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CIAO DATE: 4/5/2007
Facing China's rise: guidelines for an EU strategy
Philip Andrews-Speed, Axel Berkofsky, Peter Ferdinand, Duncan Freeman, François Godement, Eberhard Sandschneider, Antonio Tanca, Marcin Zaborowski
December 2006
Abstract
With its booming economy, China is emerging as the key player in Asia-Pacific and possibly as the world’s next superpower. So far, China has mainly developed as a ‘trading power’ – concentrating on the expansion of its economy and retaining a relatively restricted international role. However, there is no doubt that the dynamic rise of China’s poses major challenges to the status quo in the region with consequences for its neighbours and other powers present there, such as the US and, increasingly, also the EU.
Clearly, China has always been a power to be reckoned with, but over the last decade its influence and ‘punch’ at the global level have grown at an accelerated pace, changing the international system. There are three major areas in which ‘China’s rise’ is beginning to have global implications:
The economy – the impact of China’s economic expansion has been affecting global markets since the 1990s. In the last few years, China’s trade surplus as well as its stock of foreign currency and bonds have grown to the point at which Beijing’s policies are key factors shaping the global economy.
Energy – in the last five years China has become an energy importer; it is already the world’s second biggest energy consumer (the first being the US). China’s demand for energy has pushed prices up with implications for other consumers and for the geopolitics of energy-rich regions.
Global governance – in response to its growing energy needs China has invested in some states in the Middle East and Africa, where its interests and relationships with local regimes are often in conflict with both the US and the EU. This raises the question as to whether China sees itself as a shareholder in global governance and international security or not.
