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


Memorandum by Bill Rammell MP, Minister of State, Foreign and Commonwealth Office

MANAGING THE EU-CHINA RELATIONSHIP

1.  Does the European Union have an overarching strategy on China; and to what extent have the Commission, the Council and the Member States been able to agree on common policies towards China?

  The EU-China relationship is currently governed by the 1985 Agreement on Trade and Economic Cooperation between the European Economic Community and the People's Republic of China (the 1985 Agreement). The Guidelines on the EU's Foreign and Security Policy in East Asia (also known as the East Asia Policy Guidelines)[39] adopted during the 2005 UK Presidency added a security policy dimension to the EU's relations in East Asia. These guidelines have since been declassified and shared with third countries. They demonstrate that the EU has an interest in fostering China's emergence as a responsible global player.

The Commission's China Country Strategy Paper 2007-2013 provides an overarching direction for relations with China. Negotiations began in 2007 to upgrade the 1985 Agreement to a Partnership and Co-operation Agreement to better reflect the scope of relations today and encompass cooperation across the political, trade and economic spectrum. The launch of an annual High-Level EU/China Economic and Trade Dialogue Mechanism in April 2008 gives the EU a further tool to develop the EU-China relationship.

December 2006 Council Conclusions endorsed the recommendations made in the 2006 Commission Communication "EU-China: Closer Partners, Growing Responsibilities" and the Commission working paper "Competition and Partnership", stating that "they are an important contribution to the continuing development of an integrated and coherent EU policy towards China ... constituting a comprehensive review and restatement of EU policy towards China." The Council's endorsement indicates agreement between the Commission, Council and Member States on a common approach towards China.

DEMOCRACY, HUMAN RIGHTS AND THE RULE OF LAW

2.  How successful has the EU been in encouraging Chinese participation in international conventions as the International Convention on Civil Political Rights; and the UN Human Rights Council?

  On the question of the International Covenant on Civil and Political Rights, the EU reported in its Annual Report on Human Rights 2008 that there had been no progress on this area of concern. The EU continues to press for a detailed timetable for ratification and for reform of the Chinese legal system to ensure compliance with the Covenant. The National Human Rights Action Plan of China (2009-2010) does mention work towards ratification in general terms. China reported at the EU-China Human Rights dialogue 25-26 October 2008 that it had been actively preparing for 10 years for the ratification process, and that since 2003 there had been a series of reforms of the judicial and legislative system. However, in reality the situation is complicated by incompatibilities between Chinese legislation and the Covenant.

On the UN Human Rights Council (UNHRC), the EU seeks to work with all members of the Council to promote and protect the victims of human rights violations wherever they occur. China is currently a member of the Council and is standing for re-election in May. We support their engagement at the UNHRC and believe it is important in helping to develop cross-regional understanding of how to approach key human rights challenges. The EU will continue to work with the Chinese and look to gain their support in responding to these challenges effectively. China has played a role in the Universal Periodic Review (UPR) process at the UNHRC by asking constructive questions in other Member States' reviews. The EU has encouraged all States to prepare rigorously for their UPR, engage independent civil society in every stage of the process, and adopt an open, self-critical approach. We were satisfied that the Chinese approached their review in February seriously but were disappointed that all recommendations proposed by EU Member States were rejected.

3.  When he gave evidence to the Committee, Mr Lillie mentioned that institutional reform was one of the areas where the human rights dialogue with China was fruitful; what are the main examples of concrete progress made in this area?

Over recent years the European Commission, which takes part in the Human Rights Dialogue as a member of the EU Troika, has used its co-operation programme to promote human rights in China. For instance, the European Commission has supported Human Rights Seminars for European and Chinese experts to exchange views and experiences. Other activities carried out in recent years include the EU-China Legal and Judicial Co-operation Programme, by far the most important foreign assistance project of its kind in China. This has given substantial assistance to strengthen the rule of law in China. A further example of constructive collaboration has focused on developing civil rights awareness at grass roots level through an EU-China Village Governance Programme in Yunnan province. Currently, the European Commission also implements an initiative on Governance for Equitable Development with the UNDP. This project aims at strengthening the rule of law and the participation of civil society in China. The programme will promote participatory and inclusive approaches to selected legislative, judicial and governmental processes.

