The EU Arms Embargo With China: The Challenge of Dual Use Technologies


2012-10-11 By Richard Weitz

The EU arms embargo is now seen by China as well as the EU more as a symbolic act of protest than as a tool for actually changing Beijing’s behavior.

Technically, EU members are not legally forbidden from selling military items to China. However, the 1989 EU (then the EC) declaration is a political commitment and EU governments are supposed to uphold its spirit.

The constraints on arms exports do not aim to inflict economic punishment, but rather are designed to send a strong message about European values. Most disputes between the EU and China still concern human rights, which remains the single most significant stumbling block between the two parties.

Yet, there is no universal understanding of what the embargo entails in practice.

Each EU member interprets the embargo in terms of its national laws, decision making processes, and regulations. Since the EU lacks strong foreign policy institutions, the arms embargo against China is best seen as a collection of national EU arms embargoes.

As a result, the EU collective stance lacks coherence or means of enforcement.

On June 4, 1989, the People’s Liberation Army (PLA) violently suppressed protesters, who had been calling for greater government openness and democracy in Tiananmen Square and elsewhere in China. The killing of many unarmed demonstrators provoked international outrage and led many countries to adopt sanctions against Beijing, including an embargo on the sale of weapons.

The EU declaration (then by the 12-member European Community) establishing an embargo comprises one sentence in a June 17, 1989, communique issued shortly after the massacre: “In the present circumstances the European Council thinks it necessary to adopt the following measures… interruption by the member states of the community of military cooperation and an embargo on trade in arms with China.”

From the perspective of many in Europe, the rise of China has transformed the embargo from a symbolic gesture into a genuine trade impediment that decreases China’s willingness to do business with Europeans. But China has taken self-defeating actions at key moments when it looked like the EU might lift the embargo. Credit Image: Bigstock 

Despite the existence of an EU-wide embargo on selling weapons to the PRC following the use of the Chinese military to suppress peaceful protesters in 1989, EU companies have been able to find loopholes in the embargo by selling components and incomplete technologies rather than complete weapons to Beijing.

For example, according to the British Institute for Public Policy Research, despite the embargo, the United Kingdom has still been able to engage in the trade of weapons components and technologies with China, granting licenses to companies to sell ₤500 worth of military technologies and parts to China between 1997 and 2006.

In addition, the Chengdu Aircraft Corporation used French aircraft design software to develop its J-10 fighter.  The aerospace technology transferred to the PRC for building A320s can be applied to bombers and military transport aircraft. German marine diesel engines power the new Chinese Navy 054A naval frigates, while the PLA Navy uses British-built Deep Sea Recovery Vessels for maritime rescue.

A clear case of Sino-European dual-use interaction advancing from European exports to bilateral joint development is the joint venture between Eurocopter and Harbin Aircraft Industry Group in researching the medium EC-175 helicopter, which is likely to enter PLA service as the Z-15.

The framework for the EU’s arms control is the EU Code of Conduct on Arms Exports and the European Communities export control for dual-use items. These regulations are, however, implemented at the national level, leaving considerable room for national interpretation.

For example, paint for military applications is banned as they appear on national munitions lists; on the other hand, diesel motors that can be used in submarines, and technology that can help shoot down satellites, can be exported without difficulty.

In addition, the fragmentary nature of EU’s arms exports has prevented the compilation of a comprehensive list of which technologies have been transferred.

Since the fall of 2003, France has sustained a campaign calling for lifting the embargo.

In 2003-2004, then President Jacques Chirac stated that the embargo was “of another time and no longer corresponds to today’s realities.” There seemed to be sufficient political approval from influential EU members to lift the ban, but the U.S. government threatened to exclude EU firms from the U.S. arms market if the Europeans lifted the embargo.

At times, other countries, notably Spain and Greece, have supported repeal, though this may have been a form of political posturing. Western leaders announce their support for ending the embargo to curry favor with China, knowing that the embargo will remain since it can only be revoked by a consensus of all EU members.

The embargo debate gained renewed attention in January 2010 when Spanish Foreign Minister Miguel Angel Moratinos said that his country would use their turn at the EU’s rotating presidency to propose lifting the embargo. 

The statement took many in the EU by surprise, with some analysts ascribing it as a Spanish gambit to improve economic ties with China. The statement had little practical impact since the most influential governments that had supported lifting the embargo in 2004—France, Germany, and the United Kingdom–had all come under new leaders considerably closer to the United States and more wary of China’s rise.

In contrast, the United Kingdom has generally opposed lifting the embargo.

