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EU to challenge US on china

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The big EU powers are moving to lift the ban on arms sales to China in a frontal challenge to U.S. policy and power in Asia

By Stephen Glain

Newsweek International

Aug. 9 issue - Bush administration officials call it the "new great game." It threatens to rival the war in Iraq as a source of transatlantic tension and poses a serious, if subtle, challenge to U.S. hegemony in the world's most dynamic and populated region.

The European Union is reviewing the arms embargo imposed on China after the 1989 Tiananmen Square crackdown, and is likely to scrap it soon, widening Beijing's access to modern weaponry. Pentagon officials say France and Germany, which are spearheading the drive in the face of fierce U.S. opposition, hope to have the matter settled in time for a Sino-EU summit in December. "The Americans are laying very clear markers to warn the Europeans how they feel about this," says Banning Garrett, an Asia expert at the Washington-based Atlantic Council of the United States. "But there is a good chance the embargo will be lifted late this year."

The embargo battle reveals the creeping return of multipolarity in a world dominated by a single superpower for the last 15 years. Earlier this year, during a visit by Chinese President Hu Jintao, French President Jacques Chirac said it "makes no sense" to maintain the embargo, given the improvement in Chinese civil liberties since Tiananmen. While the United States has cajoled EU members into respecting the arms sales ban, its stand is beginning to erode under the centrifugal forces of Chinese growth and EU expansion in a global marketplace. "In Singapore, they're talking about shifts in the 'balance of influence' " in China's favor, says Clyde Prestowitz Jr., president of the Economic Strategy Institute in Washington. "In Australia, they're asking, 'Please do not ask us to choose between Washington and Beijing.' The unipolar world is being challenged in Asia."

Ending the embargo has been on the EU agenda for years, in part as a carrot for China's economic liberalization. Chirac argues that the West sells weapons to countries at least as oppressive as China, and that closer defense ties could be used to press for reform in Beijing. EU leaders were poised to discard the embargo before May, when the bid stalled with the arrival of 10 new EU members, many of them small states that are close allies of the United States. However, says Frank Cevasco, president of Cevasco International defense consultants, senior officials of the new EU member states say the Germans and French are already confronting opponents with a mix of threats and rewards to end the embargo, and the resistance is likely to get "rolled over" in the next round of lobbying.

Bush administration officials say the embargo is crucial to "managing" China's evolution as a regional power. Removing it now, they argue, would reward an autocratic regime and imperil American forces should they be deployed in support of Taiwan, which Beijing regards as a breakaway province. Washington has even threatened "in the most emphatic manner" to deprive NATO allies of new defense technology if they drop the arms ban, says Cevasco.

The official EU position is that there is no move to end the embargo, but many of its leaders have made their intentions plain. In March Javier Solana, the EU's top foreign-policy official, spoke of the evolving "comprehensive strategic partnership" between China and Europe, and the need to "solve" the embargo. Even leading critics of Beijing's human-rights record, like the Netherlands, are no longer holdouts. "If we were the only country to refuse lifting the embargo," Dutch Prime Minister Jan Balkenende said in May, "it would not be good for economic relations with China."

Lifting the embargo would not have a rapid impact on China's military. Chinese ódefense spending is rising faster than its gross domestic product, says Frank Umback, an Asia expert at the German Council on Foreign Relations. Since 2000, China has been the world's largest arms importer, and its $50 billion to $70 billion defense budget is the third largest in the world behind the United States and Russia. EU rules give each member effective veto power over arms sales, and it is unlikely the Union would approve any deal that would tip the balance of power in Asia.

What Pentagon officials fear is a ripple effect. China's wish list includes information systems and radars, precision-guided munitions, advanced diesel-power submarines and over-the-horizon missile-guidance technology that would deny the U.S. Navy's ability to operate safely from behind Taiwan."When the EU abandons the embargo, the second- and third-order effects will be significant," says a senior U.S. Defense official. Nations already selling to China will be "compelled to offer ever- higher levels of systems," says the official, and for those who have restrained themselves at U.S. request, like Israel, "the urge to sell will become irresistible."

The United States is already struggling to stop sales to China; in May, Washington blocked the sale of a Czech radar system. China has used Russian technology to develop its own diesel-powered, shallow-water sub, and Israel has been selling lethal weaponry to Beijing for years, much of it purchased from or developed with its American ally. For example, Chinese fighter jets carry Israel's Python 3 heat-seeking missile, which is based on the U.S. Sidewinder.

The EU is expected to surpass Japan as Beijing's largest trading partner this year, and both sides are eager to build on their growing trade. Beijing is participating in the EU's $3.3 billion Galileo observation-satellite project, though the Europeans refused to share the project's military and data technologies after heated discussions with the United States. After Chinese Prime Minister Wen Jiabao's lobbying tour of Europe earlier this year, British Prime Minister Tony Blair unveiled $1 billion in new Anglo-Chinese business deals and British officials suggested the embargo had exhausted its useful life.

European leaders make no secret of the fact that China is their most effective counterweight to U.S. hegemony. EU External Relations Commissioner Chris Patten said recently that China has a "multipolar view of the world into which Europe fits rather well." Four days before Taiwan's March presidential elections, France held its first joint naval maneuvers with China. Umbach says China is playing Europe against America, forcing Washington to pay attention to EU-China ties "it has tended to overlook." The game is on; Washington must play.

© 2004 Newsweek, Inc.

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