CEIAS
China as Norm-Taker and Norm-Setter in Southeast Asia and Europe

by Alfred Gerstl

Jul 10, 2020 in CEIAS Insights

China as Norm-Taker and Norm-Setter in Southeast Asia and Europe

In order to promote and implement its ambitious Belt and Road Initiative (BRI), China acts in Southeast Asia and Europe still more as a norm-taker than a norm-setter. However, Beijing’s ability to set regional norms will likely grow in the near future. China already demonstrated its political will to undermine the unity of the norm-setting regional organization ASEAN and the EU. A remedy could be to better include China in reformed international and regional governance mechanisms.

After President Xi Jinping announced China’s ambitious Belt and Road Initiative (BRI) in autumn 2013, expectations of massive economic benefits for China and the participant countries were high. More recently, however, skepticism and even fears of growing Chinese influence potentially causing economic and political dependency became stronger in all parts of the world. Severe concerns have also been raised on hidden geopolitical motives behind the BRI, its opaque governance structures, and operational mechanisms. The People’s Republic of China (PRC), though, portrays the BRI as win-win cooperation for all participants and complementary to existing (sub-)regional initiatives. All in all, the BRI resembles more a basket of various domestic and external policies and implementation tools rather than a cohesive grand strategy.

Although the BRI is conceived as a mainly bilateral initiative within a multilateral framework, most projects are transnational in nature and thus require multilateral coordination and cooperation. Thus standards and rules must be developed that apply for the implementation and arbitration rules on the regional or at least sub-regional level. The question is whether China will thereby rely on existing international and regional norms or if it aims to promote its own rules and standards.

Both the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) are respected international organizations with a proven track record of providing regional public goods in the form of rules, norms, and institutions. Both are multilateral and inclusive institutions and cooperate for decades with China in multiple policy fields and in different formats. Compared to the EU, however, ASEAN is a much weaker norm-setter and lacks the power to enforce its rules. Exactly this limited power is a key reason why China officially endorses ASEAN’s regional centrality in East Asia; however, it is verbally also supportive of the EU integration process.

China’s adverse and norm-setting power in Europe

At least at the first view, the PRC acts currently in Southeast Asia and Europe as a norm-taker. However, China’s power is rising and Xi promotes a much stronger role for China in international politics. Accordingly, both ASEAN and the EU perceive China’s ability to become a norm-setter in their respective region as a strategic threat. Already now both organizations see China as having the adverse power to undermine their political unity in certain policy areas and thus their ability to set or enforce norms in their very regions. Certain ASEAN members (notably Cambodia and Laos) and EU members (Greece and Hungary) support Beijing diplomatically, thus undermining the consensus of ASEAN and the EU, respectively. Moreover, China already partly sets new norms, namely in the South China Sea and in Central Eastern Europe (CEE). In the latter region, the establishment of 17+1 is the most visible example of Beijing’s willingness to create new cooperation formats to promote its interests.

17+1 is a key reason for Brussel’s new skepticism of the PRC in general and the BRI in particular. China’s inroads to CEE, a strategically vital region which has also a significant global symbolic relevance, pose a strategic challenge to the EU. In Europe, most BRI projects are implemented in Central Eastern, Southeast Europe, and the Western Balkans. This diverse region is regarded as Beijing’s gateway to the more developed Western European markets.

The PRC established the 17+1 cooperation format already in 2012. (Before Greece’s admission in April 2019, it was known as 16+1.) Twelve out of the 17 European 17+1 members are also members of the EU. The EU governance system fully applies to them, but also indirectly on the five non-EU members (Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia), as they aspire to join the EU. However, Brussels influence on these five nations declined in the last years due to the slow progress of the accession talks.

Ironically, even though the Coronavirus originated in China, Beijing’s mask diplomacy, a new form of soft power, was successful in certain countries but is heavily contested in others. During the current Corona pandemic criticism on the EU grew in the Balkan countries. However, even a majority of the Italian citizens are critical of the EU, claiming the EU and the European partners did not support the nation enough. 52 percent of the Italians view China as a “friend”, while 45 percent see Germany as an “enemy”. Yet, 78 percent prefer that the EU leads the economic recovery process. Italy is the largest EU and the first G7 member that signed a BRI Memorandum of Understanding with China in March 2019.

In need of an EU strategy on China

The sheer fact that a non-European power created a (sub-)regional organization in Europe must be strategically concerning for the EU. However, unlike Emilian Kavalski claims, China is not yet “a fully-fledged European power” – rather it is a new and additional player in Europe where already the US, Russia, and Turkey promote their competing interests.

To tackle China’s growing influence in Europe, a cohesive and credible common EU strategy is required. It should build on the comprehensive and realistic, albeit very brief strategy paper of March 2019 in which the EU portrays the PRC as a partner, a competitor, and, for the first time ever, as a “systemic rival promoting alternative models of governance”. Due to the different economic interests of the EU members, however, a common position will be difficult to develop and implement. The EU’s lack of unanimity on democracy and human rights issues in China, most recently Beijing’s policies in Hong Kong and the autonomous region Xinjiang, demonstrate this problem.

Not only the political but also the economic dimension plays an essential role in any EU strategy on China. In general, infrastructure coordination and collaboration between the EU and China could be beneficial for both parties. Synergies between the BRI and the Master Plan on ASEAN Connectivity (MPAC) 2025 and the EU’s Trans-European Transport Network (TEN-T) program (since 1996, reformed in 2013) can be easily found. Yet, the EU has become more outspoken about strategic Chinese investments in Europe and the legal impediments for European investors in China. A breakthrough in the negotiations, though, could not be reached during the virtual EU-China talks in June 2020.

