EUROPEAN INSTITUTE FOR ASIAN STUDIES 

Newsletter April / 2010

                                                           

 

   Today, the European Institute for Asian Studies (EIAS), a Brussels-based  think tank and policy research centre established in 1989, launches a new online publication, the EIAS Newsletter. Our intention is to provide regular updates on recent and forthcoming EIAS meetings, original content relating to EU-Asia issues, as well as news of other EIAS activities. We hope that you find this a useful contribution to the discussion of the European Union’s relations with its partners in Asia and we welcome any comments and suggestions from our readers for our next edition.

Dick Gupwell
EIAS Vice-Chairman

    

In this issue:

• Measuring China's economic growth 

• A Sino-Indian tug-of-war in Myanmar

• What next for EU-China relations?

• North Korea try to avoid World Cup own goal

• EIAS Events & Activities      

• News round-up

Lunch Briefing on China’s role in Global Production Networks

EIAS hosted a Lunch Briefing on 4th March, where Prof. Ari Van Assche spoke on ‘Are we making a Dragon out of a  Dragonfly? China’s role in Global Production Networks’. In his talk, Prof. Ari Van Assche explained that the general perception that, in recent years, China’s exports have become a major element in international trade, is a considerable exaggeration. This is because half of Chinese exports are composed of processed goods, where only 18% of the value is actually added in China. In effect, a trade triangle has developed between the West, China and the other East Asian economies and any Chinese success in recent years has been linked to the overall success of East Asia.
  
The report of the Lunch Briefing can be read here and the presentation can be found here. 
 
   
EIAS Briefing Paper by M. H. Ting 'Canaries in the Mines: Significance of Sino-Indian Interaction in Myanmar'
 
Although the concurrent rise of China and India has served to increase the relative geopolitical obscurity of South-East Asia, M.H. Ting argues that the region, far from being a peripheral area, is a theatre of primary importance in relation to both Asian giants. Burma/Myanmar, sharing long common borders with both China and India, is chosen as a case study of where Chinese and Indian interests meet and overlap.

M.H. Ting uses the  “prospect theory” to analyse the effects which Chinese and Indian interests in Burma will have on the international system. China and India, as aspiring powers, would be expected “to devote more effort at consolidating their respective positions in Burma as they size each other up, in this context, for status and prestige. Hence, Ting’s allusion to Burma being the proverbial "canary in the mine”.

While explaining China’s and India’s traditional interests in Burma, M.H. Ting notes that, while China began to develop close political and economic relations with Burma’s military junta after 1989, India remained critical of the Burmese regime for some time, instead lending support to Aung San Suu Kyi and Burma’s democracy movement. However, concern at China’s growing influence in Burma led to a reversal of India’s position after 1993. In return, the Burmese military have welcomed India’s growing engagement as a counterweight to China.
  
This EIAS Briefing Paper was published in February and can be read here.
    
  

 

                                                    'Shanghai, a hub of foreign trade,                                                   witnessed China's 13 % decline in exports to the EU last year'

         

The 'Rites of Spring' in EU-China relations

With the end of winter, the return of spring, the end of the Chinese holidays and China's annual session of the People's Congress, the beginning of the 2010 international diplomatic season is underway, marked this year by the arrival in parts of Europe of Vice President Xi Jinping and preparations for a visit to Beijing by European Union leaders in late April, that began with early skirmishes over the exchange rate of the Chinese Renminbi. 

This year these developments were accompanied by the silent release of dramatic EU-China trade figures for 2009, a thoughtful report of a national parliamentary enquiry into EU policy toward China and unconfirmed reports that some member governments and the EU Commission were reviewing such policies.

While it received virtually no public attention, the visit to both Eastern and Western European states by the heir-apparent to the Chinese leadership should be regarded as a significant reaffirmation that Beijing has not completely dropped its diplomacy toward Europe in favour of the US, Asian allies or other important regions. Although some analysts of the Chinese leadership have suggested that Xi's stature may have slipped somewhat, thereby downgrading the value of his foreign contacts, he is still one of the upper echelon of the country and his visit to Europe underlines some continued priority in relations. His visit this year included, not only Russia and Belarus, but also EU members Sweden and Finland. It continues the pattern of high-level Chinese visits in recent years that have included the President, Prime Minister and other senior figures.

