Stanley's blog

After more than two weeks in China, and a third visit in two months, I offer a number of reflections and recommendations, including on developing the so-called “strategic partnership”.

EU-China relationship

This is best characterised as: “Europe, we still love you. We’ll love you even more if you get your act together externally – as a counterweight the Americans.” (see below)

Beijing regards the post of European Council President as the more important, apparently being the external voice of the EU. They see Herman Van Rompuy as an excellent conciliator etc but a low key figure. He is welcome in Beijing.

Catherine Ashton is highly thought of by both MOFCOM & MFA and is seen as good for EU-China relations.

Trade

There is no indication that market access will be improved or investment restrictions reduced, in the foreseeable future.

The trade negotiations are not progressing at all satisfactorily.

The EU should seek an early deal on market economy status (MES) for two reasons: if the EU does not negotiate soon it will be granted automatically in 2015-6, rendering negotiations useless. There is still an opportunity to wring some market & investment access commitments out of Beijing. The Chinese need to appreciate that a positive approach to the lifting of MES is in their interests, because of its effect on protectionist trends. The time is also opportune as Beijing has raised the same question with Washington.

Agreement would also act as a stimulus to the overall relationship. It was one of the two key ‘demands’ Wen Jiabao made in his meeting with European scholars (see below).

The EU should state specifically what concessions are required, proposing that, asy, half of them be fulfilled before MES is granted.

Non-trade

The trade provisions will inevitably be decoupled unless the trade mechanism could be incorporated under the umbrella of the Partnesrhip & Cooperation Agreement (PCA).

PCA negotiations are progressing but the Taiwan, human rights and ICC clauses have still to be agreed. The EU should insist on Taiwan clause wording that China has accepted with third countries, and that provisions previously agreed with any Member State be ignored.

The human rights clause should be limited to repeating the commitments China has already undertaken.

In my view, the Chinese will not sign the PCA without an EU commitment to lift the arms embargo, or possibly, the granting of MES. Beijing is right that listing China among a handful of pariah states is totally inconsistent with the treatment of a strategic partner.

The Commission should categorically state that the embargo in no way controls the sale of arms – that task falls to the arms export code, which is supposed to be tightened. Wen Jiabao has offered to give an undertaking not to buy arms from EU Member States (see below). Hypocritically, arms-producing Member States may not agree.

It is to be questioned what arms could be sold to China which they cannot already buy or produce of the same quality. The Commission should ask for an authoritative, independent report on the effect of the embargo and the arms code (and a revised one), examine what arms are currently sold to China by Member States and what arms China cannot currently acquire, and make recommendations. There should be a public hearing. A lobbying campaign in Congress is also recommended.

Tibet remains a souring factor embedded deeply in the Chinese psyche. Germany and France have been ’punished’; now Denmark is in the freezer. This is unacceptable and the 27 should stick together.

Now that the UK has officially recognized that Tibet is part of China, the European Council should agree: (1) to restate that Tibet is part of China, (2) to state that EU governments are entitled to meet on their own territories whomsoever they wish, and (3) to tell China that in the light of its sensitivity, Member State leaders will only meet the Dalai Lama as a religious leader and never on government premises.

It should always be borne in mind that the Chinese leadership seeks a good reputation for China and for the country to be regarded as a constructive, responsible international player.

The EU should agree its core objectives to match China’s, which are: preservation of existing system; preservation of territorial integrity; and maintaining a positive environment for continuing economic development. These might be: reduction of trade deficit by increasing access to Chinese market and investment; protection of intellectual property; and helping China with its democratisation process and human rights improvement.

The EU suffers from insufficient officials speaking Mandarin and knowing China: this contrasts strongly with the US. It is essential that the new EES initiate a programme for training officials on contemporary China and to speak Mandarin.

Negative public opinion (assisted by media reporting) in both the EU and China needs to be reversed. The disillusionment on Europe by young educated Chinese is particularly worrying. Misperceptions abound. There is a need for an intensive programme to promote mutual understanding. Communication, particularly by the Chinese, needs drastic improvement.

There is a serious lack of mutual trust. Trust comes from working together. Mutual understanding facilitates working together. When EU and Chinese negotiators meet, it is essential that they understand how the other sees the problem and its context.

The EU should promote a study on university-level text books on contemporary and historical China, to see whether they paint a fair picture.

China and the EU should finance a much larger programme of youth exchanges.

Serious consideration needs to be given to the obstacles to ratification of the PCA, when agreed, with particular regard to the European Parliament.

