Last year proved a tipping point for China’s approach to the world. The confluence of Europe’s debt crisis and America’s contracting defence budget has created rising expectations that China will shoulder ever greater power burdens for international stability.

No longer can it keep a low profile in international strategic and economic affairs. Could it join America as a world policeman sooner than expected?

Beijing’s push outwards has happened faster than its most ambitious leaders could have expected. But as it extends its reach to diversify investments, protect oil interests, patrol shipping lanes and support overseas workers, it risks unexpected ripostes. Every superpower eventually faces blowback.

A honeymoon decade of frictionless business expansion worldwide is over. Already China is embroiled in skirmishes and politicking on new frontiers. After the murder of 13 Chinese sailors on the Mekong river in October, China dispatched armed patrols into Burma, Laos and Thailand, the unruly states forming the notorious Golden Triangle. China is now the Mekong’s de facto river cop.

To predict the outcome of this, consider how Chinese investments were a contested issue in the recent election campaign in Zambia. Even in China-friendly Burma, a giant dam project orchestrated by a Chinese company was just shelved due to local popular opposition.

As China increases its commercial presence in resource-rich countries, such scenes will play out more often. The number of Chinese workers abroad expands by the day. In Libya, more than 35,000 Chinese workers had to be evacuated in March. The combination of search and rescue operations with interests in natural resources can thrust substantial burdens on a nation. Great powers have often been moulded by events rather than grand strategy. The commercial adventures of the East India Company compelled the British state to intervene in China, sparking the opium wars.

China’s traditional inclinations have been to work directly with other governments and demand assurances of protection for Chinese interests, while also freeriding on the security provided by western players, as in Afghanistan. But the absence of credible government in Somalia, for example, has forced China to contribute more heavily to anti-piracy operations in the Gulf of Aden. While it is still reluctant to vote in favour of interventions such as in Syria, that could change. China has more blue helmets UN peacekeepers worldwide than other Permanent Security members.  Much as western powers have long used the UN’s legitimacy as cover for their own interests, China could do the same.

The west should view this as an opportunity, not a threat. China should be encouraged to move from hands-off non-interference to engage, as it has done over Iran, North Korea and Sudan. The Mekong river incident and the rescue operation in Libya reveal how China has launched its own ‘responsibility to protect’ doctrine, at least concerning its citizens and workers abroad.

China has crept into the superpower league by deftly building friendly ties with regional powers. While it may seek to avoid choosing sides between various rivals, it will inevitably suffer repercussions as its influence grows. Just as few predicted five years ago that China’s navy would be patrolling the Gulf of Aden, we could one day witness Beijing demanding action in the UN for crisis intervention in a resource-rich country, such as Angola, where it has big interests.

This might not fit with the ‘responsible stakeholder’ mantra promulgated in western capitals several years ago, but China can be motivated to collaborate through self-interest. As the US and Europe have learnt in the Arab spring, China is taking note that negotiating solely with regimes is inadequate. The Lancang-Mekong navigation route could be the Gulf of Aden or the Katanga copper belt of Africa as resource corridors open, they become not only channels of commerce but also conduits for warlords and hijackers. To ensure long-term access to resources, China will have to make friends across the spectrum beyond the Gaddafis and Mugabes.

If it pursues this proactive strategy, China can leapfrog centuries of imperialist missteps and avoid blowback. After all, China has to date not been conquering colonies but rather buying them. This may sound optimistic. But while many in the west tend to quail at the thought of an increasingly interventionist China, it is just possible that an assertive Beijing protecting its interests could also be good news.

Parag Khanna is a Senior Research Fellow at the New America Foundation, Senior Fellow at the European Council on Foreign Relations, and Director of the Hybrid Reality Institute.

 Jonas Parello-Plesner is a Senior Policy Fellow at the European Council on Foreign Relations. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson. The original version of this paper was posted pm the Financial Times and can be accessed here. 

1. A regional solution to global imbalances: We need a Beijing Accord
2. Need for a paradigm shift in Mekong management
3. Sino-Indian relations: Beijing muffs its hand

Great powers are sometimes moulded by events as much as, if not more than, by grand strategy. In 1898, the United States — at the time an isolationist and anti-colonial power — entered onto the world stage after Spain allegedly sank the USS Maine in Havana Harbor.

The commercial adventures of the East India Company compelled the British state to intervene in China, sparking the Opium Wars, while in 1850, the British foreign secretary, Lord Palmerston, ordered the British navy into the Aegean in order to protect a British subject, Don Pacifico, and reclaim his lost property. All were defining historical moments, even if they were identified as such only in retrospect. They demonstrate that the greater a rising power’s economic interests in a foreign land and the more nationals it has involved there, the more likely it will feel compelled to act should events threaten either.

Libya might be such a defining moment for China. The veto-wielding Security Council member joined the international community this weekend in voting for a UN resolution that includes a travel ban; an asset freeze on Moammar Gadhafi and his family; and a referral of the situation to the International Criminal Court (ICC). All of this behaviour is novel and unusual for China. Influencing China’s position on reference to the ICC could have been the broader demand, beyond the West, from African and Middle Eastern nations in the UN. There was also strong and unanimous backing for suspension of Libya in the human rights council.

But recent events in Libya have made China bend its cherished principle of non-intervention, most pressingly by forcing it to launch its biggest-ever rescue mission of Chinese nationals. Some 32,000 Chinese citizens in Libya are in the process of being rescued, with the majority already out of the country. A Chinese frigate that was participating in anti-piracy operations in the Gulf of Aden has been deployed in the rescue efforts. Four Chinese military transport planes were also sent. When these planes lifted off from Xinjiang, it marked a new departure for China as a great power, symbolising Beijing’s realisation that respect for national sovereignty sometimes has to be squared with pragmatic solutions to pressing problems.

This is in stark contrast to 2007, when China vetoed a UN resolution criticising Myanmar. Then, the Chinese ambassador swept the issue under the rug, stating, ‘No country is perfect.’ China also routinely blocks international action over other intransigent governments like Zimbabwe and North Korea.