Some of the EU’s new members from the former Soviet bloc have joined with Britain on human rights grounds, remembering the horrors they suffered under Communist rule. Germany, Denmark, and several other countries have wavered back and forth depending on the government in power. The European Parliament has also enacted resolutions calling on the EU to keep the embargo. Although the Parliament has no formal powers in this area, its position carries some moral weight as reflecting popular views.

From the perspective of many in Europe, the rise of China has transformed the embargo from a symbolic gesture into a genuine trade impediment that decreases China’s willingness to do business with Europeans.

The rationale offered by some Europeans for allowing EU corporations to transfer dual-use technologies to the PRC is to stimulate Chinese demand for supporting EU technologies, satisfy technology transfer requirements for joint ventures, curry favor with the Chinese government, and acquiring more insights and influence regarding Chinese dual-use R&D. European firms have a clear advantage over their U.S. counterparts in the area of competing for dual-use sales to China. U.S. companies face severe sanctions for transferring sensitive technological information to foreign governments; European, as well as Japanese and Russian, firms generally do not encounter the same obstacles.

Proposals to relax the embargo have always encountered strong U.S. opposition since the U.S. military could easily find itself fighting Chinese-armed countries if not the People’s Liberation Army itself.  With regards to China’s military ambitions, the United States has potentially more to lose from PRC military modernization, compared to Europe. Unlike the Soviet Union, China is not an existential threat to the EU’s territorial integrity, political independence or economic system. In contrast, the United States is concerned about Chinese military activities because they potentially threaten U.S. allies in Asia.

A further concern for the United States in the event that the EU lifts its arms embargo is the effect it will have on Taiwan-Chinese relations.

The Taiwan Relations Act authorizes U.S. arms sales in support of Taiwan.  The Chinese Anti-Secession Law of 2005, designed to formalize the Chinese option to use force against Taiwan, has strengthened U.S. concern that EU weapons could potentially be used against Taiwan.  The recent improvement in the PRC’s relations with Taiwan has reduced fears about a PRC military strike against Taiwan, but concerns regarding North Korea have increased. The United States and its regional allies worry that increased EU defense sales to China would risk allowing sensitive military technologies to flow from China to its rogue state allies, especially North Korea.

PRC officials have pressed to obtain more advanced dual-use technologies from EU companies as well as a comprehensive repeal of the embargo. The Chinese have been lobbying the EU to scrap their arms embargo, describing repeal as primarily of symbolic importance to recognize PRC’s full acceptance as a normal regime.

Chinese representatives have consistently described the embargo as an affront. In January 2010, for instance, the Foreign Ministry said that, “the [embargo’s] discrimination does no go along with the current world trend and the development of a comprehensive strategic partnership between China and the EU.”  Furthermore, the Chinese media belittles the EU’s subordination to Washington: “if the EU repeatedly resorts to excuses of external factors…it will make people more convinced that the EU is still a political dwarf.”

PRC representatives have argued that the arms embargo has had little impact on their country’s military capacity and has simply, in the words of China’s ambassador to the EU, denied European defense companies “a chunk of business.” 

Yet, they complain about the embarrassment of placing China in the same category as other EU-sanctioned countries such as Sudan, Zimbabwe, and Myanmar.

For example, in November 2011, Hua Chunying, counsellor of the Department of European Affairs at China’s Ministry of Foreign Affairs, said that the “Arms embargo against China, along with the [EU’s denial of] market economy status issue, in essence, are symbols of political prejudice and inequality.”

Similarly, Meng Xiangqing, deputy director of Strategic Research Institute at the National Defense University of the People’s Liberation Army, said Beijing wanted to remove the embargo not in order to buy weapons but because “the arms ban is a purely political problem which embodies political discrimination and inequality.” Meng explained that this issue was still important “because behind the political discrimination and inequality is whether there is strategic mutual trust between China and the EU.”

Europeans obviously do not want to antagonize their largest trading partner, especially as they have become increasingly reliant on China’s help for their economic recovery.

But China has taken self-defeating actions at key moments when it looked like the EU might lift the embargo.

For example, China enacted an “Anti-Secession Law” in March 2005 that legitimized its right to use force should Taiwan make moves toward independence.

And in 2010 Chinese diplomats irritated many EU governments by urging EU embassies in Norway to not send representatives to the Nobel Prize awards ceremony for dissident Liu Xiabo.

Editor’s note: There is also the question of China and its role in supporting states going through the Euro crisis.  We have looked at the impact of China on Greece in sorting out an exit strategy from the Euro in our Strategic Inflections Point Report.