Adjust font size:

Sino-European-U.S. Relations and the Possibilities of Trilateral Cooperation

CIIS Time: Aug 19, 2013 Writer: Wang Yi Editor: Li Xiaoyu

byWang Yi[1]

 

In recent years, due to significant changes in the international balance of great powers, China, Europe and the United States have become major centers of power that exert influence on current and future global politics and economics. Both cooperation and competition have grown between the three sides, and their interactions at international forums have likewise increased. The trends of their relations and the interactive models that they establish will have profound implications for future patterns in international relations.

 

I. The Current State of Sino-European-U.S. Interactions

 

The state of Sino-European-U.S. relations really began to take shape upon the conclusion of the Cold War and the demise of the Soviet Union, with China rapidly rising to play an increasingly important role on the international stage. However, interactions at that time were often exclusive and dictated by special purposes. Politically, the United States and Europe came together to pressure China on issues pertaining to freedom, human rights, democracy and Tibet. Similarly, the initial establishment of the Sino-European strategic partnership was to some extent aimed at containing U.S. hegemony by means of a coalition. More notably, China and Europe decided to establish a global strategic partnership after the American invasion of Iraq in 2003 in order to balance U.S. unilateralism. Militarily, the public and private struggles surrounding the lifting of the EU arms embargo on China have reflected the negative impacts of these trilateral interactions. In 2005, the EU, facing strong pressure from the United States, decided to maintain its arms embargo. From that moment onward, the United States came to exert a negative influence on the EU arms embargo. Furthermore, the decision to maintain the arms prohibition became a highly symbolic “containment card” that Europe and the United States jointly played in order to cope with China’s rise. As such, the arms embargo became a major obstacle to the development of better Sino-European and Sino-U.S. relations. Economically, the United States and Europe both cooperate and compete with each other. The two compete with each other to reap the benefits of China’s rapid economic growth. After the establishment of the ministerial-level Sino-U.S. Strategic and Economic Dialogue, the EU strongly demanded that it enjoy the same treatment from China, implying that it wanted to establish a Sino-European strategic and economic dialogue. As is evident from the above dynamics, Sino-European-U.S. relations are no longer characterized by three independent sets of bilateral relations – instead, the three countries’ relations with each other are interwoven and interrelated. The future trajectory of these trilateral interactions is very clear, mainly demonstrated in the following trends:

 

1. The trilateral relationship is of increasing strategic significance, playing a leading or hindering role in other areas.

China, Europe and the United States occupy positions of primary importance in international politics and the three sides exert a profound influence on global and regional politics, economics and security, in addition to global governance and other important fields. However, without a formal trilateral mechanism in place, the strategic nature of their relations is mainly embodied in bilateral and multilateral interactions.

(1) China and Europe: In 1998, the annual China-EU summit mechanism was established, elevating bilateral relations between the two parties to a “comprehensive partnership.” In 2003, this “comprehensive partnership” was further elevated to become a “strategic partnership,” deepening bilateral cooperation across various fields. In 2004, the EU became China’s largest trading partner, surpassing the United States and Japan. By now, China and the EU have established more than 50 dialogue mechanisms in various fields, including the China-EU Summit, which is the highest-level mechanism for regular communication between the two sides. The topics for discussion at these summits span politics, economics, culture and society, and they provide great momentum for the sustainable development of both sides. The EU has been China’s largest trading partner since 2004, and in 2011, China became the EU’s largest trading partner, surpassing the United States. European Council President Herman Van Rompuy said that the EU-China partnership was the core of the global architecture, and that the two sides’ objectives are to use the comprehensive strategic partnership to create new opportunities.[2]

(2) China and the United States: In 1998, China and the United States established a framework for cooperation by pledging to build a “constructive strategic partnership.” In 2005, China and the United States held their first strategic dialogue. In 2006, they launched the Strategic Economic Dialogue. In 2009, the leaders of the two countries decided to further integrate the two dialogue mechanisms with the establishment of the China-U.S. Strategic and Economic Dialogue. Through this dialogue mechanism, the two sides have undertaken effective communication and exchanges on underlying strategic and economic issues concerning the two countries and the world. The dialogue mechanism has helped enhance mutual understanding and trust, all while promoting bilateral cooperation across many fields.

