Examination of Witnesses (Questions 280-289)
RT HON
MARGARET BECKETT
MP, MR SEBASTIAN
WOOD AND
MR DENIS
KEEFE
13 JUNE 2006
Q280 Mr Purchase: There is certainly
a growing understanding by the Chinese of how world capital markets
work; that is for certain.
Margaret Beckett: And everything
else.
Q281 Sandra Osborne: In relation
to Sino-Japanese relations, despite the very strong economic relationship
between the two countries there are, as you are aware, both current
and historical tensions between the two countries. Could you foresee
a situation where this could lead to confrontation in relation
to economic and political influence in East Asia, and what could
the UK Government do to ease those tensions?
Margaret Beckett: I very much
hope not. We have very good relationships, as I have said several
times, with China. We also have with Japan and we are doing everything
we can to encourage two countries with both of whom we have such
positive relationships to maintain more positive relationships
with each other. You are right to identify the existing concerns
and indeed some of the historical difficulties, which are always
problematic, but let me give you a very simple example which I
think is widely understood now. China has this enormous need for
energy. It also, sadly, uses energy quite inefficiently still.
The greatest experts in the world on energy efficiency are probably
the Japanese. There are all kinds of areas where these countries
could help each other to their mutual benefit and that is something
that we are trying to encourage in terms of recognition of these
things in the hope that that can lead to better relationships.
Q282 Sandra Osborne: That is interesting.
When the committee was in China I asked them about clean coal
technology, coming from a mining area myself, and they were saying
that the UK Government was sharing its expertise with China in
that regard, which was very good to hear. Could I ask you about
Japan scaling back on its pacifist requirements within its constitution
and also expanding its military operations, talking about joining
NATO or entering into a partnership with NATO? How does the United
Kingdom Government view these developments?
Margaret Beckett: We are supportive
of Japan's wish to have a better relationship with NATO. Obviously,
the issue of how they handle their constitution and so on is for
them but certainly we have quite welcomed the fact that the Japanese
have felt able to contribute to some of the peacekeeping forces
and things of that kind. We believe there is a useful role that
they can play and would not be hostile to seeing them play it.
This is an area where Japan could perhaps now begin to make a
contribution that they have been inhibited from making in the
past. For example, I have a feeling they are in Sudan. They are
certainly in some of these peacekeeping policing roles, certainly
in Iraq.
Mr Keefe: Iraq and Afghanistan.
Q283 Richard Younger-Ross: Turning
to central Asia, with Moscow's retreat in the early 1990s China
led for the formation of the Shanghai Five and has now set up
the Shanghai Co-operation Organisation in 2001 which now includes
China, Russia, Tajikistan, Kyrgyzstan, Uzbekistan and Kazakhstan
with Iran, Pakistan and India having observer status. Can you
outline our view of the Shanghai Co-operation Organisation and
in particular do you feel that it is going to lead to an eastward
drift in terms of influence not only in central Asia but also
in western Asia and in fact in other areas of the Middle East?
Margaret Beckett: It is a little
early to tell but we do not really think so. It is quite a young
organisation, three to four years old, I think.
Q284 Richard Younger-Ross: It was
set up in 2001.
Margaret Beckett: Yes, but it
only got going, I think, in 2002 and then began to set up some
permanent bodies. It was established formally in 2001 but has
only really got going in the last three or four years. It is a
youngish organisation; it is still evolving. Why we do not really
think that we will see a great deal of expansion is that although
there are a number of other countries which have observer status
there does not seem to be any appetite—any consensus anyway—within
the existing body to expand the membership. Indeed, it is my understanding
that the legal framework of their rules does not allow for the
addition of new members. It is a little hard to judge what contribution
it will make in the long term but we do not see it yet as being
something we think is going to expand and grow and have a major
impact.
Q285 Richard Younger-Ross: Secretary
of State, we have the members of the EU and there are countries
who are not members of the EU that have special arrangements with
the EU. Is it not possible for them to set up such arrangements?
Margaret Beckett: It is possible
but, let us face it, in the EU the central body is the major group
and then there are a small number of others who have arrangements
but in this case it is quite a small central core, so if you have
a small central core and lots and lots of outreach that does not
sound like a very strong body to me. Only time will tell, I think.
You asked me how we see it at the moment; that is how we see it
at the moment.
Andrew Mackinlay: In that brief you have
there Sir Michael Jay and his colleagues will have put, "Mackinlay
will go on about Kyrgyzstan", and how right he is, and if
he did not he should have done because obviously I am not trying
hard enough. The fact is that in this area we are poorly represented.
