Dr.Klaus Ebermann: Far East/Near East relations seen through European eyes

Message: there is a case for stronger Chinese presence in the Near East

Four  particular “discoveries” after having left China, during my stay in Egypt from 2005 to 2009:

• “New Egypt” as a vibrant and successful economy, with economic growth around 5% even through the current period of economic/financial crisis, thanks to substantial economic /financial reform and modernization policy since 2004; “top reformer” in Africa and Middle East, high rank for ease of doing business among emerging (for Egypt: re-emerging) economies; examples Orascom (telecom, also in Europe), Oriental Weavers (also in China), a regional hub for ICT, all on top of oil, gas, tourism, Suez canal; even if Middle East Peace Process (MEPP) continues to stall and non State actors create extremist tension in the region, the real world of business is well ahead of politics
• Global importance of the Near East, not only, as obvious,  for oil +gas, main Asia/Europe trade route and ICT link, but also politically: MEPP failure poisons UN relations, spills directly  into Central Asia, other Asian Muslim countries, even countries with Muslim minorities such as China; likewise, for religious fundamentalism, terrorism, obscurantism in place of secularism; in addition, migratory pressure from the region (population growth) and through the region (Soudan, sub Saharan Africa)
• Complexity of Arab-Arab relations, multiple friends and foes among countries (and people) of the region adds to the distinctly different model of  Islamic social fabric and society; as a result,  difficult for foreigners to understand and therefore multiple errors of judgment (e.g. “Greater Arab Initiative” or “Regime Change” for the US, variable perceptions and links from EU Member States) Russia, Turkey
• “Wanting China” (title of business magazine last November: ”development of economic relations between Revolutionary Egypt and New China”) still rather one-sided affection with surprisingly low profile, despite manifold Government visits both ways; China’s model of development abroad and at home putting peoples well being into the center (the “eight principles” including “truth from facts”, peoples’ livelihood, harmony in diversity, holistic thinking) and, more recently, the successful navigation through the economic crisis have given China enormous attractivity and political capital in the region

Seen from Europe, what kind of conclusions to draw from this picture? Resist, just observe, or encourage? Definitely, encourage and create a win/win/win for the triangle Near Est/China/EU

•  Strong point for those asking for more China investment into the region: US, while traditionally strong, lost substantial shine during Bush administration and now disillusionment after high hopes for Obama (Cairo speech); with Israeli bias, no progress on settlements, on Gaza, on MEPP; if any, only limited fresh US impulses expected, Congress permitting; as for the EU, we deploy our strongest policy and tool box (European Neighbourhood Policy, “everything but membership”, 1 bio € of projects and programs, Free Trade Zone) and yet, only the 2^nd basket (ec. cooperation) of Barcelona Process/Euromed/ENP has thrived while the 1^st (political) and the 3^rd (“people to people”) have stalled, because of Israel for the former and immigration/visa realities for the latter; also, different priorities among EU Member States; Russia is coming up, but has little to offer; likewise, for Turkey
• China, on the other hand is shining: UNSC, BRIC, FOCAC and successful management during the economic crisis bring assertiveness and clout , worldwide, so why not more in the Near East? Stability in that region is important for China and the key element for maintaining/obtaining stability is to upgrade living conditions, infrastructure, competitiveness and most of all: jobs
• FDI is a trump card for China, because where else could substantive additional investment come from during the persistent economic slowdown, worldwide, if not from China? Risks are certainly not higher than in Afghanistan, Iran, Soudan, Algeria, but returns could be rather interesting (Egypt as manufacturing and outsourcing platform for largest possible Euro-African market,  processing and transformation potential in trade, skilled labour, but production cost lower than in most other emerging markets, no.1 outsourcing destination in Africa already, ICT leader in the region), and on top cheap gaz, oil and substantial  renewable energy potential (wind and sun)
• Political windfall could include China taking more than a bystander’s role in the region and accept  sharing some global responsibility for the region, including the protection of China’s own interests (which exist, with or without stronger economic presence)
• European interest in the region, building on proximity and strong historic/cultural/economic links, aims at contributing to having a prosperous, viable and stable neighbourhood. Again: job creation, living conditions, institution building and, furthermore, secular modernization. Migratory flows, illegal immigration are warning shots right in our own neighbourhood. At a time when financial markets have substantially dried up and religious zeal by non State   actors threatens stability in a region with rapid growth of population it should be in our interest to have another major actor with a secular agenda and both political and  economic/financial weight contributing to strengthen stability. We will remain competitors, but this time products/services would come from ENP countries.
• Win/win/win is obvious for the Near East at the receiving end; for Europe there would be a welcome addition of a strong stabilizing factor at Europe’s southern flank; and China would not only address a contagious risk factor important for China itself, but it would also build up economic presence for a large market with potentially sound return, and without reinforcing current trade imbalances    

                                                     Dr.Klaus Ebermann

                                                      Brussels, 5.2.2010

Disclaimer: this outline recapitulates the oral presentation made on 26 January in Beijing. Both the spoken word and this outline represent the personal views of the author.