Spanish court ruling could hurt China-Spain trade

Spanish court ruling could hurt China-Spain trade

Spain’s High Court has issued arrest orders to detain former Chinese President Jiang Zemin, former premier Li Peng, and three others over charges brought by Tibetan human rights groups in Spain. The ruling may damage trade ties between the two countries.

On February 10, 2014, Judge Ismael Moreno ruled that former Chinese President Jiang Zemin was responsible for acts of torture and human rights violations committed by his subordinates against the people of Tibet. Judge Moreno cited a Spanish law that allows suspects to be tried for human rights abuses committed abroad when a Spanish citizen is involved. This is not the first time that Spanish courts have undertaken such action against former high-ranking Chinese officials.

In November of 2013, the Spanish High Court put forth a similar order against former Chinese President Hu Jintao. In both instances, Chinese governmental officials expressed anger over the rulings. The Chinese Foreign Ministry has called on Spain to prevent further such court orders stating that “The Tibet issue is a core interest for China and the feelings of the people, and is extremely sensitive.” Ministry spokesman Hong Lei further stated that Spain’s allowing such cases would send a message to separatist forces in Tibet that their activities have support abroad.

China has had control of Tibet since its troops arrived in 1950. Long a source of controversy and criticism, recent events such as over 60 people being injured in protests have resulted in renewed attention towards the Tibetan issue.

Spanish officials issued the ruling after two Tibetan human rights groups and a Tibetan Buddhist monk first filed in 2006. In response to Chinese comments on the arrest orders, the Spanish Prime Ministers’ office has declined comment. An appeal by a Spanish public prosecutor to prevent the order from proceeding was rejected.

The appeal – and reports of unnamed Spanish government officials privately expressing worries over the order – may hint at a broader concern of potential economic ramifications. The order itself is symbolic, without any real likelihood of enforcement or detention. But there is reason to think that such worries may be well founded.

Bilateral economic cooperation peaked from 2005-2007, while the last couple of years saw a trade downturn, dropping 9.9 percent in 2012 alone. Recently, the two countries have made efforts to increase economic ties and particularly Spanish exports.

Indeed, exports to China are a critical aspect of Spain’s economy and its economic recovery. While 70 percent of the country’s exports are (unsurprisingly) to the European Union, a non-trivial 9.6 percent goes to China. In the face of weak domestic demand, the growth in Spanish exports to a variety of countries, with the fast growing segment being non-EU, has helped Spain’s economy considerably.

With exports becoming more important in light of Spain’s economic condition, are recent orders from Judge Moreno likely to result in trade ramifications from China? Based on official statements, Beijing views Spain’s order as not only an affront but also as an interference in an internal matter.

Historically Beijing has punished countries for similar reasons. In 2010, two researchers concluded countries that conducted high level political meetings with the Dalai Lama against Beijing’s objections were extremely likely to face economic repercussions in the form of reduced imports. These reductions typically ended after two years and cost as much as 8 percent of countries exports.

Although this is not a high-level meeting and a judge – not high level government officials – issued the order, this offers a cautionary tale. Spanish politicians from the ruling conservative party have expressed concern and are working to restrict the ability of judges to act on issues outside the country’s borders. While it is not certain if Spain will face a loss of exports over the detention orders, it is clear that Spain has become more export reliant and has sought to increase its trade flow to China. The arrest order is not going to help.

Categories: Economics, Europe

About Author

Sean Durns

Sean Durns worked as a research assistant to a former high ranking Pentagon official and the Director of National Security Strategies at a DC based think tank. His analysis has been referenced by a variety of media outlets including The Wall Street Journal, Roubini's EconoMonitor, OilPrice, and many more. He holds a M.Sc. in History of International Relations from the London School of Economics where he focused on US foreign policy, security studies, and energy security.