4.  To what extent do the differing legal cultures and histories of the Europeans on the one hand, and the Chinese on the other, influence their approach to the question of human rights, the rule of law and democracy? On what points do European and Chinese views converge and diverge most?

Respect for human rights and the rule of law are founding principles of the European Union. Fundamental rights, as expressed in the European Convention on Human Rights (ECHR), as well as those derived from constitutional traditions common to the Member States, form general principles of Community law which underpin all EU action. All 27 EU Member States are bound by the ECHR and adherence to the Convention is a condition of EU membership. Countries seeking to join the EU are required to demonstrate stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.

The Chinese government has made progress in establishing effective legal and judicial systems and has acceded to a number of international human rights conventions: it has signed and ratified the International Covenant on Social, Cultural and Economic Rights (ICSCER) and signed the International Covenant on Civil and Political Rights (ICCPR). However, China continues to prioritise economic rights ahead of political and civil rights, often restricting the latter in the name of protecting progress during China's economic reforms. China also places collective rights and interests on at least an equal footing as individual rights, often qualifying the application of the latter in the interests of the state. While the authorities continue to stress the importance of government and Party officials operating within the constraints of Chinese legislation, the judicial system is under the control of the Chinese Communist Party. This approach impacts on judicial independence and the rule of law.

  Whilst China has lifted more people out of poverty than any other country over the last 30 years, there are still many civil and political rights which remain of serious concern, including the death penalty, freedom of expression and a commitment to representative democracy in a pluralist system.

5.  What is China's policy on the rule of law and democracy in Hong Kong?

  The Chinese government undertook that the Hong Kong Special Administrative Region (HKSAR) would enjoy a high degree of autonomy, except in foreign and defence affairs, and that the continuation of Hong Kong's social and economic systems, lifestyles, rights and freedoms would be guaranteed. This is enshrined in the Sino-Joint Declaration on Hong Kong, an international treaty to which the UK is a party. We consider that the "One Country, Two Systems" principle of the Joint Declaration has worked well in practice and that the rights and freedoms guaranteed in the Joint Declaration have been, on the whole, respected.

However, in certain areas, notably on constitutional development, we have expressed our concern when we have felt that progress has not been rapid enough. In December 2007, for example, the Foreign Secretary expressed disappointment that the National People's Congress ruled out universal suffrage in Hong Kong in 2012 despite this being the wish of the majority of Hong Kong's people. We have since welcomed a clear commitment from the Hong Kong authorities that 2012's elections will be progressively more democratic in preparation for the introduction of universal suffrage in 2017 and 2020.

FOREIGN, SECURITY AND DEFENCE POLICY

6.  What is the kind of cooperation being conducted at the moment between the EU and China on disarmament and non-proliferation? What discussion do the EU and China have on these questions in UN forums and other bodies such as the Conference on Disarmament, the Nuclear Suppliers Group, the Wassenaar regime on dual-use goods and the Ballistic Missile Technology Control regime?

  The EU has been working closely with China over the past three years, under the auspices of the EU Export Control Project. The project mainly focuses on capacity building within the Chinese export control authorities, and has included work with Chinese licensing and customs officials and also with Chinese industry. The main goal of the project is to bring China's national export control legislation and practices in line with international standards, including incorporating control lists from export control regimes such as the Nuclear Suppliers Group (NSG), the Missile Technology Control Regime (MTCR), the Australia Group (AG) and the Wassenaar Arrangement (WA).

The first EU Working Groups on Global Disarmament and Arms Control and Non-Proliferation Troika meeting to take place in Beijing was held on 20 March. In this meeting China showed an interest in establishing a specific dialogue with the EU on Small Arms and Light Weapons Dialogue (SALW) issues, as well as the UN Register of Conventional Arms. China is ready to listen to the EU on assistance to third countries as it has little experience on the subject.