China-EU Summit

Apart from climate change, there does not seem to be great interest in the Nanjing summit agenda. No serious breakthrough seems achievable. A positive result on climate change would be highly desirable. Expectations and communication of the results need to be managed.

Chinese scholars and others attach greater importance to summits than Europeans – who rightly see it as part of a process. The number of agreements signed is watched closely. It is important to include a reference in the joint statement to the fact that many agreements were signed during Premier Wen’s visit to Europe in January. The statement must be agreed promptly, avoiding the unfortunate 2007 Beijing fiasco. A shorter statement would help.

Foreign policy

China is more assertive, but does not want to be perceived as so.
China eschews a leadership role.
• Deng Xiaoping’s axioms in this regard (“Bide time, conceal capabilities, but do some things”, “China should adopt a low profile and never take the lead”) have been modified, but the new formulation is not yet known. (ref: China’s 11th Ambassadorial Conference in July 2009)
• This Chinese attitude is encouraged by China’s apparent success in dealing with the financial and economic crisis, the cause of which it publicly blames on the US.
• China has been more active in a number of areas, eg: China is the biggest UNSC member contribution to UN peacekeeping; disaster relief; Africa and other developing countries.
• Despite China’s concern about instability in the region, China is reluctant to get involved over Afghanistan, Iran and N Korea. It regards the primarily responsibility to be that of the US.
• Afghanistan: There is also concern, because of the Xinjang problem with the Uighurs, not to attract a terrorist backlash; and also that the NATO objectives are not achievable.
• Iran: The need for Iranian energy overrides the nuclear threat, although Beijing does not want Iran to go nuclear.
• N Korea: Again, China is unhappy about the nuclear threat, but China’s prime concern is to avoid instability through the collapse of the regime, which would lead to a huge immigration problem for China.

Obama visit

The visit was not an unqualified success.
• The official joint statement was bland on sensitive issues, as expected, eg “Both sides recognized that the United States and China have differences on the issue of human rights.” The Human Rights Dialogue is to continue.
• Significant was the agreement to establish a joint Clean Energy Centre with headquarters in both countries and the Electric Vehicles Initiative.
• The major contentions are: of the Chinese, market economy status, protectionism and barriers to Chinese investment in the US; of the US, the value of the RMB, intellectual property and US access to the Chinese services market.
• Hu Jintao’s mind was probably on three nos: no to more arms sales to Taiwan; no to seeing Dalai Lama; and no to support for Xinjiang separatism.
The body language of the two Presidents was telling.
• The Chinese media coverage was mixed, with Obama not necessarily being the leading item unless Hu Jintao was involved.
It was sad to see an American president holding a press conference without journalists being allowed to ask questions.
• It is very difficult to gauge the impact of the visit on the public.
• The ‘town-hall meeting’ in Shanghai was unfortunately scripted to a certain extent, and Chinese participants carefully selected and trained.
• The meeting was only televised for the local audience and there was strict censorship of Obama’s statements on sensitive issues, eg his call for an end to internet censorship, but the statement spread around the Net in China.
• Phoenix TV (a privately owned Hong Kong-based Mandarin speaking station) pulled the broadcast after 10 minutes or so. Xinhua.net showed nothing, although advertised it.
• The US media coverage appears to have been mainly negative, but of course influenced by the domestic political scene. There was even talk of Obama being “humiliated”. There is no doubt that the Chinese got their way in the organization of the visit.

Forum on China-EU Strategic Partnership

The prime question to address is: why did Beijing choose to hold such a major event. The decision was only taken in late September. There were some 200 delegates and another 100 observers. The Chinese official line-up was impressive, including Li Keqiang, Li Junru, Dai Binguo, Zhang Zhijun and a separate meeting with Wen Jiabao (see below). Over 50 Chinese and some 28 European scholars participated.

The unspoken message from the Chinese government was, in my view: “Europe, we still love you. We’ll love you even more if you get your act together externally – as a counterweight the Americans.” The decision to hold the conference (sponsored by 10 leading think tanks, including the Party School) appears to have been influenced by the Obama visit and the fact that the PRC-EU summit will not be held in Beijing.

This message was confirmed by the excellent and indeed friendly and informal atmosphere. No move was, however, detected in the Chinese negotiating positions.

Themes discussed were: the strategic significance of the China-EU partnership; China’s development mode; China-EU media cooperation, humanitarian and cultural exchanges; the status quo and prospect of China-EU trade and investment relations; approaches of China and EU to address financial crisis and reform of the international finance system; and cooperation on climate change, energy and environmental protection.

