International Summer Institute on Asian Integration 2008
GIARI-Waseda

EU Attempts to Lift Arms Embargo on China
and security balance in East Asia:

implications for East Asian integration process

Olena Mykal, PhD

Research Fellow, National Academy ofSciences of Ukraine
olena.mykal@gmail.com
Tokyo
August 29, 2008
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CONTENTS

Introduction

Embargo issue: history&present situation

China’s current trends

1.

China’s military budget&Military capabilities

2.

R&D Expenditures, Research Centres

3.

Technology Transfer

Conclusions

Selected References

2INTRODUCTION•

KEY QUESTION: DOES LIFTING ARMS EMBARGO ON CHINA“AFFECT THE REGIONAL BALANCE OF POWER IN EAST ASIA” (ORIT IS A REMNANT OF THE PAST)?

•WHY? Stable and cooperative Sino-Japanese relations is the key element for
an integration in East Asia.

•THEORY: Realism•

CONTRIBUTION: China embargo has not been seen from this perspective,a case-study to test possibility of integration.

•DATA: Interviews (EU, Japan, China), primary & secondary sources3

EMBARGO
1989: EU imposed embargo on arms exports to China after Tiananmen Square incident
2003: European Council gave mandate to the European Commission “to re-examine thequestion of the embargo on the sale of arms to China.” (Fr&Ger)
2004: - European Council “invite[d] the Council to continue its consideration of the arms
embargo in the context of the EU’s overall relations with China.”- US, Japan severe critics: East Asia security balance would be undermined- China stance: embargo is a political discrimination against China- EU Council: “…arms exports should not be an increase of arms exports… neither inquantitative nor qualitative terms”
2005: - launch of EU, Japan, US, China strategic security dialogue on East Asia
- EU Council: importance of EU-China dialogue on human rights- European Parliament: “.. arms embargo to remain intact until greater progress… madeon human rights and on cross-Straits relations between China and Taiwan, … until the EU
makes its code of conduct on arms sales legally binding.”

Nowadays: EU follows code of conduct, not on the agenda“…Europe is starting to fear the reborn state in which it infused substantial investments, aid,
political efforts, and patience… Albeit that Europe is widely appreciated as an alternative tothe USA, distrust remains present.” (Hoslang)4

CHINA’S CURRENT TRENDS

1) Military budget of China (foreign weapons, military-related R&D)
- Official figures’2008: $59 bn (17.6% increase), 1.7% of GDP, $45 per capita- US estimates: $139 bn, up to 4 % of GDP, No. 2 in the world- Trend: 1999 – $12 bn, 2002 – $20 bn

China’s Military capabilities
Air Force:

Naval Force:

AWACS (Airborne warning&control system)

Kilo-class submarines: little noise

Chinese Fourth-generation Aircraft>Japanese SDF:

Sovremenny II: anti-ship capabilitySU-27: more than 150

SU-30: anti-ship&anti-ground capability
SU-33?: carrier-based fighters

5CHINA’S CURRENT TRENDS2) R&D expenditures & Research centres

China's Government Expenditurefor Science and Research (100 mln yuan)
•1200
•1000
•800
•600

•400
•200
•0

Source: China Statistic Yearbook

R&D % of GDP%

R&D Expenditures in GDP in China, Japan, EU, USA

43,532,52006 - State Council of China adopted the Guidelines on
National Medium- and Long-Term Program for Scienceand Technology Development (2006-2020):- “by 2020, the progress of science and technology willcontribute at least 60 percent to the country’s development.
Meanwhile, the country’s reliance on foreign technology
will decline to 30 percent and below.”- MEANS: enterprises to spend more on research anddevelopment while state financial investment will be used tomainly develop basic research.
- 11 priority areas: energy, waters resources,…nationaldefence.
- National defence: “China will reform the current scientificand technological management system and combine andcoordinate the military and civilian research organizations.”(joint civilian-defence projects)

21,5
10,52010(e)2020(e)2005

EU-252004

Japan

2003

2002

USA

2001

2000

1999

1998

1997

1996

19950Research centres: economic resources, favourable tax
regime, human resources (no shortage in HR)
Major areas: nuclear energy, space industry, high energy
physics,
biology,
computerscience,electriccommunications (advanced level).

