Now Europe Faces China's Wrath

It's an old complaint, but a justifiable one. When the U.S. raises human rights issues around the globe, its European allies nod their heads in sympathy, let America take the political heat, and then quietly book the big export orders and investment deals themselves. In China, the ploy has enabled European joint ventures to corner 80% of the auto market and a nice piece of the commercial aircraft market. When Beijing gets annoyed at Washington, it takes business away from U.S. companies and throws it to Europe. So a huge deal General Motors thought it had closed suddenly goes to Daimler Benz, and $1.5 billion in planes promised to Boeing wind up with Airbus Industrie. By leveraging its huge market, China has been able to effectively play Europe and Japan off against the U.S.

Until now, perhaps. On Jan. 19, the German Bundestag voted a motion criticizing China's human rights record in Tibet. Beijing quickly gave Bonn a dose of what it usually reserves for the folks in Washington. Just weeks after Premier Li Peng stated that China would favor Europe over the U.S. commercially because Europe downplayed human rights issues, Beijing canceled a scheduled visit by German Foreign Minister Klaus Kinkel. Bonn then canceled trips by two other Cabinet ministers. The government of Chancellor Helmut Kohl is now scrambling to smooth things over with China and protect the billions of dollars in contracts signed by German companies.

The fear China has generated in Germany and the U.S. shows that it is imperative for the Group of Seven leading industrial nations to come together and present a common policy toward the emerging giant. This does not mean bludgeoning the Chinese on a thousand different issues, from how they should protect their own environment to how they should run their own orphanages. It does, however, involve explaining that certain human rights are universal and that expressing concern for them doesn't necessarily threaten the sovereignty of China.

A coordinated G-7 policy toward China would also help define the rules of its entry into the World Trade Organization. Right now, Europe and the U.S. are at odds over whether China should enter as a developing or developed country. A G-7-brokered compromise is needed to expedite China's entry. This would make trade problems a multilateral matter, not a bilateral one.

As the experience of Korea, Taiwan, and other nations has shown, a sure path toward democracy is via economic growth and prosperity. The Group of Seven can play a significant role in generating that prosperity and that democracy in China.

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