From the Iran nuclear issue, climate change, Diaoyu/Senkaku disputes, to the Norwegian Nobel Committee's decision to honour Liu Xiaobo, China is used to throwing its economic weights around.
China's deputy foreign minister Fu Ying told Nobel Institute Director Geir Lundestad at the end of last month that such as decision 'would pull the wrong strings in relations between Norway and China, it would be seen as an unfriendly act.'
After the award was announced, the Chinese foreign ministry denounced it as 'obscenity' and warned that it could harm diplomatic relations between China and Norway.
It is a clash between China's authoritarian capitalist model and the universal values of human rights and democracy promoted by Western nations. And for too many times governments and corporations have chosen to prioritise pragmatic over human rights concerns. In February 2009, two months after Liu Xiaobo's arrest, US Secretary of State Hillary Clinton landed in Beijing with a conciliating message: 'our pressing on those issues can't interfere on the global economic crisis, the global climate change crisis and the security crisis.'
Norway is also prepared to manage relations with China carefully. Foreign minister Jonas Gahr Støre said the Norwegian government and Nobel Committee are completely independent from each other. Norway is prepared to maintain its relations with China in accordance with its 'long range policy.'
The two countries are currently involved in discussions over a bilateral trade deal, which could serve as a blueprint for a similar agreement between China and the European Union. Norway's Statoil also announced in August that it aimed to export its expertise through the exploration of shale gas in China.
The question of whether human rights and pragmatic concerns come first has long been subject to debate. The US introduced the 1974 Trade Act the Jackson-Vanik Amendment which denied normal trade relations to countries with emigration violations, specifically targeting Soviet Union.
Until accession into the World Trade Organisation in 2001, China was covered by the provisions of Jackson-Vanik, although the US president had granted normal trade relations status to China using the waiver provisions since the late 1970s. This evolved into a yearly human rights controversy during the 1990s after the Tiananmen incident.
After more than three decades of rapid economic reforms, China has made itself indispensable to the functioning of the world economy. With unprecedented interdependence, states are confronted with the stark choice between realpolitik and principled foreign policy.
This conflict between principle and practicality is real. In 2006, Canadian Prime Minister Stephen Harper initiated years of frosty Sino-Canadian relationship by attacking China's human rights record: 'I think Canadians want us to promote our trade relations worldwide... but I don't think Canadians want us to sell out important Canadian values - our belief in democracy, freedom, human rights...'
What followed were cancelled talks between the two countries' leaders, as Chinese president Hu Jintao said that Canada had made 'irresponsible remarks about internal affairs.' Stephen Harper, conspicuously absent at the Beijing Olympics, remained unmoved through most of 2008. With the outbreak of the financial crisis, criticisms from the business and conservative communities and a realisation that Canada needed to diverse its dependence on the US led to a Canadian rapprochement with China, cumulating in Harper's visit to China in December 2009, almost five years after the Canadian leader took office.
To Western nations, China's brand of capitalist authoritarianism is particularly difficult to deal with. In 1989, we declared the End of History with the fall of the Berlin Wall. In 1999, George Bush senior declared: 'Trade freely with China and time is on our side.' It has now become apparent that Western hopes that globalisation, development and integration will make China more liberal are misplaced. The Nobel Committee rightly observed that China's economic reforms have lifted millions out of poverty, but political change has not kept up.
In face of China's pragmatism, some are pessimistic about the effects of the Nobel Peace Prize. Catherine Baber, Amnesty International's deputy Asia-Pacific Director, said, 'This (Nobel) award can only make a real difference if it prompts more international pressure on China to release Liu, along with the numerous other prisoners of conscience languishing in Chinese jails.' The Economist also views that 'major Western powers are little inclined to jeopardise their relationships with China for the sake of individual dissidents.'
Some in the West call for more pragmatism in dealing with China's pragmatic approach. Francois Godement, China expert at the European Council on Foreign Relations, proposed that the EU should build coalitions with others affected by China's rise, and take advantage of the few areas where it has real leverage over China.
Liu Xiaobo's award shows that the West has not forgotten those who are struggling for freedom and democracy in China. But until Western democracies find a way of resolving the conflict between principle and pragmatism, realpolitik and capitalism may yet again proved to be the Achilles heels in their promotion of human rights in China.
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