Select Committee on Foreign Affairs Minutes of Evidence


Examination of Witnesses (Questions 1 - 19)

TUESDAY 13 JUNE 2000

MR HUGH DAVIES, DR CHRIS HUGHES, MS KATIE LEE AND PROFESSOR MICHAEL YAHUDA

Chairman

  1. May I welcome our four witnesses of the first panel to the Committee this morning. We welcome Mr Hugh Davies, who is a former British Ambassador on the Sino-British Joint Liaison Group, and is now Asia Adviser to Prudential plc. We welcome Dr Chris Hughes of the London School of Economics. Ms Katie Lee, Director of the Great Britain-China Centre, welcome, and Professor Michael Yahuda of the London School of Economics, welcome again. We, as a Committee, have embarked on this inquiry, which is looking into the policies and role of the Foreign and Commonwealth Office in relation to China; so our focus is the United Kingdom administration, how we maximise our contact, our influence, our relationship with China—this colossus in all of its manifestations—in terms both of the UK plc and the United Kingdom as a country, with a serious concern about human rights, cultural exchanges, and so on. We are, as you know, at the start of our inquiry. The Committee will, in fact, be visiting China—Beijing, a number of regional centres, and Hong Kong—from next Saturday; so it is wholly appropriate that we listen to you and discuss with you, as experts on the China field, so that we might learn and, through us, our colleagues and our wider public. It is perhaps those misperceptions that I would like to begin with: on how we try to understand China, China to understand us, and seeing ourselves as others see us. We are going, on Saturday, as a parliamentary delegation. It would be helpful, as a start, to know how the Chinese perceive that. Do they see the difference in kind between the British Government, the administration, and a parliamentary body, with clearly a very different perspective? Who can help us on that?

  (Mr Davies) I think my experience would suggest that they see Parliament of this country, as parliaments of other countries, as very much part of the whole panoply of the state. They find it a little bit more difficult to distinguish between parliamentary attitudes and governmental attitudes than we do. So I think that they will regard your deliberations and your decisions as being extremely important in terms of their perception of how the British Government will be reacting towards China in the future.

  2. In so far as we are independent of Government policies, sometimes critical of Government policies; in so far as we take a position on human rights, for example; will that be seen to be an echo of Government policy? I do not know if any other colleagues would wish to come in. Professor Yahuda?
  (Professor Yahuda) There are experts in China who understand these things quite well. Whether that would be true of the people they advise is another matter. Of course, they have become accustomed to the independence of the American Congress. Whether or not they understand the difference between the parliamentary system here, where the executive has to have a majority in the legislature in order to govern, as opposed to the American one, where obviously Congress is much more independent in that sense, is a moot point. I think they tend to look to governments, to the executive, to handle any embarrassing things that Parliament may throw up. In the British case, they tend to get reassurance from the Government side that they need not worry too much about what may or may not be said in Parliament, even though they are representative of particular bodies of opinion of a particular country.

  3. I was going to ask next about the National People's Congress. Can I pose the question in a different way in respect of the National People's Congress, whom we are obviously going to meet. To what extent is there a degree of independence? How should we field with the NPC?
  (Dr Hughes) The NPC has been growing steadily more independent. It is far from independent in the sense that we understand it. It has, over the past decade, expressed dissent from the administration.

  4. Can you give examples of that.
  (Dr Hughes) In particular, on the issue of corruption and law and order. The usual process is for almost unanimous assent to anything that the Government does; but with the issue of law and order and corruption there has been a steadily decreasing vote of approval when the reports are given each year. So that is the key issue in Chinese politics, at the moment, and a good example of where the NPC can voice deep public concern on this issue. That would be an example. But it is far from independent.

  5. Any examples in the field of foreign affairs?
  (Dr Hughes) Not that I can think of, no. That is a different issue altogether.

  6. What role does the NPC have in Parliament?
  (Dr Hughes) I can think of one issue which is not easy to define. They would not define it as foreign affairs. The Taiwan issue, for example. There was apparently some dissent during the last presidential election in Taiwan in 1996, where the local delegates from the NPC were not happy with the military manoeuvres that were carried out along the coast opposite Taiwan. In their definition it is not foreign affairs.

  7. They were more doveish in respect of Taiwan and its administration?
  (Dr Hughes) That is right. It is always hard to assess the truth of that. It is very difficult to establish exactly what does goes on. There were quite a lot of reports at the time that the representatives from those coastal areas were very unhappy and expressed their dissent about the manoeuvres that were going on.

