CHAPTER 11: CONCLUSIONS AND RECOMMENDATIONS
Chapter 2Through Chinese eyes: the significance
of the EU for China
POLITICAL AND ECONOMIC LINKAGE
314. China has difficulty with the political
nature of the EU and its decision-making processes and finds it
complex and incomplete as a system of governance. For this reason
China often feels more comfortable with the Member States where
lines of authority are clearer. This view may change if the EU
becomes more effective following the implementation of the Lisbon
Treaty. The Chinese do not think the Treaty will have a major
impact on the EU's foreign policy but, until they see how the
EU develops, the Chinese may blow hot and cold over the relationship.
Since it is unlikely and undesirable that the EU will develop
the strategic or defence capacity of a unitary State, the relationship
will remain different from China's relations with other international
actors, not least the United States (paragraph 42).
315. It is unrealistic and undesirable that a
single EU-China relationship will replace relations between China
and individual Member States. The two will rightly continue in
parallel. However, the EU and its Member States must be more consistent
and not undermine each other. China will always pursue its own
domestic and commercial interests single-mindedly. It will target
individual countries and pick the easiest interlocutors to deal
with, to achieve its aims, particularly when it sees that Member
States are not united (paragraph 43).
316. The EU has to make hard decisions about
which areas of its relations with China are best dealt with through
a united EU approach. It is clear that disunity and lack of mutual
support over issues such as the Dalai Lama weaken the position
of both the EU and the Member States involved. The Lisbon Treaty
will not be sufficient to enhance EU solidarity. Whilst respecting
the division of competences, the EU and its Member States need
to decide the key issues on which, in practice, the EU should
stand firm on a united approach and then fully implement this
approach (paragraph 44).
317. The Chinese will trade where they need to
trade. Evidence given to us showed that good political relations
have not necessarily led to commercial success with the Chinese.
Conversely, difficult political relations have not necessarily
entailed commercial damage (paragraph 45).
318. The EU and its Member States should be forthright
and consistent in their opinions and should not compromise on
their principles for illusory short term commercial gain (paragraph
THE VIEW OF THE PEOPLE
319. We welcome the significant number of Chinese
who study in Europe every year. However, we believe that the EU
and the Member States should give greater encouragement and support
to European students wishing to study in China to redress the
imbalance in numbers and to expand the EU's capacity in government,
business and the media to understand China as a country and an
international actor. The EU and its Member States should also
encourage the study of Chinese languages, culture and institutions
within the countries of the EU (paragraph 56).
WHAT CHINA WANTS FROM THE EU
320. The Chinese are interested in social, political
and regional models which might be useful for their own reform.
When they show interest the EU should make efforts to help them
with the aim of encouraging steady and peaceful change. In particular,
assistance with the introduction of social security provisions
may be one way to help the Chinese increase home consumption and
re-balance their trade surplus (paragraph 63).
Chapter 3EU perceptions, EU actions
A STRATEGIC PARTNERSHIP
321. 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 (paragraph 77).
322. 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
consistent determination (paragraph 78).
323. 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 (paragraph 79).
324. 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 (paragraph 80).
325. 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 (paragraph 81).
326. 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 (paragraph 82).
327. 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" (paragraph 83).
THE INTERESTS OF THE MEMBER STATES
328. 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 relationship (paragraph 89).
THE PARTNERSHIP AND COOPERATION AGREEMENT
329. 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 (paragraph 93).
Chapter 4China and international responsibility:
stability and world order
CHINA ON THE GLOBAL STAGE: AMBITIOUS TO RISE BUT
RELUCTANT TO COMMIT
330. The EU should accept China's wish for greater
representation in international organisations, and especially
financial institutions, commensurate with its increased economic
weight. At the same time, the EU should emphasise in its dialogue
with China that China cannot commit only to those institutions
and agreements that fulfil its national interests, and that it
is in China's interest to increase its commitment to upholding
the rule of law and maintaining international stability, alongside
other major nations (paragraph 103).