Now, in Libya, China seems to be promoting the doctrine of the ‘responsibility to protect’ — a doctrine Beijing has traditionally feared might be used against it regarding its own dispute-ridden provinces. China has not conceded on all of its red lines, of course. Beijing was reluctant to suspend Libya’s membership on the UN Human Rights Council and insisted that doing so did not represent a precedent. It is also dragging its feet on the establishment of a no-fly zone over Libya, an option now being discussed by the US and its partners outside the UN.

At the outset, China eyed the revolutions in the Middle East cautiously. Tunisia resembled a miniature China, with an authoritarian regime and relatively high growth. Chinese officials tried to let the issue slip under the radar, in order to prevent sparking internal debates about the value of the Beijing consensus abroad and — even worse — at home.

On Egypt, official Chinese press coverage was directed mainly toward efforts to get Chinese nationals out of the country. Their numbers — around 1,800 — were far smaller than in Libya, but Chinese rescue efforts there included the evacuation of around 300 Taiwanese, giving Beijing the perfect opportunity for positive press spin in China. This also served to divert Chinese press coverage away from sensitive issues about democracy and social change.

Beijing’s ambition was to continue promoting a similar press line on Libya, but Gadhafi’s violent struggle to hold onto power made that impossible. By throwing the country into chaos, the Libyan leader made the orderly evacuation of Chinese nationals more difficult. In so doing, Gadhafi infringed on China’s most holy principle: stability. Some nations are carrying out rescue operations without the full consent of the Libyan authorities simply because there is either no one to ask or no one able to answer with authority. Although it has not reported any such operations, China has probably faced similar difficulties in effecting its own evacuations, adding to the novelty of the current mission for Beijing by further reducing its compliance with the traditional principles of nonintervention and sovereignty.

What explains China’s change of tack on Libya? Had Beijing blocked action at the UN while having difficulty getting its nationals out of a chaotic situation, it would have had a tough time selling its policies as a success to domestic audiences. China’s desire to enhance its international respectability also plays a role. The Libyan situation comes at an opportune time for China to attempt to reverse the image it acquired in Asia during 2010, its annus horribilus. China spent much of last year being portrayed in the region — rightly or wrongly — as an overly assertive bad neighbour.

The need to protect its economic interests and nationals abroad are thus giving China’s foreign policy a new twist. Trends like these will bring China further out into the world and test its principles, just as broadening interests changed the behavior of the UK and the US in preceding centuries. In 1850, Lord Palmerston compared British subjects to a citizen of ancient Rome, who could proudly assert his rights by announcing ‘Civis Romanus sum’ — ‘I am a Roman citizen.’ According to Lord Palmerston, ‘a British subject, in whatever land he may be, shall feel confident that the watchful eye and the strong arm of England will protect him from injustice and wrong.’

China’s citizens are starting to feel the same need for protection all over the globe, forcing Beijing to shoulder one of the many burdens of great-power status. This time around, it is a burden that coincides perfectly with Western interests.

Jonas Parello-Plesner is a Senior Policy Fellow at the European Council on Foreign Relations. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson. The original version of this paper is posted in World Political Review. This paper may not be on-published without permission.

1. China takes on the mantle of a great power
2. UN Security Council resolutions on Libya and the significance of ‘R2P’
3. Libya and R2P: The limits of responsibility

The EU can work together – at least when it is pushed together. China’s heavy-handed effort to get European nations to skip the Nobel peace prize ceremony in Oslo last week did the trick.

Not only did member states show up but Serbia and Ukraine, both countries with EU ambitions, were encouraged to show up as well. Yet this was atypical of a relationship with the EU in which China, with newfound power, has found it easy to divide-and-rule.

While the European Council focused on the Euro crisis this week, away from the limelight, EU leaders were also adopting a new China policy. In fact, discussion about this policy began four months ago when EU leaders took up Europe-China relations. Then the issue was overshadowed by the internal EU topic of the day: Romas. Dealing with China was relegated to short talks and coffee breaks.

This story, unfortunately, reveals a lot about the EU’s strategic outreach. The EU looks inward and seems more destined to be an enlarged Switzerland than the missing link between the US and Asia in the shaping of global affairs. China has recognized this, and increasingly sees Europe as an investment opportunity rather than as a global partner.

On a recent trip to Beijing, I met a range of prominent Chinese officials and academics and not one asked me how Europe intended to influence the revised US strategy toward Afghanistan or about European views on the upcoming referendum in Sudan. To Beijing, Europe is not so much post-modern but post-global.

How can the EU’s strategic shrinkage can be reversed? EU Council President van Rompuy’s comment in September on the need for ‘reciprocity’ — giving to China only when the EU gets something back — was a good start. In line with this, the new draft EU trade policy looks at the possibility of closing off the European public procurement market if China does not give the EU reciprocal access to its market. This tough EU language has not gone unnoticed in Beijing. Chinese interlocutors ask about it repeatedly. China understands a clear but consistent message.

But by itself, this new approach will not be enough. The EU must pursue a set of commonly agreed aims. Europe needs to set urgent, coherent strategic priorities and set aside strategic patience and trust. The process of setting new trade policy priorities needs to be extended to the political realm. Member states must select a few priorities on which they really want to engage with China. Non-proliferation, climate change, good governance and human rights are good candidates.

In addition, Europe must work together to present a united front. Resisting the bilateral twitch is difficult. Bilateral visits like UK Prime Minister David Cameron’s recent trip to China and Chinese President Hu Jintao’s visit to Paris are locked in the logic of bilateral trade promotion. But seeing links to China mainly as a bilateral issue rather than a European-wide interest means accepting a weak position vis-a-vis Beijing. China deals with Europe as it is, not how we dream it is. While European states pursue their own agendas, China will get free traders in the Northern countries to block moves that it sees as too strong, while ensuring that indifferent Southerners dilute policies on human rights.

A purely bilateral vocabulary seems increasingly anachronistic when an Airbus is assembled with sub-components from all over Europe. Member countries must acknowledge that signing up to the EU is a binding commitment. A high-level EU official conceded that the just adopted internal strategy paper was kept relatively bland because of suspicion that it would be leaked to China. As a result, it couldn’t contain a more detailed game plan for how to secure EU interests through trade-offs and linkages.

The EU’s bilateral instinct can be overcome. The internal pressure for multilateral compliance should be stronger once the External Action Service is up and running. But the EAS is no deus ex machina. Member states must be continuously engaged to pursue reciprocal engagement with China. The European Parliament, with its new say over foreign policy, could play an important role by naming and shaming member states that subvert the EU’s strategic priorities in exchange for bilateral advantages.