  8. One final point. The European Union as a force in foreign affairs. To what extent do they distinguish us from our European colleagues? Clearly Hong Kong was one reason why bilateral relations were important but what is the perception of the United Kingdom within the EU context?
  (Dr Hughes) Since the Desert Fox operation in 1998, when the United States and the United Kingdom operated outside the Security Council remit, there has been a growing perception that the United Kingdom is more allied with the United States than it is with Europe due to a shared doctrine of intervention. That is one aspect. On the other hand, they see Europe as a pole in what they see to be a multi-polar world order. I am not sure whether they see the United Kingdom as part of Europe or not. Sometimes they do but sometimes—
  (Professor Yahuda) May I add one or two points. One is that the main problem for the Chinese leadership, as they see it in the world, is the United States. Therefore, they are looking to Europe and also to Britain, as not exactly counter-weights to the United States, but at least as some sort of centre which can reduce the capacity of the United States to lay down the law. Associated with that they look at the European Union first of all as an alternative market, as an alternative supplier of technology, but also as having a political voice that is separate from the United States. Obviously they hear that voice loudest in France. To a certain extent, they sense it here in the United Kingdom too. So there is a certain ambivalence in the way they look at the United Kingdom. In one sense it is seen as American's closest partner in Europe. On the other hand, it is also seen as part of Europe. It should be noted that they also seek to try and play on some of the differences between, say, France and Britain or Germany and Britain, as a way of trying to get a degree of advantage in commercial terms.

  9. On the WTO were they surprised, when they had done their deal with the United States, that it was not the end of the story? That the EU also had a voice as well?
  (Professor Yahuda) I think they were a little bit surprised. They felt, quite rightly, that the United States was the key, but I think they thought that the European Union did not have that much leverage. It was possibly a salutary lesson for both sides, to have the matter prolonged in the way that it was. To reach a conclusion that, in the end, involved a degree of compromise on both sides.

Sir John Stanley

  10. As the witnesses know, this Committee's responsibility is to examine the performance of the Foreign Office. Therefore, our terms of reference of this inquiry are to enquire into the role and the policies of the FCO in relation to the People's Republic of China. Against that background I would be grateful if each of the witnesses could list for the Committee what they consider to be the successes of the British Foreign Office during the lifetime of the present Government, and what they consider to be the failures in the British Foreign Office during the present Government's lifetime. Mr Davies, I am sure, will put his distinguished past behind him.
  (Mr Davies) That is very unfair, Sir John! I was, of course, in the Foreign Office until only 15 months ago. I was associated very closely with what I think is probably the major achievement of foreign policy towards China over the last 20 years and that is the successful return of Hong Kong. I think that was by all measures a very successful operation, which took many years and many people's efforts. It certainly was not simply down to the Foreign Office, but the Foreign Office was the instrument through which many of the contacts were made. Failures: I am not certain I shall venture into an attempt on failure. On the whole, the Foreign Office is faced with the difficulty of handling the relationship with a very, very important and growingly important country, where there are issues that come to face this country. It has already been touched on by the Chairman. The question of human rights, Tibet, and Taiwan and these issues. They are very difficult to handle. Inevitably there will be times when matters are perceived to have been mishandled by Government, whether it is the Foreign Office or other parts of the Government. Certainly there was a great deal of criticism after the visit of President Jiang Zemin about the police handling, and a perception that the Foreign Office was partly responsible for that. I am not going to enter into that discussion, but I will just flag that up as a point which caused concern at the time. In my view, I would say that the Foreign Office, (but I would say this, wouldn't I?) does its best in difficult circumstances. In general, the relationship between China and the United Kingdom has come through difficult times but is now, at the moment, set on a fairly fair course. I think the Foreign Office has a lot to do with having achieved that.
  (Dr Hughes) I suppose the Foreign Office has done a good job in terms of consular affairs and facilitating trade and investment and so on. It does that kind of thing well. But to many of us outside the FCO it sometimes appears that they could take (I am searching for the right word here) a more positive or forward looking attitude on other issues; specifically, security issues. To give an example: I think there is a crisis, at the moment, in relations with Taiwan. I just wonder what sort of policy is being developed or how far forward it is looking. What sort of contingencies are being prepared for an issue, with so serious an aspect, which does threaten security and regional stability? So I am not quite sure how much thought is going into those sorts of issues.
  (Ms Lee) I can only comment at a micro level. One of the successes I would have thought is the establishment of a Human Rights Project Fund, which has been very influential in increasing the number of exchanges between Chinese partners and the United Kingdom on a number of key issues of concern.