CHINESE INVOLVEMENT IN PEACEKEEPING AND COUNTERING
331. China looks to the UN as the framework for
conducting international affairs. However, its policy of non-interference
in the internal affairs of other countries has at times hindered
the effectiveness of the UN in dealing with conflicts and abuses
of human rights in countries such as Burma. There are signs that
this is changing, mainly because of China's increasing need for
stability in the world as its economic interests drive it further
afield in search of resources. The EU should demonstrate to the
Chinese that good governance leads to the stability in which they
and the EU have a mutual interest (paragraph 113).
332. China has provided non-combat troops and
significant logistical support to UN peacekeeping operations.
The EU should encourage China along this path and urge them also
to contribute combat troops. The EU should also explore whether
China could assist the EU with logistical support for its missions
in Africa and Asia (paragraph 114).
333. Chinese projection of naval forces to protect
its shipping from Somali piracy is significant as a demonstration
of capacity and as an acknowledgement that its domestic concerns
can best be served in cooperation with others. Further cooperation
with the EU's Operation Atalanta should be encouraged (paragraph
334. We note that Chinese efforts to establish
port facilities in a number of countries in the Indian Ocean appear
to be primarily motivated by commercial considerations. The EU
should accept that these are a normal part of the expansion of
China's regional economic relations and do not represent an attempt
to change the strategic balance in the Indian Ocean at this time
China's growing interest and engagement in its
335. China's trade and political relationships
with the countries in East Asia have intensified in recent years.
China is now a major regional player. The EU should note the increasing
role of China in the region and engage in more frequent consultations
with regional powers about China's role. The EU should explore
ways in which to develop ASEM as a major forum for dialogue and
cooperation between European and Pacific Asian countries (paragraph
IRAN, NORTH KOREA, BURMA
336. China's performance is improving on non-proliferation
and arms transfers as it increasingly appreciates that it has
a strategic stake in regional and international stability. The
EU should encourage China along this path in collaboration with
the US which will remain China's principal interlocutor on non-proliferation
issues. The EU should also seek China's support in other arms
control measures, such as engagement in the EU Strategy on Small
Arms and Light Weapons, where it can also play an important role
337. China and the EU share non-proliferation
objectives in Iran and North Korea, but China has a different
approach. In Iran it has economic interests to protect and it
dislikes sanctions in principle. The EU should persuade China
that it is in its interests to engage seriously in joint actions
as part of the E3+3 (UK, France, Germany, US, Russia, China).
In North Korea the EU, which has no direct role in discussions,
should encourage China to continue to play a leading role in the
talks, despite its fears of possible instability on its border
if the regime were to change suddenly (paragraph 128).
PAKISTAN AND AFGHANISTAN
338. China and the EU share concerns about stability
and terrorism in Afghanistan and Pakistan where China also has
a considerable economic stake. The EU should explore the potential
for sharing information and even intelligence with China on both
countries, and on insurgency and terrorism, recognising that there
will be problems reaching common definitions of, and responses
to, terrorism (paragraph 132).
Chapter 5China and international responsibility:
CHINA'S ARMED FORCES, CAPABILITY AND POWER PROJECTION
339. The EU does not have a direct security role
to play in East Asia, except on environmental and energy security
issues, on which it should establish more formal discussions with
China. On other security issues the EU will have to exert its
influence through other regional actors, such as the USA and Japan,
and ASEM (paragraph 137).
340. We support regular dialogue between the
EU and the United States on East Asian strategic and security
matters (paragraph 138).
SCIENCE AND TECHNOLOGY COLLABORATION AND CHINA'S
SPACE AND CYBER PROGRAMME
341. The EU's engagement with China in the field
of science and technology, including projects such as the Galileo
satellite programme, is to be commended. However, the EU should
be aware that China is probably collaborating to compete. This
is particularly the case for dual-use projects with both military
and civilian potential, of which the space and satellite programmes
are the most significant. The EU should be cautious about sharing
technology with China that might involve commercial or strategic
risk for the EU and its partners in the future (paragraph 146).
