Author : Sonika Gupta

Issue BriefsPublished on Feb 27, 2004
ballistic missiles,Defense,Doctrine,North Korea,Nuclear,PLA,SLBM,Submarines

China, EU and the Arms Embargo


Following Chinese President Hu Jintao’s visit to France, the French President Jacques Chirac urged for the lifting of EU arms embargo against China, imposed in the wake of the Tiananmen Square incident. The French President said that in the context of improved relations between the EU and China, the ban on weapons sales to China was anachronistic. The other countries covered under the EU weapons ban include Zimbabwe, Sudan and Myanmar. After Tiananmen, the US and its European allies were in agreement about the rationale and the necessity of preventing China from acquiring high technology weapons that China could use against its own people. Over the years, the gap between the European and American perceptions of China has increased significantly. European capitals are moving towards closer economic and possible strategic understanding with China. On the other hand, the Bush administration’s threat perception from China remains high, both vis-à-vis Taiwan and as a strategic competitor of the US.

Divergent Perceptions of China

The current French-sponsored proposal to review the EU arms embargo against China is an indicator of the growing divergence between the US and French interests in global politics. Within the EU, France has been the most vocal critic of US policies in post 9/11 era. In fact, the French and Chinese positions on international order have a lot in common with both countries advocating the idea of a multi-polar world to counter US unilateralism. The joint declaration signed during this visit by the French and Chinese Presidents envisions a comprehensive strategic partnership between the two countries with agreement on multipolarity and strengthening of the UN Security Council to counter threats to global peace and security.

Within Europe, the lifting of the arms embargo has mixed support. During Chinese Premier Wen Jiabao’s visit to Germany last year, China had pushed for German support on the issue. After Wen’s visit, the matter was discussed by EU foreign ministers at the summit held in December. Though Germany is, in principle, in favor of lifting the ban it does not, however, feel that the time is yet ripe to do so. The Scandinavian countries have traditionally been strong proponents of the ban. After the Chinese President’s visit to France, the Washington Post reported that the Dutch would consider the proposal for the review of the ban. The United Kingdom government too has welcomed a review of the ban. The British Government is of the view that the EU Code of Conduct governing arms exports is a better instrument for arms control than the current ban. The EU Code was proposed by Tony Blair’s government and prohibits EU partners from selling arms to countries that may use them for internal repression, in places where there have been serious human rights violations and for provoking or prolonging conflicts.

The current EU ban imposed in 1989, in absence of an agreement among EU partners, is subject to national interpretations. This means each country within the EU is free to decide which items of its defence exports should be put on the banned list and which ones left out. This has facilitated some arms exports to China from many EU countries including France and United Kingdom. After 1989, France entered into a deal to supply China with light helicopters and UK sold it the Jetstream MP aircraft and the Searchwater AEW aircraft radar.

The real opposition to the ban comes not so much from EU governments as from domestic political opposition within EU nations. This was amply demonstrated by the half the French legislators boycotting Hu Jintao’s speech at the French National Assembly. In fact, many of them joined human rights groups protesting outside the legislature. However, despite this, Chirac’s government has committed itself to sponsoring a review of the ban. Similarly, there has been debate in the British Parliament questioning the ethical basis for removing the ban in the face of China’s poor human rights record and its missile deployment targeting Taiwan. Concerns have also been raised about China rexporting British arms to the world arms market. The British Government’s response to this has been to assure the opposition that Britain continues to be concerned about the human rights situation in China and would like to see more progress on this issue.

Why does France want to lift the ban?

The French say that the change of leadership in China is a factor convincing them to review the ban. China under Hu Jintao is seen as a mature nation with economic development as its first priority. However, the change in leadership is not the clinching factor in France pressing for a review of the ban. Business is. The EU and China are each other’s third largest trading partners but the two-way trade between France and China is lagging behind. In 2003, the China-France trade was only one third of the trade between Germany and China. The French defence industry, like defence manufacturer’s the world over, want to tap into growing Chinese demand for modern weapons and technologies. China is specifically interested in the purchase of Mirage aircraft from the French manufacturer, Dassault. In 1992, in a deal worth nearly 2.6 billion dollars, Dassault sold Mirage 2000-5 aircraft to Taiwan. Some of these were upgraded by the company last year making them capable of tracking and neutralizing cruise missiles that China has deployed along it coast. However, the deal was struck inviting Chinese displeasure and the PRC made it clear that France must adhere to the ’One China Policy’ if it wants to do serious business with China. Under this policy China maintains that sale or lease of arms to Taiwan by any country is as interference in its internal matters.

China has successfully pushed the ’One China Policy’ with the Netherlands and Germany. Both these countries have an explicit policy of not selling arms to Taiwan. In 2001, Germany and the Netherlands also reacted sharply to the US decision to sell Taiwan eight diesel powered submarines as a part of its annual defense package. As the US shipyards do not manufacture conventional submarines any more, the US assumed that the technology could be sourced from either Dutch or German manufacturers. Both countries declined and also criticized Bush administration’s presumptuous attitude in this matter.

US and the European Defence Industry

The European and American difference of opinion in the matter of arms exports goes beyond a divergence of interests on selling arms to China. A closer look at the politics of major arms deal reveals a growing concern in Europe about American efforts to control global arms industry through US owned firms. The apprehension is that US dominance in the area of defence technology would endanger Europe’s ability to forge a political or military agenda independent of US interests and involvement.