A joined-up China policy is needed urgently, events tend to overtake the EU while it ponders policy. This year, it was Chinese investments in Europe, particularly in government bonds from Greece to Spain. China’s investment in Europe is a natural diversification from a dollar overdose. Chinese investment should be welcome, but the EU should be an intermediary so that this process is not framed as a bilateral favour that creates political dependency between China and member states. Eurobonds, which have also been widely discussed as a solution in the euro crisis, could be a useful tool in this.

For EU foreign policy ‘czar’ Catherine Ashton and her team in Brussels and Beijing, fleshing out the elements of a common EU China policy means anticipating events and providing guidance for how individual actions and bilateral visits play to (or undermine) Europe’s strength. For example, the EU needs a code of conduct for dealing with Liu Xiaobo after the Nobel debacle. Such a code of conduct could be minimal. The important point is that it is adhered to. Member states must make strategic choices that do not favour short-term national rewards at the expense of Europe’s strength. The member-states of the EU must move China up the policy agenda and act in unison if they want to reap the benefits of stronger ties to China and avoid being divided and ultimately ruled.

Jonas Parello-Plesner is a Senior Policy Fellow at the European Council on Foreign Relations. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson.

1. China into the European breach, but not just yet
2. European debt crisis: European fragmentation?
3. EU-China relations: Disappointment after Copenhagen

There are a couple of certainties about Cancun. It will not bring a global deal. The US will try to focus the agenda on a lack of transparency in China’s emissions control efforts — to cover the fact that the US also brings nothing substantial to the table and is stuck in an anachronistic, fuel-guzzling economy and mindset. Chinese negotiators will arrive with their usual arguments, but equipped with better PR techniques for making sure they aren’t seen as the game stopper — the real lesson they took away from Copenhagen. The poorer countries will clamour for more aid for both mitigation and adaption to climate change. The EU’s credibility among other key players will be slightly dented by its current internal skirmishes on moving from 20 per cent to 30 per cent reductions by 2020. At the end of these two weeks in Mexico, those who aspire to a global deal will be directed towards 2011 and South Africa, and few will believe that it can happen there either. Finally, the summit will be a lot warmer than Copenhagen, and the general world temperature will continue to rise, as the scientists keep telling us.

The conclusion is that big global deals are off – at least for the time being. That’s the short, and somewhat depressing, summary. Yet Cancun doesn’t have to finish up before we can start looking at where we go next. Nor are huge international summits the only way forward. For Europe, if the road to a global deal is blocked, there are other routes to take. The EU can make progress on climate change without the entire world’s simultaneous agreement, and should not stay purely on the multilateral track that is leading to the same dead end as the WTO-negotiations on the Doha-round. This is where the EU, which is in itself the world’s biggest multilateral adventure, has to demonstrate ingenuity and innovation. Bilateral agreements with nation states outside Europe and cooperation with non-state actors are two ways forward.

In the absence of a worldwide deal, the EU should pursue climate change agreements with countries like China, India and Brazil that can be initiated bilaterally and then feed into the global system. These should be based on joint reduction-settings, and include EU soft loans for buying energy efficiency and renewables. A similar approach is already working in the arena of free trade; having recognised that global free trade talks were stalled, the EU has bilateral trade agreements in the pipeline with several Asian countries. These might prove to be the stepping stone for returning to a global agreement. Likewise, bilateral climate change deals could be the building blocks that later allow the EU to return to the multilateral table, bolstered by new partners who support a global deal.

Let us examine the potential for greater EU engagement with China on climate change. This is not to point an environmental finger at Beijing. The US is a much larger per capita emitter than China, but is gridlocked internally and with the likes of Sarah Palin talking about a climate change ‘hoax,’ any deal with Washington seems unlikely in the near future. Meanwhile, China is the world’s largest emitter, albeit with lower per capita levels, and climate change is already a major priority in EU’s relations with China.

We shouldn’t underestimate the EU’s influence. Copenhagen is perceived as a disaster for the EU yet many concrete Chinese projects like carbon-free cities are developing because of the EU not the US. The EU should enhance that and develop a concrete partnership with China based on the latter’s own ambitions relating to energy efficiency. The next key phase is the current elaboration of the new Five Year plan in March 2011. China wants to achieve sustainable growth. The EU should be plugged even further into this. In this area, existing networks with internal Chinese actors will also an asset, and there are huge economic possibilities for the EU. As a study by the HSBC bank concludes, the low carbon energy market in the European Union and China already makes up half the global market; this proportion is projected to grow further by 2020. The EU should, however, remember to push for reciprocity. For example, Europe could seek to include in any energy efficiency deal measures that would gradually see China’s national aims become binding targets for a multilateral solution. The EU would only bring its valuable technologies to the table if China also was willing to gradually re-commit to higher multilateral targets.

The EU must also expand its policy options by examining the potential of bottom-up approaches and cooperation with non-state actors. Just as the EU itself is a multi-layered civilian power, with interplay between nation-states, civil society groups and citizens, the new world order is not only about power shifts to the emerging BRIC powers. It is also about the development of a flat, inter-wired world with non-state actors influencing global governance. It is these transnational networks of business, industry and citizens that EU should cooperate with in curbing climate change. It is business that will produce the new innovative solutions to climate change – not the dictates of government. It is citizens and groups that demand that their pension funds orient their investments in a climate friendly direction. And finally it is individual decisions that make people change lifestyle and reduce their carbon footprints. Look at the newspaper ads leading up to Cancun in the UK by a group of companies lobbying for stricter corporate reporting on carbon emissions! If such initiatives spread to Chinese and American companies, that would influence their government and could strengthen the push for climate change far more than international pressure at global summits.

The EU should not give up on global multilateralism — its own raison d’etre. While pursuing bilateral deals, there is also room for joining forces with other states and regional groupings. For example, although the EU acting alone has had little success in its attempts to pressure China into greater commitment to the multilateral track, the solution could be for Europe to cooperate with others in influencing Beijing through Climate Change agreements. Likewise, the bottom-up approach to multilateralism that engages business and civil society has the potential to succeed where efforts to persuade governments have failed. While it waits for the world to inch towards a global deal, the EU can take positive strides in other directions using the best of its own peculiar form of transnational network and civilian engagement.