342. The development by China of a cyber capability
has potentially serious commercial and communications implications
for EU Member States.
The attack on the Google corporation exemplifies the Chinese authorities'
rising capacity to use technology for political control at home
and cyber attacks internationally. When attacks emanate from China
the EU should make strong representations to the Chinese government
and be prepared to take strong counter-measures including the
curtailment of collaborative technology programmes. The EU should
begin by engaging the Chinese authorities in discussions on the
development and employment of cyber capability. This is an area
where the EU should work closely with the United States through
NATO and other relevant organisations (paragraph 147).
THE 2003 ATTEMPT TO LIFT THE EMBARGO
343. The EU arms embargo was imposed as a symbolic
sanction to express concern about human rights in China following
the suppression of the Tiananmen Square demonstrations in 1989,
and it still retains this character. The 1989 embargo is limited
in scope and has had little effect on the volume of arms sales
by EU Member States to China. These are regulated at the EU level
by a 2008 legally-binding Common Position on arms exports (paragraph 159).
344. The embargo is a sensitive and symbolic
issue for the Chinese and an irritant in EU-China relations. It
requires cautious and tactful handling by the EU. The Chinese
were disappointed that the EU did not lift the arms embargo in
2003, and they were seen to have lost face because of the confidence
they placed in European diplomacy to deliver the lift. The Chinese
perceived the EU decision as driven by the US, even though it
might have been derailed by European parliamentary and public
opinion on human rights grounds. The Chinese perception that the
EU is the weak partner in relation to the US, rather than a strong
partner for China still affects EU-China relations. The EU must
avoid public division and policy reversals in future, which only
serve to undermine its credibility (paragraph 160).
345. The embargo is understandably a sensitive
issue for the United States, Japan and other partners. The EU
must consult closely with these partners on any future proposal
to lift the arms embargo. Regional stability and security in East
Asia must be safeguarded. The EU would need to convince the United
States and its East Asian partners that the arms embargo is mainly
symbolic and that the Common Position on arms exports is sufficiently
robust and enforceable to prevent the export of offensive weapons
systems and sophisticated military technologies (paragraph 161).
346. The EU should be prepared to lift the arms
embargo only when the international conditions above have been
fulfilled and if the Chinese government makes progress on human
rights and regional security. Specific conditions should include
ratification of the International Covenant on Civil and Political
Rights, greater transparency on military modernisation and the
removal of the military threat to Taiwan (paragraph 162).
347. China's perception of the threat of a unilateral
declaration of independence by Taiwan has risen since the 1990s
due to democratisation on the island and rising nationalism on
the mainland. This has resulted in intense military preparation
to deter or confront a possible Taiwanese de jure independence.
Despite China's repeated claims that Taiwan is an internal issue,
it is a potential flash-point for the whole region, which could
bring the US and China into open conflict. Despite the EU's lack
of a defence capacity in East Asia, it would face serious consequences
from a conflict across the Taiwan Strait and its regional repercussions.
Close consultation with the US and Japan is needed on the subject
348. Current policies in Taiwan and China mean
that the situation remains stable. However, the latest US arms
sales to Taipei have rekindled tension between Beijing and Washington.
The EU should state its support for the one China policy but its
rejection of re-unification by anything other than peaceful means.
It should discourage China and Taiwan from taking any unilateral
actions that would infringe these principles. The EU should also
continue to support the status quo across the Taiwan Strait
349. The EU should continue to support Taiwan
in areas which China would regard as non-threatening and should
encourage the Chinese to be more flexible, seeking to persuade
them that Taiwan's participation in some international organisations,
such as observer status at the World Health Assembly, will not
damage the Chinese case on reunification (paragraph 171).
Chapter 6Trade and investment
350. China is a key trading and investment partner
for the EU and its importance will grow. An important objective
for China is EU recognition of its status as a market economy.
