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


Examination of Witnesses (Questions 500 - 519)

THURSDAY 14 MAY 2009

Professor Xinning Song

  Q500  Lord Inge: A lot of my question has already been answered but perhaps I could just talk about one bit of it, which is the Common Foreign and Security policy. How seriously does China take Europe's Common Foreign and Security Policy?

  Professor Song: The Chinese side cannot take the CFSP very seriously because we do not really know what it is. That is the problem. In terms of EU-China relations it also refers to EU-China security co-operation. The military exchange is not China-EU; it is China and EU Member States. We have no project at European level. The argument is, is there a real CFSP after ten years? Probably the European defence policy is more relevant because with the CFSP the argument is, is it possible for the EU in the near future to have a coherent foreign policy? The answer is no. That is related to this.

  Q501  Lord Inge: Can we go to the security policy? Are you saying China does not take Europe's military capability seriously or are you saying also that it does not understand what the policy is?

  Professor Song: Basically, it does not understand what the policy is, especially the external part. We know that Europe as a whole has no military capacity. It is the EU and NATO, and in terms of externally, that means China and EU co-operation in this area. So there is almost none. There is also the argument about Iraq and Afghanistan: is it the EU or EU Member States? It is NATO, not the EU. Where is the EU?

  Q502  Lord Inge: Do you keep an eye on NATO?

  Professor Song: Yes. China has informal contacts with NATO. The Ambassador in Brussels has met the NATO people on several occasions, but it is still on an informal or unofficial basis. The argument from the Chinese side, especially with the military or foreign affairs people, is that there is an arms embargo.

  Q503  Lord Crickhowell: This is a minor point perhaps, but China has, quite interestingly, sent a ship to the Indian Ocean to help to deal with the piracy problem and is working quite effectively alongside the European-led initiative. Was there any particular feature or aspect of policy that led China to do that? What do you think the objective was? There is not an obvious immediate Chinese interest.

  Professor Song: First, there is a clear Chinese interest there. For the last four or five years the protection of Chinese economic interests overseas as well as the security of Chinese citizens has been a big topic of debate. There is also strong debate about whether China should send ships that far away. The leadership still worries about this kind of action and how the outside world perceives it. The Chinese leadership is always worried about the so-called China threat. They prefer to keep a low profile in the international arena. Most of the time they feel they have no choice, they have to do something, and then they act; otherwise they prefer to do nothing.

  Q504  Lord Inge: Can I just ask briefly, has China suffered any ships being taken by pirates?

  Professor Song: Yes, and Chinese people working on ships. I think also a Taiwanese ship was captured.

  Q505  Lord Anderson of Swansea: Professor, the spirit of co-operation, the wish to co-operate, is in some ways more important than the actual institutional framework. Nevertheless, it is important to ensure the smoothest institutional framework, like plumbing, to remove any obstacles to a smooth relationship. In your view, is the current institutional framework between Beijing and Europe adequate, fit for purpose? If not, how can it be improved, and what can you say about the PCA negotiations, the Partnership and Co-operation Agreement negotiations?

  Professor Song: In terms of the institutional arrangements for EU-China relations, we have different levels. There is the annual summit and probably 30 different types of sectoral dialogue. It seems to me that the institutional framework is structural and stable. I am not familiar with the detail of that sectoral dialogue but the structure looks good.

  Q506  Lord Anderson of Swansea: So you cannot suggest any improvements?