Jonas Parello-Plesner is a Senior Policy Fellow at the European Council on Foreign Relations. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson.

1. Copenhagen to Cancun: Where is climate change policy going internationally?
2. Dispelling illusions on China and climate change
3. Roadmap for US-China cooperation on climate change

It is the biggest multilateral event this side of the G20, including the leaders of India, China, Japan, Korea, Indonesia and Australia. On Saturday the 30th of October the 16 leaders of the East Asia summit will gather in Hanoi, with special representation for both Russia and the US. Secretary Clinton is joining as the latest leg of her impressive Asia-Pacific trip. From Russia, Lavrov, is flying in. The EU, however, is conspicuously absent.

During the Bush-administration there was no American interest in joining the East Asia Summit, perceived as another talk shop with concrete results. The Obama administration reversed all that. It both signed up for Asian multilateralism – the Treaty of Amity and Cooperation with ASEAN – and made sure it brought something to the negotiation table. At the Asian Regional Forum in Hanoi in May – normally a dull meeting (including the EU) with minimal impact on global headlines – the US, backed by the countries of South East Asia, brought up the South China Sea issue with China. The ripples of that encounter are still lapping up against the shores around Asia.

Russia first pushed itself into the East Asia Summit at the original 2005 gathering in Kuala Lumpur, where Putin showed up as a special guest of the chair. Since then, Russia has shown its consistent interest in being involved, and signed the treaty of Amity and Cooperation. That paid off, and Russia will – like the US from 2011 onwards – be joining at the top-level.

The story of EU involvement, unfortunately, is a sad one. Originally there were differing views inside the EU on whether to try to join the East Asia Summit when it was set up in 2005. There were also differing views whether the EU should sign the admission ticket, which is the treaty of Amity and Cooperation with ASEAN. The treaty is generally speaking a peace treaty. It is also a treaty steeped in the language of its birth years, the 1970s, and replete with language on non-interference and sovereignty. Consequently, it’s not quite a mirror image of the EU’s values.

The EU decided to sign up collectively in late 2006, and it was ASEAN’s turn to be bureaucratic. It demanded a treaty change, as the EU is not a state entity. That, and other national concerns, prompted France to go it alone and sign up individually. The UK government proposed to follow suit but never found a suitable occasion to take matters further. Germany stayed with the common European platform. Since then, the ASEAN amendment was completed in May this year, and the EU is potentially (finally) in a position to be invited to join the East Asia Summit.

But there are still questions to answer before the EU decides that it should join (or before it would be allowed to join) the East Asia Summit.

First, who will be Mr. or Mrs. Europe? At the moment, Asians are probably – and rightly – worried that inviting the EU would entail a huge delegation: It could turn into a combination of the two Presidents, Barroso and van Rompuy (as in the European set-up for the G20), tailgated by the still-functioning rotating Presidency. Add to that Asian uncertainty about whether the big EU countries that signed up bilaterally would also demand an individual seat. That makes the lack of an Asian invitation to the EU quite understandable.

Europe is no longer a particularly compelling world power, with a natural right to occupy several seats just to satisfy questions of internal coordination and the big-power aspirations of individual member states. The fact that there are many Europeans in the negotiating rooms also doesn’t bring better results (as the negotiations in Copenhagen last year demonstrated). The EU must wake up to a new reality, particularly in Asia, where it doesn’t have an automatic seat at the table. Accordingly, the EU should show up with its president, and make it clear to the Asians that, if invited in 2011, Europe will be a one-person show, roughly equivalent to Obama and Medvedev.

Secondly, the EU needs to bring clear priorities to the negotiating table. When Clinton brought up the South China Sea in May, she was rightly addressing worries of the South East Asian states. The message was clear and it had resonance and impact. If the EU had been present tomorrow in Hanoi, its strong priorities would be free trade and the demand for a genuine and concerted push in completing WTO-free trade negotiations. The recently completed free trade agreement with South Korea would match the EU’s continued free-trade credentials. Free trade is an area where the EU currently has a more coherent position than the US, which remains hampered by Congress and a blind-eyed focus on the appreciation of the renminbi as the only international cure to trade issues. The Asians would listen and appreciate to a European message. Another priority area could be climate change.

In short, it could be done with a compelling and coherent voice that would be listened to by the rest of the summit. But back to reality. The EU is not present at the East Asia Summit. It should be. With one president.

Jonas Parello-Plesner is joining the European Council on Foreign Relations as Senior Policy Fellow. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson.

This article was first posted here on the European Council on Foreign Relations website.

1. The East Asia Summit: ASEAN’s forum for maintaining peace
2. The United States and the East Asia Summit: a new beginning?
3. Will the US commit long term to the East Asia Summit?

The saying ‘forget about Europe’ has become common in Asia in 2010. It has been reinforced by the euro crisis provoked by massive Greek debt. After the euro crisis the Chinese financial press largely wrote Europe off or compared it to Latin America after the 1980s debt crisis. The economic basis for the EU’s power is decreasing. The eternal process that characterised the Lisbon treaty, which is now finally in place, has been perceived as endless procedure for Asian outsiders with little impact while the global order moves on.

Yet the EU still has something to offer in Asia. It is moving ahead on one important area where it has overtaken the US: trade. It is often said that the business of Asia is business. The EU understands this, and has just agreed to a far-reaching free-trade agreement with South Korea. That is the right message from the EU to Asia for this week’s top level gatherings when the Asia-Europe Meeting (ASEM) and EU-China and EU-Korea summits are being held in Brussels from the 4 to the 6 of October.

The trade deal will take effect from July 2011. Combined EU-Korea trade in goods was worth about 53 billion euros in 2009, according to EU statistics. The agreement is predicted to create about 19 billion euros ($24 billion) of new exports for EU producers.

The agreement is noteworthy for three reasons.

First, it is the largest free-trade agreement since NAFTA in 1994. It is the most comprehensive free trade agreement ever negotiated by the EU. Import duties are eliminated on nearly all products. There is liberalisation of trade in services. It is therefore a clear signal from Europe and Asia about continuing free trade even in difficult economic times.