(3) Europe and the United States: Established in the wake of the Second World War, the trans-Atlantic alliance is based not only on common culture, values and institutions, but also on a wide range of common interests in regional and global affairs. Bilateral trade, services and investment amount to US$ 1 trillion annually, while direct investment reaches nearly US$ 2 trillion. U.S. investment in Europe is three times the value of its investment in Asia. In 2011, EU exports to the United States amounted to 260 billion euros and U.S. exports to the EU reached 184 billion euros.[3] To meet challenges posed by China and other emerging countries, U.S. President Barack Obama embraced a new understanding of the EU during his second term and has decided to further strengthen the trans-Atlantic partnership. Negotiations are in full swing over the establishment of a trans-Atlantic free trade area. As U.S. Vice President Joe Biden stated, “Neither the U.S. nor the EU can meet the challenges of today’s world without the other. America shares common values, interests, abilities and goals with Europe, [and] we respond more effectively to the same global challenges if we work together.[4]

With the China-Europe, China-U.S. and Europe-U.S. strategic dialogue mechanisms established, the third-party factor has become increasingly important in each of their bilateral strategic relations, either serving as a driving force to promote bilateral relations or becoming a backstage manipulator that obstructs and destroys developments in bilateral relations. Because China is politically, economically, institutionally and culturally different from Europe and the United States, and because the rise of China has strongly impacted the vested interests of Europe and the United States and the current global structure, China often has been the “victim” of European-U.S. strategic consultations. In the wake of the U.S. invasion of Iraq in 2003, France, Germany and other major EU countries proposed to lift their ban on arms sales to China in order to strengthen the containment of U.S. unilateralism. The heightened intimacy between China and Europe during this period concerned the United States, which feared that it may signal the arrival of a “Sino-European Axis.” The goals of China and Europe in developing a strategic partnership were not originally concerned with the “third party,” but the United States nonetheless became a disturbing factor in Sino-European relations. This was largely due to the United States’ strong opposition in 2005 to the EU lifting its ban on arms sales to China and the Sino-European plan to cooperate on the Galileo satellite navigation system. The European-U.S. dispute surrounding the ban on arms sales to China served two objectives for the United States: it expressed U.S. discontentment over the EU’s improving ties with China and it sought to further strengthen trans-Atlantic relations by launching strategic consultations and dialogues with the EU over global issues. Although European views are not necessarily shared in Washington, Europe has had a more mature position that will help lay a broad basis for the future handling of relations with Beijing.[5]Sino-U.S. dialogues once prompted the EU to resent the formation of a so-called G2, but it then became more concerned with the instability caused by the United States due to its constant meddling in the Asia-Pacific region. Unabated frictions between China and the United States in the Asia-Pacific region essentially provide the adhesive for close cooperation between the EU, which remains trapped in its debt crisis, and China, which is trapped in U.S. “encirclement.” There are several factors that are fueling positive energy in Sino-European relations. First, because the EU’s foreign policy has been frustrated by its debt crisis and it is marginalized in the U.S. global strategy, the EU is not willing to participate in the United States’ strategic rebalancing toward the Asia-Pacific region. Second, there is no consistent element of strategic antagonism in Sino-European relations; China has always supported the European integration process and the stability of the euro and the euro zone. Third, China has provided support and assistance to Europe within its means, including its continued investment in euro zone debt markets and capital increases in the IMF. In addition, the two sides have enhanced financial cooperation and eased pressures from the European debt crisis. The EU praised China for its propping up of the beleaguered union. As Van Rompuy and President of the European Commission José Manuel Barroso remarked in a joint article, China’s remarkable development speed has had an enormous impact on Europe and the rest of the world. The EU and China are prepared to push their bilateral strategic partnership to new heights.[6]

 

2. Previously asymmetrical trilateral relations are becoming relatively symmetrical and balanced.

Sino-European-U.S. relations, once asymmetrical and irregular, have now become relatively symmetrical and balanced. At the start of its reform and opening-up period more than three decades ago, China was at an apparent disadvantage in terms of economic strength and international status when compared with the United States and Europe. As such, it was not able to exert influence on Europe-U.S. relations and other critical regional and international affairs. Under the auspices of the United States and Europe, the Western world dominated international politics, economics and security, and China could only accept this fact and acquiescently obey. However, China’s rapid development has greatly altered this scenario: nowadays, even though China is still unable to form an equilateral triangular relationship with the United States and Europe, it is nonetheless capable of exerting immense sway on trilateral interactions.

