China, the European Union, and the International Politics of Global Governance

The global political system has experienced various ongoing and profound transformations since the end of the Cold War in the early 1990s. In general, two themes particularly stand out: the reconfiguration of power relations on a global scale and the accelerated process of globalization, leading to the rise of various global issues, which demand effective solutions that are often beyond the remit of individual states. These two concurrent themes have led to dramatic changes in post—Cold War world politics.

China-European Union (EU) relations have been stable and growing steadily since the mid-1990s, prompting significant optimism in both China and Europe until a few years ago. The momentum of the Sino-EU comprehensive engagement was since 9/11, particularly in the wake of the Iraq War, that the United States began to worry that the Sino-EU partnership would weaken the transatlantic alliance.¹ In 2004, David Shambaugh, a seasoned China watcher, even raised the issue that China and Europe might forge an axis in global politics.² Others speculated whether China and the EU would attempt to develop an “exclusive partnership.”³ In recent years, however, bilateral ties have been increasingly challenged by a number of problems. Sino-EU relations are becoming increasingly more fluid and complex. Observers who were optimistic have now started to be concerned about the long-term prospects for Sino-EU ties.⁴ Other scholars are questioning whether China and the EU can really join hands to shape a new world order.⁵ Indeed, nowadays, negative reports and not-so-sanguine views frequently appear in news reports, various forums, and the remarks of political leaders. From all accounts, it seems that a new dynamic is emerging in Sino-EU relations, generating significant uncertainties in the bilateral ties.

The People’s Republic of China and the European Union (EU)’ are fairly recent arrivals to the international system, both having been established in the aftermath of the Second World War, and both having taken some time before rising to global prominence. However, since 2015 China and the EU have become the top two economies in the world, and they also are each other’s biggest trading partners. The year 2015 marked the fortieth anniversary of the launch of diplomatic relations between the two sides, and since 2003, China and the EU have also recognized each other as “strategic partners” (Reiterer 2013).

Studies of China-European Union (EU) relations tend to privilege interestfocused explanations.¹ In such accounts, China’s main goals in its relations with Europe are usually presented as material—the pursuit of increased trade and investments intended to boost China’s economy. Sometimes, they are also presented as status seeking, as China viewing the EU as a potential great power alternative to US hegemony. Moreover, interaction with great powers—the United States, Russia, and the EU—is believed to confer on China the status of a great power.

China and the European Union (EU) are both active players in the United Nations (UN). As one of the founding members of the UN, a permanent member of UN’s Security Council (UNSC), and a rising power in the world, China’s influence in the UN has been on the rise. The EU, along with and through its 28 member states, is a major financial contributor to the UN and has always been an important player in UN-sponsored global governance, especially after its “super observer” status in the General Assembly (UNGA) was established by Resolution 65/276 on May 3, 2011. Nevertheless, as two significant and influential actors, their coordination in the UN in security, political, or developmental areas has not been developed at a high level, as was imagined, due to their different status, positions, strategies, values, and so forth.

Since the eruption of the global financial crisis in 2008, the Anglo-American model of financial regulation has been widely discredited. Indeed, while this crisis is still referred to as a “globa” crisis, it was in effect a specific form of capitalism associated with the “West” that was really in crisis.¹ The crisis exposed the severe shortcomings of a global financial architecture “known variously as neoliberalism, the Washington Consensus or the globalization consensus,” centered on the notion that all governments should liberalize, privatize, and deregulate their economies to generate growth.² Even the architect of “the Washington Consensus,” John Williamson, acknowledged that the crisis had done much to undermine confidence and faith in the (neo)liberal approach, and instead fortified proponents of strong state forms of capitalism such as the “Beijing Consensus.”³

The concept of the rule of law was originally developed in the context of domestic legal systems characterized by a high degree of centralization, institutionalization, and hierarchization.’ During the last two decades, though, significant efforts have been undertaken to apply this concept to the international legal order. The growing consensus on the importance of the rule of law is best demonstrated in the field of international trade, which currently functions as one of the most regulated and institutionalized domains of global governance. It is now widely recognized that the rule of law strengthens international trade and that international trade can reinforce the rule of law accordingly.² On the one hand, domestic legal systems and international law can provide a stable legal environment that regulates imports and exports, constrains protectionism, and favors foreign investment. On the other hand, the use of international arbitration or dispute settlement at the national and international levels strengthens the rule of law. Even the general recognition in international trade regulations that “the best form of dispute settlement is dispute avoidance”³ reinforces the rule of law as it pushes states to adopt transparent and publicly accessible trade regulations.