Yet China is not meeting many of its existing obligations. The
EU expects China to open its market to fulfil its World Trade
Organisation (WTO) treaty obligations, address non-tariff barriers
and protect intellectual property rights. The EU should not consider
granting market economy status until China meets its own obligations
351. Meanwhile the EU should take firm action
when dialogue does not produce results, by means including the
WTO dispute resolution mechanism (paragraph 189).
352. The EU and its Member States should define
their priorities for Chinese market opening and focus on these
in all negotiations with the Chinese government (paragraph 190).
353. The vast trade imbalances between China
and the West are not sustainable. They contributed to the recent
failure of global financial systems. The continued undervaluation
of the Renminbi will be an increasing source of friction between
the USA and China and will inevitably come to a head in the near
future. Any consequent fall-out between the US and China in terms
of trade or protection will inevitably have major effects on EU
trade and its markets. The EU in partnership with the United States
must address this issue firmly with China through the G20 (paragraph
354. The EU, and the European Central Bank, should
find ways of encouraging the Chinese authorities to hold a higher
proportion of their reserves in euro-denominated instruments (paragraph
355. The EU needs to have a trade presence in
major industrial centres outside Beijing, in order to extend its
influence and effectiveness (paragraph 193).
356. The EU must consider what needs to be done
to enhance its competitiveness and maintain its global position
in the light of the economic challenge from China and emerging
markets (paragraph 194).
Chapter 7Climate Change
CHINA'S ROLE AND APPROACH
357. China is the world's largest emitter of
greenhouse gases. Nevertheless, its overriding concern is delivering
economic growth. The Chinese Communist Party sees this continued
economic development across China as the basis of its legitimacy.
All other policy considerations, including climate change, take
second place (paragraph 204).
358. China has set a target for reduction in
energy intensity of 40-45 per cent by 2020 compared to 2005 levels.
This is welcome. However, China's refusal to set targets for emission
reductions does not offer a realistic prospect of its transition
to a low carbon economy, without which limiting global average
temperature increases to 2°C will become impossible (paragraph
THE EU AND CHINA: PARTNERS IN ADDRESSING CLIMATE
359. We are concerned that competition for short-term
commercial advantage between the Member States is undermining
EU engagement with China on climate change. We recommend that
the Member States put collective EU interests before short-term
commercial advantage in the area of climate change (paragraph
360. The EU should raise the issue of state subsidies
for electricity with the Chinese government and highlight that
this practice creates a disincentive for energy efficiency (paragraph
COOPERATION ON ENERGY AND LOW CARBON TECHNOLOGIES
361. Although we strongly support the concept
of the EU-China Near-Zero Emissions Coal (NZEC) initiative, based
on Carbon Capture and Storage (CCS) technology, we are sceptical
that the current pace of development, and the lack of committed
funding, will lead to a successful and timely outcome. There needs
to be a much stronger determination by the UK, the EU and China
for this initiative to work
THE COPENHAGEN CONFERENCE
362. We are deeply concerned about the failure
of the Copenhagen conference on climate change in December 2009.
The EU made a concerted effort to achieve agreement on a legally-binding
treaty on climate change in the negotiations leading up to the
conference. However, China and other developing countries were
successful in opposing this (paragraph 220).
363. The adoption by some participants of a Copenhagen
Accord outside the UN framework is a positive first step but falls
short of the EU's objectives (paragraph 221).
364. Copenhagen illustrated a marginalisation
of the EU, even when united; the Chinese leadership of the developing
world; and its direct challenge to the United States as an equal
365. The EU should be prepared to set an example
on carbon emission cuts which is in the interests of the Member
States and the world. It must reassess its negotiating strategy
prior to the UN meetings in Bonn and Mexico City in order to re-enter
the negotiations as a player rather than as a spectator. The Government
should consider whether a new approach by the EU towards China
and other major developing countries is needed. All options should
be included in this review. In particular a major effort should
be made by the EU to convince China of the need for a fully effective
international system of verification and monitoring of commitments
entered into (paragraph 223).
