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The use of the death penalty in Taiwan, by contrast, is almost unknown-I cannot say entirely unknown because, regrettably, it was used earlier this year. However, I admit to a sense of disappointment when reading the various references to relations with that country. I had hoped that the committee would have taken this opportunity to question some of the basic assumptions that underlie western Governments' thinking on this matter and recognised that the 23 million people who live in Taiwan also have rights that deserve to be taken

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into consideration. I refer particularly to the assertions in the summary with the heading "China's lines in the sand". The report states:

"First, 'one China'. China will not accept any questioning of its territorial integrity whether over Tibet, Hong Kong or Taiwan. It is the Taiwan issue that presents a threat to regional security".

That sentence has been quoted by a number of noble Lords in this debate. From that, one might assume that Taiwan is somehow threatening its neighbours militarily. That is clearly an absurd proposition. The only threat in the region comes from the People's Republic of China, which has stationed 1,500 missiles on its coastline, all targeted at Taiwan, and has passed an anti-secession law, which, it claims, gives it the right to invade Taiwan if that country declares independence.

Almost 20 years have passed since the Kuomintang last claimed that it was the legitimate Government of the whole of China and during that time Taiwan has evolved from a one-party dictatorship under martial law into a genuine parliamentary democracy where Governments are changed through the ballot box. I remind your Lordships of what the Foreign Affairs Committee in another place said in paragraph 173 of its August 2006 report East Asia. It stated:

"We conclude that the Chinese military build-up across the Taiwan Straits threatens peace and stability in East Asia .... We further conclude that the growth and development of democracy in Taiwan is of the greatest importance, both for the island itself and for the population of greater China, since it demonstrates incontrovertibly that Chinese people can develop democratic institutions and thrive under them".

By contrast-I hope that the noble Lord, Lord Teverson, and members of his committee will not take offence at this-the tone of the report that we are debating seems to be that we must do nothing to promote relations with Taiwan that upsets the PRC. Paragraph 171 of the report states:

"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".

If it is right for Taiwan to participate in these international bodies-I would add to that list the International Civil Aviation Organisation, the United Nations Framework Convention on Climate Change, the Inter-Parliamentary Union and others-why should the People's Republic of China be given a veto?

The case for Taiwan to be given observer status at the World Health Assembly-finally granted in May 2009-was overwhelming because of the significant contribution that the country had made over the years on world health issues such as the SARS epidemic and earthquake relief. If a visitor arrived from outer space and examined the various relationships between Britain and Taiwan-in financial services, in industrial investment by British companies in Taiwan and by Taiwanese companies here, in the provision of places for Taiwanese students at British universities, in collaborating on tackling financial crime and terrorism, in combating disease, in coping with national disasters, and much more-that visitor would come to the conclusion that here were two friendly countries working together closely in virtually every area that mattered.

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However, we know that life is not quite like that. I well recall an exchange in your Lordships' House in January 2003 on a Question that I asked on WHO membership. The noble Lord, Lord Avebury, asked my noble friend Lady Amos, then a Foreign Office Minister, whether she could think of any of the attributes of a sovereign state that Taiwan lacked. Her reply was:

"My Lords, the noble Lord will be aware that we do not recognise Taiwan. The majority of countries in the UN also do not recognise Taiwan".-[Official Report, 20/1/03; col. 432.]

That was a truthful answer, but it was not quite an answer to the question that the noble Lord, Lord Avebury, asked.

However, I pay tribute to the previous Government, whom I was proud to support, for one very important decision that they took in relation to Taiwan. On 3 March 2009, they granted visa exemption for six months to Taiwanese passport holders. We were followed by Ireland and New Zealand, and Taiwan has offered similar rights to British passport holders. There is no evidence that this has created any problems in the countries involved.

I was interested to see the letter that Ivan Lewis MP, the former Foreign Office Minister, sent on behalf of Her Majesty's Government to the noble Lord, Lord Roper, on 6 April. I am delighted that the noble Lord has been sitting through this debate and is listening carefully to all our deliberations. Paragraph 10 of the letter states:

"The Government agrees that the EU has a significant stake in the maintenance of cross-Straits peace and stability. In line with the East Asia Policy Guidelines, the EU should continue to welcome positive developments and initiatives aimed at promoting dialogue, practical co-operation and confidence building. It should also encourage both sides to pursue pragmatic solutions to Taiwan's involvement in international organisations, especially where Taiwan's practical participation is important to EU and global interests".