Both the EU and the US will also be making high-level economic and policy contacts with Beijing in the coming weeks with the EU team led by Commission President Barosso, Trade Commissioner Karel De Gucht and others, on April 29. De Gucht and EU envoy to Beijing, Serge Abou, in mid-March, both sought to express European discomfort with the Renminbi exchange rate, but also sought to distance Europe from the strong-arm tactics or megaphone diplomacy waged in this area by the US, where Senators have publicly spoken and introduced measures aiming at potential retaliation against the low value of the Chinese currency, on which a US Treasury report is also awaited.

In general, Europeans have been less outspoken about the allegations of currency
manipulation and its impact on trade competitiveness. Also entering the picture, were the Eurostat data for EU-China and other trade for 2009, which were released without fanfare or comment but which deserve close scrutiny and analysis. They seem to show that the highly-sensitive level of EU imports from China, in 2009, dropped by close to 13%, while EU exports to China rose moderately by 4%, leading to a decline in the controversial EU trade deficit of some 35 billion euros. This should be welcome news for the EU, but requires more information and details regarding types of exports and imports, such as whether Europe continued to send components to be assembled in China but imported much less finished products, or exactly what categories suffered or gained in the wake of the economic, financial, trade and social downturn of 2008 - 2009.

In the midst of such developments, there was also additional information within the EU of possible policy reviews toward China, in keeping with some additional tensions over the Copenhagen Climate Change Summit, which severely disappointed and dented the EU, and other issues. The British Government was said to be in the midst of such a policy review. The EU Commission was also said to have completed most of the work on a review and draft of a new Country Strategy. The British House of Lords, on March 22, also released a report on EU policy toward China, which followed a thorough consultation procedure by the EU subcommittee, led by Lord Teverson, including contacts in Brussels and Beijing. The report ranges over virtually all EU-China issues, including the arms embargo and human rights, and should serve as a reference for such oversight by national parliaments.

Further reading:

 

 

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EIAS Events

► 10th - 11th May 2010:

11th WORLD KOREAN FORUM 'The New Era for Korea and the EU'  EIAS, in cooperation with  the Korean Global Foundation (KGF), is organising the 11th World Korean Forum. With representatives attending from all over the world, the forum will be  a major global event covering isses of EU-Korea relations. Several representatives from different EU Institutions including the EC, the EP and the Council have been invited to speak at this conference. Read more.

Interested in attending the Forum? Then please find the programme here and register here.

Other upcoming events:

► Recent developments and outlook for SAARC

► Prospects for Sri Lanka in the post conflict situation

You might have missed...

Asthon wins budget struggle
Lady Ashton, the EU’s foreign policy chief, appears to have wrestled control of the EU’s development budget – the world’s biggest at around 30 billion euros over the next six years. If the move is confirmed, development aid will be distributed by the EU’s External Action Service (EAS), a diplomatic body established by the Lisbon Treaty. The move is likely to face resistance from officials in the commission, who argue that foreign policy and development policy should be kept separate.  
Who's in and who's out at 8th ASEM ?
Preparations for the forthcoming 8th Asia-Europe Summit Meeting in Brussels, in October, have been dominated by the issue of enlargement to new participating countries. Rather than discussing the challenges ahead, some participants from both Europe and Asia reported that much of the time was spent debating whether Russia, Australia and New Zealand should join 43 states, and the EU Commission and ASEAN Secretariat, already involved. While some Europeans are still not convinced that more countries should be added, Asian representatives are keen to balance the recent expansion of EU participants. However, concern has been voiced that, with so many participants, there will be little time for substantive discussions at the summit.
India passes woman's quota for parliament
The world’s largest democracy approved a move to reserve 33% of India’s lower house, the Lok Sabha, for women MPs. The bill, which passed through India’s upper house after being stalled since 1996, is seen as a major step towards gender equality in the country. Women lag far behind men on many economic and health scales throughout India. “This is a historic and giant step towards empowering women and a celebration of their rights,” said prime minister Manmohan Singh. The bill must now pass through the lower house. Last May, the Lok Sabha elected Smt. Meira Kumar as its first ever female Speaker.
Burma boycott
Burma’s main opposition party, Aung San Suu Kyi’s National League for Democracy (NLD) announced they would boycott the country’s first elections in twenty years. The party cited unjust election rules as the reason for the decision, refusing to expel its detained leader Suu Kyi to take part in the polls. While no date has been set for the elections, the military have pledged to hold them later this year.
Bangladesh, India get that sinking feeling
New Moore Island, a tiny sandbank in the Bay of Bengal that had been the subject of territorial disputes between India and Bangladesh, has sunk underwater due to rising sea levels. "What these two countries could not achieve from years of talking, has been resolved by global warming," said Sugata Hazra, an oceanographer at Jadavpur University in Calcutta. The incident highlights the threat posed, particularly to Bangladesh, by rising sea levels. The delta-nation could see as much as 18% of its coastline underwater if sea levels rise one metre by 2050, as projected by some scientists.

