Implications for transatlantic relations
Based on these competing interests, the rise of China presents a significant challenge to transatlantic relations. However, defending liberal goals will be complicated by the existence of asymmetric interests in the US, Canada and Europe, and by Beijing’s pursuit of ‘wedge’ strategies that exploit this asymmetry.
Asymmetric interests
First, although stakeholders in the transatlantic relationship all value liberal institutions and principles, their direct interests are engaged at very different levels. Asymmetric interests will be particularly pronounced in the security realm. The US is allied with Japan and the Philippines, which face direct territorial threats from China; this makes the US the transatlantic actor most attuned to Chinese territorial revisionism and violations of international maritime law in Asia. European countries, distant from China and lacking regional alliances, will be much less likely to react; they will have a harder time convincing their publics to forgo the economic gains of accommodating Beijing, or to pay the costs of confronting it. So far, the UK and France (which both have interests and historical ties in Asia) have participated in freedom-of-navigation operations in the South China Sea; those countries are more likely than other transatlantic actors to engage in collective security operations in East Asia. France, for example, is sensitive to the free passage of shipping through the South China Sea, as well as to the security of a million French nationals in New Caledonia and French Polynesia. Still, East Asia’s vast maritime geography means that a threat to one country (for example, a Chinese threat to Japan in the East China Sea) need not present a threat to other actors in the region, thus undermining collective security actions.43
In the economic realm, asymmetric interests will also complicate transatlantic efforts to counter Chinese mercantilism. Major exporters will place a high value on access to the Chinese market; other countries dependent on capital inflows will prioritize cultivating good relations with Beijing to attract Chinese foreign direct investment (FDI). According to Sophie Meunier, Europe has shown significant discord in its policies vis-à-vis Chinese investment. European countries have responded to increased Chinese FDI ‘with competition and cacophony, each one scrambling to attract investment to its own territory and negotiating its own terms with China’. This ‘cacophony’ has led to a situation in which China has been able to access the EU market without reciprocating in kind. As Meunier notes:
Chinese investors have ample access to EU countries with few establishment restrictions in place, whereas EU investors face a variety of regulatory hurdles in China, such as requirements to enter into joint ventures with local partners (which can lead to transfers of technology with damaging effects to Europe in the long run) or bans on investing in several sectors altogether.44
Countries also have asymmetric preferences and interests when it comes to human rights policies. For example, many European Union countries reject the idea that human rights should serve as a primary driver of their relations with China. Certain EU countries (notably Germany, Sweden and the UK) are sometimes active and vocal, or active but more discreet, about putting pressure on Beijing. Others are passive, even counterproductively so, in encouraging China to improve its human rights record.45
Wedge strategies
International relations theorists have noted that the process of balancing against a threat – mobilizing national resources and forming alliances with other countries – is often delayed and inefficient. Because internal mobilization is costly, states prefer to free-ride on the efforts of others when trying to discern whether a country’s intentions are status quo or revisionist.46 A country that is the target of a balancing coalition can exacerbate these obstacles through ‘wedge’ strategies: in other words, it can use a mix of incentives and deterrents to divide potential allies, thus diluting the power and will of a counterbalancing effort.47
China has already used wedge strategies to exploit asymmetric interests among the transatlantic partners.48 One of its key levers is economic: Daniel Twining notes that, in the past decade, ‘a wave of Chinese capital has washed over Europe’s shores, transforming property markets from London to Lisbon’.49 To divide the EU from adopting policies critical of or hostile to Chinese interests, Beijing lavishes individual countries with favourable trade or investment deals. In particular, as Meunier notes, China ‘woos aggressively the countries of Central and Eastern Europe separately from the rest of Europe, notably because of their lax, if not non-existent, regulatory conditions for entry’.50 Increasingly, China has sought to advance its interests by interfering in local politics in several countries – in New Zealand, Canada and also in Germany.51 Among other things, Beijing seeks through such actions to prevent the EU from speaking with a unified voice on and with China.