Perhaps I may ask the Minister a simple question: do the new Government agree with what their predecessors said on that matter?

I have a couple of further questions for the Minister. The first relates to the EU arms embargo on China, to which the Select Committee report refers. Can he give an assurance that the Government will not support the lifting of the arms embargo until the PRC has abandoned its threatening stance towards Taiwan and has removed the missiles from its coastline?

Secondly, do the Government stand by what the Minister's new noble friend, the noble Lord, Lord Howell of Guildford, said during the exchanges on the Question to which I referred a moment ago? Speaking from the opposition Front Bench, the noble Lord said:

"I am sure that we all appreciate that because of respect for the 'one China' policy and our relations with the People's Republic of China, we do not accord Taiwan full diplomatic status. Can we at least be assured that we give Taiwan representatives in our country and the sort of causes that we are discussing in this Question the same support and encouragement as are given by our neighbours, particularly France and Germany, in their dealings with Taiwan? Are we as effective as they are in maintaining good relations with this remarkable democracy?"-[Official Report, 20/1/03; col. 432.]

His reference to the support offered to Taiwan's representatives in the UK is important. Is the Minister aware that practice differs markedly from one EU country to another in terms of Taiwan's offices' legal

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status, the immunities granted to their staff, the rules on vehicle ownership, use and taxation, and so on? I do not expect the Minister to give me an answer today, but perhaps he will institute a review of the situation and, where possible, ensure that, where the UK practice is behind that which is followed in other countries in the EU, we will attempt to match that. Perhaps he could write to me about that in due course.

I thank the noble Lord, Lord Teverson, again for his brilliant introduction. I am grateful to the Minister for his attention throughout our debate and I look forward to his reply. I congratulate all members of the committee on pursuing such an excellent study.

6.30 pm

Lord Cobbold: My Lords, I intervene briefly in this debate to congratulate the noble Lord, Lord Teverson, and his committee on an excellent report. European committee reports always achieve a high standard. The only problem with this one is that it is physically difficult to read because of its very tight binding. I agree with the report's principal call for the EU to raise its game substantially and forge a strategic relationship with China based on trust and mutual respect. Like the noble Lord, Lord Alton, I think that one of the most important statements in the report is in paragraph 43. It reads:

"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".

We in this country already have a special relationship, as many speakers this afternoon have mentioned, because of Hong Kong and, more particularly, the English language.

I first visited Hong Kong in 1959, but my first visit to the People's Republic was a business trip in 1990. It was a revelation at that time to learn that China's economy had been growing by around 10 per cent per annum since 1979. It was clear that if this rate was to be maintained China would be the largest economy in the world by the middle of this century. In spite of the current global recession, China is still on track.

On my return in 1990 I went to the University of Hertfordshire, of which I was then a governor. I told the university that it must develop a relationship with China; I am happy to say that it now has around 1,000 students from China. I think there is a total of around 77,000 in Britain and, according to paragraph 50 of the report, as many as 190,000 in the EU as a whole. These are important numbers. Happily, at alumni parties organised by the university in China, graduates have been enthusiastic about their experience in Britain, and have said that it had helped them to get good-quality jobs on their return.

It is also important to arrange for more education in the Chinese language in this country. I think some of my children and grandchildren are being taught the Chinese language. Education is just one of the many links that we have with China. These links are well covered in the committee's excellent report. My one concern is over the statement in the gracious Speech that the Government look forward to an "enhanced partnership with India". I have nothing against India, but what about China?

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6.32 pm

Baroness Kinnock of Holyhead: My Lords, I also congratulate and thank the noble Lord, Lord Teverson, and the members of the sub-committee, who have provided a detailed and persuasive case on how the European Union can better co-ordinate its policies towards China and maximise its leverage over China. Most of the speakers have played around with those points. It remains quite difficult to pinpoint exactly how we will do it but at least we are charting some paths. My one carping observation is that, from the evidence sessions, it is apparent that the committee took no evidence from a single member of the European Parliament on the several visits that it would have made to the Commission. With the Human Rights Sub-Committee, the Development Committee and others there, the committee might have sought that useful contribution.

The context that we are dealing with in these issues is the increased assertiveness which China is showing. That assertiveness increases the case for a more coherent strategic approach to our relationship with China. On Burma, Iran and North Korea, we know that China has been-and continues to be in most cases-less than helpful. On trade and investment policy, industry and technology, climate change, proliferation and human rights, the European Union clearly needs to refocus more strategically on how it deal with its concerns.