Secondly, the EU is ahead of the US. The US Korea free trade agreement, KORUS, is still stalled. Negotiations about this agreement started long before the EU’s. Congress has kept the agreement pending. Obama has promised to give the agreement a push forward and trade ministers will be working hard to achieve a result before the G20 meeting in November in South Korea. Yet protectionist siren songs are being heard louder and louder across the US following a continued jobless recovery. The need for a speedy appreciation of the Chinese yuan is a constant demand. There is no desire for more Asian exports. And even in Asia the, EU comes first. Seoul’s trade ministry said that ‘The pact will bring about economic benefit more than a free trade pact signed with the US.’.

Thirdly, the timing is perfect. The agreement sends a great signal before the upcoming G20 in South Korea of certain commitments by the EU: to free trade, to linking with Asian economic powerhouses and particularly to South Korea. The G20 will for the first time be hosted outside a G8 country and for the first time to be hosted in Asia. Consequently, finalising this agreement shows respect for the new found power of Asia. And this respect is shown not only to China, India and Japan but also to upcoming middle powers like South Korea.

The EU should use the G20 Summit, and the EU-South Korea summit preceding it, this week on the 6th of October, to upgrade its relationship with South Korea to that of a strategic partnership. South Korea has an economy worthy of G20 status, adheres to democratic governance and values; and is committed to a multilateral approach. Equally importantly, it is the first nation to have moved from being a developing country (with a GDP per capita similar to contemporary Afghanistan after the destruction of the Korean War) to joining the OECD club of development donors.

The EU disperses more than half of the world’s development aid so a strong partnership with South Korea in that domain is desirable. It would give the EU increased leverage with other powers like China and India who still hold that their original developing country status exempts them from global norms in the development area. South Korea demonstrates that just because you were once a poor country doesn’t mean that you can give aid without any conditions regarding governance.

The EU now has to prove that the South Korea agreement was not a lucky one-off on trade and push forward with the free-trade agreements with India and with ASEAN.

The EU is still a big rumbling machine moving in odd ways. The economy is not in great shape. There might be more Greek-like debt incidents to come. Still, it remains the world’s largest economic and trading bloc. In a time where it gets harder and harder to keep protectionist voices down, the EU has given Asia just the signal it needs that there is readiness to keep the free trade agenda moving. The EU is showing why it shouldn’t be counted out in Asia.

Jonas Parello-Plesner is joining the European Council on Foreign Relations as Senior Policy Fellow. He has worked as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson.

1. U.S. trade policy in Asia: Going for the Trans-Pacific Partnership?
2. America, trade, and Asia
3. East Asia must share Obama’s leadership to keep trade open

There are rumours that Kim Jong-il will visit China late-March. If the visit takes place, it must be after the 18 March when the joint US-ROK military training ends, which is regarded by North Korea as a prelude to war. The supreme commander can’t be seen to leave the country during that period. Alternately, the visit might be made by a top official in the North Korean system, such as Kim Young-nam. So, what should we expect from this meeting?

Broadly speaking, our expectations can be framed around Kim Jong-il’s promise to his people.

Kim has promised to the North Korean people to make the country strong and prosperous by 2012, the centenary of the birthday of his father, Kim Il-sung’s. On the face of it, this promise is illusory. The North Korean leadership is probably the least accountable leadership in the world. It was casual about the plight of its people during the famine of the mid-1990’s, and on numerous other occasions.

Kim’s deadline of 2012 is important during a time when his succession remains to be settled. Recently, the North Korean economy has been given higher priority. This was highlighted by the North Korean leadership’s unusual apology for the disastrous currency reform, and acknowledgment of the regime’s failure to provide basic material comfort. For the North Korean leadership, there will have to be some practical results as we move toward 2012. These practical results will be what Kim is looking for out of China. Could they be in the arena of economics, or will they take the form of progress on the nuclear question?

As for the nuclear question, the Six Party Talks are still in official hibernation, with a flurry of bilateral consultations taking their place. Recent Chinese statements that the talks could restart in the first half of this year are promising. The renewal of talks would place China back in its preferred position as mediator. Outside of these negotiations, North Korea is often portrayed as China’s headache. When North Korea is anchored in the negotiation room, it becomes the US’s headache. Getting negotiations started is therefore clearly in China’s interests. It could also help China on another nuclear case, namely Iran. Getting North Korea back to the table could demonstrate the value of negotiations instead of sanctions.

But restarting these talks will require China to employ some deft diplomatic manoeuvring. The US and its allies have demanded progress on North Korean denuclearisation before starting talks on other issues. North Korea has demanded bilateral talks with the US, and an abolition of the US’ hostile policies, including sanctions.

This looks like a possible re-run of the Banco Delta Asia-affair in 2005, where North Korea demanded bilateral negotiations with the US. But, unlike Banco Delta-Asia, these current sanctions can’t be separated in a bilateral way – they are based on UN resolution 1874. Besides, China has also stated that the sanctions are a separate issue.

A further issue is that the US is more constrained by the continuation of bilateral negotiations. Bilateral negotiations could sideline US allies like Japan and South Korea. They could also reaffirm to North Korea that there is a reward for abandoning the Six Party Talks.

Despite all of this there remains a possibility that the Six Party Talks could be restarted. A possibility which would satisfy North Korea on bilateral talks, and the US, Japan and South Korea on Six Party talks, could be for the Chinese to restart Six Party talks and the sub-working groups simultaneously. One of these sub-groups could deal with bilateral US-DPRK relations including diplomatic recognition. The US and DPRK might then meet bilaterally in this Six Party talks sanctioned format. Or the Chinese might have other similar diplomatic tactics to secure face-saving for both parties.

For China, a visit by Kim could and would be employed to confirm North Korean willingness to reengage in talks. Kim will want something in exchange from the Chinese. Most likely, this will take the form of investment, and this is where the economic side comes in.

Every time Kim goes to China the question is posed about whether North Korea will copy China’s economic reforms. The simple answer is that, for North Korea, this is not really possible. North Korea’s leaders realised early on that full-blown economic reforms would blow the current regime away. Regime survival trumps the economic benefits of following the path of China and Vietnam’s economic reforms. And ever since North Korea started timid economic reforms in 2002 there have been successive efforts to rein in market forces; currency reform in 2009 being the latest attempt to stamp out middle class traders selling Chinese goods in local markets.