The Presidency noted that the EU is currently focusing its efforts on the air trafficking of SALW and would be happy to discuss these issues further with China at a later date.

  EU Member States regularly discuss issues bilaterally with China at the Conference on Disarmament. In particular, China and the UK, as recognised nuclear weapon states, regularly discuss disarmament issues in Geneva. China is not a member of the WA, however on 12-13 November 2008 the WA organised an Outreach event in Beijing. The WA delegation included experts from the UK, who met with Chinese counterparts.

7.  What is the kind of cooperation being conducted at present between the EU and China on counter-terrorism, and what points would the UK and the EU like to include in the EU-China Partnership and Cooperation Agreement on that topic?

  There has been little concrete activity to date between the EU and China on counter-terrorism. The draft Partnership and Co-operation Agreement includes reference to the possibility of a consultation mechanism on counter terrorism between the EU and China. The Chinese have approached the European Commission to initiate a formal EU-China annual counter-terrorism dialogue. Member States decided to pursue informal exploratory talks to clarify what the Chinese want from a counter-terrorism relationship with the EU.

8.  To what extent does the technical and scientific cooperation between Europe and China assist in China's modernisation in areas such as defence and space; and is the EU confident that it has adequate mechanisms in place for oversight and regulation of these interactions?

The EU Code of Conduct on Arms Exports regulates defence exports from the EU to China. When fully implemented, the legally binding Council Common Position Defining Common Rules Governing the Control of Exports of Military Technology and Equipment (The Common Position) will further build on this framework.

Some EU Member States have working relations with China on space issues. For example, the UK, through bi-lateral links between UK and China and through UK participation in European Space Agency-China programmes, has a number of joint Space education initiatives. These include exchange of students, exchange of scientists and engineers, provision by the UK of space training courses for Chinese scientists, engineers and government space officials, and invited lectures.

  The UK has sold a small satellite to China through Surrey Satellites Technology Limited. This is operating as part of a global disaster management constellation. Discussions on the sale of a second satellite have begun.

  The UK would welcome the Commission setting out how they might oversee interaction with China on space issues.

9.  What is the Government's estimate of Chinese military expenditure and rate of increase in expenditure? Should the EU be concerned about this? Will China soon have armed forces and technological capability to challenge US dominance in the Asia-Pacific region, as well as in space?

  China announced in March 2009 that it will increase its defence spending in 2009 by nearly 15% to 480.6 billion Yuan (US$ 70 billion), the 19th double-digit percentage increase in the past two decades. The White Paper "China's National Defense in 2008" states that these increases fund (1) improving pay and conditions for servicemen; (2) compensating for inflation; (3) "pushing forward the Revolution in Military Affairs" (ie procuring modern equipment). Due to differing accounting methods it is difficult to compare international defence expenditure. Many estimate Chinese spend to be higher than publicly stated figures, with the 2009 US Department of Defense Annual Report to Congress "Military Power of the PRC 2009", putting the actual figure at between US$105 billion and US$150 billion for 2008 (against a declared figure of about US$60 billion).

As China's defence spending increases, it is in the interests of all EU member states to encourage China to increase transparency.

  We do not make public estimates of the comparative strengths of different countries' armed forces.

10.  What is the total value and categories of arms exported from the UK and other EU member states to China, either directly or indirectly?

  Figures on the total value (in Euros) and categories of arms exported from the UK and other EU Member States are shown below. These figures are taken from the 8th, 9th and 10th European Council Annual Reports. According to Operative Provision 8 of the European Union Code of Conduct on Arms Exports covering the periods 2005-07, respectively. As stated in each of the annual reports, the statistics are compiled differently by each Member State and therefore not all countries have been able to provide the same information. The value of arms exports shown for each year is as follows please see the attached relevant annex Q10 for breakdown of individual member state exports:


2005—€113,242,714
2006—€133,899,971
2007—€91,557,318


11.  Will the newly adopted Common Position defining Common Rules Governing the Control of Exports and Military Technology and Equipment be more effective that the Code of Conduct it replaced in limiting arms exports to China?

