have invited the US to consult with them on the Code of Conduct. "I think this is saying: We're going to lift the ban. Come talk to us. We won't sell anything to China, but open up your market to our companies."

[Paul_Denton]

It is getting somewhat past the era of old Red China. It's just China now. There are still some old ChiComs around, too. If we cut off trade, we would damage our own economy as well. It's not so simple.

A price worth paying to destroy their economy.

[superiorslots]

Hey your chart is 15 years old!!!!!!!. Ends in 1989. We import more than 10% from China now. I think the us is now 25-30% of chinese exports.

[IonImplantGuru]

Hey your chart is 15 years old!!!!!!!. Ends in 1989.

My bad! Shame on me, didn't even look at the dang x-axis. Can't easily find any more current data, at least the way I'm searching.

[traumer]

"not just the US against China..... British radar and electronics... missiles and helicopters designed by the French... satellites built with the help of Germany and Britain "

Matthew 24:7
For nation shall rise against nation, and kingdom against kingdom

[traumer]

Better do it now then 1 year later... America will manage - and hopefully learn from this

[Destro]

No brainer from Matthew. I;s been allways the case.