  Professor Song: It needs deepening. I know a little about the technical dialogue but a good example is the dialogue on human rights. It is quite interesting. There is a lot of argument about whether it is useful or not. I have heard the complaint from the European side, especially from NGOs, that it is pointless, but it seems to me it is quite useful from the Chinese side. Some of my students from various ministries are involved in this. They say they have to do something every time there is a dialogue. That is the impact. They have to respond and that is good. This kind of structure has a problem on both sides. On the Chinese side it is basically governmental people; on the European side it is NGOs, so how can they have a real dialogue? I have heard from the European side that most of the people involved in the EU-China dialogue from European NGOs know nothing about China, so how can they have an effective dialogue? They always say, "You should do this, you should do that, you should do the other," according to their general knowledge, but they need specialist knowledge of the Chinese situation. That would be more effective. Also, the Chinese side should have non-governmental people involved and on the European side governmental people should play a more active role. The EU and China should do something to follow up this dialogue in the form of a specific project. It should not just be talk. We have these kinds of things going on with the Australians. An Australian NGO came to China. They have to work with the Government, otherwise it is difficult, but there is a concrete project. The Chinese Government allowed them to go into Chinese prisons to do a project. That is something real. There is no specific project of this nature with the EU. Dialogue is not enough. That is an area where something could be done.

  Q507  Lord Anderson of Swansea: What about the PCA?

  Professor Song: I am not sure. The PCA is a totally internal negotiation. We do not know what they are talking about or what progress is being made. Yesterday we had a conference in Bristol and the Commission people were asked why they need a PCA. There is this argument on the Chinese side: everything is fine without a PCA, so why do we need it? There is the human rights issue, which could be put into a framework and constrain China, but if you look back at why we started this, it dates back to 2003-04. That is the basic background, the expectation. At that time the Chinese Government believed that the EU would lift the arms embargo and grant Market Economy Status to China but nothing happened. From 2006 we had discussion with the Commission in Beijing. They asked why China was not interested in the PCA initiative. Our argument was that they needed to look at the background, which they are doing now. The debate is how we reach agreement. The Chinese will argue what the EU can offer China. Otherwise, there should be less talk. We can have a negotiation and we can even reach agreement, it will probably take another five or ten years to be ratified. That is useless. That can be the situation legally. The problem is that we have no common understanding on certain specific issues. The PCA is an example of this.

  Q508  Lord Anderson of Swansea: Are you in fact saying that, in your judgment, the institutional framework is currently adequate and that you have no particular suggestions for improvement of that framework?

  Professor Song: On the technical side, it is okay. We have solved the technical problems with trade and the environment. They are different. The only other issue I am familiar with is human rights; the human rights dialogue needs improving but basically I think it is good.

  Q509  Lord Crickhowell: On human rights, we did meet the EU people who deal with the regular dialogue with China on human rights. I was not aware until I went there that there is in fact a regular six-monthly meeting and they all sit round the table, apparently get on very well, and very, very occasionally, some significant movement is made, though not very often. I therefore saw a distinction arising. Clearly, China very much dislikes the moral lecture which you said the UK rather went in for, telling people how to behave, but China seems quite prepared to sit down in a regular meeting and have a civilised discussion about these issues, which perhaps does have a long-term impact, not least the knowledge in China that these exchanges are going on. So there is a quite well structured relationship on this taking place on a regular basis.

  Professor Song: Yes, I agree. The structure is good, but it could be more effective on human rights.

  Q510  Lord Hamilton of Epsom: Can we now move on to the more economic questions about the existing financial crisis and the downturn in world trade. How is that affecting the relationship between the EU and China? What are the more long-term perspectives, looking forward to the next ten years? Does China see itself as being an economic leader in terms of the global economy in the future?

  Professor Song: As we discussed before, EU-China economic relations are very good. Despite the financial crisis and the sharp downturn in trade, the EU is still China's number one trade partner. In terms of economic co-operation, there is another argument: the EU as a trade bloc is number one for China but it is 27 countries, and economically it seems to me China will pay more attention to East Asia. The EU 27 makes up something like 17 per cent of China's total foreign trade. East Asia we call the ten plus two plus two, that is, the Asian ten, plus Japan and South Korea, plus Hong Kong and Taiwan. That represents more than 40 per cent of China's foreign trade, so much bigger than the EU. They are only 14 countries but represent a bigger share than the EU 27.

