Upsetting Asia’s Delicate Balance

The irony was delicious. Who would ever have thought that the principal source of disagreement between U.S. President George W. Bush and his European hosts last week would have been a European desire to sell arms and an American determination to stop them from doing so? Yet so it proved. Not even a shared dinner of lobster risotto and truffle sauce could get Bush and his French counterpart Jacques Chirac (who in this case speaks for Europe old and new) to agree on the European Union’s plan to lift its embargo on supplying defense technology to China, imposed after the Tiananmen Square massacre in 1989. Bush wants the embargo to stay, lest European goods one day be used against U.S. forces, who are pledged to defend Taiwan from an unprovoked attack by China. Chirac, by contrast, said that the embargo “is no longer justified and has to be lifted.”

The conventional wisdom in Europe is that the ban (which has never been watertight) will be ended this year. Conceivably, though, threats of retaliation from the U.S. Congress might convince the E.U. to back downSen. Richard Lugar, chairman of the Senate Foreign Relations Committee, told the Financial Times recently that he would support a ban on the export of sensitive American technology to Europe if there were a chance it would end up in Chinese hands. That will be enough to persuade some European firms with substantial American businesssuch as BAE Systems, the U.K’s largest defense companyto stay out of the China game. But for many other European firms, the lure of the China market will be too strong to resist and they will find specious justifications for their sales. (The most specious was offered by the French Defense Minister, who seems to have convinced herself that European exports will stop China’s development of its own capability in high-tech systems.) Though the E.U. is working on a code of conduct that willit is saidprevent the export of anything really nasty, there’s little point in lifting the ban unless everyone expects that trade between the E.U. and China will thereby grow.

What will the E.U. sell, and what does China want to buy? In a recent interview with TIME, German Chancellor Gerhard Schrder declared that his nation “has no intentions whatsoever of delivering weapons to China.” Well, finealthough in the view of some analysts, it isn’t really weapons that the Chinese want. But it isn’t bratwurst, either. “The Chinese are not as likely to purchase off-the-shelf weapons systems as they are military-related technologies,” says Evan Medeiros of the Rand Corporation in Washington. “Possible examples include submarine engines, fire control systems for air defense missile batteries, or over-the-horizon targeting.” The Chinese want such technology because the People’s Liberation Army has been on a modernization drive. It has cut forces by hundreds of thousands of personnel and revised its strategies from human-wave attacks toward surgical strikes. The short-term objective is not necessarily the capability to invade Taiwanwhich China regards as a renegade provincebut to possess the missiles and submarines that would make a threat of invasion credible enough should Taiwan ever think of declaring formal independence.

The security of Taiwan, however, does not seem to have entered into European calculations. It shouldnot just because Taiwan is a democracy, but because it is emblematic of a larger point. Though Europeans seem blithely unaware of it, the strategic balance in East Asia is extraordinarily fragile. Political relations between China and Japan are frosty. Japan has, for the first time, just agreed with the U.S. that peace in the Taiwan Strait is one of its security objectives. North Korea could yet collapse into chaos, unify with the South, and leave China without a buffer state between itself and the U.S.’s allies. Many of the tensions in the region would be resolved if China were to develop into a democratic society that neither threatens its neighbors nor feels threatened by thema consummation devoutly to be wished. But the future may not be so benign. A China where nationalism has replaced Marxism as the legitimating ideology of the state could yet turn into a regional bully.

With China’s likely path still unclear, it hardly seems sensible to shift the balance of power in East Asia. And Europeans should be under no illusions: in Asia, ending the embargo will be seen as a case of China convincing the E.U. to do something the U.S. doesn’t want. The policy shift, says Yan Xuetong, director of the Institute of International Studies at Tsinghua University in Beijing, will be evidence of nothing less than “a common interest in Europe and China to combat world domination by America.” After a week in which Bush and European leaders reaffirmed their shared values, it is hard to believe that the Europeans really want to send such a signal. But if the embargo is lifted, that is the signal that Asians will receive.