We have no embassy in Kyrgyzstan. Indeed, I put it to you that
you might go back and ask these people who do prepare the brief
why we have this abysmal failure in what is a fragile area by
the standards of the region and democracy whereby, stubbornly,
Sir Michael and his colleagues refuse to advise the Secretary
of State to open a mission there. We have an ambassador working
from Kazakhstan, the size of Western Europe, and apparently he
travels to Kyrgyzstan. I just want to leave that with you. This
line of questioning has clearly opened up an area where you are
not too briefed on this, and I have no criticism of yourself,
as you know, but I just do put it to you, Secretary of State,
that this is sheer cussedness and stubbornness by the Foreign
Office on this region.
Q286 Chairman: You have made your
point. Now perhaps the question can get answered.
Margaret Beckett: I readily admit
to the committee that it does not say anything in my brief—and
I have read all of it—either about Mr Mackinlay or about
the fact that there is great concern about the lack of an embassy
in Kyrgyzstan, but of course I take due heed of that.
Andrew Mackinlay: I am a happy man now.
Chairman: I am glad you are a happy man.
Q287 Mr Illsley: Could I come on
to a question which my colleague, David Heathcoat-Amory, touched
on earlier, and before I do that can I apologise for coming to
the meeting late? I had a constituency engagement. China's economy
is growing at an incredible rate. I think when the committee made
its previous visit to China we were told that the Chinese economy
needed to grow at around 7 to 8% per annum simply to stand still
and accommodate its increasing population. We have seen over the
last few years China involving itself in areas where it can identify
new markets or new sources of products. Given that China has a
bit of a history in Iran and Saudi Arabia with their weapons programmes,
and in Iran's case with its original nuclear programme, is there
any danger or fear on the part of our Government that China might
be looking to stabilise or ensure its oil supplies by entering
into contracts with countries in the Middle East which could colour
its judgment in terms of western relations or the UN's views particularly
of Iran? Is there any danger that China's judgment in the Middle
East is likely to be clouded by its desire to feed its internal
economy?
Margaret Beckett: Obviously, as
you say, China has need of substantial resources to fuel its growth
needs and that is leading it, as we were saying earlier on, to
look to areas where it can sign contracts and so on and that will
lead, I suppose, to some difference in relationships. First of
all, I do not at present see much evidence that China's attitude
to international relations and global affairs generally is as
yet bound or influenced by such steps and, indeed, in a sense
part of what we were discussing earlier on is China's tendency
to stand aloof from such things and simply say, "We have
got a commercial contract with you; that is the end of it".
If that is their attitude, even though we might seek to encourage
them perhaps to be more proactive in their approach to some of
the regimes they deal with at present with regard to trying to
encourage developments we might wish to see, I think it will be
some time before one might think that China might be influenced
in a reverse direction, if I can put it that way. I am sure that
China will, of course, take careful account of her overall interests
but think it would be a brave country or business or group of
people who thought that they had in some way got China over a
barrel with regard to the attitudes that she would take because
of such relationships.
Q288 Chairman: I am conscious we
have got almost one minute to go and I wanted to ask a question
on Africa, building on what you have said earlier, if we have
time for that. Can I ask you about governance and the Africa Commission?
We have pressed for good governance, yet the Chinese are in Angola
where they are basically allowing the Angolan Government not to
comply with international standards as regards transparency and
other issues. They are in Sudan, and you have mentioned Zimbabwe
already. Does in effect China's voracious appetite for raw materials
and markets in Africa undermine the good governance agenda the
rest of the world has been trying to pursue?
Margaret Beckett: I do not think
it necessarily does but I think there is that potential danger.
I also think the Chinese are an extremely intelligent and skilful
people and it seems to me—and I hope this does not sound
cynical—there are two reasons at least why countries across
the world have increasingly focused on the issue of good governance
in Africa. One is the issue itself, the sheer horror of seeing
countries' natural resources despoiled by corruption, seeing their
natural advantages wrecked because of appallingly bad and incompetent
governments let alone any kind of criminal approach, and that
in itself is a good enough reason for wanting to encourage good
governance. But I also think that over the years there has been
a growing recognition by the international community that it is
not in anybody's interests—it is not in the interests of
investors or people who wish to benefit from the natural resources
that some of these countries have—to see this appalling
governance, because for one thing that in itself is not sustainable
and it is inefficient and it is to everybody's mutual disadvantage.
China is much too wise not to see that that thinking and that
concern applies to Chinese investments just as it does to investments
from anywhere else in the world.
Q289 Chairman: Thank you. On that
optimistic note, hopefully, I would like to thank you very much
for coming, and I would particularly like to thank you for your
brief answers which allowed us to get through a wide number of
subjects. Thank you very much. We will see you next week.
Margaret Beckett: Thank you. I
will look forward to that.
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