  Q511  Lord Hamilton of Epsom: What about the US?

  Professor Song: As a single country, the US is number one.

  Q512  Lord Hamilton of Epsom: What percentage?

  Professor Song: Fifteen or slightly less. There is also the argument that if we take the United States, Canada and Mexico together, it is almost the same as EU, but East Asia is more. China's economic relationships with East Asia, with the EU and with the United States are at different levels. In those terms, China very much pays attention to the economic relationship with the United States and the EU. The two together are about one-third of China's total foreign trade. Also, what is very important for China is technology transfer. Interestingly, we have difficulty getting technology from the United States but we get lots of technology from Canada that is really from the United States. If you look at the 16th Party Congress in 2002, and the 17th Party Congress of 2007, when they talk about China's external relations, it is always its relationship with developed countries first, which means economic and security aspects. That is very important to China. Recently we have had what is called the "new left" in China criticising the current leadership strongly, saying they are pro-Western.

  Q513  Lord Hamilton of Epsom: What is the overall state of Chinese exports compared with a year ago? They have dropped, have they not?

  Professor Song: For the first four months compared with the same period last year there has been an average 20 per cent drop. Interestingly, however, total trade dropped by something like 20 per cent but the trade surplus increased by 35 per cent in the last four months, some 70 billion.

  Q514  Lord Hamilton of Epsom: Can I just come back to something you said earlier, which was that China looked at the EU as a social power. I do not quite know what that means but certainly what is true is that EU social costs are at one end of the spectrum when China's are at the other. Do you see a convergence of China and the EU? Do you see China's social costs going up? Is the EU economic model a thing to admire in the global market we are in today, where it seems we are still determined to load costs on to employers all the time? What is your view on all that?

  Professor Song: The EU as a social power means the EU as basically a kind of social model. People consider the European Continent practises what is called social capitalism as opposed to in the United States free market capitalism. China faces a challenge domestically on social security. China has no social security and we are trying to build up social security system—pensions, health care, medical care—not on models relying on market forces like the United States but more like Europe. According to research, the Chinese prefer the European model to solve this problem, but we have still not actually adopted the European model. There are lots of research projects on the issue. A recent health care project came up with four proposals, two based on research on the European medical care system. That is very important for China in the long term. Despite the financial crisis, lots of people argue, as can be seen in the newspapers, that the Americans are losing their houses, they are living in their cars, and there is none of this kind of thing happening in Europe. The Chinese see that as being because the Europeans have social security.

  Lord Hamilton of Epsom: But are the Chinese prepared to see the state spending 40 per cent of Gross National Product, which is what they do in most European countries?

  Q515  Chairman: Just a quick answer to that one, please.

  Professor Song: I still think the Chinese may prefer the European model. Social stability is very important for the Communist Party.

  Q516  Lord Jones: Earlier on, professor, you did mention the hope of a technological partnership. I am wondering whether the aerospace industry in China might be the means for that. You might know that Airbus/EADS, with the Chinese, are producing aircraft in China now. Is there the prospect of that industry growing to the point where you would be satisfied that there was partnership between Europe and China?

  Professor Song: Yes, not just that but the automobile industry is also very important. There are more European projects in China than Japanese or American. If you look at the profile of the EU or Europe, it is very high in China compared with other Asian-Pacific countries. We have had projects for the last few years, and the European profile is comprehensively the highest in China. So there are the social foundations in China for working with the EU. That is one way of managing EU-China relations.

  Chairman: We have covered human rights to a large degree so I think we will move on to co-operation in other areas.

  Q517  Lord Crickhowell: I am turning to question 9 but I want to break it up into two separate parts, because I think there are two quite different areas. First, international policy global governance issues. How do you see the ability of the EU and China to co-operate on things such as non-proliferation, Iran, North Korea, nuclear programmes and so on, and the situations, which were briefly mentioned earlier, in Afghanistan and indeed in Africa, the role of China, for example, in Sudan? Would you like to say a word about the effectiveness of the EU and China working together on issues of this kind?

