Stars and Dragons: The EU and China - European Union Committee Contents


Chapter 2—Through Chinese eyes: the significance of the EU for China


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 46).


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).


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 3—EU perceptions, EU actions


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).


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).


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 4—China and international responsibility: stability and world order


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).


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 115).

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 (paragraph 116).

China's growing interest and engagement in its region


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 123).


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 (paragraph 127).

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).


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 5—China and international responsibility: security


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).


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[121]. 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).


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 (paragraph 169).

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 (paragraph 170).

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 6—Trade 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 (paragraph 188).

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 191).

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 192).

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 7—Climate Change


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 205).


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 208).

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 211).


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[122] (paragraph 216).


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 (paragraph 222).

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 8—Human rights and the rule of law


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 237).

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).


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).


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).


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 9—China and the EU in Africa: Competing models of development cooperation?


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 291).


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 296).


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).


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 (paragraph 305).

Chapter 10—Hong 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

122   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

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