The crisis in Ukraine has forced the West to reconsider how it defends international law. As tensions in South East Asia grow, can Berlin apply the same lessons to a European Asia policy?Over the last year, German foreign policymakers have done a great deal of soul searching. Shortly after Foreign Minister Frank-Walter Steinmeier launched a review of German foreign policy in February 2014, Russia annexed Crimea. The crisis that followed was a kind of strategic shock for Berlin, which had invested more than any other Western power in the idea of Wandel durch Handel, or “change through trade” – in other words, the idea that the best way to integrate Russia was to increase economic interdependence. Chancellor Angela Merkel has since set out a much tougher policy toward Moscow centered on economic sanctions.
What is less clear is whether the post-Ukraine rethink will extend to other areas beyond Russia policy. Of particular importance is Germany’s approach to China: over the last decade, China and Germany have developed an increasingly close relationship based on the exponential growth of German exports to China, which are now almost double the volume of its exports to Russia. But while illusions about the possibility of “partnership” with Russia have been shattered during the past year, German policymakers have not yet demonstrated an awareness of the need to formulate a new China policy. Even as China has become increasingly aggressive in its neighborhood, Germany’s policy toward it remains based on the same assumptions as its former policy toward Russia – in particular, the idea that increasing economic interdependence can slowly but inexorably transform authoritarian powers into democracies, and revisionist powers into “responsible stakeholders.”
China and Germany have recently begun to widen the focus of their relationship to discuss security as well as economic issues. So far, their discussions have focused on urgent issues for Germany and Europe such as the Ukraine crisis – last October, for example, Merkel sought to persuade China to mediate with Russia. But as tensions increase in Asia, there is an increasing need for Europeans to think about the role they want to play – if any – in Asian security.
Given its close relationship with China, Germany will be crucial for the development of a coherent European approach to Asian security. Although its new security dialogue with China could be an opportunity for Europe, it could also undermine a coherent European approach to Asian security.
An “Asian Crimea”?
Over the last few years, tensions in Asia have dramatically increased – so much so that last year it became commonplace to compare the situation to that in Europe in 1914. The tensions center above all on unresolved territorial disputes in the region. The most explosive are those that China has with nearly all of its neighbors, based on territorial claims that go far beyond the United Nations Convention on the Law of the Sea (UNCLOS) – the key piece of international law covering maritime disputes. China claims the area enclosed by the “nine-dotted line” – in effect, most of the South China Sea – and the Japanese-governed Senkaku Islands (which the Chinese called the Diaoyu Islands) in the East China Sea. In the last five years it has become more aggressive in its neighborhood and more open in its bid for regional hegemony.
Chinese revisionism has the potential to lead to a kind of “Asian Crimea” crisis. One possible spark is Chinese aggression against Japan: In recent years, the danger of miscalculation has increased as Japanese fighters have been scrambled to deal with increasingly frequent Chinese incursions into Japanese airspace. Any conflict between China and Japan would risk pulling in the United States. During his visit to Asia in April 2014, President Barack Obama made it clear that Article 5 of the Japan-US Security Treaty “covers all territories under Japan’s administration, including the Senkaku Islands.” Although Europeans are not formally obliged to take sides with Japan, a failure to support it diplomatically could damage relations with the US and undermine Europe’s claim to stand for the rule of law – particularly if China violates international law as clearly as Russia did in Crimea.
A second possibility involves Chinese aggression in the South China Sea. China moved an oil rig into Vietnamese waters near the Paracel Islands in May 2014, leading to clashes between Chinese and Vietnamese ships. Then-US Defense Secretary Chuck Hagel subsequently criticized China’s “destabilizing, unilateral actions.” Over the past year, China has also been reclaiming land around islands that it controls in the South China Sea – and, in at least one case, built a runway. There are now fears that China could impose an Air Defense Identification Zone in the South China Sea, as it did in the East China Sea in November 2013. Any crisis in the South China Sea would threaten European trade.
