When you're going cup in hand to a country, it's very difficult to maintain the moral high ground. For a state, economic prosperity allows "ethical dimensions" to foreign policy (in theory). Now that China will almost certainly take a stake in the E.U through the sale of bonds, China will ask serious concessions of Europe, including a lifting of the arms embargo that Europe placed on its trade with China, after the Tiananmen Square massacre in 1989 when several hundred unarmed civilians protesting peacefully for democratic reform were killed. There were later reports that troops searched the main Peking university campus for ringleaders, beating and killing those they suspect of co-ordinating the protests.
The European arms industry is notable in that in includes a large amount of American spin-off technology and joint-concept development. American military spin-off technology is always entering the media, for example this woman's artificial exoskeleton enabling her to regain movement in lower limbs. But after 9.11 a significant portion of greater budgetary allowances went in Homeland Security - in particular, developing methods to combat chemical and biological weapons, or coping with dissemination, or of nuclear fall outs.
Even so, the US military research and development budget is peerless. But it's projected that research and development as a percentage of total defense spending is set to fall from 34.4% in FY2011 to 34.0% in FY2012, and that is set against a total reduction in defense spending. The conservative think tank the Heritage Foundation proposed this scenario under a re-elected Obama:
The conservatives rail against the differing trajectories of the United States and China and the EU developments will be vilified in the right-wing media. But the US defense budget, now running at about 5% of GDP (it was 4.7% in FY2010) became inflated after 9.11, pursuing two foreign occupations and concerned about the use of CBN weapons on its own soil. The U.S. defense budget is still about six times that of China but the generational gap in technology is closing. Given the aging population in the United States as the baby-boomers hit retirement (lucky them) there is teh requirement for a correction in spending. Military expenditure as a percentage of GDP is still historically low for the United States (it hit 3% in 1999-2001 as there became a vacuum of perceived threats) which reached as high as 9.4% on the Vietnam war. True, Europe spends as nations anywhere between 1 and 2.5% of GDP on military, but it was not a superpower in the Cold War, forced to alloy its military-industrial complex into foreign policy.
Yet there are problems with the EU-China development. With technology, China, like Israel in the specifically military sphere, and India is a leader in reverse engineering (reverse engineering, Guochanhua, also has a subsidiary area related to copyright and computer code called Clean Room Design or Chinese Wall). Reverse engineering requires creativity and innovation. With today's technology, it also requires vast computational expertise which fits and compliments China's designs on building a peerless cybercapability. The danger isn't at all that China will procure European military hard and software, but that its brilliant reverse engineering will create a second generation of these acquisitions, rendering obsolete the equipment the European's sold.
Robert Gates, concerned with the lack of interoperability between the ever advancing United States and his European allies offered a plaintive critique in Munich shortly before he left his post as Secretary of Defense. Nato had a "dim if not dismal" future because of European penny-pinching. In the current list of priorities with the European Union, Nato isn't top. "It's the economy, stupid." People must eat before they can go to war.
If the arms embargo is lifted it will certainly show that American hegemony has disappeared because at the height of their power in the 90s they would never have allowed such a move. Further, if the arms embargo is lifted (and surely the European Union will not lift all aspects of the embargo) the conservative commentary in America will paint Europe as set to become a military research and development laboratory for China. This will further lead to fragility in Nato. Presumably the UK, out of the Euro, may retain some independent juristiction on its arms trade, but it works hand in hand with so many European partners that this may be a moot point.
Of course, wealth is relative and not homogenous in a society. In fact in several new authorative reports the very rich in society have not just got relatively richer, but absolutely wealthier, despite the economic downturn. I'm writing a blog on this in the next couple of days.
Today, the words of Eisenhower as he warned of the dangers of the military-industrial complex seem ironic:
"we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations. This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."
This economic development could very much shift the strategic landscape. The United States, which really underpinned materially the Libya adventure, and without which, the Gadaffi regime would probably still be in existence in some form, could step back from European military assistance in the future. Consider the furore over the stealth helicopter crashing in Abottobad and the fears of Chinese reverse engineering. Given that mindset, why would the U.S. give Europe cutting-edge technology in the future? Joint Strike Fighter? What Joint Strike Fighter?