This new dynamic is rooted in several factors. First, since the start of the 21st century, particularly with the outbreak of the financial crisis in the United States and the sovereign debt crisis in Europe, the negative effects of globalization have intensified the inherent social, economic and racial problems in Europe and the United States. Western countries have generally fallen into a difficult situation characterized by long-term economic downturns, heavy debt, high unemployment, a sharp drop in overall social welfare, intensified wealth inequality, exacerbated social conflicts, rising public discontentment and a flood of corporate relocations. These developments have evolved into a more fundamental questioning of Western democratic institutions, and protests have taken place with increasing frequency. For many years, in particular throughout the series of wars it has been engaged in, the United States’ international policies and behavior have repeatedly weakened its moral foundation and prestige as the so-called “global police.” Since the U.S. financial system wrought the larger global financial crisis, the American development model, once regarded as a global paragon, has been widely criticized by the international community. The EU suffered internally from the debt crisis and externally through its declining international influence and alienation from the United States. The “specialness” of Europe-U.S. relations no longer exists in the traditional sense. A common socioeconomic development model and commitment to NATO once represented the strategic advantages of the long-term Europe-U.S. relationship. But today, these commonalities have become weaknesses, and the two sides often condemn each other on issues like crisis response and the division of responsibility and cooperation in NATO. Europe complains that its debt crisis was caused by the American subprime mortgage crisis, and it has called for the end of the United States’ unilateral dominance over the world financial order. Meanwhile, the United States has accused Europe’s debt crisis of undermining the external environment for its own economic recovery. Former French President Nicolas Sarkozy publicly criticized the extremely liberal financial policies of the United States, stating that they were the root cause and chief culprit of the world economic crisis.[7] Obama, for his part, openly criticized the EU’s slow reaction when dealing with debt crises in Greece, Spain and other countries, warning that if there is a recession in the euro zone, the U.S. recovery will be negatively affected.[8]Regarding NATO, the United States repeatedly and sharply criticized the tendency toward European “demilitarization” and defense spending cuts in Europe, warning that if the trend does not change, “the future of NATO will be dim, if not dismal.”[9] Under a more integrated global economy, particularly with transnational issues gaining increasing prominence, it has been hard for Western countries to monopolize international affairs the way they once did.

Second, China’s role and weight have changed dramatically in its trilateral relations with the United States and Europe. With continued growth in its overall national power, China’s influence on international and regional affairs is rising and the China factor is becoming an increasingly important element that affects the development of international relations. As early as the 1990s, Western scholars asserted that both sides of the Atlantic – Europe and the United States – recognized that China and its economy would exert a great influence on the first quarter of the 21st century.[10] Trapped in their domestic and regional crises, the United States and Europe urgently need China’s cooperation in order to address the challenges they are facing, namely, economic and financial troubles, global security and climate change. In a 2009 joint statement, China and the United States reiterated that they were “committed to building positive, cooperative and comprehensive China-U.S. relations for the 21st century, and [that they] will take concrete actions to steadily build a partnership to address common challenges.”[11]During the second round of the China-EU Strategic Dialogue in Hungary in May 2011, Catherine Ashton, EU High Representative for Foreign Affairs and Security Policy, said, “The EU-China relationship should be an example of international cooperation for the 21st century.”[12] China’s position in this trilateral relationship is relatively favorable and gaining strength. China is a target that Europe and the United States continue to vigilantly watch, as well as a partner over which they are competing to win over.

In general, however, owing to the allied relations between the United States and Europe built over common values and a solid foundation, China will continue to hold a relatively weak position in this trilateral relationship. China’s relations with these two parties are influenced not only by domestic politics and bilateral relations, but also by changes in the two parties’ positions.