 

North Korea prepare to take on the world...on the football pitch

by David Bartram

'Players warm up before a match at the Kim II-sung Stadium, Pyongyang' 

With just over two months until the 2010 World Cup kicks off, all eyes will be on the 32 nations making their way to South Africa to compete for one of sport's biggest prizes. Yet, while every aspect of certain countries' preparations are being scrutinized - just look at the global media coverage David Beckham's torn achilles received - others are receiving less attention.

North Korea qualified for the World Cup for the first time since 1966. It was an impressive feat in itself given that some of Asia’s more traditional football powers, including Saudi Arabia and Iran, failed to make the cut. But how will taking part in one of the biggest shows on earth affect the world’s most secretive state?
  
For a country that usually maintains a blanket ban on foreign press, answering this question has been something of a guessing game. As a result all sorts of rumours have surfaced about how the World Cup will be presented to North Koreans. It was widely reported earlier this year that only matches which reflect favourably upon North Korea would be broadcast. Some even suggested that North Koreans weren’t even aware that their country would be participating in the World Cup.
 
But in reality, argues Nick Bonner, who runs the Beijing-based Koryo Tours, a travel agency specialising in trips to North Korea, the World Cup will be as big an event in North Korea as it will be elsewhere. “There is certainly a massive buzz during the World Cup, and this one will be no different. Although matches are not broadcast live, they are usually shown on Sunday on TV. During this time the streets are empty – everyone watches the game and it’s always the talking point on everyone’s lips.”
 
This North Korea side have the chance to write themselves into the country’s sporting folklore, much like the 1966 team, who shocked the world by reaching the quarter-finals, defeating Italy before narrowly losing to Portugal. The draw for the 2010 competition has paired North Korea with Portugal again. “The 1966 team are greatly revered”, says Bonner. “After the Korean War there were only three buildings standing in Pyongyang but people made footballs out of anything just to play. It truly is the national game in North Korea, everyone kicks a football from an early age.”
  
Mark Rushton, who plays for an amateur football team in Beijing, travelled to North Korea last year to play an exhibition match against a North Korean university. He says that North Korea takes a more conciliatory attitude when it comes to football than in the traditional diplomatic sphere. “We were allowed to play in the national stadium in Pyongyang – something no foreign amateur team had ever done before. It was almost a diplomatic statement.”
  
There is a sense that football could be used by North Korea as a way of reaching out to the world. However, that isn’t to say it doesn’t also become a tool of the type of international gesturing seen from the country in recent years. When North Korea were drawn to play South Korea in the qualifying round for 2010, the match was moved from Pyongyang to Shanghai, after the North Koreans refused to allow the South Korean national anthem to be played – a requirement before all FIFA matches.
   
Yet football has, at least in the past, been an instrument for improving international relations. Pak Doo-Ik, one of the heroes of the 1966 team, still has fond memories of travelling to England to take part in the World Cup. “The English people took us to their hearts and vice versa. I learned that football is not only about the winning. Wherever we go, playing football can improve diplomatic relations and promote peace.” Whether North Korea’s World Cup appearance will be used as such is yet to be seen, but it does appear that North Korea will be experiencing the highs and lows of the World Cup like the rest of us.
                                 

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