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The joint EU-China statement of 29 January, after the visit to the Commmission of Premier Wen Jiabao, opened by stating that, “[t]he visit has increased mutual trust, promoted bilateral cooperation, and achieved complete success.” This is very encouraging. Wen, who last visited Brussels in 2004 noted that mutual trust between EU and China had in fact increased. “A strong Europe can ensure a multi-polar world. The biggest country in the world and the biggest group of countries in the world will create a big impact on the world”, Wen said.

“This visit is intended to have a lot of symbolic value. I think the Spring Festival time was chosen for good reason.” explained Zhou Hong of the Chinese Academy of Social Sciences. “China wants to show it’s ready for a fresh start after the recent troubles, ready to expand communication and coordination, especially over the financial crisis.” Wen’s diplomats describe his seven-day visit to Europe as a “journey of confidence”

The atmosphere was excellent and the Premier charming. The Chinese delegation was very constructive, determined to put the Summit cancellation issue behind the two parties and move on.

Both sides expressed satisfaction with the progress made in bilateral cooperation. The two sides emphasized that the China-EU relationship has gone beyond the bilateral domain and is increasingly of global strategic significance. And that it is imperative to further improve the China-EU comprehensive strategic partnership. Dialogue will be intensified so as to increase mutual understanding.

The postponed Lyon summit (by China because of contacts with the Dalai Lama, notably by Nicolas Sarkozy) will now take place in Prague, probably in April. The usual annual summit will take place in Beijing probably end November: two summits in one year are frankly too much. The second China-EU high-level forum on economics and trade will take place in Brussels in April 2009.

The meeting focussed mainly on the financial and economic crisis, its social impacts and attempts to form a global response, particularly with the G20 summit in London in April in mind. Tackling climate change, international relations, research cooperation, civil aviation, clean energy and education were also discussed

Coordination on macro-economic policies will be enhanced. Positive measures will be taken to overcome the financial crisis and facilitate the liberalization of trade and investment. Both sides emphasized that open, free and fair trade and investment opportunities necessary to tackle the global financial and economic crises. This is not solvable without strong cooperation between China and EU.

There were mutual commitments to working on climate change, energy supply and food security. Again this is not solvable without strong cooperation between China and EU. Cooperation in crisis management, on the UN’s Millennium Development Goals and sustainable development everywhere.

Wen was urged to increase the value of the renminbi, he argued that China’s currency policy was correct and that the RMB has appreciated by 20% against the US dollar since 2005, and that the stability of the Chinese currency was needed to maintain a reasonable and balanced basis and, will play a positive role in stabilizing international finance and the economy.

The following nine Cooperative Agreements were signed:

Erasmus Mundus External Cooperation Window, China Strand

This programme will provide opportunities for hundreds of Chinese and European students and academics to pursue their studies in Europe and China, respectively. The China strand under the Erasmus Mundus programme amounts to €26m for five more years, (i.e. from academic year 2009-2010 onwards).

EU-China Policy Dialogues Support Facility (PDSF+)

The purpose is to provide additional funds (€1.8m up to a total of €7.8m) to continue facilitating and supporting the implementation of the different Policy Dialogues between the EU and China.

Civil Aviation Cooperation Programme

This project will provide institutional capacity building to relevant Chinese governmental and industrial entities to accommodate the rapid growth of China’s civil aviation sector and it envisages the transfer of knowledge and best practices from the EU.

China-Europe Public Administration Project II (CEPA II)

The aim is to help improve the performance of the Chinese administration and public service and establish dialogue platforms between European and Chinese public administrations.

Europe-China Clean Energy Centre (EC2):

A permanent centre in Beijing will be created to promote the use of cleaner energy technologies and to support energy conservation and efficiency, thus assisting China in its transition to a low-carbon economy.

Bilateral Coordination Mechanism on Forest Law Enforcement and Governance (FLEG)

The overall objective is to contribute to the reduction of illegal logging and associated trade globally, in order to promote sustainable development.