  Professor Song: Yes, I think China would like to work with the EU on different international or global issues. At the moment the debate in China is about whether the EU has the capacity, because the United States certainly has this capacity; China has worked with the United States in North Korea and even Iran and elsewhere. We worked together in Iran but not with the EU; it was with the Member States. That is the dilemma. The EU and China have a joint declaration on non-proliferation and arms control. It is a question of whether the EU can play a real role in this area or whether we prefer to work with the two other Security Council members, the UK and France. That is the crucial problem. Again, China and the EU have a dialogue on Africa but nothing happens. This is related to how China and the EU at European level work on this. It is probably better to work with the Development Departments of the UK or Germany on these kinds of issues. That is the big debate: should we concentrate more on the Member States or the EU in different issues? With Afghanistan, as I mentioned, is it the EU or NATO? There is actually no role for the EU; it is the EU Member States, the NATO Member States. That is the dilemma on this. Last year there was a Commission policy paper on EU-China-Africa trilateral co-operation, which raised a similar problem. What is Africa? With whom do we deal? We cannot work with more than 50 countries. Does the EU have this capacity? No. There is a paper but no action. That is the problem.

  Q518  Lord Crickhowell: Can I turn then to an area where perhaps the EU has a leading role and does act coherently as one, and that is on environmental policy, where Europe has actually taken a lead. While President Obama is now moving in the same direction in a very welcome way, it has been Europe that has taken the lead, and there is already a great deal of co-operation, exchange of financial assistance and so on, and huge scope for technological development; clean coal technology is crucially important for both countries. Again, we heard in Brussels that there are really quite encouraging noises coming out of China about the approach to Copenhagen and really making progress. How do you see the climate change and environmental issue?

  Professor Song: This is a very good area that China and the EU can work on, and I think have worked on together. There are quite a number of EU-China co-operation programmes on environmental issues, not directly related to climate change, but if we look at the EU-China leadership, when they meet, it is probably the easiest area in which to have a common understanding. I am not sure what they can realistically do, especially in Copenhagen, because China still has its own domestic problems. I would suggest that there is great potential for co-operation in this area but we also need to be careful, especially on climate change. The European side says, "You have done wrong. You must do something about it." The Chinese people can very easy argue that in per capita terms you have caused much more damage than us." We should concentrate more on a common responsibility, rather than saying, "It is your responsibility Because you pollute more." This approach is very important, because the Chinese leadership is concentrating more on domestic problems. If they have to succumb to international pressure or domestic pressure, they will always go with the domestic. They cannot say, "We do not care." That approach is very important.

  Lord Crickhowell: Can I just follow that up? You are absolutely right. I think there has been a difference of expectation between Europe and China but there does seem to be a growing recognition in China that they have to move along this road, not least because of the environmental threat to China. Can I say how much I sympathise with what you said about the lecture point? Indeed, at a meeting we had with senior Brussels officials dealing with this, they kept using the words "We expect China," and I criticised them; I said, "You should not be talking in language indicating that you `expect' China. You should be seeking a common interest in doing something," and I think you have made a very important point.

  Q519  Lord Hamilton of Epsom: I would just like to come back on the meeting we had in Brussels. One of the things that they were putting enormous resource behind was the whole idea of carbon capture. Carbon capture in power stations is something that might happen in 2020, which is a very long way off. We have absolutely no idea how much it is going to cost. At the same time Europe is spending its time trying to get China to sign up to these things when we have absolutely no idea what effect this will have on the cost of your electricity or whether in fact the technology can be had at all. What does China feel about signing up to these things? That is what Europe is trying to force you to do

  Professor Song: I am not sure about this. I know nothing about this. It is outside my knowledge.

  Chairman: That is fair enough.


 
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