366. Despite Copenhagen, bilateral climate change
cooperation between the EU and China is achieving practical results.
The UK played a leading role in this respect, including by achieving
agreement on the EU-China Partnership on Climate Change during
its presidency of the EU in 2005 (paragraph 224).
367. The EU China high-level dialogue should
include the issues that arise from industrial pollution and its
effect on the Chinese and wider environment (paragraph 225).
Chapter 8Human rights and the rule of law
GENERAL APPROACH OF THE EU
368. Given its importance in the EU-China relationship,
the EU Delegation in Beijing should consider increasing the number
of those working on human rights (paragraph 232).
369. The UK and the EU engagement strategy towards
China must be robust and focused, including on human rights (paragraph
370. We welcome the EU's rapid support for the
Government's position on Akmal Shaikh. We are very disappointed
that the UK and EU requests for clemency were ignored by the Chinese
authorities (paragraph 238).
371. The EU must demonstrate much greater unity
and consistency if it is to convey effective messages to the Chinese
government on human rights and the rule of law. We recommend that
the EU Member States show greater solidarity, through public declarations
if necessary, with other Member States when they come under pressure
from the Chinese government on questions of human rights (see
also Chapter 3) (paragraph 239).
EU PROJECTS IN CHINA
372. The Commission is carrying out an impressive
range of civil society, rule of law and human rights projects
in China, often in partnership with Chinese civil society organisations.
The UK and other Member States are also doing important and successful
work in this area. We welcome these activities and believe they
should be strengthened (paragraph 243).
EU-CHINA HUMAN RIGHTS DIALOGUE
373. The EU should continue to pursue a regular
and confidential dialogue with China on human rights. In most
cases this is likely to be more effective than public declarations
or high-handed moralising. However, such a dialogue must produce
results and not become a cover for inaction. If the EU-China Human
Rights Dialogue fails to make significant progress EU Member States
should consider raising China's human rights record more actively
in the United Nations Human Rights Council (paragraph 250).
374. We believe that the Chinese government should
not be allowed to dictate who participates on the European side
in the EU-China Human Rights Dialogue. The list of civil society
participants from the European side should be drawn up by the
EU, taking into account expertise on China and the issues on the
agenda. The EU should also encourage China to permit the participation
of a wide range of Chinese civil society organisations in the
dialogue (paragraph 251).
PROMOTING HUMAN RIGHTS THROUGH THE UNITED NATIONS
375. We are concerned that China may be undermining
the efforts of the United Nations to protect and promote human
rights worldwide. While China has responded more positively than
in the past to high-level EU engagement on human rights violations
in Darfur and the Middle East, it has also blocked some UN Security
Council resolutions entailing targeted sanctions against gross
human rights offenders such as the military junta in Burma and
Zimbabwe. The EU should press the case that, as a member of the
United Nations, China has a duty to respect and promote human
rights; but also that respect for human rights around the world
is a cornerstone of stability and human development and is therefore
in China's long-term interest (paragraph 255).
376. Tibet is an extremely sensitive issue for
the Chinese government and one that it perceives as a threat to
national unity and territorial integrity. However, there is evidence
that there have been grave violations of human rights in Tibet,
which we deplore (paragraph 267).
377. The issue of Tibet needs to be handled carefully
by the EU and its Member States. A regular, constructive dialogue
between the Chinese authorities and Tibetan representatives is
the only way a long-term solution can be found. We welcome the
resumption of talks between representatives of the Dalai Lama
and the Chinese authorities (paragraph 268).
378. The EU should call on China to pursue the
dialogue with representatives of the Dalai Lama in a spirit of
compromise and mutual respect. The EU should seek to persuade
China that respecting human rights in Tibet is a legal and moral
obligation; and that fair treatment of all Tibetans will help
rather than hinder China's long-term stability and unity. The
EU should continue to raise the issue of Tibet in its human rights
dialogue with China (paragraph 269).