  When fully implemented the legally binding Common Position will replace and build on the previous politically binding EU Code of Conduct on Arms Exports adopted by the Council in 1998. The key changes introduced by the Common Position are: updated references to international agreements; clear reference to International Humanitarian Law in Criterion Two (this is already included in UK legislation but not covered in all other EU Member States legislation); language on respect for re-export provisions; explicit coverage of the risk of diversion to terrorists and of the risk of reverse engineering or unintended technology transfer.

The Common Position represents a significant advance in the minimum standards and processes applied by all EU member States. The new Common Position is legally binding under of the Treaty of European Union. However, the licensing of defence exports remains at the national discretion of each Member State.

  The previous EU Code of Conduct on Arms Exports covered only the physical export of goods, whereas the new Common Position extends this coverage to include; licences for trafficking and brokering, and for the intangible transfer of technology. The secondary legislation implemented under the UK's Export Control Act 2002 means that UK practice is already in line with these and other changes.

  The adoption of the Common Position will not materially affect the UK licensing authorities' assessment of exports to China. Not only will the applications for licences be subject to assessment against the Common Position, but the EU Arms embargo also remains in place. The scope of the embargo is limited to goods that might be used by the Chinese authorities for internal repression.

12.  What are the criteria that the UK believes the EU should apply to decide whether it should lift its arms embargo on China? Would the lifting of the embargo improve relations with China? Should the EU expect something in return?

  The EU arms embargo on China has been under review since 2003. The December 2004 European Council Presidency Conclusions set out the EU's common approach on resolution of the embargo issue:

    "The European Council reaffirmed the political will to continue to work towards lifting the arms embargo. It invited the next Presidency to finalise the well-advanced work in order to allow for a decision. It underlined that the result of any decision should not be an increase of arms exports from EU Member States to China, neither in quantitative nor qualitative terms. In this regard the European Council recalled the importance of the criteria of the Code of Conduct on arms exports, in particular criteria regarding human rights, stability and security in the region and the national security of friendly and allied countries. The European Council also stressed the importance in this context of the early adoption of the revised Code of Conduct and the instrument on measures pertaining to arms exports to post-embargo countries ("Toolbox")."

  The Chinese would clearly like to see the embargo lifted, but sensitivities remain, not only in Europe and with China, but with other interested parties, notably the United States and Japan. The broad consensus across the EU is that the time is not yet right to lift the embargo, but that it should rightly remain under review.

13.  How do you expect the foreign policy of the new administration in the United States to impact on EU-China relations?

  A strong US-China relationship is crucial for the world economy and for global peace and security. There has been continuity of US policy towards China throughout successive administrations, as well as the development of increasingly effective mechanisms for dialogue and consultation. Secretary of State Clinton's visit to Beijing and a bilateral between Presidents Obama and Hu in London, indicate that the US-China relationship is in good health. Significant announcements by the new US administration, for instance on climate change and counter-proliferation, will have implications for China and the EU in the run-up to Copenhagen and the Non-Proliferation Treaty Review in 2010. The EU remains China's largest trading partner, as well a key partner for China on climate change cooperation.

14.  To what extent does China see the EU as a counter-balance to the United States; or as a potential partner in building a multipolar world?

China publicly advocates moving to a multipolar world and strengthening multilateralism, primarily through the UN. China engages bilaterally with Member and with the EU through its mission in Brussels across a range of issues. Following the postponement of the 11th annual EU-China Summit in December 2008, the February 2009 visit by Premier Wen Jiabao to several EU capitals and Brussels was described by China as a "confidence-building" trip to demonstrate that China remained committed to strengthening relations with the EU.

