The Evolution of the EU-China Relationship: From Constructive Engagement to Strategic Partnership; Embracing the Dragon: The EU's Partnership With China
Like everybody else, Europeans are becoming fascinated by China's rise and its potential to transform the international system. The EU is already China's largest trading partner, and European executives and investors still dream about the opportunities presented by the Chinese market. But the relationship is now also spreading to other, more "political" areas, including climate change, human rights, Iran, energy, satellites, and arms sales. These three studies reflect both growing European interest and a European consensus that engagement is the best way to ensure that China develops peacefully. The Zaborowski volume includes essays by some of Europe's top China watchers, including particularly good ones by Peter Ferdinand, François Godement, and Eberhard Sandschneider. Casarini includes a useful analysis of the EU's aborted plan to lift its arms embargo on China and how that episode caused a huge rift with the United States. And Barysch convincingly makes the case that Europe's engagement with China is not only already greater than many realize but likely to continue to grow as well.
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America's economy is in its eighth year of sustained growth, transcending the German and Japanese "miracles." This is no fluke. America's unique brand of entrepreneurial capitalism is based on a series of advantages that explain the stunning success of the 1990s and provide the basis for extending this winning streak. These strengths include deft managers, technological innovation, and a culture that values rugged individualism -- all fueled by finance capital that can nimbly meet the needs of a globalized, rapidly changing economy. Furthermore, the era of the deficit is over. Pessimists who warn of inflation should be ignored; American business leaders understand that today's low level of inflation is self-perpetuating. America's prosperity is structural, not transient, and its lead over Europe and Asia will only widen with time. America had the twentieth century. It will also have the twenty-first.
Eurasia is the axial supercontinent. It is home to most of the world's politically assertive states and all the historical pretenders to global power. Accounting for 75 percent of the world's population, 60 percent of its output, and 75 percent of its energy resources, Eurasia's potential power overshadows even America's. For these reasons, the United States should begin paving the way to a transcontinental security system that will ensure Eurasia's future is more peaceful than its past.
Only a few years ago pundits were sure that the United States was losing to Asia and Europe and had to emulate their more state- directed economies to remain competitive. Now the conventional wisdom is that America is number one and that the rest of the world should adopt its more laissez-faire approach. In fact, neither caricature is right. Asia was booming and now it is slumping, but it will be back. Europe's underlying ossification will persist. But most important, while the U.S. economy is in a period of robust growth, nothing fundamental has changed. Its long-run growth rate has not accelerated, productivity has not risen, and the structural unemployment rate has fallen by one percentage point at most. Come the next recession, all this triumphalism will seem silly.
