Daily Archives: November 2, 2011

The leaders of the group of 20 leading economies first convened almost three years ago to address the financial crisis. As now, there were deep doubts about the financial fundamentals of a major global economy. As now, authorities were struggling to bring Main Street the financial stability it needed, without going too far beyond what it wanted. As now, the immediate challenge was to contain financial panic and the deeper challenge was to lay a foundation for renewed and inclusive prosperity.

The depression that looked possible then has been avoided but the outlook is hardly satisfactory. What can be learned from the last three years as the G20 gathers in Cannes? The world’s leaders, especially the Europeans, will ignore these lessons at their peril. 

China is likely to react sympathetically when Europe approaches it for assistance, directly or indirectly. All Brussels has to do to win support is to treat China as pragmatically as it treats Russia. It is striking that Europe does not indulge in ideological grandstanding on democracy and human rights in Russia, but does in China.

A few simple symbolic gestures could win significant favour in Beijing. The EU has so far denied China the status of “market economy”, even though it will gain this automatically in 2015 under current World Trade Organisation agreements. Another possible symbolic gesture is to lift its arms embargo. This does not mean that the EU will begin arms sales to China. That will not happen. But the removal of the embargo would end a humiliating condition imposed on China, and not on Russia.

China has sound geopolitical interests in keeping Europe together. A strong, united Europe provides an alternative economic pole, reducing China’s reliance on the United States. If Brussels is to persuade Beijing to make a substantial commitment to Europe, it has to demonstrate more geopolitical competence – and also more independence in managing relations with China.