5 FEBRUARY 2005, Page 6

There are good reasons for selling arms to China, but better ones for not doing so

The USA is not always right, nor is it an easy ally. The Americans regularly forget the difference between an alliance and an empire. Sometimes, a partnership with America is a bit like being in bed with an elephant.

There would appear to be a clear case in point, the EU embargo on arms sales to China. Most of Europe wants to lift it, but the Americans strongly disapprove. One can understand the Europeans’ attitude. The embargo was imposed after Tiananmen Square: an understandable reaction. But in the years since then, China has been transformed. It is globalisation’s greatest success. Were it not for the strength of the Chinese economy, there could have been no Japanese recovery, while the Americans would not be able to finance their deficit and we have seen nothing yet. The latent economic energy in China is awesome.

Economics is not everything, and other aspects of Chinese life are more problematic. The Chinese leadership regularly cites Mr Gorbachev as an example of how not to do things. Even so, economic development must eventually lead to political change. Over the millennia, the Chinese have mastered every art except politics. They will now have to rectify that and they do not have long.

It will not be easy. Embedded in the Chinese official psyche is a profound fear that if the authority of the centre were to crumble, chaos would rapidly ensue. Chinese history offers no successful example of devolution, yet the country is far too large to be a unitary state. There is no simple model for China to follow.

The West has one role in all this: to offer encouragement while keeping its fingers crossed. There is no point in bleating on about human rights. The Chinese would only take offence, and their sensitivity is understandable. Chinese officials often refer to ‘the period of humiliation’, also etched on their psyche. This refers to the century or so in which China was a plaything for Western and Japanese interests. The Chinese are a people with a deep sense of history and an intense national pride. It may take them another century or so to feel wholly at ease with their former oppressors.

During the interim, we can merely hope that the process the Chinese describe as ‘peaceful rising’ will continue. It is in Britain’s self-interest that this should hap pen. We have always earned our living on the high seas, and over the next century the world’s great fortunes will be made, or lost, in the China trade.

British-Chinese relations are in good shape. Any difficulties over Hong Kong have been forgotten. There has been a considerable growth in Chinese studies in the UK. Eton allows new boys to start Chinese right away, while our universities are falling over themselves to attract Chinese students. On that subject, I heard an interesting comment from an academic, contrasting the Japanese and Chinese at his university. The Japanese tend to herd together, as if they were always looking for the girl with the little umbrella to direct them where to go. The Chinese are far more individualistic. It takes them about five minutes to throw themselves into the diversity of college life.

Given all these links, a Tiananmen-era embargo has become an embarrassment. To bracket China with Burma and Zimbabwe; no wonder the Chinese feel offended. There is no suggestion that our arms manufacturers should be able to sell everything that the Chinese could wish to buy. The embargo would be replaced by a code of conduct, intended to prevent sales which would alter the strategic balance in the eastern Pacific.

That might all seem straightforward, but it ignores the American factor. Though the Americans have one bad reason for supporting the embargo, they also have a good one, as well as a lot of leverage. The bad argument relates to human rights. Much of the American political class now judges other nations by abstract, universal criteria which take no account of historical development. The recent successes in Iraq will hardly have discouraged all that.

If George Bush were an ironist, his comment that there is no French word for entrepreneur would have been a witty remark. There are certainly no American words for realpolitik or raison d’état. Yet there is a raison d’état ground for American unhappiness about arms sales to China: Taiwan. The Chinese insist that it is part of China. It was seized from them, initially by the Japanese in the era when foreign powers were behaving like diners at a Chinese banquet and helping themselves to anything that looked tasty.

China is prepared to tolerate a de facto separation of Taiwan and to work for peaceful reunification. But there is a red line. Were the Taiwanese to declare themselves independent, the Chinese say that they would use force. Would they carry out that threat? Most experts believe that the answer would probably be ‘yes’.

If so, there would be a crisis. At the very least, the world economy would go into the deep freeze. There would also be a grave risk of a Sino-American war which could turn nuclear. The US is committed to the defence of Taiwan. In a rational world, there would be no danger of the Taiwanese declaring independence. They would be insane to risk everything for a few national symbols. But Taiwan is a democracy and, as such, prey to populist excitements. Nor will the Iraqi example have been lost on the Taiwanese. If Iraq can determine its future, why deny them the same rights?

It is to be hoped that there is a hotline between Washington and Beijing, an understanding as to what would happen if some hot-headed Taiwanese government did declare independence, and an agreement that any such statement should be ignored. George Bush has already slapped down the Taiwanese premier for rash comments about independence. Mr Bush understands Sino-Taiwanese realpolitik. The situation should be manageable. But there is a chance that it could all go horribly wrong.

That is why the Americans are in favour of the arms embargo. They are certain that the Chinese want to purchase ultra-sophisticated electronics which they cannot yet make themselves. As for codes of conduct, the US knows how that translates into French: ‘Don’t get caught.’ They are threatening to suspend technological co-operation if the embargo were lifted. They too would probably carry out their threat. This would damage Nato in general and the UK in particular. We gain most from US co-operation.

None of that would worry the French. Au contraire: they would be delighted at any weakening of Nato and even more so by the disruption of Anglo-American relations. Lifting the embargo would be in French interests. It is not clear why anyone believes that we would benefit. Yet our ministers seem to be drifting towards the French position. There needs to be a reconsideration. It might be possible to find a partial method of lifting the embargo that the Americans could reluctantly accept. Otherwise, and despite American clumsiness, Britain would be better off with the status quo.