CHAPTER 3: EU PERCEPTIONS,
The significance of China for
64. In the light of China's emergence as a major
economic and political power, the EU has had to adjust its policies.
As Lord Mandelson put it, "China's growing economic weight,
and therefore its increasing political influence or power in the
world, means that we have to come to terms with China as it is
and not perhaps
as we would like it to be"
(Q 715). The public has become increasingly aware of China's
commercial importance, not least through the presence of so many
"Made in China" articles in European shops.
65. We asked our witnesses for their views on
the mechanisms operating in the EU-China relationship (see Chapter
1). For Stephen Lillie, the current structures represented a "huge
architecture which reflects the breadth of the relationship"
(Q 11). Europe Minister Chris Bryant MP argued, however,
that the current institutional architecture was inadequate; a
formal Council Decision should set the framework for the EU's
policy on China, rather than the present working paper. He
hoped that the new High Representative for Foreign Affairs
created by the Lisbon Treaty would present the Council with
proposals for a "more effective long-term, strategic relationship
with China" (Q 758). The EU should be "more
robust" in its relationship with China, and needed a "strategic
vision" of that relationship (Q 766).
66. Michael Pulch
told us that the EU Delegation in Beijing was one of the largest
and was growing, reflecting the importance of China. Its staff
of 120, Brussels-based and locally-engaged, included people from
the EU agencies, e.g. the European Patent Office. With the implementation
of the Lisbon Treaty, the Delegation would become the embassy
of the EU as well as the Commission, and would probably expand
further. More reporting would be expected than current resources
could probably deliver. Trade provided most of the Delegation's
work but they also undertook political reporting.
67. Professor Ash thought that the way in
which the EU talked to the central government and its agents posed
a problem; there was no guarantee that policies formulated in
central government were implemented when they reached provincial,
sub-provincial and municipal governments (Q 184). Professor Breslin
thought that the EU's Delegation concentrated its activities in
the political centres, whereas the China-Britain Business Council,
for example, operated offices in six or seven different cities
and different regional activities. A more even representation
in different parts of China would do no harm (Q 185).
68. We were told by James Moran (DG Relex) that
strategic dialogues on East Asia had started in recent years involving
the troika; one on
transparency in military expenditure had gone well (Q 344).
For Dr Gudrun Wacker (German Institute for International
and Security Affairs), the added value of the sectoral dialogues
was "far from clear". The recently-instituted High Level
Economic and Trade Mechanism, modelled on the US Strategic Economic
Dialogue, "could be helpful". It was not clear who could
negotiate for the EU on currency issues, given that not all Member
States were members of the euro (p 325).
69. Patrick Child pointed out that the Chinese
government had a longer time horizon in its planning than the
EU and Member State governments, with the EU's institutional cycle
and changing national governments (QQ 338, 353).
Coherence and consistency
70. Professor Godement claimed that the
EU's diplomacy with China lacked focus. In some 50 summits between
the EU and China, the same EU policy priority had never appeared
twice and the language changed. This contrasted with the United
States' relationship with China, which was strategic and focused
71. Dr Wacker thought the annual summit
meetings were important to build trust in the "long-term
orientation" of the partnership, but that EU representation
by the Commission, Council and rotating Presidency was cumbersome.
It lacked consistency and continuity, as each rotating Presidency
introduced something new, resulting in "nice words"
in the summit statements but no follow-up. The EU should cover
less ground with greater consistency; but Commission, Council
and Member States would not subscribe to a common strategy, on
paper or in implementation. Two 2006 Commission papers on economic
and political relations with China were modified substantially
by Council Conclusions. "The Member States are either not
willing or not able to formulate their interests and priorities
instead, national reflexes prevail" (p 326).
72. Professor Shambaugh wrote that the Commission
and Council had formulated a series of well thought-through Communications
on China since 1995. The problem was that the Member States did
not follow the strategies and policy guidelines formulated by
the Commission and Council, thus undercutting their authority
as well as the substance and wisdom of EU policies. The incoherence
of the "common" foreign and security policy had had
a negative effect on how the EU was perceived in China. The diversity
of the EU weakened its ability to gain China's respect and to
negotiate effectively on substantive concerns (p 309).
A strategic partnership?