15.  What is the EU's policy on cross-strait relations between China and Taiwan, and how successful has it been?

The EU's policy on cross-Strait relations between China and Taiwan is laid out on page 8 of the Guidelines on the EU's Foreign and Security Policy in East Asia.[40]

The EU has publicly welcomed recent progress in cross-Strait relations. We hope that the Chinese Government and Ma Ying-Jeou's administration will continue to engage in direct dialogue to resolve differences and strengthen cross-Strait stability, with a view to finding a peaceful solution to the Taiwan question, acceptable to the people of both sides of the Strait.

  EU policy has been to encourage dialogue and coordinate measures to encourage stability. Since the May 08 election of Ma Ying-Jeou dialogue between the Chinese mainland and Taiwan has increased substantially, with progress so far including the launching of direct flights and shipping links between Taiwan and the mainland.

16.  What is the role of the ASEM process in managing EU-China relations?

  ASEM brings together 43 States across Europe and Asia in an informal process of dialogue and cooperation. Bilateral relations between two ASEM parties (in this case the EU and China) are not raised in formal meetings of the ASEM process. However, the meetings can provide opportunities for the EU to convene a troika meeting with China in the margins. China played an important role as the host of the most recent ASEM Summit in October 2008, and in the interest of consensus allowed firm statements on issues such as Burma, Iran and Afghanistan.

17.  To what extent do China and the EU have similar approaches to global and regional governance, including the reform of the United Nations and the International Financial Institutions, as well as governance of the global trading system? Do the EU and China cooperate in the framework of the G20?

As a country with a high and increasing degree of influence on the world stage China has much to gain from a reformed global system. China's primary international objectives are to maintain and open global trading system and secure the resources to maintain domestic growth. Allied to this is the desire to increase its influence in global governance, strengthen relationships with major powers and neighbours, and to ensure regional security.

At the Spring European Council on 19-20 March 2009, European leaders made a series of concrete proposals in advance of the London Summit supporting a multilateral initiative on trade finance and the need to reform the governance of international financial institutions. They also agreed on the need for a very substantial increase in the resources of the International Monetary Fund (IMF), including a new loan of 75 billion Euros from the EU to make sure the IMF is able support the world's most fragile economies.

  China is actively engaged in the G20. It believes it is the right forum for tackling the current economic crisis and worked closely with the UK to ensure the London Summit was a success.[41] China's priorities for the international financial institutions are more balanced surveillance by the IMF, particularly of the world's advanced economies; a stronger early-warning function for the IMF; and governance reform to ensure that voting shares in the IMF and World Bank reflect the realities of the modern global economy, and that senior management positions are filled in a transparent way without nationality bias. China joined the expanded Financial Stability Forum (FSF, which will become the Financial Stability Board) shortly before the London Summit.

  EU Leaders also supported improved IMF surveillance instruments in order to strengthen its key role in crisis prevention and governance reform to ensure that voting shares in the IMF more adequately reflect relative economic weights in the world economy. The EU also welcomed the expansion and institutional reinforcement of the FSF.

  China joined the World Trade Organisation in 2001 and shares the EU view on its importance for an effective multilateral rules based global trading system. China also shares the EU's desire for an early conclusion of the Doha Development Agenda. China is one of five countries with which OECD has established an "enhanced engagement" relationship.

18.  To what extent is China trying to build up its influence in Latin America and the Middle East? To what extent do Chinese companies and investment funds play a part in this strategy?

  China's economic growth is highly dependent upon access to foreign energy sources. China has been a net importer of oil since 1993, including from the Middle East and Latin America. Given the relatively short period that China has been a net importer, it does not have the historical strategic partnership with traditional exporters that other long term importers have established.

China has made only moderate investment into the Middle East region. However, due to growing Chinese oil consumption, Arab leaders are beginning to recognise an increasing interdependence with China. The China-Arab Cooperation Forum, established in 2004, aims to forge closer trade links and strengthening cooperation on international affairs.