To quote an example, after the Germans and the Dutch refused to cooperate in the building of the diesel powered submarines that the Bush administration has promised Taiwan, One Equity Partners, a US owned financial investor, acquired controlling interest in Germany’s largest shipyard, HDW that could supply the technology. However, since German law prohibits the direct or indirect sale of defence technology to Taiwan, the company could not put its plans through and it put up its controlling interest for sale again. Acting on such concerns, the French defence ministry commissioned a study last year to evaluate the risks from US investment to French and European defence companies. France was specifically concerned about the activities of the Carlyle group, a private equity fund, believed to have close links with the Bush administration and involved in buying out the Italian aero-engine company, FiatAvio.

The US acquisition of European defence or dual use high technology industries, like aviation, is adding to the post 9/11 differences between US and its European allies. As long as the world view of the US and Europe was broadly the same, their defence establishments could be seen as complementary but this is no more the case. After the end of the Cold War, US and its European allies have differed on many issues of global peace and security. The US war on Iraq has caused a major rift and has also divided opinion within the European Union about relations with the US. A proposal for setting up of a military force with independent EU headquarters is an indicator of the EU’s desire to create capabilities to pursue an independent foreign policy. This force is intended to be deployed in conflict zones in close coordination with the United Nations.

China and EU: Converging Interests

While there are burgeoning differences between the US and its European allies, the Chinese have been able to convince major European players about the wisdom of entering into mutually beneficial economic deals and to push the contentious issues to the back burner. China wants to extend the already robust EU-China trade relationship to include major defence deals. The US may still believe that American and European interests in containing the rise of China are complementary; the merits of such a policy are becoming increasingly less apparent to the EU. For one, the EU has no strategic stake in the Taiwan conflict that significantly defines the nature of US-China relations. Secondly, since major European players like France and Germany do not view China as a strategic competitor, therefore, selling advanced weapons to China is more of a business concern than strategic. Any change in the balance of power across the Taiwan Strait as a result of European arms sales to China is largely irrelevant to the EU.

Taiwan Arms Imports: Shrinking Options

By convincing major European nations to adhere to its ’One China Policy’, China has ensured that Taiwan does not get advanced military technology from Europe. While Taiwan has a steady supply of arms from the US, its options to buy sophisticated technology from the global market are now very limited. Other than its weapons supplies from the US, the 1992 Mirage deal, that included long and short range missiles for the aircraft, was the last major arms deal that Taiwan concluded with any country. While Canada, Ireland and Israel have supplied Taiwan with light helicopters, armoured personnel carriers and one light transport aircraft respectively, these do not qualify as major arms deals. The bulk of Taiwan’s arms come from the United States. This makes Taiwan’s arms acquisitions heavily dependant on the state of US-China relations.

While the US is committed to helping Taiwan to protecting itself, Taiwan cannot stretch or test the limits of this commitment. Effectively, this means that Taiwan’s struggle for greater sovereign space in the international arena will be more and more constrained in the time to come. President Bush’s reprimand of Taiwanese leader Chen Shui-bian’s proposed referendum in March 2004 is a case in point. The US has advised Taiwan against taking any steps, like the referendum, that would destabilize the situation in the Taiwan Strait. The proposed referendum is directly linked to Taiwan’s arms imports. One of the questions of the referendum asks the people whether Taiwan should expand its defensive capabilities to face the threat from Chinese missiles deployed across the Taiwan Strait. Chen Shui-bian, however, clarified that a negative vote in the referendum will affect only future arms imports and not the current NT$500 billion arms-procurement plan to acquire an advanced anti-missile deployment plan that the Taiwanese defense ministry has been working on since 1997. This NT$500 billion special budget is meant to pay for the eight diesel-engine submarines, 12 P-3C Orion aircraft, anti-missile Patriot PAC-3 systems and four Kidd-class destroyers that Bush administration promised to sell to Taipei three years ago as part of the US arms package.

China’s concerns regarding the US supply of weapons to Taiwan have increased significantly. The Clinton administration had stuck to a policy of only providing defensive weapons, under which they refused the Taiwanese demand for submarines. The present administration in announcing an arms package for Taiwan that includes submarines angered both China and its European allies like Germany and the Netherlands. A recent report in People’s Daily quoted the right-wing Washington Times as saying that the Bush administration is also considering selling Taiwan the Aegis ship-borne missile system which was earlier held back from the US arms package. China needs to keep abreast of the high technology weapons being supplied to Taiwan by the US and for this it needs Europe to play ball on the issue.


However, even if the EU ban on weapons sales to China is lifted, the EU Code of Conduct would still prohibit sale of arms to countries that use it for internal repression or external aggression. In this regard, China’s human rights record and its expressed willingness to use force if Taiwan moves towards greater independence will continue to be issues of concern for the EU. In the short term, the lifting of the ban will have more impact in the political arena with the differences between the US and the EU getting sharper. In the long term, it will significantly alter the balance of power in the Taiwan Strait and redefine the security environment in the Asia-Pacific region.

* Views expressed in this article are those of the author and do not necessarily reflect those of the Observer Research Foundation.

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