Yet despite its reluctance to embrace economic reform, North Korea still needs foreign cash to survive, and particularly it needs cash from China. There is talk about signing an investment agreement in March between Chinese companies through the Taepung group, and the North Korean State Development Bank, with investments expected to total more than $10 billion. This level of investment sounds unrealistically high for North Korea to absorb in a short period of time yet a lower number would also be welcomed.  Demonstrating the importance of the agreement, Kim Jong Il, or another high-level dignitary, is expected to attend the signing ceremony.  An agreement like this would provide Kim with some desperately needed foreign currency, as well as providing the leadership with a concrete economic achievement.

Even Chinese investment will not be enough to reverse North Korea’s dismal economy. North Korea will not be prosperous in 2012 by any standards. So Kim cannot easily make North Korea both strong and prosperous – although he may make it strong by sticking with the nuclear weapons.

The nuclear arsenal, then, is both a bargaining tool, and the regime’s insurance policy. North Korea, without nuclear capacity and missile technology; would be a poor Communist country in a remote area in Asia likely to attract about as much news coverage and international attention as Laos.

Kim has little room for manoeuvre. By 2012, he has promised to make North Korea both strong and prosperous; a deadline that will be very difficult to meet no matter how successful his diplomacy. He also faces the vexed issue of succession. Notwithstanding possible new investments and renewed momentum in relation to the Six Party Talks, a visit to China will only serve to highlight these problems.

Jonas Parello-Plesner is Executive Director of a Danish NGO. He used to work as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson and regular columnist on Asian affairs.

1. The Cheonan sinking and Kim Jong Il’s China visit: Now what?
2. Kim Jong-il goes to Beijing
3. Kim Jong-un’s regime: facing up to domestic challenges, China and the US

Relations with North Korea seem heeded in a more positive direction after the Chinese PM Wen’s visit to Pyongyang, President Hu’s talk with Kim’s envoy and after the informal meeting between State Department official, Sung Kim and North Korean nuclear negotiator, Ri Gun in San Diego at the end of October. Yet tensions are still simmering with the naval clash between North and South Korea Monday the 9th.

On top of that Obama is going to tour the region starting Friday. Both Japan, China and Korea are bilateral destinations. It will be his first trip to the region full of economic dynamism notwithstanding the global crisis. It will also be a meeting with the US’ main creditors that keep the dollar floating by buying more. The visit will provide a possibility to give cooperation with China a new solid footing without turning it into a G2 and thereby alienating the US’ other partners. And finally, it will be a chance to discuss North Korea. Will Obama bring new messages to engage North Korea?

On North Korea, Obama’s trip is likely to contain the following ingredients; A message of engagement to North Korea by dispatching Bosworth at a later date. A reconfirmation of the military alliance with both Japan and South Korea concerning the threat from a nuclear and missile-armed North Korea. A wish to see China to doing more on North Korea. And a discussion of the desirability of a grand bargain with North Korea as outlined by Lee Myung-bak of South Korea.

As I outlined in an earlier article, Obama is caught in dilemmas with North Korea. Obama wants to speak with the enemy both also to listen to his allies. Obama will bring along a message of engagement with North Korea and enter the black hole of negotiations with North Korea. The remaining question is if he will come out more successful than his predecessors.

Yet the engagement is still going to be confined to bilateral talks with the aim of restarting multilateral talks in the Six-Party process. That means that the Special Representative, Stephen Bosworth will travel to Pyongyang. The informal understanding is that there will be no more than two independent meetings. This is done in order to respect the US’ allies so that Japan and South Korea do not feel alienated from the process and because the results obtained with North Korea in the previous negotiations were enshrined in the framework of the Six Party talks.

So the US can’t stay in the bilateral loop for too long. In that context, it was seen as a positive development that Wen brought back a message from Pyongyang that North Korea will return to multilateral negotiations if there is sufficient progress in the bilateral track. It might be a mirage. The fine print says that Kim was more exactly stating that the renewed negotiations could be multilateral talks and not necessary Six Party talks and could be in different formats with 4, 5 or 6 participants. North Korea has previously declared the Six Party talks dead. DPRK might offer to reengage in a four-party process thereby potentially excluding one or two of US’ allies. Not very palatable to the US – yet true to the promise to Wen of reengaging multilaterally. North Korea will know as in earlier occasion to play this game well. And the US will be vulnerable because of the ambition to show results from engagement.

Obama’s second dilemma is regarding principles versus pragmatism. It also comes in full play with North Korea. Obama made his far-sighted speech in Prague in April on a nuclear-free world. The Nobel Prize was also awarded on that visionary background. Obama’s pragmatic and engaging side is therefore more constrained with a nuclear transgressor dreaming of becoming the Israel of North East Asia. Here he has to show resolve and principles in action.

Compare it with Burma where he is able to meet with the leaders of the regime, which he is intending to do in the up-coming ASEAN-summit in Singapore. The difference is that regime only hides bad behaviour towards its citizens and not nuclear weapons. So restarting talks with Nort Korea from anywhere else than where the Six-Party process halted and with irreversible progress will make Obama look as caving in on principles.

Lee Myung-bak is likely to make Obama talk of the possibility of a grand bargain of economic aid for nuclear disarmament with North Korea during his stay in Seoul. Everybody would like to see that happen. In practice, it is easier to offer yet it has been impossible to carry through. Earlier negotiations show that North Korea consistently harken back to an action-for-action principle. It might also be the way for the US and partners to actually check up on on-going compliance.

‘We are not in talks for talks’ sake,’ Jeff Bader, the NSC official said at a press briefing before Obama’s trip. ‘We are not interested in buying Yongbyon for a third time. We are not interested in indulging North Korea’s dream of validation as a self-proclaimed nuclear power.’ Yet that is precisely what Kim is going to offer although repacked in a new form. This administration is not dead-intent – like Bush was under the last phase with chief negotiator Hill – on creating a quick legacy. It can still wait. Yet so can North Korea. The destabilising effect on the region and the non-proliferation regime is the real time pressure for the US.

1. North Korea – the US still caught between speaking with the enemy and listening to allies
2. Obama’s North Korea policy and the June 15 South-North Joint Declaration
3. North Korea: a victory for Obama’s Asian diplomacy

Barack Obama: ‘America … has to talk with its enemies.’ ’[It] requires allies who will listen to each other, learn from each other and, most of all, trust each other’.

