SINOGRAPH

Fading Europe aids China's US ties
By Francesco Sisci

BEIJING - The day before the start of the strategic dialogue between China and America, on July 27, Beijing released the news that President Hu Jintao had sent his Taiwanese counterpart, Ma Ying-jiu, a telegram applauding his election as the ruling party (Kuomintang, KMT) chief. It was the first direct communication between the rival leaders.

Chinese strategists think that, in a nutshell, the controversy between China and the United States can be reduced to the issue of Taiwan. Certainly, China and the US have and will have many points of friction, including clashes on trade, economics and human rights, but none is as relevant and burning as that of
Taiwan, which has preserved its de facto independence for decades thanks to American support.

If the US does not sponsor what Beijing calls "splittist" activities, but conversely favors a peaceful solution to the Taiwan issue, there should be no more major strategic issues with China. On the contrary, Beijing would be grateful to Washington for its role in creating a peaceful resolution with Taiwan.

A solution to the Taiwan issue is not quite there - many details have to be resolved. However, in recent months, with the Ma Ying-jiu presidency, there have been many steps forward. There have been so many that even the formerly pro-independence Democratic Progressive Party made contact with Beijing directly, signaling an end to its former hostilities with the mainland.

In Washington, the first round of dialogue with Beijing was successful. The two sides agreed that there were positive achievements in the economic dialogue, although progress on concrete bilateral trade and economic issues was limited. Most importantly, American President Barack Obama saluted the beginning of the dialogue as the one relationship that could provide a major framework for peace and development in this century.

China, America’s largest creditor with almost US$2.2 trillion of reserves, has the largest say among foreign countries in the destiny of the greenback. In America, many economists reckon that a devaluation of the dollar could improve the overall balance of banks and credit institutions and could help the country to get out of its present financial crisis.

China is scared of a possible dollar devaluation, which would devalue its dollar-denominated assets. However, even this possibly major source of friction can be avoided. In almost-bankrupt California, Republican senatorial candidate Bill Mundell says that dollar devaluation could be limited if the state were to privatize public assets to replenish its coffers. This plan could be extended nationwide and help turn around the crisis, argues Mundell - something that would be welcomed by China and could draw the two countries even closer together.

In any event, this is a dialogue between America and China, with a role for Japan, the world's second-largest creditor. Europe is out of the picture because it has no major dollar holdings.

Strategically, China has leverage with North Korea and Iran, the two major flashpoints of global politics. And China has a major interest in the stability of neighboring Afghanistan. Europe as a whole and individual European countries have limited or no leverage over Iran and North Korea, and despite their troops in Afghanistan, Central Asia is very far and remote from their interests.

Furthermore, China’s economy will most likely grow in the coming decades - and so will its political power. Therefore, Europe’s relative gravitas in both global affairs and American issues will proportionately decrease.

The euro is a very important currency, and it will remain so for many years. However, without a political head, it is bound to remain little more than an instrument of trade. Furthermore, the European Union is without a united foreign or defense policy, and thus collaboration on military campaigns is bound to remain negotiated by the US on a country-by-country basis, while the EU's overall might won’t massively increase. In other words, European countries' participation could grow more cumbersome and less essential in the coming decades.

Certainly, many countries will keep their niches. Germany and the northern countries will hold on to their specialization in mechanics; Britain will be one of the centers of finance and higher education; France will dictate the standard for bon ton and good wines; Italy will remain some kind of open-air amusement park with good food and good weather; and the Iberian Peninsula will continue to be the picturesque European projection of Latin America. All of these things are of keen interest but realistically out of the big game - although few will admit it, out of politeness and memory of the old might.

These trends are surely not set in stone, and they can be reversed and changed by setting in motion different trends. But to do it, Europe should develop its own unified Asia policy, set its own priorities and learn to have one voice on the euro and European defense strategy. However, there are no signs that Europe or individual European countries are realizing their incumbent marginalization - and even less showing any sign of reaction to it.

If that were to occur, the whole geopolitical game would take a very different spin. Europe is after all still the largest trading power in the world, but it is a gigantic hydra with no legs and 25 heads. Will European governments take the hint from the US-China dialogue and see that they have to move now because in five or 10 years it will be too late? It is unlikely.

No single government is willing to cede power to Brussels or other fellow European governments. There is not even a single official language for Europe or European citizens. Brussels speaks a Babel of 25 languages and interpreters are mostly useful in light of some Keynesian scheme for useless jobs. If a single European party were to speak on behalf of unity, it would not know in which language to start. Curiously for the unreligious EU, extra-learned Catholic Curia priests, proficient in a dozen languages, would be the only officials able to talk to almost all Europeans.

In fact, the case for unity is useless, but yet present institutions do something positive: they check and constrain the political movements and agendas of single countries. In this way, European countries have the worst of both worlds. They don't have enough unity to move as one, and yet they have too much unity to each move alone. If they were alone, each could at least develop its own strengths. Yet, it is very hard to see European countries shaking their EU shackles.

This absence has been there for a long time - so long that we find it no longer relevant. However, this absence will give an extra boost to US-China ties. For both countries, there is no one else that will be as politically attractive or interesting as the other for the next 50 years. Even if Europe takes just 10 years to wake up, it may be too late to unravel the strong relationship that will have developed between the US and China in this decade.

In the end, the absence of Europe could be the yeast of trans-Pacific ties - the gluing factor, like the absence of air - between the US and China.

Francesco Sisci is the Asia Editor of La Stampa.