China’s economic interests in Europe may be a driver for accepting the EU norms. For example, in 2018, within the 17+1 format, a training center in Sofia was established with the aim that Chinese business people shall get familiar with the procurement and other relevant EU rules. Its establishment is a reaction to the legal difficulties the Chinese-Hungarian consortium faces in the implementation of the BRI flagship project in CEE, the high-speed railway connection between Budapest and Belgrade which should be extended to Piraeus.

China as norm-taker and norm-setter in Southeast Asia

Similar to the EU-27, the ASEAN member states thus far do not have a common position on the New Silk Road. This reduces the Association’s influence on shaping this initiative in its own region. A common regional position, though, would even be for Beijing difficult to overcome. As regionalism is in Southeast Asia based on intergovernmentalism and consensus, unanimity is for ASEAN even more difficult to achieve. However, in order to safeguard its regional centrality, the Association needs to actively strengthen its unity and speak with one voice towards the PRC. Yet, fears increased that certain ASEAN members, notably Laos and Cambodia, will become even more dependent on China by falling into a BRI debt trap. In 2012, Cambodia as ASEAN Chair was accused of promoting China’s interests during the ASEAN foreign ministers meeting. As a result, no consensus could be reached. For the first time in its history, ASEAN was therefore not able to issue a communiqué after a ministerial meeting – a diplomatic disaster for the Association.

In 2019, we witnessed two opposite trends of Chinese behavior in Southeast Asia: alleged attempts of Beijing to impose its rules in implementing the BRI but also measures to jointly develop common norms and standards. An example of norm-taking is that China makes use of existing infrastructure initiatives. ASEAN established well-functioning governance mechanisms on regional and sub-regional levels, especially in the Greater Mekong Subregion (GMS), cooperating with Japan and the Asia Development Bank (ADB). Literally, China now builds on the bridges Japan financed in the GMS.

In general, the governance rules of the China-dominated Asia Infrastructure Investment Bank (AIIB) reflect international standards of financial governance, not Chinese norms. However, the European diplomats As the negotiations about the AIIB standards demonstrated, coordinated critical responses of the European governments pose significant challenges “to China’s cultivation of its normative influence”.

An example of joint norm-developing is that in January 2019 China’s Council for the Promotion of International Trade and the Singapore International Mediation Centre signed a memorandum of understanding. The aim is to establish a mediation panel, comprising “experienced mediation professionals from China, Singapore, and countries involved in Belt and Road projects, who will familiarize themselves with the various jurisdictions”.

However, there are also examples of China’s willingness to impose its norms and interests. The opposition in the Philippines alleges that the Duterte administration agreed confidentially with Beijing on loan agreements for infrastructure projects. It claims the government waived sovereign rights and accepted that any arbitration procedure would be under Chinese norms. Moreover, Duterte has repeatedly offered concessions in the South China Sea in exchange for more Chinese investments. Even Malaysia under former Prime Minister Mahathir Mohamad accepted China’s superior power but was at least able to renegotiate the unfavorable terms for BRI projects, notably the East Coast Rail Link (ECRL), the former government had accepted.

China’s relations with Malaysia, the Philippines as well as Vietnam are overshadowed by the territorial dispute in the South China Sea. In this regional hotspot, China clearly disrespects international law. It does not accept the award of the Arbitral Tribunal of July 2016 which rejects China’s nine-dash line, as so-called “historic rights” have no legal base under the United Nations Conventions on the Law of the Sea (UNCLOS), and its main territorial claims in the Spratly Islands. Beijing proceeds with the building of artificial islands and further militarize them. In addition, Chinese vessels search for oil and gas in the Exclusive Economic Zones (EEZ) of Malaysia, the Philippines, and Vietnam. Talks on the Code of Conduct with ASEAN remain stalled. All in all, it seems as in the South China Sea (Chinese) might makes right.

Integrating China in the existing governance structures

If Beijing takes the political concerns of the Southeast Asian nations more into concern, the BRI may act as a catalyst for a better overall economic and political coordination and collaboration between Southeast Asia and China. Thereby ASEAN’s lean, but nevertheless principled governance approach could guide the governance of the New Silk Road in Southeast Asia and other regions. A completely new and specific Sino-ASEAN BRI mechanism would duplicate the existing formats. Moreover, relying on ASEAN governance mechanisms offers the PRC an additional advantage: “China seems to be able to live quite comfortably with an ASEAN style of diplomacy that its adherents are under no obligation to comply with, and yet which confers of fig leaf legitimacy, just from being a responsible stakeholder […]”, writes Mark Beeson.

BRI is a global project. In order to better include rising China in the existing international and regional governance mechanisms, compromises both from the PRC and the Western nations are required. Even though human rights, social and environmental norms, and values should be respected by all parties, there are many financial and practical governance structures and rules that could be reformed in the mutual interest of the industrialized and developing nations to more adequately mirror the interests of the Global South. In this sense, the BRI could develop into an initiative that reflects global rules and norms, but also values and mechanisms from different regions that are mutually accepted. The New Silk Road could then function as an internationally respected framework for multilateral collaboration in infrastructure and connectivity that complements rather than replaces the existing international and regional governance structures and principles.

 

This article is based on the article “Governance along the New Silk Road in Southeast Asia and Central and Eastern Europe: A Comparison of ASEAN, the EU and 17+1”, published in the peer-reviewed Malaysian journal of history, politics and strategic studies Jebat. The text has been shortened and updated.

Authors

Alfred Gerstl
Alfred Gerstl

President

Key Topics

ASEANEUChina

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