North Korea is a litmus test for Obama’s foreign policy tenets. On the one hand, Obama promised to speak with the enemy to bring new results in foreign policy. On the other hand, Obama also wants to secure acceptance and listen to allies as a fundamental part of his foreign policy. These two principles are difficult to reconcile and apply to North Korea.

Speaking with the enemy has been difficult to pursue with North Korea with the continuing escalations during the spring and summer with missile and nuclear testing. So far the talk has not been direct and has gone through the media. Hillary Clinton has been comparing North Korea to an unruly teenager and North Korea on their side has called her ‘a funny lady’.

North Korea has declared the Six Party Talks useless and is not intending to return to them. The US’ allies, notably Japan and South Korea are reluctant to see the US engage bilaterally with North Korea. It could both reward bad behavior and sideline the allies. They felt left out, especially Japan, during the last part of Bush’s presidency and chief negotiator Hill’s quick negotiation moves. That is also why South Korea recently suggested continuing the Six Party talks without North Korea to secure a continued common line among the other partners.

The US seems now to have found a temporary middle position satisfying both principles. The recent news regarding North Korea is the US’ move to engage in direct talks with North Korea. It will be talks that are bilateral but called – with diplomatic finesse – a part of the framework of the multilateral Six Party Talks and as a means to convince North Korea to return to these negotiations. In this manner, the US aims to adhere to both to the foreign policy line of speaking to the enemy and of listening to allies.

On that background, I had the pleasure of interviewing the US special Envoy, Stephen Bosworth recently after his visit to the partners in the Six Party talks and ask him some questions that illuminate the dilemmas in dealing with North Korea.

Q. Obama stated that the US should talk to enemies and listen to allies as foreign policy tenets. How do you reconcile those priorities when it comes to North Korea?

We are doing both. We have just been conducting intensive consultations with our partners. I’m referring to the other four members of the Six Party Talks; namely China, South Korea, Japan and Russia. We are solidly in agreement and share the same goal of denuclearising North Korea.

With regards to North Korea, we have consistently stated that we would be willing to engage in dialogue with North Korea. The goal of our bilateral talks is to persuade North Korea to return to the Six Party talks.

Q. Is the recent move such a middle ground between the two priorities? Direct talks but only to revitalize the Six Party talks – you speak with the enemy and still please the allies?

Well, we describe them as bilateral talks within the Six Party talks because the aim is both denuclearising and getting North Korea back to the Six Party talks. In the end what is needed is a multilateral solution. There is not one country that can provide a solution alone to all that the country wants.

Q. Can sanctions push North Korea back to the negotiation table?

Not on their own. Sanctions have to be combined with possibilities for North Korea in the form of incentives.

Q. Can China push North Korea back to the negotiation table?

The Chinese are an important player. We are working closely in contact with them. They have their direct bilateral contact with North Korea which is important. Yet answering your question, I think that China is the best source to evaluate how much influence they actually have on North Korea.

Q. Can you get North Korea back to the negotiation table?

[laughter] Definitely not by myself. The chances really are better in a multilateral setting.

Q. If/when you go to North Korea what are the main messages you are going to convey?

I will say that we are willing to restart the negotiation process. We should start from the 2005-statement in the Six Party talks, which clearly stated that denuclearisation was the shared ambition – also by North Korea. And secondly, I will say that the Six Party talks format is the means to achieve that goal and that North Korea should return to them.

Q. What if bilateral contacts from your side do not lead back to a resumption of the Six Party Talks – will you continue the bilateral track then which could annoy the allies?

That is too soon to comment on. We will have to make a decision based on the results of our diplomatic effort.

Q. Returning to talking with the enemy. Do you see it as likely that Obama during his Presidency will meet in person with Kim Jong-il?

I have no idea. If such a meeting were to happen it would be an indication of significant progress with regards to North Korea and denuclearisation.

Q. Is nuclear North Korea a fact we have to live with – however discomforting?

One of the purposes of engagement is to start a process of dialogue to change North Korea’s perception of self-interest. North Korea is saying that they will not give up their nuclear weapons. That is the situation right now. Our task is to change that position through engagement and persuasion. That is diplomacy.

Q. Are there other long-term solutions than negotiations?

I don’t think so. There is no military solution. Containment does not give long-term results. Negotiations are the way forward.

1. Engaging North Korea: will Obama buy Yongbyon for the third time?
2. North Korea: a victory for Obama’s Asian diplomacy
3. A more effective US policy on North Korea

China and India (Chindia) is on everybody’s lips when talking about rising Asia.

Then what is KIA? A car, most people would reply. Yet it could also be the new brand-name for Asia’s middle powers; (K)orea, (I)ndonesia, and (A)ustralia. They are Asia’s 4th, 5th, and 6th largest economies. All three are often dwarfed by the big power play between China, India and Japan and the region’s –and the world’s – superpower, the US.

Yet look at Indonesia’s population as the world’s third largest democracy, Korea’s economy, and Australia’s size – a continent in itself. They are solid middle powers. Relocate them to Europe and they would be large countries on most accounts. In Asia, they are too small to be big, but too large to be small.

Korea, Indonesia, Australia are all members of G20 – a forum which has gained preeminence in the on-going economic crisis. In G20, they are sitting at the table with an equal say alongside China and India.

All three have individual ambitions to leave their own print on Asian multilateral institutions and regional integration in the making, ranging from APC to G20 Caucus and E8.

South Korea, which used to describe itself as a shrimp encircled by whales, has new-found ambitions to play an independent role in Asian multilateralism. Lee Myung-bak has launched a New Asia Initiative that focuses both on strengthening Korea in Asia and Asia’s global voice.

Korea sees itself as in a position to mediate between the large powers –notably with China and Japan through its seat in ASEAN+3, which held its first independent meeting last year. It is expected to continue doing that. ASEAN+3 also produced Asia’s only joint and multilateral response to the economic crisis with the multilateralisation of the Chiang Mai Initiative (currency swaps), largely at the instigation of Korea. At the same time, Korea also sees itself as a voice for small countries and a bridge to the West with its democratic system and alliance with the USA.