  Over the last decade China has invested heavily in the Latin American energy sector, largely through the acquisition of direct stakes in energy companies (such as a $1.42 billion stake in Ecuadorian oil and pipelines operations). Allied to this are significant Chinese investments in energy infrastructure, such as $400 million in Venezuelan railway and refinery infrastructure, $8 billion in Argentinean railways and $239 million for the construction of a natural gas pipeline across Brazil. China published its first Policy Paper on Latin America and the Caribbean in November 2008.

19.  Are reports of China conducting cyber warfare and hacking attacks against public and private targets in EU countries credible?

  We are aware of such reports. We do not comment on intelligence matters. However, we take protection of our critical national infrastructure extremely seriously. The National Security Secretariat in the Cabinet Office is leading a cross-departmental project to develop the UK's approach to cyber security. We will continue to engage with stakeholders both in industry and internationally, including within the EU, as this work progresses.

INTELLECTUAL PROPERTY

20.  To what extent is the protection of intellectual property an issue in EU-China relations?

  Protection of intellectual property (IP) remains one of the major concerns for EU businesses active in China, and therefore is a continuing issue for EU-China relations.[42] The EU regularly raises IP issues in high-level dialogues with the Chinese government.

In 2006, the EU identified that IP infringements are expected to cause the loss of more potential revenue than any other single non-tariff barrier. It continues to support enforcement capacity building in China. Recently the EU established the IPR2 project to work with the Chinese Government to improve the effectiveness of their IP enforcement.

The Chinese Government has done much to improve intellectual property rights management, including through development and publication of a National Intellectual Property Strategy to improve awareness, utilisation, and protection of IP. These developments have led to increasing confidence in IP protection in China. However, enforcement remains a concern.

Does China engage in industrial espionage?

  We do not comment on intelligence matters.

THE EU, CHINA AND AFRICA

21.  What is the Chinese view of promoting security and development in Africa; and how far does this approach correspond to that promoted by the UK and the EU? What scope is there for greater cooperation between Africa, China and the EU in questions of security, stability and the rule of law in Africa?

  The 2006 white paper "China's Africa Policy" stated that its policy was to promote peace and stability, development and common prosperity. Key stated principles are non-interference in domestic affairs, mutual trust, respect of sovereignty, political equality and mutual benefits. China has been a strong supporter of the MDGs and in particular in pushing developed countries to meet the commitments they have made in bodies such as the G8 to increase resources for international development.

China does not engage significantly in donor harmonisation in Africa, nor link its own conditionality with those of other donors. China does not publish detailed information on its aid. Chinese investment in Africa does not come with good governance conditionality but with a range of conditions related to how loans will be repaid and concessions that China will be granted as a result of the investments. This is a different approach to most (although not all) of the OECD. China does not regard a dialogue on rule of law and governance as being appropriate within its partnerships with African countries for reasons of political equality and non-interference.

However, China's position with regards to working with others to promote development in Africa has been evolving. In recent years China's EXIM Bank has signed Memoranda of Understanding with the World Bank, the Asia and the African Development Banks. In 2007 China also became a donor for the first time to the 15th IDA replenishment. Its $30 million contribution was relatively modest (the UK provided £2.1 billion), but it showed China's acceptance of its global role in dealing with international poverty reduction. China also contributed $120 million to the 2008 replenishment of the African Development Fund and shown interest in working with the African Union.

  Despite the differences in approaches to development, the EU has identified strong shared interests in promoting development in Africa. At the 10th China-EU Summit held in November 2007, the EU and China strongly welcomed the idea of trilateral cooperation which was later endorsed in a communication from the European Commission. There is huge scope for cooperation which could bring together strengths from both sides, for example China's expertise in agriculture and infrastructure and the EU's strengths on institutional and organisational building.

  The EU recognises the importance of China's contributions to infrastructure, initiatives on health and contributions to peacekeeping as well as the benefits arising from the growth in trade and investment between Africa and China. But there are also concerns. These mostly relate to transparency and an unwillingness of China to share information with other international partners. The EU has a strong desire for China to work closely with the EU and other international partners so that synergies can be explored.