Beijing seeks to prevent the EU from speaking with a unified voice on and with China
China’s wedge strategy towards the EU has already produced victories. In 2016, a tribunal at the Permanent Court of Arbitration issued a ruling about disputed territory in the South China Sea. Before the verdict was announced, diplomats had considered a joint US–EU statement to underscore the tribunal’s legitimacy. As Theresa Fallon notes, Chinese diplomatic efforts (particularly towards southeastern Europe) thwarted any such unity.52 Since then, Chinese inducements have led Greece and Italy to join the BRI. Greece, receiving Chinese investments, objected to commenting on the 2016 tribunal verdict, and prevented the EU from criticizing China’s human rights record at a UN forum.53 China has also organized the ‘16+1’ group – a group that includes China and several Central and Eastern European countries (11 of them EU members). Greece has recently announced its intention to join. Many Europeans fear this organization will become a vehicle for dividing Europe: undermining single-market rules and key China-related EU policies, such as ‘a proposed screening process for foreign investments in areas that include crucial infrastructure and military technology companies’.54
Another wedge divides the US and Europe, preventing the emergence of a transatlantic coalition. During the Obama administration, Washington and Tokyo took a hard line against China’s creation of the AIIB, arguing that the new bank would undermine the liberal development regime guided by the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and other liberal institutions. But the UK (soon followed by France, Germany and Italy) joined the AIIB, arguing that it could do more to shape the bank’s policies from within. Twining notes that ‘by luring America’s closest friends into the new grouping over loud protest from Washington, China has demonstrated the limits of U.S. influence in Europe, and its ability to checkmate American power in allied capitals’.55
43 Lind, J. (2014), ‘Geography and the Security Dilemma in Asia’, in Pekkanen, S., Ravenhill, J. and Foot, R. (eds) (2014), The Oxford Handbook of the International Relations of Asia, Oxford: Oxford University Press.
44 Meunier, S. (2014), ‘Divide and Conquer? China and the Cacophony of Foreign Investment Rules in the EU’, Journal of European Public Policy, 21(7): pp. 996–1016, doi: 10.1080/13501763.2014.912145 (accessed 2 May 2019).
45 Rühlig et al. (2018), Political Values in Europe-China Relations.
46 On intentions, see Edelstein, D. (1990), Over the Horizon: Time, Uncertainty, and the Rise of Great Powers, Ithaca, NY: Cornell University Press. On buck-passing, see Walt, S. (1990), The Origins of Alliance, Ithaca, NY: Cornell University Press. On ‘underbalancing’, see Schweller, R. (2004), ‘Unanswered Threats: A Neoclassical Realist Theory of Underbalancing’, International Security, 29(2): pp. 159–201, www.jstor.org/stable/4137589 (accessed 2 May 2019).
47 Crawford, T. (2011), ‘Preventing Enemy Coalitions: How Wedge Strategies Shape Power Politics’, International Security, 35(4): pp. 155–89. On strategies used by allies to counter wedge strategies, see Izumikawa, Y. (2018), ‘Binding Strategies in Alliance Politics: The Soviet-Japanese-US Diplomatic Tug of War in the Mid-1950s’, International Studies Quarterly, 62(1): pp. 108–20 (accessed 2 May 2019).
48 Zhiquin, S. (2012), ‘Understanding China–EU Relations’, Carnegie-Tsinghua Center for Global Policy, 15 October 2012, http://carnegieeurope.eu/publications/?fa=49688&lang=en (accessed 2 May 2019).
49 Twining, D. (2015), ‘China’s Trans-Atlantic Wedge’, Foreign Policy, 23 March 2015, https://foreignpolicy.com/2015/03/23/chinas-transatlantic-wedge/ (accessed 2 May 2019).
50 Meunier (2014), ‘Divide and Conquer?’.
51 Poggetti, L. and Shi-Kupfer, K. (2018), ‘Germany’s Promotion of Liberal Values vis-à-vis China: Adapting to New Realities in Political Relations’, in Rühlig et al. (2018), Political Values in Europe-China Relations.
52 Fallon, T. (2016), ‘The EU, the South China Sea, and China’s Successful Wedge Strategy’, Asia Maritime Transparency Initiative, 13 October 2016, https://amti.csis.org/eu-south-china-sea-chinas-successful-wedge-strategy/ (accessed 2 May 2019).
53 The Economist (2018), ‘China has designs on Europe. Here is how Europe should respond’, 4 October 2018, https://www.economist.com/leaders/2018/10/04/china-has-designs-on-europe-here-is-how-europe-should-respond (accessed 22 May 2019); and Horowitz, J. and Alderman, L. (2017), ‘Chastised by E.U., a Resentful Greece Embraces China’s Cash and Interests’, New York Times, 26 August 2017, https://www.nytimes.com/2017/08/26/world/europe/greece-china-piraeus-alexis-tsipras.html (accessed 2 May 2019).
54 Peel, M. (2018), ‘Bulgaria to host contentious China summit’, Financial Times, 18 May 2018, https://www.ft.com/content/
e0dd5d3a-5aa1-11e8-bdb7-f6677d2e1ce8 (accessed 2 May 2019).
55 Twining (2015), ‘China’s Trans-Atlantic Wedge’.