China

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CHINA’S CURRENT TRENDS

3) Technology Transfer:- Galileo Navigation Satellite System (EU GPS) – development of satellite guided navigation
technology by domestic industry (military superiority in space is a key element to achieving
operational objectives (PLA)- Areva & Airbus (corporate parent: European Aeronautic Defense and Space): $30 bn
160 passenger planes - about $14.8 billion, Areva - $11.9 billion to build nuclear reactors
Airbus: to award at least 5% of the supply contracts for its next-generation widebody jet, the A350XWB to China and the share “may be enlarged based on the future business plan.”
Areva (nuclear industry): 2 reactors+technology&uranium to dicrease coal dependency. China would buy
35% of the production of Areva’s uranium-mining subsidiary, UraMin, which plans to obtain the nuclear
fuel from its three mines in Africa.
-TT: China introduced 18 363 technologies from the EU with a contract value of USD79.4 billion(Sep’03).

Dual—use goods: The sole embargo that is in force concerns the ban on arms deliveries that wasimposed following the Tiananmen incident. The real impact however is limited, given the fact that Europe
turns a blind eye towards the substantial exports of dual-use goods which are applied in advanced
systems such as submarines and fighter planes. (I. Anthony)
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CONCLUSIONS

Embargo is intact along with:•China’s non-transparent military budget•

China’s advanced military capabilities•Promotion of R&D activities•Technology Transfer to China from Europe

The security balance in East Asia is being changed

WHAT is China Embargo?: Remnant of the past? Matter of perceptions?

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SELECTED REFERENCES
1.
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7.
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11.
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13.
14.
15.

Brussels European Council, Presidency Conclusions, No. 5381/04, Brussels 12-13 December 2003.
Brussels European Council, Presidency Conclusions, No. 10679/2/04 REV2, 17-18 June 2004.
Ting Wai, Recent Developments in EU-China Relations, Materials of the Third European Union Studies
Association Asia-Pacific Conference, Keio University, Tokyo, 8-10 December 2005.
Summary on Japan-France Summit Meeting and Dinner Hosted by Prime Minister Koizumi, 27 March 2005.
Japan lodges fresh protest to EU plan to lift China arms embargo, EU business website, 16 September 2005.
I. Anthony, Militarily Relevant EU–China Trade and Technology Transfers: Issues and Problems (SIPRI, Solna,2006).
M. O’Hara, La coopйration aйrospatiale entre l’Europe et la Chine (Western European Union Assembly, Paris,2004), pp. 6–10.
J. Hoslang, The European Union and China: The Great Disillusion, European Union Review, 2006, Vol. 11. No.
4. pp. 555-580.
East Asian Strategic Review, 2003-2007.
Choi Jiyoung, A Study on the Chinese Nationalism in Sino-Japanese Relations, Materials of the International
Symposium “New Dynamics Between China and Japan: How to build the Future from the Past?” FrenchJapanese House, Waseda University, 27-29 June 2007.
The European Parliament and the China-Taiwan Issue: An Empirical Approach, European Foreign Affairs
Review, 2004, Vol. 9, No. 3, pp. 115-140.
Taeho Kim, Anchoring the Right Pattern of Interdependence and Rivalry: China-Japan Relations under the New
Leadership, Materials of the International Symposium “New Dynamics Between China and Japan: How to build
the Future from the Past?” French-Japanese House, Waseda University, 27-29 June 2007.
O. Mykal, China within Global Technology Transfer of Japan: Implications for Europe, Asia-Pacific Journal ofEU Studies, 2006, Vol. 4. No. 2, pp. 137-166.
China Issues Science and Development Guidelines, 9 February 2006, Chinese Government’s Official Web Portal.
China Issues Guidelines on Science and Technology Development Programme, , 9 February 2006.

9THANK YOU10