 

3. Past pertinence and exclusiveness are being replaced by intensified competition and enhanced cooperation.

In the post-crisis era, the bilateral relationships between these three parties all demonstrate a new feature of the combination of competition and cooperation, which is replacing the pertinence and exclusiveness of the past.

From a political standpoint, in 2006 the EU for the first time highlighted 20 requirements for China to meet in areas such as the economy, international security, democracy and human rights. These developments signaled that the EU began to take a tougher stance toward China.[13] Shortly afterward, the U.S. Congress granted the Dalai Lama a medal and the leaders of Germany, France, Britain and other EU countries successively met with the Dalai Lama, indicating coordination by the United States and some EU countries on the Tibet issue. In the geopolitical field, the United States is stepping up its efforts to encircle China in the Asia-Pacific region. Together with Europe, it is attempting to suppress and elbow China out of the Middle East, Africa and other regions. The contest over Syria has further demonstrated the divide between Europe and the United States on one side and China and Russia on the other. EU demilitarization due to the financial crisis and the accelerated eastward shift of the U.S. strategic focus, however, have weakened NATO and the trans-Atlantic partnership, further deepening strategic differences between the United States and Europe. In economic and trade sectors, the financial crisis has exposed the underside and negative effects of the dominance of the U.S. dollar. China and Europe have both advocated a more diversified international financial system, challenging the hegemonic position of the U.S. dollar. Former French President Sarkozy made it clear that he wanted to create a new international monetary system that was no longer solely dependent on the U.S. dollar.[14] Regarding the RMB exchange rate, the United States and Europe have continuously exerted pressure on China. While the impacts of the U.S. and European debt crises are increasingly being felt in the Chinese economy, protectionism and other frictions against China have unabatedly continued. For example, Europe and the United States jointly conducted anti-dumping and countervailing investigations against China’s photovoltaic firms. In environmental and climate change fields, China and Europe have firmly urged the United States to join the Kyoto and post-Kyoto mechanisms. The United States and Europe jointly asked China to undertake emission reduction obligations, while China and the United States did not agree with the high emission reduction goal proposed by the EU, instead stressing the importance of developing environmental technologies and stimulating economic growth.

Competition between the three sides in terms of geopolitics, trade and hotspot issues is intensifying, and structural conflicts are inevitable. That being said, the common interests shared by the three sides are steadily growing, and positive interactions are increasing instead of decreasing. Mired in long-term difficulties, the United States and European economies need to maintain and strengthen cooperation with China for their own interests. The differences between China on the one hand and Europe and the United States on the other hand in terms of economic development and macroeconomic industrial structure make it both possible and necessary for them to develop complementary and mutually beneficial relations. China, Europe and the United States are already key and indispensable players on an array of issues, from the reform of the UN and the international financial system, nuclear disarmament, non-proliferation of weapons of mass destruction, immigration, economics, trade, global governance, climate change, energy and food security and other important issues. The three sides’ policies and positions are interlinked, interactive and mutually influenced. China’s idea of “G3 Co-governance” and Western scholars’ conception of a “tripartite coexistence” of the RMB, the euro and the U.S. dollar have indirectly proved the eagerness of Europe and the United States to cooperate with China. The main reason for this eagerness is that China, Europe and the United States are already the most prominent actors on the international stage, comprising the key stakeholders in global strategic issues. This dynamic determines that trilateral relations between the three parties are a combination of cooperation and competition. On the one hand, the three sides have a strong incentive to cooperate: if they work together, they can mutually benefit and better cope with various challenges. China, Europe and the United States, along with all other countries, are facing an array of global issues, and it is in the interest of all countries to get together to effectively cope with these challenges. On the other hand, there is competition among the three parties in their attempts to meet these challenges. The core of their competition rests on how the three sides can fairly and justly share and allocate responsibilities and obligations in the international community. The essence of their competition is the struggle for space and the rights of national development – in sum, it involves an optimization and change of responsibilities, rights and returns in the international system.