Tensions in East Asia have eased to a certain extent over the last few months, and China and Japan agreed to talk about their territorial dispute ahead of the Asia-Pacific Economic Cooperation meeting in November 2014; Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe have met twice since then. In addition, China has softened its rhetoric toward its neighbors – in March 2015 Xi spoke of Asia as a “community of common destiny” – and begun to reach out to its neighbors in East Asia through its 21st Century Maritime Silk Road initiative. But the sources of tensions have not disappeared, and China’s military spending continues to increase; in March, it announced that its defense budget would rise by ten percent to roughly $145 billion in 2015.
The European Dilemma
The EU has a number of interests in East Asia, including the preservation of peace, the promotion of a rule-based international system, the development and consolidation of democracy, the rule of law, human rights, non-proliferation of weapons of mass destruction, and regional integration. In statements made during her term as High Representative for Foreign and Security Policy, Catherine Ashton emphasized that territorial disputes should be resolved on the basis of the rule of law, and in particular UNCLOS. But the EU has so far stopped short of calling out China for its aggression in the way the US has – or in the way the EU has called out Russia – let alone begun thinking about how it might use its collective resources to prevent or respond to a possible “Asian Crimea.”
While the EU itself emphasizes the international rule of law, member states seek above all to avoid antagonizing Beijing as they compete with each other for Chinese investment. A few years ago, it was the countries of the so-called eurozone periphery that were desperately seeking Chinese investment; now, however, it is nearly all member states, including “core” countries such as France, which agreed last year to sell a stake in the port of Toulouse to a Chinese consortium. The UK has similarly sought Chinese investment and agreements to make the City of London a center for offshore renminbi trading. In March, the UK became the first EU member state to express its intention to join the Asian Infrastructure Investment Bank.
At the same time, however, France and the UK – the EU’s two permanent members of the United Nations Security Council – have also quietly begun to play a more active role in Asian security. In particular, the French – who, uniquely along EU member states, have over a million citizens in the Indian Ocean – have followed the US in “pivoting” to Asia. France has increased security cooperation with Japan, which is seeking to strengthen its security ties with EU member states in response to the rise of China. In 2014 France and Japan created a “2+2” framework for regular talks between the two countries’ foreign and defense ministers, and have begun to cooperate on weapons development, including “unmanned systems.”
The UK has similarly intensified security cooperation with Japan. In 2013, after Japan relaxed its restrictions on research, development, and trade in defense equipment, it signed a defense cooperation agreement with the UK. Since then, the two countries have signed a number of further agreements and are negotiating an Acquisition and Cross-Servicing Agreement that will allow the armed forces of the two countries to provide each other with logistic, technical, and administrative support. Japan and the UK also set up a “2+2” framework for security dialogue between their foreign and defense ministers. After the first meeting in this format in January, Tokyo and London announced they had agreed to undertake joint research in air-to-air missile technology.
Meanwhile, the instinct of most other EU member states is to remain “neutral.” Some argue that, although Europeans may have increasing economic interests in Asia, they do not have any substantial stakes in faraway conflicts between Asian countries over apparently insignificant rocks, shoals, and reefs or in the emerging strategic rivalry between China and the US. Others think Europeans could play a mediating role between the parties in territorial disputes. In order to boost their chances of success, they argue, Europeans should avoid being seen taking sides. Thus while the EU institutions make statements, member states pursue their own interests. A crisis could even lead to a European split, with France and the UK increasingly aligned with Japan and the rest of the EU seeking to remain “neutral.”
Germany’s Role in Asian Security
Given its weight within the EU and its close relationship with Beijing, Berlin is of crucial importance. Germany and China see each other as their most important partners in each other’s regions: the Germans see China primarily as a market for their exports, while the Chinese are interested in technology transfer from German manufacturers. At their third government-to-government consultation, held in Berlin in October 2014, China and Germany announced an “innovation partnership” focusing on the joint development of “industry 4.0.”
But the two countries are increasingly talking about more than business. They have upgraded their “bilateral strategic dialogue” to include representatives of the two countries’ defense ministries – making it somewhat like the “2+2” framework France and the UK have established with Japan.