73. In 2005 the EU began a strategic dialogue
with China. Our witnesses were generally unimpressed with its
development. The Europe Minister told us that it could be more
strategic and coherent (Q 758). For Lord Mandelson, the best
way to conduct the relationship was "at a high level, in
a coherent way and with give and take". Dialogue was valuable,
but it should lead to "deliverables" (Q 728). The
EU should refocus its efforts in the light of the Lisbon Treaty.
The UK would argue strongly that "one of the places [the
EU] needs to
increase its reputation is in China"
(Q 781). Professor Flemming Christiansen (Chair in Chinese
Studies, Leeds University) hoped that European political discourse
on China would undergo a "reality check". Obsolete perceptions
should be discarded and shared understanding of China among European
decision-makers built (p 247).
74. Lord Patten of Barnes criticised the EU:
China had a clear strategy but the EU response was fractured and
inconsistent. Channels for dialogue proliferated across the European
institutions and the Member States, including six climate dialogues
and approximately 28 dialogues on trade and economic issues. The
EU did not always act collectively, even in areas of EU competence
such as these (QQ 551, 558).
75. Professor Mitter believed that a "frank,
honest and positive acknowledgement of
more useful in terms of engaging with the policy makers
and thinkers in China" rather than using phrases which attempted
to overcome real differences in world view (Q 160). Professor Feng
thought that in China the term "engagement" was not
understood; "cooperation" should be used.
76. Professor Godement challenged as outdated
the EU's treatment of China as a developing country to be aided
in transition towards a market economy and a changed political
system. China still had underdeveloped areas, but the EU's relationship
with China was not typical of its relationships with other developing
countries. Interdependence between the EU and China would not,
by itself, lead to a convergence of norms or to democracy in China.
"We are dealing with an interlocutor who is naturally stronger
and more realist" and who saw the EU's practice of engaging
unconditionally with China as an opportunity to push further in
many areas. Experience in negotiating with the Chinese on WTO
entry had shown that the tough, united approach of the US had
been more successful in gaining concessions than that of the EU
(QQ 573, 574).
77. The EU calls its relations with China
a strategic partnership, but as yet this is a misnomer. In practice,
the EU-China relationship is currently better described as a "collaborative
partnership," in which they collaborate on a limited range
of issues. The EU must seek to build a genuine strategic partnership
with China, increasing mutual understanding and broadening engagement.
This will involve a two-way exchange. The EU may, for example,
have lessons to learn from the Chinese on commercial competition
and gaining markets.
78. The rotating EU Presidency, with its changing
priorities, has not served the EU well in dealing with China.
The EU must identify its key priorities for EU-China summits and
pursue them with clarity, vigour and consistency so that China
takes account of EU views. The Lisbon Treaty arrangements alone
will not do this. It will also require strong political will and
79. Experience in negotiating China's entry
into the WTO showed that the tough approach used by the US produced
the best results. The EU should not be afraid to use this approach
if appropriate in negotiations with the Chinese. If the Chinese
cancel a summit, the EU should demonstrate in other areas of the
relationship that this is not cost-free.
80. The institutional framework for EU-China
relations is highly developed, especially at the working level.
Summits and sectoral discussions should focus on deliverable outcomes
on real issues. The sectoral discussions should be used in future
to discuss those issues which have dropped from the summit agenda
but are still important to Member States.
81. The EU needs to expand its representation
beyond Beijing and Hong Kong and establish regional offices, in
order to extend its influence and effectiveness, particularly
in China's other major centres.
82. Apart from key climate change projects,
the EU should ensure that funds disbursed under the development
envelope focus on training in areas of governance such as the
rule of law, human rights and social models.
83. In discussions with China the EU should
endeavour to ensure clarity in the language used, and that each
side knows what the other means when using terminology, such as
"strategic" and "engagement."
The interests of the Member States
84. Dr Brown said that the UK, Germany and
France had tended to take a lead within the EU on policy towards
China; they were the biggest investors in China and recipients
of investment from China (Q 78). On the other hand Matthew
Baldwin (Cabinet of EU Commission President Barroso) thought the
EU was increasingly acting as a union though there would always
be a parallel set of contacts between the larger Member States
and China. The EU was working on a multiplicity of contacts: parliamentary,
business-to-business, NGO (QQ 322, 328).
