Europe's oldest embargo - arms sales to superpower China

15 Mar 2011, Frank Slijper

After the bloody suppression of protests in Beijing's Tiananmen Square in 1989, the European Union (and the US) ordered an arms embargo that applies until today. From a human rights perspective this is fully justified: the situation remains appalling and attempts at democratic reforms are nipped in the bud. At the same time the embargo is also clearly politically motivated, to keep China as small as possible in military terms. While the economic relationship with China has grown, military co-operation rightly remains a thorny issue. Despite cracks in the embargo it won't be off the table any time soon. Yet it is a question how long the blockade will be maintained with China strengthening its power base.

With a duration of over 21 years, the arms embargo against China is the longest-running European embargo, only that against Burma (Myanmar; from 1991) comes close. On the other hand, it is only an embargo in the most literal sense. Where in the case of Burma list of constraints is the fairly exhaustive, the Chinese arms embargo was never precisely defined. For that reason, and because in those days there was no use of a common list of military goods, it has always been left to the individual member states to see how comprehensive they would make the embargo. Thus, the British government in 1995 stated that they left possibilities for the export of military goods that cannot shoot and cannot be used for internal repression. Therefore Searchwater radar was allowed to be sold to China. For years, Chinese military delegations receive invitations to British arms fairs. France in recent years even supplied naval guns, as well as helicopters and sonar for frigates. Germany also exports numerous diesel engines (in some cases built under licence in China) for everything from submarines to armoured vehicles and tanks.

The Netherlands, in turn, has always felt that night vision equipment could be delivered without problems. Since the 1970s, Photonis (since 2005 part of the same French group; before, it was part of Delft Instruments) delivers night vision technology to China, including complete production lines. From 1990 to 2001, almost ten million euros worth of military night vision equipment went to China; from the late 1990s much of this this technology was re-labelled “dual-use” (both military and civilian applications) enabling even smoother export procedures. Delft Instruments in 2001 received a new order to supply a production line, due to "its position in the forefront of technology", according to the company’s annual report. In the following years, image intensifier tubes - the heart of a night vision goggles – worth many more millions of euros go to China, often under the veil of "surveillance and security purposes". Whether they are really used for “civilian” destinations (rail, ports, forestry, Olympics) they are said to be meant for remains obviously the question as Dutch officials also admit. In a few cases clearly military users, such as border troops, are considered an acceptable destination.
Another notable issue is that of the Chinese rapid-fire cannon for naval vessels which shows remarkable resemblance to the Goalkeeper of Thales Netherlands. The Dutch government and Thales say they believe that the lookalikes a good example of Chinese copycat skills, but of lesser quality. Still, the question of how China acquired the technology remains unanswered.
The most important step in recent years, however, is the Dutch permit in 2006 – with a state-backed export credit – to export military electronics "plus associated training and logistics services” to facilitate a Thales Netherlands deal. The equipment worth 3.5 million euros was provided to a Chinese shipbuilder working on four frigates for the Pakistani navy. In view of the previously acknowledged Chinese copy skills, it deserves mentioning that the exports got a green light with simple reference to the fact that Pakistan, not China was the final destination.
A little later, in 2007, the then Ministers of Foreign Affairs and Defence - Verhagen and Van Middelkoop – told Parliamant that the government would "not oppose lifting the EU embargo, if the context so require". This position is not known to have changed since.

The US embargo was always complete, with a ban on the supply to China of all military goods and services. But since President Obama in 2010 put the door ajar for the delivery of a Hercules transport plane – with China only authorised to use it for combating oil spills at sea - European manufacturers dream of new market opportunities and the easing of European export controls. So Italian Finmeccanica, one of the four largest European arms manufacturers, recently announced that if export restrictions would be relaxed, China could become an important growth market, eg for military transport aircraft.

Early in 2010, for the first time in years, lifting the embargo was on the Brussels agenda, at least that was the intention of Spain -- but like previous attempts, everything remained as it was. Similarly in late 2010 the issue appeared on the agenda of the EU High Representative for Foreign Affairs and Security Policy, Catherine Ashton. France also looks to terminating the embargo, but more Atlantic-oriented countries continue to support the American line, also partly from a practical standpoint: Washington has repeatedly said that European companies could forget US deals if they sign contracts with the Chinese army. In addition, there is a broader fear of damaging relations with the US.
As long as the embargo is in place, the European arms industry will therefore primarily focus on tapping civilian markets, such as passenger aircraft (Airbus/EADS) and non-military ships (Damen Shipyards) hoping that in the future these contacts may evolve into military orders.

Partly forced by the European and US embargoes, China has over the past 20 years mainly focussed on Russian arms. Because the Russians have not always wanted to sell the newest technology to the Chinese - wary of their infamous coping skills - parts of the military, including the Air Force, are certainly less sophisticated than Beijing would have wanted. Nevertheless, the industry, with large sums of state aid, has in recent years caught up technologically in an impressive way. At the Zhuhai airshow in southern China in November 2010 a series of unmanned aircraft (the big trend in military aircraft) was proudly presented to the world, as were also some increasingly-capable fighter aircraft and other weapon systems. Not only does this serve China’s domestic demand, China is also no longer a third-class supplier of exports to pariah states. Apart from controversial clients such as Sudan, Pakistan, Burma and Congo, in times of economic crisis less controversial governments also show interest in the favourable price/quality ratio of Chinese weapons. And just like Western countries do, for China arms exports are also an ideal way to connect with resource-rich countries: easy access to natural resources that feed China's industrial engine, in exchange for quality weapons. Therefore in recent years China has increased its influence, especially in Africa and South America.

In that respect, one could argue that the tremendous economic growth and the associated military modernisation of China in recent years have overrun the effectiveness of the European arms embargo. Western arms industries still enjoy a significant technological advantage, but given the pace at which China modernises its military, in about ten or twenty years most of that gap may be bridged. But, from an arms control perspective this is of course irrelevant. That the Chinese regime does not allow all kinds of basic, universal human rights is a good enough a reason not to sell arms to it. On the other hand, Europe uses double standards when the same does not apply to a whole range of other countries that have an equally dubious reputation. Without trivialising the Chinese labour camps and the suppression of democratic forces, the question arises why sanctions against China last for 21 years, while there is no embargo whatsoever for dictatorial countries such as Kazakhstan, Chad or Syria. And because of its boundless oil thirst the capitalist world unscrupulously and massively delivers weapons worth billions of euros to Saudi Arabia, one of the world's most repressive regimes.

Published in War Profiteers' News, March 2011, No. 28
http://www.wri-irg.org/node/12351