Until now, German officials have been somewhat skeptical of the attempts made by France and the UK to play a role through defense cooperation with countries such as Japan. Tokyo suggested increasing defense cooperation with Germany as it has with France and the UK, but Berlin’s response was tepid, in part because the country is skeptical about the ability of military means to shape the international environment and enhance security. Further, Japan may be a like-minded country, but Germany does not have any particular obligation to it. “NATO is not in the Pacific,” said one official. Others stress the need to avoid “thinking in terms of blocs.”
Some German officials even consider the statements by the previous EU’s High Representative for Foreign and Security Policy misplaced – in particular the joint statement by Lady Ashton and then-US Secretary of State Hillary Clinton in 2012. In the opinion of these officials, the EU should not take a position on the substance of individual territorial disputes but rather on process: “We are not interested in what the dispute is about, but in how it is handled.”
The problem, however, is that taking a robust stand on process – and in particular on the need to resolve territorial disputes on the basis of the rule of law – could in practice lead to taking sides on substance. China’s territorial claims are based on history rather than UNCLOS or broader international legal norms. Thus a principled insistence on the rule of law could lead to a confrontation with China – which Germany has been keen to avoid.
Berlin has often stressed its desire to develop a common European approach to Asian security. It may be flattering when Washington, Moscow, and Beijing ask Germany to play a privileged role, wrote Steinmeier in the final report of the foreign ministry’s 2014 review of German foreign policy, but it “must always turn it in a European direction.” But reaching agreement among the 28 EU member states – each with different economic and strategic interests – is extremely difficult. For example, Germany tried to include a statement on maritime disputes in the South China Sea in the declaration following the Asia-Europe Meeting last November, but other member states opposed it, worrying that they would be punished for criticizing China.
A European Division of Labor
A solution to this collective action problem could be a division of labor between EU member states. Instead of seeking to remain “neutral” – an ultimately unsustainable and self-defeating position – Europeans should seek to use their collective resources as part of a common approach to Asian security based on the rule of the law. Germany has neither the naval resources nor the strategic culture of France or the UK, and is therefore unlikely to be able – or willing – to emulate the role they are playing today in Asian security. But its relationship with China gives it economic leverage that it could use as part of a coordinated approach. In short: Berlin should be prepared to use its economic power to further European interests in Asia.
The shift in Germany’s Russia policy in 2014 could function as a kind of model for the role it could play in a European approach to Asian security. After the annexation of Crimea, Germany backed tough sanctions and persuaded reluctant EU member states to agree to them. In other words, instead of simply pursuing economic objectives in relation to Russia, it used its economic power to attain a strategic objective: the maintenance of the European security order. Although Europeans understandably still want to see China as a partner – just as they wanted to see Russia as a partner – they should be prepared for the possibility that they may at some point need to take a tougher approach.
This does not automatically mean imposing economic sanctions against China, though it is possible that Europeans may be forced to reluctantly consider such a step in future if Chinese aggression does lead to an “Asian Crimea.” In the meantime, to prevent such a dramatic crisis – and risk a split within the EU, or between the EU and the US – Europeans should plan a coordinated approach to Asian security that fully utilizes economic, diplomatic, and military leverage. As part of this approach, Germany should use its economic power, alongside British and French defense capabilities, to deter Chinese revisionism in Asia. In other words, instead of simply assuming that trade is transformative – the assumption of German policy so far – German policymakers should think about how they can use trade to actively encourage China to moderate its actions in Asia.
 Martin Fackler, “In a Test of Wills, Japanese Fighter Pilots Confront Chinese,” New York Times, March 8, 2015.
 Jane Perlez, “China Building Aircraft Runway in Disputed Spratly Islands,” New York Times, April 16, 2015.
 Xi Jinping, “Towards a Community of Common Destiny and A New Future for Asia”, speech at the Boao Forum for Asia Annual Conference, March 28, 2015; Jacob Stokes, “China’s Road Rules,” Foreign Affairs, April 19, 2015.
 Council of the European Union, “Guidelines on the EU‘s Foreign and Security Policy in East Asia,” June 15, 2012.
 See François Godement and Angela Stanzel, “The European Interest in an Investment Treaty with China, European Council on Foreign Relations,” February 2015.
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