85. Professor Shambaugh wrote that perspectives
on China varied greatly among the Member States. Some central
European countries were quite hostile to China; some Mediterranean
countries were naïve about China; France, Germany, and the
Netherlands were quite sceptical of China; whereas the UK and
the Scandinavian states were much more positive towards China.
Only Germany and the UK had national "strategies" for
managing relations with China (p 310).
86. Robert Cooper (Director General, EU Council
Secretariat) commented that there would always be different interests
and points of view among 27 countries; the question was whether
there was sufficient solidarity and common interest to get more
from cooperative behaviour than from trying to make gains as individuals
87. Professor Godement said that several
countries had faced difficulties in their relations with China:
the Netherlands in the early 1980s, and the UK in the run-up to
the 1997 handover of Hong Kong. France had alternated between
"honeymoon diplomacy" and sudden crises. Currently the
UK, Germany and France were caught in a "prisoner's dilemma"
in their relations with China, each seeking advantages from the
difficulties encountered by others (QQ 573-575, 580, 582).
88. Charles Grant also commented that Europeans
sometimes undermined each other: when the German Chancellor had
got into trouble over the Dalai Lama in 2007, the British and
French had not shown solidarity; nor had the French received solidarity
when President Sarkozy had got into trouble on the same subject.
"If only we could
get our act together and concert
our diplomacynot unify with one voice but concert it so
we support each otherwe would be much stronger in dealing
with the Chinese. They would have more respect for us" (QQ 87,
100-1). Lord Patten of Barnes agreed: when European leaders decided
to meet the Dalai Lama, China found it easy to pick them off.
"Not a single Member State comes to the defence of the others
everybody hopes that they will gain some imagined commercial
benefit from the embarrassment caused to a fellow Member State"
(QQ 551, 558).
89. Although Member States will continue to
pursue their own interests for political and commercial reasons,
unwarranted Chinese political or economic action against any Member
State must be seen as an affront to all EU Member States. There
should be a presumption that the EU and its Member States should
take action promptly in such cases to uphold solidarity across
the EU. This would be one of the most effective measures to rebalance
The Partnership and Cooperation
90. Patrick Child told us (in May 2009) that
discussions on a Partnership and Cooperation Agreement were making
good progress. James Moran said that updating the 1985 Agreement
was suggested by the Chinese. The new Agreement would be more
comprehensive. As of May, agreement had been reached on a number
of difficult areas, for example non-proliferation (on which the
Council was in the lead). With the new Agreement, the EU aspired
to engage the Chinese at the level of their State Council. Trade
had however been more difficult as the Chinese would not go beyond
their WTO commitments (QQ 337, 340). Franz Jessen at the
Commission added that crime, terrorism, corruption and migration
were four major chapters in the PCA negotiation and progress had
been made on the first three (Q 365).
91. Stephen Lillie told us that the PCA was being
pursued as two parallel negotiations: on trade, which was moving
more slowly; and on other areas including environment, tourism,
culture and transport, which were moving slightly faster. There
was also an article on terrorism. Points of divergence remained,
including many difficult market access issues from the European
of the sensitive negotiations concerned Taiwan which was politically
very important for the Chinese but raised difficulties for the
European side (see Chapter 5) (QQ 11, 33).
92. Lord Mandelson believed that the PCA would
be an appropriate framework within which to address economic and
political relations between the EU and China, covering the whole
range of issues. Negotiation was making steady but slow progress.
While agreements such as these appeared to be time-consuming,
they allowed issues to be raised and compromises made for mutual
benefit. A trade agreement was different and should focus on trade
(Q 749, 750).
93. We support the EU's efforts to negotiate
a PCA with China to replace the outdated 1985 Trade and Cooperation
Agreement. The new Agreement must underpin the new wide-ranging
strategic relationship but the EU should be careful not to dilute
the long-standing political aims such as language on human rights,
for progress on commercial relations. The time-frame should enable
a good result rather than a rushed one.
38 Chargé d'Affaires at the EC Delegation, Beijing,
Appendix 4. Back
Presidency, Commission, High Representative. Back
EU-China summits are attended by the Chinese Prime Minister and
other relevant Ministers and, for the EU, by the President of
the Council of Ministers, the President of the Commission and
the High Representative, as well as other relevant Ministers and
In 2008, during the French Presidency, the Chinese cancelled the
summit following President Sarkozy's meeting with the Dalai Lama. Back
Evidence given in March 2009. Back