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Europe’s ‘Principled Pragmatism’ on the South China Sea

Theresa Fallon
Commentary, 12 July 2016
China, Maritime Forces
Following the technical ruling in favour of the Philippines by the Permanent Court of Arbitration, and with China increasingly flexing its muscles in the South China Sea, the EU is trying to balance supporting the rule of law with a pragmatic desire to maintain good relations with Beijing.

The EU’s approach to China’s assertiveness in the South China Sea can be described as ‘principled pragmatism’, based on a pragmatic pursuit of its own interests on one hand and on upholding the principles of international law on the other. The conundrum for the EU is how it will balance the principle of supporting the rule of law against its pragmatic desire to stay on Beijing’s good side. 

Beijing is concerned not only by the Arbitral Tribunal’s ruling, which it has declared that it will not abide by; it is also concerned by the court of international public opinion. It has worked to discredit the tribunal and has refused to recognise its authority. In this it has also made efforts to shore up support from countries around the world. 

A diverse range of countries including Poland, India and Fiji have indicated that China’s official news agency, Xinhua, has misrepresented their respective positions on the tribunal. In the process China has paradoxically magnified the international dimension of the dispute by using carrots and sticks to encourage countries to support its proposed bilateral approach, rather than the application of rule of law under the United Nations Convention on the Law of the Sea (UNCLOS). It is widely acknowledged by legal scholars that the ruling alone will not settle the issue but will create clarity and a foundation on which to begin a process of negotiations which will eventually help lead to a settlement of the dispute. 

In the past, the EU has carefully danced around the complex issues involved in the South China Sea disputes. Beijing has clearly signalled that it considers the territorial disputes in that sea to be a series of bilateral issues between China and each of its neighbours, rather than a multilateral issue. It has warned the EU not to meddle in this issue and to stay out of it. The May 2014 White Paper that China issued after President Xi Jinping’s visit to Brussels clearly reflects this. The joint statements of all past EU–China summits mention crisis hotspots where the EU and China could co-operate (for instance Ukraine, Syria and Libya) but studiously avoid mentioning the South China Sea because of China’s opposition. 

The EU certainly has no interest in antagonising China. It already has enough problems of its own, both internally (migration, terrorism, economic imbalances) and externally, along its southern and eastern frontiers. The EU needs China as a security partner in international crises, given the latter’s global influence and its permanent membership of the UN Security Council. More importantly, China is perceived as a trade and investment partner with the potential to stimulate the sagging European economy. 

Chinese investment in Europe has ramped up. According to the Rhodium Group, between 2000–14 Chinese companies spent $52 billion on direct investments in the 28 member states of the EU. Investments increased after the sovereign debt crisis when European assets could be bought at reduced prices. The largest beneficiaries of Chinese FDI were Europe’s ‘Big 3’ countries:  $13.8 billion was invested in the UK; $7.8 billion in Germany; and $6.7 billion in France. In 2015 Italy became the largest recipient of Chinese FDI with the sale of Pirelli to ChemChina. Competition between EU member states to attract Chinese FDI may give Beijing increased influence and leverage. 

The EU and its member states are also interested in participating in China’s ‘Silk Road’, or Belt and Road Initiative, which promises new infrastructure connections between China and Europe, supported by a $40-billion Silk Road Fund and by the new Asian Infrastructure Investment Bank (AIIB). The UK, France, Germany and Italy decided to join the new bank in March 2015. Despite US opposition to the AIIB, fourteen of the 28 EU member states joined. There was no co-ordination at the EU level about individual member states joining the AIIB. China often plays one EU member state against the other to influence EU policy.

The EU’s unwillingness to take China to task was clearly shown in the statement made by EU High Representative Catherine Ashton in November 2013, when Beijing unilaterally imposed an Air Defense Identification Zone over disputed waters in the East China Sea between China and Japan. At that time, the EU called upon all parties ‘to take steps to calm the situation’, even though the source of the crisis was clearly a measure taken by China. This watered down statement, designed not to upset China, had the unintended consequence of angering both Japan and South Korea. 

In May 2015, the new EU high representative, Federica Mogherini, spoke at the Shangri-La Dialogue held in Singapore and did not mention the South China Sea issue directly, although she did refer to ‘some maritime disputes’ that were ‘far from being settled’ and called for a ‘maritime order based on international law’. Some felt she was tone-deaf when she highlighted in this context the near-token co-operation between the EU, China, Japan and the Republic of Korea in the fight against piracy in the Horn of Africa and suggested that it could be expanded. In 2015 there were no reported pirate attacks in the Horn of Africa. The prospect therefore of the EU co-operating with China in security and defence puzzled and disconcerted some Asian participants.

So far the EU has been quite happy to leave the burden of maintaining security and stability in Asia to the US. It has benefited from the US naval presence and from open sea lanes of communication in the South China Sea. President Barack Obama’s interview in The Atlantic criticised Europe’s free-riding as the EU does not share the burden of political or economic costs. Lack of substantial action by European partners in Asia will be difficult to camouflage.

The EU is a party to UNCLOS. Nevertheless, according to some diplomats the EU’s fear of upsetting China prevented Brussels from sending an observer to the Arbitral Tribunal hearings in The Hague. Diplomats who attended the hearing privately reported  a sense of shock that the EU chose not to send an observer. China’s efforts to discredit the Arbitral Tribunal, coupled with the EU’s professed support for the rule of law, would have made attendance by an EU observer a significant symbol of support for the arbitration process. Instead, a Brussels official stated that the EU preferred to see what the final outcome of the Arbitral Tribunal was, rather than send an observer. This pragmatic hedging approach allows the union room to manoeuvre until a decision has been made on the case, but it does not win it points from those ASEAN countries that have sent observers to the Arbitral Tribunal hearings. 

Perhaps in response to the EU’s absence from the tribunal hearings, as well as to lobbying by partners, Brussels issued a statement on 11 March 2016 in which it took a public stance in support of the principles of international law in the South China Sea. This short statement took months to write, as 28 member states had to agree on the language. Although China was never mentioned directly, Beijing was irritated. The statement demonstrated the limits of China’s cheque-book diplomacy.

Is the EU’s principled pragmatism approach sustainable? Despite its need for good relations with China – for security and economic reasons – the EU is founded on rules established to settle international relations, so it cannot renege on its very founding principles. If it did it would lose all credibility. 

After the judgement of the Arbitral Tribunal is announced, the EU is expected to make a new statement, one which will once again uphold the principles of international law while being careful not to criticise China directly. When the 28 members of the EU speak with one voice on an international issue, their message has significant weight and reinforces international legal norms when they are violated. It is likely that the US will ask the EU to be part of  a joint statement in order to magnify the impact. 

Ultimately, however, these are only statements; the EU must now take the difficult step of applying its principles in a more concrete way. Last year Mogherini declared at the Shangri-La Dialogue: 

the EU has a military dimension as well: our economic face is the one most Asians (and also most Europeans!) are more familiar with ... So please, please don’t look at us just as a big free trade area: the European Union is also a foreign policy community, a security and defence provider. 

However, Beijing clearly signalled that it does not want the EU to play a role in the most important security question in Asia – the South China Sea. Just how the EU will pragmatically square its principles with its need to have good relations with China remains to be seen. 

Theresa Fallon 
Senior Associate, European Institute for Asian Studies.
Twitter: @TheresaAFallon

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