 

II. Exploring the Establishment of a Trilateral Cooperation Mechanism

 

North America, Europe and East Asia are the three core areas in global politics and economics, comprising what is often referred to as the “tripartite world.” The leading actors in this tripartite world are the United States, the EU and China. These three global players are already and will remain the most important political and economic entities for the next 20 years.[15] Based on the situation laid out above, one can infer that trilateral cooperation has a bright future and will undergo the following changes:

1. The duality of cooperation and competition between the three parties will gradually normalize.

Cooperation and competition will coexist because the interests in this trilateral relationship are complex and intertwined. The degree of cooperation and the intensity of competition between the three parties are unprecedented in world history. As such, duality is the basic feature of the Sino-European-U.S. relationship in the post-crisis era. This duality will determine the future of trilateral relations, ensuring that they will not develop in an overly one-sided manner following the logic of disputes and conflicts.

During President Obama’s second term, the United States will generally adopt a hedging policy toward China, “taking precautions and containment measures in addition to engagement and cooperation.” It will also seek to strengthen relations with China based on the implementation of its strategic rebalancing in the Asia-Pacific region and the basic understanding that China is both a rival and a potential partner. All of this will occur in the context of the continued promotion of an eastward shift in overall global strategy.

Europe and the United States have much common ground but also many differences in terms of basic values and interests. This determines that the current Europe-U.S. relationship is inevitably characterized by competition along with cooperation. Similarly, China, Europe and the United States have many commonalities and differences in values and interests, all of which help cause the duality of Sino-European and Sino-U.S. relations. For example, if one looks at Sino-European economic and trade ties, it is clear that complementary and cooperative relations have shifted to competitive and cooperative ones. The EU has become China’s largest trading partner, and China is now the EU’s second largest trading partner. By 2011, trade between the two sides reached more than US$ 567 billion. The sluggish market caused by the European debt crisis resulted in a decline in Sino-European trade, but the trade volume in 2012 still amounted to just over US$ 546 billion. At the same time, competition is increasing. The EU was not only unwilling to recognize China’s status as a full market economy, it also repeatedly decried China’s rapidly expanding trade surplus with Europe. Despite these hurdles, it is undeniable that Sino-European trade has entered a new degree of interdependence, shifting from over-reliance on bilateral trade in the past to a structure in which trade and investment are equally important. Investment is also moving away from the one-way trend of the past, increasingly featuring a more balanced two-way investment pattern.

Confrontation between Chinese and American and between Chinese and European political institutions and ideologies has also declined compared to the past. Former U.S. Secretary of State Hillary Clinton declared that the United States would continue to put pressure on China regarding its human rights policies. This being the case, U.S. human rights policy toward China cannot disturb the two parties’ cooperation in coping with the global economic crisis, climate change and other global security challenges.[16] The reason for this tendency is because there are increasingly powerful constraining forces that lie beyond the three parties’ trilateral structural conflicts. Furthermore, as global challenges continue to grow, the three sides need to consider adopting policies that are less confrontational and more cooperative on issues like politics, economics, security, global governance and other key strategic issues. This will help avoid competition and instead promote win-win situations through relevant programs, joint crisis management and improved policy coordination. China, Europe and the United States will not become comprehensive strategic partners in the model of the trans-Atlantic relationship between Europe and the United States. Still, it is possible for the three sides to reach “functional cooperation” or form “temporary alliances” in certain areas or sectors, all while exploring the possibility of establishing a trilateral consultation mechanism.

2. Attempts should be made to establish a Sino-European-U.S. consultation mechanism.

China is actively advocating the establishment of a new type of relations among major countries, including its relationship with the United States  and the EU. As such, exploring the establishment of a new model of trilateral cooperation with win-win results should be a top priority. The feasibility and urgency of such a plan lie in the following factors:

First, developments in the international political, economic, financial and security systems are increasingly becoming major issues that fall under the scope of global governance; meanwhile, China, Europe and the United States now constitute the three most critical actors in the global governance sphere. Their centrality to global governance is not only due to their total economic power or their global influence; it is also because their divergent interests in many important international affairs consequently give rise to huge policy differences and disagreements. These issues range from politics and security to trade, finance and environmental protection. “A mixed picture emerges concerning the common economic and security interests of the EU, the U.S. and China. There are strong imperatives and increasing convergences between the three parties on common economic and security interests. The difficulty [lies] in identifying cooperative actions that [the three sides] can genuinely and jointly embrace, implement and sustain together.”[17] It is this difference that requires the three parties and other developed and developing countries to jointly plan and construct the basic structure of tomorrow’s international system. Attempts to establish a trilateral consultation mechanism can expand fields of cooperation and reduce potential conflicts and misunderstandings. If such a mechanism is not established, it is likely that a rising China will increasingly come into conflict with the interests of the status quo powers, Europe and the United States. This will in turn lead to the unfavorable situation of Europe and the United States ganging up on China.