  The UK continues to seek ways to increase dialogue and engagement, especially on the ground, with the Chinese on African issues, including areas where our views differ, ie security, stability and the rule of law. The UK similarly supports the EU in these aims, notably on the recent EU Commission Communication on trilateral co-operation, which the UK's own approach and information sharing helped inform.

  The EU has been building political support for trilateral cooperation, which offers the potential to develop synergies between China's support to Africa and that from the EU. Its Commissioners for Development and External Relations have included this as a key agenda item in their discussions with counterparts in China. This has yielded results. During Premier Wen's visit to Europe and Foreign Minister Yang's visit to Portugal in January 2008 both issued positive statements about trilateral cooperation.

  The EU has sought the endorsement of the African Union to the "trialogue". A Committee from the AU is now considering a formal response. In the meantime EU Delegations in African capitals have been exploring options for cooperation with African governments and Chinese embassies. There might be options for cooperation with the EU and possibly the UK stemming out of China's interest in working with the Infrastructure Consortium for Africa.

  The UK continues to support this being a priority for the EU. On a practical level, trilateral cooperation offers the potential for China and the EU to learn from each other. It can help build trust and mutual respect. Importantly it can help avoid political competition for supporting development in Africa.

22.  To what extent is China's relationship with the leaders of certain African countries, such as Sudan and Zimbabwe, an obstacle to the EU's efforts to promote good governance, the rule of law, democracy and human rights?

  China regards its overall relationship with Africa and its leaders as important. For some years, their leaders have begun their annual programme of overseas visits in Africa.

The human rights situation in Zimbabwe deteriorated in 2008 when elections were characterised by intense violence, torture, abductions and murder perpetrated by agents of the state. The EU was united in its condemnation of Mugabe's campaign of violence and disregard for the democratic process. China, along with Russia, vetoed the UN Security Council resolution on Zimbabwe in July 2008. However, it welcomed the Agreement of 15 September 2008: Highlighting Incidences of Non-Compliance. EU measures on Zimbabwe, including a travel ban and assets freeze, were expanded in 2008, and further expanded and renewed in 2009. The EU has also demarched the Zimbabwean government, including on the abduction of Jestina Mukoko, and arbitrary farm seizures. Additionally, the EU has highlighted the deteriorating humanitarian situation, and in 2008 provided £29 million in humanitarian and food assistance with a similar amount set for 2009.

  China became strategically important to Sudan from the mid-1990s, when Sudan was largely isolated from the international community. This presented an opportunity for China in the petroleum sector and Sudan became the home to China's first overseas oil refinery and was used as a model for Chinese energy engagement in Africa. The conflict in Darfur has been the main complicating factor in China's bilateral relationship with Sudan. Chinese Special Representative on Darfur, Liu Guijin has publicly stated the need for the Government of Sudan to do more on Darfur. The Chinese can play a moderating role with the Government of Sudan, for example in persuading them to accept the joint AU-UN peacekeeping force.

  China has a clear interest in a stable Sudan and we continue to try to engage with China to encourage it to exert influence over the Sudanese and to recognise that supporting regimes with poor political and economic governance damages long term economic prospects for all of Africa's partners and undermines Africa's own agenda for sustainable development.

23.  What is the extent of China's arms exports to African countries, and is this a matter of concern to the UK and the EU?

  Appendix IV to the white paper "China's National Defense in 2008" lists arms sales in 2007 to the following African States: Tanzania, Kenya, Chad, Rwanda and Ghana. However, this data is not—and does not claim to be—comprehensive. China has publicly stated that it participates in the normal arms trade and does not breach UN sanctions. We believe the Chinese have supplied arms to a number of African countries which we consider to be "countries of concern" (as identified in the FCO Annual Report on Human Rights 2008), including both Sudan and Zimbabwe. Although these exports may not be in breach of UN sanctions, they have the potential to destabilise already fragile situations. We consistently encourage the Chinese Government to meet international norms on arms licensing, including not allowing arms sales that may undermine the stability of other countries or regions.

