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Europe and China: Rivals or strategic partners?

29/11/2011

Below is the Executive Summary of the report, highlighting particular outcomes and future recommendations, please check back soon for the full report.


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Executive Summary

The world order is changing rapidly with “the 21st Century being the Asia-Pacific Century” Zoltán Martinusz, Principle Adviser on External Relations to Herman Van Rompuy, President of the European Council, said in an opening address at the Understanding China Policy Summit on November 29. Asian values and perspectives are moving up the global agenda Martinusz told the meeting which brought together European and Chinese policymakers, business leaders and academics to discuss whether Europe and China were rivals or strategic partners.

The European Union needs to establish a partnership with the Asia’s economic powerhouse, China, “as a matter of strategic necessity”, said speakers at the conference. Chinese Ambassador to the EU Song Zhe, delivering a message by Prime Minister Wen Jiabao, said it was critical that China and the EU continued to expand and deepen cooperation. The Chinese Premier welcomed the launch of the Europe-China Forum, a joint initiative by Friends of Europe and the Chinese Mission to the EU.

Building a stronger EU-China relationship, however, could be fraught with difficulties, for as author Martin Jacques pointed out, for the first time the West has to respect other countries’ value systems, although Hua Chunying, Counsellor at the Chinese Ministry of Foreign Affairs, believed that Chinese-European relations were now sufficiently mature to discuss differences openly.

The EU and China must form alliances so they can tackle outstanding global issues, such as energy security or climate change, said Viorel Isticioaia Burdura, Managing Director for Asia at the European External Action Service. Fortunately the omens are good on both sides, for as former EU Commissioner Lord Leon Brittan, now Vice Chairman of UBS said, “China has an overwhelming interest in a multi-polar world and in a strong Europe”. Xia Youfu, Executive Director of the Strategy Centre for China’s Open Economy and International Technology, described the EU as “very important for world peaceful development”.

The Chinese panellists referred to the momentous economic, social, legal and political changes taking place in China and underlined that the next Five-Year Plan will herald a redirection of the industrial and economic base to stimulate domestic demand, move to an innovation economy and switch to low-carbon or ‘green’ growth; these were all moves that offer trading opportunities for the EU, said Wu Changhua, Greater China Director of the Climate Group.

China is being more assertive in international affairs, through its role as one of the BRIC countries, and in the G20. Like other emerging countries, China is seeking to reform current global governance fora - the World Bank, the IMF and WTO – so that they better reflects its concerns.

Hua Chunying said Europe needed to be confident it would overcome its current difficulties, be more tolerant towards China, and that patience, mutual understand and trust are the watchwords of the relationship.

Inevitably, economics plays a major role in the partnership. As Vice President of the European Commission and European Commissioner for Competition Joaquín Almunia, put it, “China is at the top of our agenda”. Despite this there are trade barriers on both sides: European companies find barriers to investment, procurements, subsidies, intellectual property rights, and complain of a lack of a level playing field. Chinese companies, meanwhile, complain they face discrimination, and face linguistic, cultural and legal barriers in the EU.

Given the eurozone crisis, it was inevitable there would be suggestions for a Chinese bail out for Eurozone economies, but views differed greatly: Some panellists thought this would be a good idea, whereas others thought Europe should solve its own problems and learn from past mistakes. Lord Brittan, for example, felt it would be “a great mistake”. Interestingly, it was mentioned that the Chinese government felt the EU could ride out the difficulties and remain a pillar of world stability.

A number of participants stressed the importance of building partnerships on non-state levels, particularly business-to-business, as well as on the educational and military levels.

It became clear during the discussions that while both sides are keen to develop the relationship, it is beset by a number of long-standing ‘irritants’, for the Chinese: the embargo on selling military hardware to China, the refusal to grant China market economy status (MES) within the WTO, and Europe’s focus on China’s human rights record. Xia Youfu complained that “Europe is full of pride and prejudice. In the negotiations the Chinese get nothing on market access, weapons embargo or anti-dumping”.

On the tricky issue of China’s human rights record, Chinese panellists responded that the Western view of human rights was not necessarily the only one, as human rights should include the right to life and development: “We do not agree with our European friends when they say these are not fundamental rights”, said Chen Shiqiu, Vice Chairman of the China Society for Human rights Studies and Expert of he United Nations Human Rights council Advisory Committee.

 

 

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