Memorandum of Understanding on Occupational Health and Safety

This MoU provides a framework for policy discussion, mutual learning and exchanges of experiences and good practices in the occupational health and safety field, including the safety of workers in coal mines.

Action Plan on Customs Cooperation between the European Community and China with regard to enforcement of Intellectual Property Rights (IPR)

This Action Plan is intended to strengthen the application of customs controls to combat counterfeiting and piracy in the trade between the EU and China and to provide a basis for further actions to combat counterfeiting and piracy.

EC-China Agreement on Drugs Precursors

The objective of this bilateral agreement is to strengthen administrative co-operation with Chinese authorities to monitor trade and prevent the diversion and trafficking of drug precursors in international trade

Conclusion

The European Brussels visit was a charm offensive taking in Davos, Berlin, Brussels and London. He also lectured at Cambridge University on “See China in the light of her development”. Paris was excluded because President Sarkozy recently met the Dalai Lama. Germany was previously punished and relations have been reasonably restored.

Wen Jiabao clearly wants to improve China-EU relations, after the Chinese postponement of the Lyon summit. One can only speculate why. Was it simply that Beijing wishes to improve relations with Europe, or because of the global crisis and the risk of protectionism or because of concern that Washington will get tough with China?

I does not matter why as it presents an opportunity to expedite negotiations on the PCA/Trade Agreement, but this needs both a well thought-out strategy and effective tactics.

The visit appears to have deepened mutual trust and promoted bilateral cooperation. This would be extremely positive for China-EU relations with the opportunity of development in several areas. The leaders believe that strengthened cooperation has global significance and is conducive to peace, stability and prosperity and in particular, the resolution of the current crises.

Cooperation and close cooperation between the two entities would further boost trade and investment liberalization and expedite the resolution of issues such as climate change, energy security, food security and sustainable development.

It appears that China, as well as the EU, would like to see the long term relationship strengthened. Tests of the depth of bilateral relations will be the G20 summit in London in April on the economic and financial crises, and the discussions on climate change preparing for the meeting in Copenhagen in December.

But it will not be ‘plain sailing’. There remain a number of Chinese ‘noes’ as shown in a rare interview given to the media (Financial Times). It looks doubtful that China will give a substantial sum to recapitalize the IMF. Beijing still refuses to place limits on carbon emissions. China will do all that is needed to maintain growth at around 8%: Wen says that this is the best contribution to solving the economic crisis that the country can make. After the immediate crisis, China may rethink its long term strategy for its monetary reserves.

Chinese policy towards Europe is substantially influenced by domestic problems. Growth has slowed and unemployment is rising. This is exacerbated by a severe ought in northern China – considered the country’s breadbasket – which has hit almost 43% of the country’s wheat crop this winter, senior officials have warned. Low rainfall since October has affected more than 9.3m hectares of land across six major grain-producing provinces, according to official sources, which also warned that 3.7 million people and 1.85 million livestock had lost access to drinking water. Henan Daily has reported that the drought

Beijing’s prime concern is to avoid social and politically unrest. The present danger is in rural areas, exacerbated by the return of rural workers who have lost their jobs in the cities. The legitimacy of the Party very much depends on sustained growth. An example of its nervousness is the recent clampdown on media reporting. As Premier Wen said, “Many people in the West think that China is afraid of elections and democracy. Only if you have the trust of the people will they be willing to keep you in power.” Trust is best achieved by China maintaining its growth.

The real proof of the extent to which the EU-China relationship has improved will be in actions rather than words.

PS: Partnership & Cooperation Agreement

There were Partnership & Cooperation Agreement (PCA) negotiations in Beijng in the before Wen Jiabao’s visit. Significantly, the non-proliferation clause was agreed. There are now around 24 clauses in play, 14 of which have been agreed and six nearly agreed.

Note: the contents of this post will be published by the Brussels Institute of Contemporary China Studies (BICCS).

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