This chapter explores the areas in which China and the European Union (EU) meet to cooperate or compete with each other in managing global financial affairs. It adopts an approach that combines the core elements found in realist, liberalist, constructivist, and evolutionary approaches. The chapter focuses on the International Monetary Fund (IMF) at the global level as the primary institution for analysis. At the regional level, it focuses on such major regional institutions as the European Bank for Reconstruction and Development, the Asian Development Bank, and the Chiang Mai Initiative Multilateralization (CMIM). The CMIM is viewed by some observers as a mini-IMF in Asia. The chapter examines three policy areas in which China and the EU compete or cooperate with each other in the IMF: their monetary contributions, their personnel contributions, and their policy contributions. It argues that despite the rise of China, the country’s ability to contribute to global financial governance has been relatively limited and uneven up to this day. This is due mainly to the structure of the global financial system, which favors the dominance of the EU and the United States in it. Such embedded dominance has led China and likeminded countries, individually or collectively, to look for alternative structures, resulting in a financial world that is increasingly more pluralistic and polarized. China’s accumulation of huge amounts of sovereign reserves and its plan and ability to use them effectively to enhance its economic growth have helped facilitate the emergence of a new global financial order.

Asia-Europe Meeting (ASEM) was founded in 1996 to be “a useful process for promoting further cooperation between Asia and Europe” in the fields of political dialogue, economic cooperation, and other areas such as cultural communication and social development.’ However, ASEM’s significance has never been limited to Asia and Europe. Actually, the founding fathers of ASEM had greater ambitions at the global level, arguing that “this partnership aims at strengthening links between Asia and Europe thereby contributing to peace, global stability and prosperity.“² With the development of the ASEM process, more and more global issues appeared on the agendas of Asian and European political leaders and in various chairman’s statements and declarations, as well as follow-ups. However, it is still controversial whether and to what extent ASEM performed as an efficient and effective regime in that field.³ Researchers often focused on the forum itself, for example, the level of institutionalization, while seldom paid enough attention to its actors. Could we imagine that ASEM would maximize its multilateral utility for global governance without the common endeavor of those great powers from both Europe and Asia?

Traditional security issues are about the threats against the essential values of the state, territorial integrity, and political sovereignty. Means, which are also important in defining traditional security, consist of weapons, armaments systems, and the military, but diplomatic means like pacts and alliances aimed at building special relations between states for security purposes are also means of traditional security. All such means, as well as the essence of traditional security, are constantly changing under the impact of technological innovation, new ideas, and political evolution. Today, change in three areas shapes the security agenda of states like China and international organizations like the European Union (EU). First, the security of the states is within the competence of the primary institution of the world, the United Nations (UN), which promotes multilateralism as a form of collective security protection. In the past 30 years, recourse to multilateral peace operations has been increasing, and, major states like China, and the most important international organizations, like the EU, have been directly involved in the advancement of the principles, rules, and mechanisms of multilateralism. Second, a new form of cooperation is gaining momentum at the regional level, complementing and gradually overcoming the tried and tested form of military alliances.

Nontraditional security issues have steadily risen in significance since the 1990s, albeit more so in the European than in the Chinese context. Whether that rise results in greater prospects for EU-China security cooperation, particularly at the global governance level, requires further analysis of the notion of nontraditional security, of the degree to which the European Union (EU) and China have similar understandings of its meaning and applications, and of the extent to which EU-China cooperation on nontraditional security issues has taken place so far.

Global climate change poses observed impacts and future risks to the international community and is one of the major issues on the agenda of global governance. In order to reduce and manage the impacts and risks related to climate change, international efforts over the last two decades have seen the evolution of global climate change governance. While a diverse range of fora have taken up the issue of climate change since 2007, the climate change regime within the United Nations (UN) system is recognized as the leading institutional arrangement of global climate governance, with the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol as the legal basis. Tough negotiations continue toward a possible new global climate change agreement reached at the end of 2015.

The focus of this chapter is on the evolution of the EU-China relationship and its impact on the international human rights regime. The latter is understood to be the system of principles and norms based on the Universal Declaration of Human Rights (UDHR), and encompassing in terms of procedures “various UN institutions including the Human Rights Council and bodies that monitor implementation of international human rights treaties” (Sceats and Breslin 2012: 1). The chapter zooms in on how the shifting constellation of world power is fundamentally altering the distribution of capabilities and identities. It particularly looks into how this development is affecting the respective posture and strategies of the European Union (EU) and China with regard to international human rights.

Development is a declared common objective of both the European Union (EU) and China (Millennium Declaration, Busan Declaration). But besides some common ground, the EU’s and China’s strategies often differ, notably in the ways to achieve a common objective.