As the report says, Europe must raise its game. The reality that we have more influence when we work together is well understood in the report. Charles Grant has observed that we should bear in mind that China, as an ultra-realist, respects power. Therefore, uniting European member states are far more likely to have that influence over Chinese policy than we have when there seems to be too much of a focus from many member states on bilateral efforts to build special relationships between them and China. We need to insist, at European Union level through the new high representative and the European External Action Service, that we develop a system of joint messages-with more clarity-from the European Union to China.

It is also time to end what China clearly perceives as Europe's rather patronising approach to it. Its economy grew by 9 per cent in 2009. For China, this is hardly evidence of any need to emulate our economic model. The European Union must get to grips with identifying the critical issues central to building a more constructive relationship with China. We need, for instance, to promote the objectives of the Doha development round. China is a member of the WTO and has an important role to play. It well understands the need for open trading systems and would look for support on this. There is also climate change, which several noble Lords have mentioned. It means building a consensus at EU level on fewer issues than we currently focus on, and ensuring that our views are clearly understood. We should be clear with China that Europe is ready to do more on such issues as technological transfer, in which China has an interest. We understand the clear benefit for China, and the European Union is ready to be more co-operative and engaged in such issues.

China regularly expresses its interest in a partnership and co-operation agreement with Europe. However, in reality, as many noble Lords have said, nothing much

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seems to be happening. We see continuing intransigence on several issues identified in the committee's report. The conclusion is that as China's economic power has grown, our diplomatic contact with it seems more, not less, difficult. China continues to foster relations with developing countries and, increasingly, with authoritarian regimes. Nor do we see many signs that China is keen to integrate further into international systems. In the absence of Chinese support for Resolutions 1718 and 1874 on North Korea, and Resolutions 1737 and 1803 on Iran, the UN's effectiveness was severely diminished by the intervention of China, which voted against these resolutions.

Europe has limited opportunities at its disposal. However, it has been argued that the tensions between China and the US, and China and its neighbours, must mean that Europe now has a better chance to focus on building that G3 relationship which would be preferable, as the noble Lord, Lord Teverson, suggested, to the G2 relationship which most people seem to think is the likely outcome. This is a critical time for relations with China. The option of working on a G3 relationship is perhaps more possible for us at this time than it has been in the past.

China has an impressive grasp of public diplomacy, which it has developed with the United States and the European Union. Contrary to the impression that some people have given today, China understands public diplomacy and how to manage it. The European Union has shown an aversion to open and public acrimony between Europe and China because it leads to the judgment that we are failing to handle China. The bottom line is that, like Europe, China needs global trade, monetary standards, security and access to resources. The high representative now has the opportunity to argue for careful policy co-ordination with the United States to use the opportunities that the Lisbon treaty and the European External Action Service have brought about. Insufficient mention is made of that service, which will facilitate the momentum that we need.

China's change of tack on Iran shows the importance of exerting influence on China. Russia's change of policy and the involvement of the Gulf states influenced China in that regard. We should try to emulate those actions in other ways to exploit the fact that China is open to influence. That, in turn-I repeat the point I made earlier-reflects the fact that levering change could be dependent on how we work with others. Indeed, there will be no change unless we work with others.

On climate change, we should acknowledge Europe's success in building up global momentum and agreement on a legally binding treaty. It was not the case that Europe was not engaging, but what happened in Copenhagen resulted from the fact that we had nothing to engage with because we had the maximum on the table, and China reacted to that. What we saw before Copenhagen was that China was prepared to reject the deal with the BASIC group. That action was the result of influence on China. Copenhagen was certainly not a diplomatic success for China. I know for a fact that China is now busy working to rebuild bridges, particularly with African countries and small island states in the developing world, which feel badly let down by it.

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China is now busily trying to repair those relationships. We should not expect much progress beyond the Copenhagen accord before the Cancun meeting. However, the ball is most definitely in the European Union's court and that is an opportunity which we must grasp.

European solidarity on human rights is essential when we put forward our arguments. We must continue to focus on Tibet and the Dalai Lama but we should give much more attention to the plight of political dissidents in China. The imprisonment and difficulties that dissidents experience get very little of our attention compared with Tibet and the Dalai Lama. It should not be a case of one or the other, but we should place more emphasis than we do at present on the plight of political dissidents in China. The European External Action Service must work to ensure that there is a strategy on how to maintain consistent pressure on human rights. We have many strong European Union Council positions-we have the common positions on China and other countries-but they are not being followed through sufficiently with strong and concerted European Union action. As with all the policies covered in the report, there should be incentives of a positive kind on the table when we have our discussions with China, but, in tandem with that, there should be clarity on what action the European Union will take when there are clear breaches of international human rights law and, very often, of Chinese law as well.