All in all, Korea perceives itself as the right middle power to mediate in a global shift towards Asia. And South Korea will hold the chair of the G20 and will work towards an East Asian grouping to ensure that Asia’s united voice – if possible – is heard. Korea sees itself as able to secure the interests of smaller countries in Asia in that context. Korea’s commemorative summit with ASEAN the 1st and 2nd of June showed a determination to gain individual relevance towards the grouping. In Korea’s terminology, it’s the meeting of the equal size ‘shrimps’ that don’t feel threatened by each other.

The election of a South Korean, Ban ki-moon, as UN secretary-general – among other things – also showed that Koreans are generally liked in Asia with little political and historical animosity associated with the country and the people.

Indonesia is full of new confidence following a continued affirmation of democratic principles in the recent parliamentary and presidential elections combined with continued growth notwithstanding the economic crisis.

That new confidence is displayed in fresh foreign policy thinking. Executive Director Rizal Sukma of the influential Jakarta-based think tank, CSIS, has been arguing for an E-8 (China, Japan, India, Russia, Korea, Australia, USA, and Indonesia) as an informal forum to meet in connecting with Asian multilateral meetings and the G-20.

Sukma has also argued for a more independent Indonesian foreign policy less held back by ASEAN membership and geographical proximity1. The genuine lack of progress on human rights/democracy inside ASEAN – even with Charter and HR-Commission in place – combined with Thailand’s internal instability has reduced ASEAN’s role in the driving seat of regional integration. That is one of motivations for reducing reliance on ASEAN in Indonesia’s foreign policy. For Indonesia as a middle power, it is high time to secure an independent place at the high table of the Asian power concert.

How much of these ideas and proposals from CSIS will enter into government thinking remains to be seen when president Yudhoyono begins his new term in October. What is certain is that democratic, rising Indonesia also will be looking for increased leverage to assert its independent status as middle power in Asia and globally.

Australia is on the multilateral stage with PM Kevin Rudd’s proposal for an Asia Pacific Community (APC) as a forum for the better governance of great power relations, a proposal widely discussed in Asia and on this site. Where APEC 20 years ago, also partly an Australian initiative, was about securing the economically rising Japan in an appropriate multilateral framework, APC (with one letter fewer) has a larger ambition of managing great power relations in Asia-Pacific including in both the economic and security fields.

APC is also about continuing to make Australia relevant in Asia. As a primarily Pacific power its credentials can be questioned, like has been done in the inclusion process of Australia in the East Asia Summit, where Malaysia’s former PM Mahathir was very vocal in saying that they were neither ‘East (n)or Asians’. The next step in Australia’s initiative will be when PM Rudd is expected to brief Asian leaders at the East Asia Summit in October on APC.

The middle powers – a concerted approach?

KIA is not yet a united force. But they might want to be. All three want to brand themselves individually with their proposals and initiatives. Yet on their own, as middle powers, they might not be relevant enough with their individual proposals to secure the acceptance and interest of Asia’s great powers.

And all three still have their individual particularities and handicaps. Australia as a Pacific power continuously has to show its relevance in an Asian context. Indonesia even with new-found independent ambitions will continue to be anchored in ASEAN. Korea still gets bogged down in its immediate surroundings in the complicated relationship with its difficult twin brother, North Korea.

So they should coordinate their efforts. Two areas where KIA could take a common stance and make a difference are G20 and free trade agreements.

The April G20 meeting was in many headlines interpreted as China’s coming out as world power. That headline could have been captured by Asia’s united entry into the world stage. It wasn’t. Asia did not come out united or coordinated to the on-going economic crisis. ASEAN was out of play because of the chairman, Thailand’s incapacity to hold the summit meetings for ASEAN+ and EAS. So no early discussion of the G20 agenda took place or any debriefing on the meetings afterwards. It is time to make up for that.

The suggestion for a G20 Caucus should be enacted in order to endure that Asia’s big powers are obliged to meet and coordinate before the G20 meetings and to report to a broader Asian setting afterwards (EAS, ASEAN+). Korea as coming host of G20 could ensure this. Indonesia could work along and work to ensure that ASEAN does not feel left behind and is fully participating through the chairman’s continued inclusion in G20. In that sense, the last A in KIA could also be representing ASEAN. Australia should be pragmatic and see a G20 Caucus as a good stepping-stone for its intentions behind APC – namely to manage great power relations in Asia.

Another area where KIA could show a united front is the evolution of FTAs. In Asia, free-trade agreements are mired by a patchwork of individual agreements. Both Korea and Australia are active participants in this. Indonesia is not on the FTA-train yet, apart from the slow process inside ASEAN towards a free trade area. The middle powers would have an interest in coordinating and pushing for a region-wide agreement probably in ASEAN+6 format – which would include all three middle powers. That would remove the FTA-process from the current power play structure where FTA offers are part of a political charm offensive from Asia’s big powers.

Can middle powers really drive Asia forward?

The remaining question is if the middle powers will really get a seat at the table of the real negotiations. Rudd’s APC proposal to manage great power relations reflects a common characteristic of the KIA grouping. Alongside the nice sounding initiatives there is a growing powerlessness faced with the real power play in Asia, where KIA is aware that even as emerging middle powers it will be difficult to get a seat at the negotiation table – and once seated – a real say.

It is appropriate to quote in full Hugh White’s excellent remarks in another article at this site which highlights this difficulty in a realistic and pessimistic tone: ‘The plain fact – unpalatable though it may be – is that Asia’s new order will be negotiated between its most powerful states, and the painful process of compromise and concession will be best done away from the glare of big meetings. In its most important aspects it will not be negotiated in any literal sense at all, but will emerge as each major power remodel their policy to meet emerging realities’.

KIA is still a small car by all measurements. There will be limited space for KIA to influence the direction of Asian multilateral integration and great power relations. It should be coordinated to be effective and in order to influence China, Japan, India and the USA. Only in that case can KIA hope to also push the accelerator for rising Asia’s power structure.

Jonas Parello-Plesner works as senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson (www.raeson.dk). He is currently on research leave studying East Asian political integration meeting with think tanks, experts and commentators in East Asia’s major cities.

1. Asia’s middle class on the rise
2. The rise of China: the impetus behind Japanese regionalism
3. The emergence of Middle Power Asia