Second, China has established the Shanghai Cooperation Organization, BRICS and other multilateral mechanisms along with other emerging countries and major developing countries, but channels for consultation and communication between China and the world’s developed countries remain at bilateral or multilateral levels. Currently, the three parties have already established the following channels at the bilateral level: the China-EU Summit, the China-EU Strategic Dialogue, the China-EU High-Level Economic Dialogue, the China-U.S. Strategic and Economic Dialogue and the U.S.-EU Summit. At the multilateral level, the three parties have been able to communicate via the UN Security Council, the G20 Summit, the WTO, the six-party talks on the Iranian nuclear issue and the ASEAN Regional Forum, among other multilateral regional and global organizations. Although the above bilateral and multilateral channels have to some extent ensured that each party develops bilateral relations with the other two parties, they still lag far behind the level of cooperation and communication that will be needed in order to build a new type of relations among major countries that emphasizes cooperation, development and win-win situations. Therefore, it is urgent that a study on trilateral interaction and cooperation be conducted. The three parties must strengthen trilateral coordination and cooperation from within, exploring the possibility of establishing a trilateral coordination and consultation mechanism with gradual approaches that include “holding unofficial discussions before official ones” and “dealing with political issues after economic issues.” In addition, they must also improve the openness and inclusiveness of their trilateral relations by strengthening cooperation with other developed countries, emerging and developing countries and multilateral organizations, all while avoiding the perception that they are forming a “G3” relationship.

Third, a trilateral consultation mechanism presents the best path for magnifying positive energy and weakening negative energy. Given the lack of a formal trilateral consultation mechanism, it is hard for the positive energy driving trilateral interactions to function; there are often cases in which the three parties communicate or cooperate ineffectively, mutually suspect or misjudge each other and in which two parties  jointly contain and suppress the third party. These negative trends are persisting even in spite of the increased willingness and measures taken by the three sides to cooperate and co-govern at bilateral and multilateral forums on global and regional issues. The negative energy has had a considerable impact on relations, and each party watches vigilantly to prevent the other two parties from entering into exclusive  agreements that target its own interests. For example, cooperation between China and the United States on climate change marginalized the EU, making the EU deeply doubt the strength of the China-EU strategic partnership.  The EU was originally concerned about the possibility of China-U.S. “co-governance,” but these concerns soon became worries about a potential China-U.S. security “confrontation” in the Asia Pacific that would force the EU to choose sides. “The EU is a major cooperative partner of China and the United States, and it should try to establish and develop a multilateral dialogue system between the three to make contributions to the stability and development of China-U.S. relations. The EU needs both the United States and China, so it  must try its utmost to avoid taking sides.”[18](建议用间接引语,因为这是从中文回译的,不可能是这个专家的原话) China’s purchase of huge amounts of U.S. Treasury bonds makes the U.S. dollar a preferable option in its policy making, and it forges a natural monetary alliance between China and the United States. But doing so also pushes the euro into an unfavorable position. Meanwhile, China is worried that the United States and Europe’s strengthened strategic consultations are directed against it, and it is even more concerned about NATO’s globalization and the emergence of an “Oriental NATO” in the Asia-Pacific sphere. And the United States is concerned that deepening strategic cooperation between China and Europe is aimed at containing U.S. power, and it is even more concerned that Europe may yield to China in struggles over values and ideology given its urgent need to receive financial support from China.