379. China has attempted to pressure EU individual
leaders to discourage them from meeting with the Dalai Lama. EU
Member States must coordinate their approach and show solidarity
with each other in resisting this pressure (paragraph 270).
380. The UK and the EU were right to condemn
the violence in Urumqi in July 2009. We also welcome their efforts
to assist the Chinese in searching for ways to address the underlying
problems that affect Xinjiang (paragraph 273).
381. China plays an important role in the countries
and regions bordering on Xinjiang, including Central Asia, Afghanistan
and Pakistan. China and the EU have common interests there, not
least security and economic development. However, the EU should
not temper concerns about human rights and ethnic tensions in
Xinjiang in exchange for China's cooperation on fighting terrorism
and insurgency in Central and Southwest Asia (paragraph 274).
Chapter 9China and the EU in Africa: Competing
models of development cooperation?
CHINA'S GROWING ROLE IN AFRICA
382. China's worldwide search for resources to
feed its economic development has implications for the EU's own
economic and industrial needs. The EU must monitor Chinese commodity
deals, whether on food, minerals or energy resources, to ensure
that Europe's strategic interests and access to global resources
are safeguarded (paragraph 284).
383. The role of Chinese central and provincial
governments, state corporations and businesses in Africa has increased
substantially in the last decade. China has become one of the
leading trading and investment partners for African nations. In
many cases Chinese trade, investment and know-how have boosted
economic growth and employment opportunities in Africa. We support
the continuing dialogue between the EU, China and African regional
organisations, governments and civil society on development. We
believe there is scope for greater cooperation in the interest
of achieving poverty reduction, through roads and railways (paragraph
TRANSPARENCY IN CHINESE AID
384. We are concerned about the lack of transparency
of Chinese aid. African parliaments and civil society must have
the information they need to be able to hold their governments
to account. We are concerned that in some cases Chinese loan and
investment agreements are neither contributing to poverty reduction
nor respecting internationally-recognised principles of sustainable
development, good governance and human rights (paragraph 295).
385. The Extractive Industries Transparency Initiative
is a key tool for transparency and good governance. The UK and
the EU should attach high priority to securing the participation
of the Chinese government and businesses in the Initiative (paragraph
CONDITIONALITY AND GOOD GOVERNANCE
386. Good governance and conditionality are issues
on which EU and Chinese approaches diverge. China's reluctance
to take good governance and human rights into account can undermine
African and international efforts. Despite this, China does listen
to African leaders and the EU, and has gradually been prepared
to play a more constructive role in respect of some armed conflicts
in Africa (paragraph 303).
DEBT AND LABOUR ISSUES
387. We are concerned that China is encouraging
African nations to take on unsustainable and inequitable levels
of debt. This contradicts recent international and EU initiatives,
including the Highly-Indebted Poor Countries Initiative (HIPC).
The EU should engage China in a regular dialogue on this question
Chapter 10Hong Kong
388. The EU should continue to take an interest
in the Hong Kong Special Administrative Region of China, including
the implementation of its Basic Law and progress towards universal
suffrage. Pressure put on China by a unified EU to maintain momentum
on these issues can be more productive than by the UK alone because
of the UK's colonial history. We welcome the EU's support for
the British Government's position on universal suffrage and its
efforts to persuade the Chinese government to make faster progress.
The EU should encourage the Chinese government and the Hong Kong
authorities to work with Hong Kong politicians and citizens for
a mutually beneficial outcome within the framework of the Basic
Law (paragraph 313).
121 See our 5th Report (2009-10) Protecting Europe
against large-scale cyber-attacks (HL Paper 68). Back
We have already commented publicly on this point ("Lords
EU Committee criticise Government and European Commission's slow
progress on Carbon Capture and Storage Project", press statement
dated 20 October 2009). Back