Chairman

  11. Can you give examples.
  (Ms Lee) We ran a British Law Week at the time of the visit of the Prime Minister, and within that there were a number of seminars supported by the Fund. We have run a criminal court procedure seminar. There is a whole range of projects that have been supported by this Fund. If there is a failure, the failure is that there is not enough resource there to do more. In terms of our work, they are extremely supportive.
  (Professor Yahuda) I agree with Mr Davies about the significance of the return of Hong Kong. I think that was a very, very difficult time. At the time, as you know, opinions were divided on the British side as to how best to handle this. I think that, in the end, the matter seems to have been handled—at least from the British side—with a degree of success. Certainly the Chinese seem to be honouring their side of the bargain. If there is a problem there, it is more to do with the position of the local government in Hong Kong, which perhaps is putting less emphasis on developing further this "high degree of autonomy" that was promised than many people would wish to see. More broadly, there has been a success obviously in arguing that we have now entered a new phase in Sino-British relations. There were successful visits of leaders. There is an issue which arises with regard to seeking to develop a dialogue on human rights rather than confrontation, as it is sometimes called. That is, what are the criteria for judging this as a success or a failure? That seems to be very, very unclear. If one is to say one wants to have a continual interchange with the Chinese side on human rights, doubtless you could say, yes, that is a good thing. It is looking for the long-term. It is encouraging a greater interaction between the Chinese and the outside world. From a long-term point of view it is an encouraging change. But in the meantime the Chinese Government can be doing many, many objectionable things arising out of its own ruthlessness, or sense of weakness, perhaps, or sense of danger. There may be occasions when Britain needs to take a more robust position. It is not very clear what criteria will apply when such a thing might be required.

  Chairman: Before you continue, Sir John, Dr Starkey has a supplementary.

Dr Starkey

  12. Really, to Mr Davies. He said that the hand-over in Hong Kong had been successful. I wondered if he could be slightly more specific about what his criteria were for measuring that success.
  (Mr Davies) If one looks from the broad historic point of view, the chances of achieving what was achieved were, at an earlier stage, regarded as fairly low. It was a very unprecedented operation that the two sides were embarked upon. "One country, two systems", which was the concept of Deng Xiaoping, was pretty revolutionary; but actually to put flesh on the bones of that was very difficult. Although the Joint Declaration in itself was a major triumph in 1984 in getting the two sides to agree on the outline, actually fitting in all the details that were subsequently done over the next 12 to 13 years; and getting an enormous measure of consensus at the end—despite the major political difficulties that the two sides faced domestically—was a very great achievement. If you woke up, as I did, in Hong Kong, on 1 July, you did not notice any difference to what Hong Kong had been like on 30 June other than that the flags had been changed. The achievement of really achieving a smooth transition through a major change of sovereignty, from a system which was bound here by parliamentary democracy to a system which was not bound by such a system of accountable government, back at the metropolitan centre, was a remarkable achievement. It is one of which this country and China can be proud.

  13. Do you think it was universally successful for everybody, including the people of Hong Kong?
  (Mr Davies) It is difficult to judge for each individual. Of course, there have been one or two issues that have arisen since the hand-over and these have been well documented: to do with decisions in the Court of Final Appeal and one or two other issues. Most people in Hong Kong are relieved that the situation has gone as well as it has. However, there is one factor which cannot be counted out. That on 2 July, the day after the Handover took place, the Thai baht went into free fall, precipitating the Asian financial crisis. That has had much more effect on individuals in Hong Kong than the change of sovereignty.

Sir David Madel

  14. Following that, do the Chinese regard it as successful as the Foreign Office do?
  (Mr Davies) I think it is rather presumptuous for me to judge how the Chinese see it, but my own feeling is that they are very happy with what has been achieved. They were looking for a success story. They wanted Hong Kong to continue to be beneficial to the Mainland and generally speaking that has been the case, despite the financial downturn.