3. The “stepping stones” of trilateral cooperation will most likely be the economy, finance and trade.

The reasons for the above tendency are manifold. First, in the post-crisis era, geo-economics is more important than traditional geo-strategy. The high economic interdependence between China and the West indicates that Sino-European-U.S. relations are different from Cold War relations between the West and the Soviet Union. The current economic interdependence presents China with an advantage in dealing with Europe and the United States. If the United States and the EU want to punish China, they themselves will be the first to suffer. China, Europe and the United States are the three largest global economies and they play crucial roles in global economic and financial management. The unprecedented degree of interconnectedness and interdependence between the economies of these three parties has changed the old one-way, eastward model, instead forming a new two-way and more balanced model of interdependence. “Not only are China, the EU and the U.S. the world’s three largest economic blocs, they are also highly interdependent and play a defining role in global economic management. […] Economic interdependence even extends to the security realm: all three parties rely on the smooth functioning of international trade routes, the global energy market and the global information technology infrastructure.”[19] Because all three parties are committed to promoting global trade liberalization, China, the United States and the EU’s most crucial common interests lie in economic and trade relations, key fields where trilateral relations can avoid zero-sum competition and achieve cooperation and win-win results.

Second, establishing a trilateral consultation mechanism in the framework of multilateral trade and financial systems is crucial in order to resist the current trade protectionism trends and promote the reform of the financial system. China, Europe and the United States are major stakeholders that oppose trade protectionism. Given their influence, the three parties should set a good example by conducting intensive consultations concerning trade protectionist measures and taking the lead to reduce their own short-term protectionist actions. This would be a favorable choice for all three parties.[20] Financially, with the United States and Europe caught in various degrees of economic recession, their desires and expectations to strengthen the coordination of monetary policies have become strong. This makes it considerably easier for the three parties to cooperate. Seizing this opportunity, China should strive to obtain a voice commensurate with its status, conduct economic and strategic dialogues with the United States and Europe on the basis of equality and mutual trust, strengthen monetary policy information exchanges, reduce the hurdles and costs of monetary policy coordination, and promote the establishment of a global financial regulatory mechanism to cope with future crises.

Third, China presently has relative flexibility in maneuvering its trilateral trade relations. Europe and the United States are preoccupied with their own post-crisis affairs, and their cooperation is more formal than substantial. It is hard for them to  receive substantial help from each other. Even though China is prone to experience spillover effects from the crisis, it enjoys some degree of “crisis dividends.” China should seize this opportunity: while actively promoting enterprise mergers and acquisitions, it should achieve high interdependence and integration with Europe and the United States in economic and trade fields. This would help forge a closely interdependent relationship. The China-U.S. Strategic and Economic Dialogue and the China-EU High-Level Economic and Trade Dialogue were established in 2006 and 2008 respectively. As long as current platforms for economic and trade dialogues continue to transform, the three parties will be able to realize trilateral strategic cooperation in economic, trade and financial fields. China will benefit from adopting an active attitude and taking strong actions in order to change its weak position in the trilateral dynamics. By doing this, China can elevate its soft power, enhance its international influence and push the international economic, trade and financial orders toward a fair, just, inclusive and orderly future.

 

III. Conclusion

 

As major stakeholders in the present international system, China, Europe and the United States have established a highly interdependent relationship. They already have considerable common interests in meeting global and regional challenges. In the future, there will be a tripartite landscape in international relations. “A system composed of the three superpowers, that is, the United States, the European Union and China, will be a social structure of rivals and friends, unlike the one in the interwar period of enemies.”[21]

China’s role as a major player in the international arena has become increasingly prominent, and frictions and conflicts of interest will inevitably occur between China and the traditional players, namely the United States and Europe. But at the same time, it should be noted that China is increasingly sharing interests with these traditional powers on issues like global governance, coping with financial and debt crises, promoting development, energy security and cybersecurity, environmental protection, nuclear disarmament and security, combating transnational crimes, immigration and other global hotspot issues. China should learn to dance with Europe and the United States on the basis of these common interests. It must take the interests of third parties into account when dealing with either of the other sides. Together, these three parties must lay down a long-term blueprint for future trilateral interactions, promoting a formula of mutual benefit (“A+B+C=win-win”) and discarding the outdated and harmful ganging up approach of the past (“A+B against C”).

 

 

 


1   2