Noble Lords have touched on Africa and China. I know from my experience of working in Africa how the activities of the Chinese there preoccupy many people who are involved in development and human rights. Beijing combines state investment in Africa with economic incentives to attract private investment. China displays hard-nosed self-interest but successes have resulted from its resource-backed development loans. For instance, reconstruction in Angola has been helped by three oil-backed loans, which have been used to build roads, railways, hospitals, schools and water systems. Angola required Chinese companies to subcontract 30 per cent of the work to local firms. People are not generally aware of that. The Congo will receive $3 billion worth of copper-backed loans from China. According to reports that I have read, the Congolese Government have stipulated that 10 to 12 per cent of all infrastructure work undertaken under the arrangement must be subcontracted to Congolese firms, that no more than 20 per cent of construction workers involved can be Chinese, and that at least 0.5 per cent of the costs of each infrastructure project must be spent on worker training. That represents considerable progress on what I observed in the 15 years during which I travelled frequently to Africa. There are still many concerns but we have to accept as a fact that Chinese teams are building a hydro power project in Congo in exchange for oil and another in Ghana to be repaid in cocoa beans.

Chinese aid to Sudan is relatively small, but the joint venture on oil regrettably allows al-Bashir to maintain his power and Chinese arms continue to flow into Sudan in spite of the UN arms embargo. However, other aspects of the relationship are not so well known. China was pivotal in getting Khartoum to accept a joint UN-AU peacekeeping force. It agreed to the al-Bashir case being referred to the ICC. As a member

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of the Security Council, China could have vetoed that but did not. Beijing is working with the United States and the European Union to build joint strategies in Sudan. Again, that is progress on which we should build in future relations.

As the report says, we must continue to ask for more transparency on official aid and other flows of finance. As noble Lords have said, there are concerns about China's relations with resource-rich countries in Africa, but claiming the high ground will not result in the progress being made that we need to see in China's dealings with these Governments, who, as we know, need huge investment in infrastructure. China provides the assistance that they need. It increasingly understands the importance of good governance in Africa, and that it is not in its interests to fail to support and encourage that.

We are discussing the findings of this excellent EU committee report. We know that we have seriously to analyse what we have to do better in our dealings with China, a strong and powerful state protected by its status as a developing country, as others have said. Europe needs to have a comprehensive, strategic, persistent, concerted and well co-ordinated approach. The conclusion we reached is that the European Union must develop and refocus its foreign policy to meet the promise of the Lisbon treaty and the European External Action Service. Europe has moved on from past approaches and from the assessment of the Centre for European Reform that Europe's policies were,

"a ragbag of opportunistic, allergic, poorly co-ordinated and panicky policy action".

Europe will have to do better. I believe that that is possible and I hope that this excellent report will make a contribution.

6.48 pm

Lord Wallace of Saltaire: My Lords, it is a pleasure to follow the very thoughtful and constructive speech of the noble Baroness, Lady Kinnock. The Foreign Secretary has made it clear that China is an area where there should be continuity of foreign policy. It is very much an area in which there is consensus among all the main parties on what British and European policy should be.

The Government welcome this extremely helpful report which contributes to the British and European debate. Like other reports from the Lords EU committee, it will no doubt be read in Brussels and other capitals. I apologise for the delay in the ministerial reply. There have been one or two hiccups in the middle, such as the general election. Some of the committee members, at least, will be aware that the Minister responsible wrote to the chairman on 3 June:

"I hope that a time-frame of two months from the State Opening of Parliament on 25 May would be acceptable".

So a full and detailed ministerial reply will be on its way well within that timeframe. I should perhaps also apologise and say that I hope my voice does not give out before the end of my speech. I have a rather bad cold.

The report and the speeches in this debate have been balanced between EU/China issues and UK/China issues. I loved the comment in paragraph 35 that,

"it was not always clear for China where the locus of governance was in dealing with Europe",

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referring to Chinese confusion over where the balance of authority lies between national capitals and Brussels on trade, intellectual property, technological co-operation and everything else. Of course, Members of this House are entirely clear where the balance lies between Brussels and Britain. This is part of the constructive ambiguity with which we all deal within the European Union, and the Chinese are learning to navigate their way around it.

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