  15. That being so, do they think we should move on from that and Britain should become an honest broker in the dispute over Taiwan between China and the United States?
  (Mr Davies) I do not think they would enter into that. Again I feel it is presumptuous for me to judge how they would react. As my colleague has already said, they regard the Taiwan issue as an internal matter between them and the Taiwan people. They would not want an honest broker, certainly from the United Kingdom. There have been talks. Both sides have been talking to the United States about some of the issues. But I am not a politician any more. I am a businessman.
  (Professor Yahuda) On that point, you must bear in mind that the Chinese were very suspicious of the British side at the time of the Handover. After all, there was a governor there whom they disliked personally. Quite a number of them expected Britain, as they put it, to leave behind "some trouble". So from that perspective they feel relieved that there has been no trouble. In that sense, they have been willing to think in terms of Britain as a new partner. But that does not mean to say that they would want Britain to play any kind of role as an intermediary in any of their major foreign policy or domestic concerns.

Chairman

  16. Dr Hughes, you are the specialist on Taiwan, I understand. Would you like to comment on Sir David's question?
  (Dr Hughes) About the United Kingdom acting as a go-between? I think it is out of the question. I do not think the rumours about the United States' actions are going to be more than recent rumours. It is viewed as an internal issue. The British do still have some stigma as an imperialist power, which is taught in class in schools and is part of the political culture in China. That Britain is one of the big imperialist powers responsible for much of China's suffering and present problems. So I would have thought the United Kingdom is not well placed. I would not have thought that any external power was well placed to be a go-between, least of all the United Kingdom.

  17. Is Taiwanese investment in Mainland China still rising?
  (Dr Hughes) It has been dropping off over the last recent couple of years.

  Chairman: Mr Rowlands on Taiwan and then Sir John.

Mr Rowlands

  18. Hong Kong first, if I may, because I may as well finish the retrospection of that. To Mr Davies. First, there were the dire warnings about the impact of Mr Chris Patten's governorship, and then there was Mr Patten. What do you think Mr Patten's legacy was? Do you think he managed to move democracy more in Hong Kong rather than if he had not been governor, had not been there?
  (Mr Davies) With Mr Patten there was a degree of dignity in the British withdrawal which might not have been there before. We left Hong Kong with our heads held high. We had done our best for Hong Kong. The people of Hong Kong, in my view, were encouraged to see that they had a future and were able to express and articulate their own views in a way that they had not been able to do before. There was, as I say, a good deal more stress on this because of the way that Chris Patten conducted the Government—on the importance of issues such as the rule of law and accountable government and a degree of democratic accountability. No-one will claim that Hong Kong ended up at the time of the British withdrawal with a totally democratic system. That was certainly not the case. But all those things came together, and Chris Patten's legacy is a fine one for Hong Kong.
  (Professor Yahuda) I agree with that. Much of the criticism that was voiced here, perhaps elsewhere, that the key was to have as good relations with the Chinese as possible, did not put enough emphasis on the need for people in Hong Kong to feel that they too could shape their own future. I think his legacy has given them more of an opportunity to do so than might otherwise have been the case.

  19. Turning to Taiwan. It should not be briefly because it could become a very big regional issue. Do you think the Chinese authorities are clear in their minds as to how the international community would react if there was any real serious attempt, either directly or militarily, to intervene in Taiwan, and possibly be seen to try to displace or replace the newly elected president?
  (Dr Hughes) Again, as my colleague said, it is hard to speak for the Chinese and what they are thinking and what they are saying. All I can say is that the United States apparently did make it very clear to them, in private meetings during the recent presidential election in Taiwan, that there would be very serious measures taken; but I do not think there is any clarity about other states and what sort of attitude they have, apart from perhaps going along with the United States. That is what I said earlier about not being really sure what the United Kingdom policy is on this issue and how well thought-out it is. I do not know. The Chinese probably do not think it is particularly important because the United States is the major power. I am not sure if that is a particularly good thing either. Maybe we should have an interest in this kind of issue.
  (Professor Yahuda) I think I agree substantially with what Dr Hughes has just said but there is a further qualification to be made. That is, that the primary concern of the Chinese leaders is to retain themselves and the Communist Party in power. They recognise that the continued development of the economy is crucial for them. So in their calculations as to what they may or may not do with regard to Taiwan, they take into account what the international reaction may be in terms of the economics of it. In so far as the European Union and the United Kingdom do make statements from time to time that they oppose the use of force and so on, this adds a certain amount of weight, if you like, to those who argue for caution on the Chinese side.


 
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