ENERGY AND EXTRACTIVE INDUSTRIES

24.  What is the EU's policy on cooperation with China on energy? How has China's growing demand for energy and raw materials shaped its foreign policy To what extent is there scope for greater cooperation between the two sides on security of supply and good practice/transparency in the extractive industries sector?

  The commitment of the EU and China to cooperation on energy issues was underlined and given an institutional structure at the 8th EU-China Summit in September 2005. In broad terms, the EU's policy on energy co-operation with China is to intensify collaboration on energy security with a view to creating a stable, secure, efficient and clean energy environment and to promoting open and competitive energy markets.

No Chinese companies have officially endorsed the Extractive Industries Transparency Initiative (EITI). The Chinese government has also not endorsed EITI. China's official position is that its companies will abide by EITI related legislation in countries where such legislation is in force. The EU is a supporting organisation of EITI. The EU is keen to promote dialogue with China on EITI to promote greater transparency. This dialogue should seek to build on the momentum generated following the 2009 EITI Annual Conference which has seen EITI's transformation from a start-up initiative to a global transparency standard.

EU-CHINA COOPERATION ON THE ENVIRONMENT AND S&T

25.  What is the scope of the EU's environmental cooperation with China (excluding climate change)?

  The EU has an extensive programme of cooperation with China on environment and sustainable development issues, both at Member State and at Commission level. The sector and scope of the projects varies considerably, with some projects at national level and others focussed on particular regions. The first table at annex Q25 (additional information on climate change cooperation is also attached) sets out the scope, location and level of funding of current and planned activities.

A policy dialogue between the Commission's Directorate-General for Environment and China's Ministry for Environmental Protection provides the broad framework for EU-China environmental cooperation. Environment policy dialogue, water pollution, air quality and biodiversity have been singled out as top priorities, but the joint work plan also covers areas such as chemicals, waste and industrial accidents. This policy dialogue is underpinned by a number of major multiannual development and cooperation programmes, including multi-million Euro programmes in biodiversity, environmental governance (under negotiation, possibly to be launched at next EU-China meeting in May), integrated river basin management. In the water sector, the EU also provides funding support to the World Bank's watershed rehabilitation projects in the Yangtze and Pearl River deltas. Finally, the Asia-wide SWITCH grant scheme which aims to accelerate progress towards sustainable consumption and production, currently includes five projects in China.

26.  What is the scope of the EU's cooperation with China in the area of Science and Technology, including on the Galileo project and the International Thermonuclear Experimental Reactor (ITER)?

The ITER project is a major publicly-funded scientific collaboration among the world's leading fusion programmes, and involves the EU, China, India, Japan, Russia, Republic of Korea, and the United States. The ITER Agreement was signed by the seven parties in November 2006 and is expected to last 35 years. The EU is hosting ITER and is now committed to its construction and operation.

The ITER Agreement provides that during the construction phase the EU's EURATOM Framework Programme will contribute 5/11 of costs (with France as host contributing about 1/11) and each other party, including China, bearing 1/11. Following the conclusion of the Agreement on the Establishment of the ITER International Fusion Energy Organization for the Joint Implementation of the ITER Project, the EU Council on 22 July 2008 adopted directives for the EC to negotiate Co-operation Agreements on fusion energy research with specific ITER Parties, including China. The negotiations with China are still to be launched.

  A large Chinese delegation visited the fusion facility at Culham, Oxfordshire, operated by UKAEA for European scientists, in November 2008.

  China is a partner in the European Space Agency (ESA) and funded the Orbit Verification segment of the Galileo programme. China is not an EU Member State so will not be a partner in the subsequent full development phase (FOC) being funded by the EU through the Transport Council.

30 April 2009







39   East Asia Policy Guidelines: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/misc/97842.pdf Back

40   East Asia Policy Guidelines: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/misc/97842.pdf Back

41   What the London Summit Achieved: http://www.londonsummit.gov.uk/resources/en/PDF/london-summit-outcomes=020409 Back

42   http://www.china-iprhelpdesk.eu/media/docs/Tech_transfer-English.pdf Back


 
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