Wen Jiabao

The premier spent more than one hour in discussion with the European scholars, led by Jean-Pierre Raffarin, Peter Medgyessi and John Prescott. The following points emerged from what Wen said:

• We live in a “multipolar” world (the word “multipolar” and not “multilateral” was used).
• There is a PRC-EU strategic partnership; China does not have one with the US. It should be “comprehensive”. There are currently 60 mechanisms.
Wen told Obama that the G2 idea was unacceptable for three reasons. First, China will be a developing country for a long time. Second, China pursues an independent foreign policy and seeks neither alliances nor blocs. Third, the world should not be led by a couple of countries.
• Trade, of course, figured large in Wen’s mind. China seeks European technology. Climate change will be high on the agenda at the summit.
• Protectionism must be fought.
• Wen was asked what big idea would move the relationship forward? He replied: the EU lifting the arms embargo and granting MES.
China is prepared to agree not to buy arms from Member States. I do not recall such a public statement before.
• The Chinese government will study Medgyessi’s proposal to create a joint wise persons’ group to advise how to create a strategic forum. He will also explore this with President Barroso.
• Wen said that he was prepared to go to Copenhagen if it would help.
• Wen recognized that with 27 Member States, reaching consensus is more difficult.
• He was happy that the Lisbon Treaty had been ratified and saw the two appointments as a further institutional step in integration.
• Beijing would watch closely and try to figure out what changes the new treaty will bring about.

Think tank meeting

This took place at CASS, after the conference. Participants were: Cheng Weidong (IES), Ding Chun (Fudan University), Ding Yifan (WDI), Feng Zhongping (CICIR), Jiang Shixue (IES), Liu Fei (IES) Ye Jiang (SIIR), Zhou Hong (IES) and Zhu Liqun (FAU) ; Brødsgaard Kjeld Erik (Denmark), Crossick Stanley (BICCS), Holslag Jonathan (BICCS), Kynge James (Financial Times), Niquet Valérie (IFRI), Tran van Thinh Paul and Wacker Gudrun (SWP).

The facilitators were Zhou Hong and Stanley Crossick.

The following are points which emerged from the meeting:

• There was deep concern about the negative European public opinion of China, fuelled by the media; and the increasingly negative view of Europe in the eyes of young educated Chinese. In both cases, misperceptions played a large part.
• The Chinese probed the Europeans on whether the EU’s building of an identity influenced its foreign policy, and whether the foreign policy is ideologically driven. Some believed that there would be a European army.
• Misperceptions also exist among scholars.
• It was agreed that Chinese external communication was poor.
• The Chinese believed that a strategic partnership required the lifting of the arms embargo and the granting of MES.
• There was stalemate between China and the EU.
• China and EU as asymmetrical powers is a structural problem to be better understood by both sides.
• Expectations of each other are too high.

It was decided:

• To study the ways of influencing Chinese and European public opinions towards a better understanding of each other and find better ways of improving understanding and collaboration with the media.
• In order to do this, it is necessary to try to understand the roles of Chinese and European think tanks/scholars in China-EU relations by identifying the key interests they work for and their relations with their national and local governments, and EU and national in the case of Europe, and with each others’ societies (including university students) and media.

Recommendations

1. The EU should seek an early deal on MES.
2. The EU should insist on Taiwan clause wording in the PCA that China has accepted with third countries.
3. The EU should make lifting the arms embargo a priority.
4. The Commission should ask for an authoritative, independent report on lifting the embargo. There should be a public hearing.
5. The 27 should agree a concerted position on Tibet and the Dalai Lama.
6. The EU should agree its core objectives to match China’s.
7. The new EES should initiate a programme for training officials on contemporary China and to speak Mandarin.
8. An intensive programme to promote mutual understanding, remove misperceptions, reduce negative public opinion and improve communication, should be launched.
9. The proposal to create a joint wise persons’ group to advise how to create a strategic forum, should be rejected. There should be set up a small High Level Committee of Understanding or Integration, involving representatives of the stakeholders.
10. The EU should promote a study on university-level text books on contemporary and historical China, to see whether they paint a fair picture.
11. China and the EU should finance a much larger programme of youth exchanges.
12. Serious consideration needs to be given to the obstacles to ratification of the PCA, when agreed, and with particular regards to the European Parliament.
13. A Forum on the China-EU Strategic Partnership should be held in Brussels ahead of the 2110 EU-China Summit.

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