The European Union and China: global partners with global responsibilities
Thank you for inviting me to give a speech in your series of ‘Global Vision Lectures’. I have given it the title of ‘The European Union and China, global players with global responsibilities’, and both the timing and the place of this lecture are fitting.
On timing, beyond just the fact that this is the 40th anniversary of diplomatic relations between the European Union and China, we live in an age where our countries’ successes and challenges are interconnected, truly global. I have recently read the 5th Plenum’s ‘Proposals for the 13th Five Year Plan’, and a major theme is ‘Going Global’. And this applies not just to economic relations, trade and investment, but every bit as much to the environment and climate change, education and innovation, defence and security.
As for the place, where better than Tsinghua University. You started as a university which looked outwards: back in 1911, Tsinghua was founded as a preparatory school for students about to be sent by the Chinese government to study in the United States. Today, with 45,000 students, many foreign, and with a world-class faculty, Tsinghua itself is a ‘global player with global responsibilities’ and one of the world’s most prestigious universities. Only a few weeks ago I read that Tsinghua University has become the world’s No 1 university for engineering research, according to the newly published American ranking of the world’s top 750 universities. And your new Schwarzman centre is proof of a global vision.
Ladies and gentlemen,
Let me start with a quote from my boss: On her first visit to China in May, Federica Mogherini, our High Representative for Foreign Policy said: “40 years is the time for maturity in a relationship. This means that we are ready to take stock of the achievements we have made, to face the differences – and sometimes also the difficulties- of a relationship, but also able to overcome them in a spirit of mutual cooperation. (…) Our partnership, initially focused on economic issues, has evolved into a political dialogue for the mutual benefit of our peoples. Even if we are geographically far from each other, today’s global challenges know no borders – we have to address them together”.
So let me first set out the major challenges we both face, and then consider how best we can combine our strengths to address these shared challenges together.
Let me start with a sad reflection on the recent terrorist attacks in Paris. We condemn in the strongest terms these brutal attacks against innocent civilians. This shameful act of terrorism will only achieve the opposite of its purpose, which was to divide, frighten, and sow hatred. I should add that China too faces a problem of terrorism, which is likely to get worse as you play a bigger role in the world.
Ladies and gentlemen,
The European Union is getting over the consequences of the financial crisis. Despite Greece making the headlines over large part of this year, the economic recovery in the euro area and the European Union as a whole is in its third year. Admittedly, growth rates are still modest and unemployment at high levels.
At the beginning of his mandate, President Juncker said that his Commission would focus on ten political priorities, the key challenges that face both our economy and society. If I were to list them, and you were not paying full attention, you might think that I was talking about China. Which shows that in this globally interconnected world we face the same challenges. Boosting employment, a connected single digital market, energy union and a climate change policy, a fairer internal market with a strengthened industrial base, closer economic and monetary union, justice and fundamental rights based on mutual trust, becoming a stronger global actor. The EU or China? Both.
Let me talk about the current refugee crisis. In the first nine months of 2015, over 710,000 people – refugees, displaced persons and other migrants – have made their way to Europe, a trend which is set to continue.
What this says about Europe today is that it represents a beacon of hope, a haven of stability in the eyes of women and men in the Middle East and in Africa. Europe, in spite of differences between Member States, is by far the wealthiest and most stable continent in the world, and we do need to help those fleeing from war, terror and oppression.
The refugee crisis might be the biggest challenge that the European Union has seen for decades and it has the potential to change the European Union. The only way to address this common challenge is by working together, with solidarity and responsibility. I am not going to say that is easy. We all know there is no magic, quick fix to the crises we have around us.
And we need a global solution. We therefore called for a coordinated response, both to the short-term needs and the root causes. We do not ask our partners to do more than Europe does, but we ask the international community not to do less. All major countries should share the responsibilities associated with this crisis. Solidarity should be at the core of our decisions. We will continue to encourage all actors to step in and take a greater role in supporting the work we have ahead of us. Only two weeks ago we had a major summit with African leaders in Valletta, all with a view to find a balanced, cooperative approach to managing the Union’s external borders. The Vienna Conference on Syria is another instance of trying to find a global solution to problems which affect us all. I will come back to this issue later.
China, too, is constantly changing, with its role reflecting the gradual evolution into what China calls a “major country” status. The recent state visit by President Xi to the United Kingdom, as well as the state visits by Chancellor Merkel and President Hollande to China, are a clear sign of closer relations between China and the EU. President Xi’s visit to the US was also a landmark.
Just as we are continually adjusting our economy, so too China is moving towards a “new normal” and shifting gradually to an innovative, service-oriented and consumption-driven economy. The targets and reforms of the new draft Five Year Plan reflect a high ambition, and whatever the rate of growth, it will remain one of the highest in the world.
‘Going Global’ is the leitmotiv of China’s international policy ambitions. This approach of turning outwards is symbolised by the ambitions of the One Belt, One Road strategy, the creation of the Asian Infrastructure Investment Bank and BRICS Bank, the intention to internationalise the RMB. Their significance is far deeper than just the building of infrastructure, trade and investment, important though those are. It goes beyond financial infrastructure, information infrastructure and people to people ‘infrastructure’, if I may use the term. For the new Silk Road to succeed, much more is needed, in particular two things:
– Better economic global governance. China has an important role, underlined by your chairmanship of the G20 meeting.
– A secure and stable environment all the way from China to Europe, including in Afghanistan, Iran, Iraq, and even Syria. Peaceful developments on the South China Sea, in the Malacca Straits, the Gulf of Aden are, in turn, the precondition for the 21st Century Maritime Silk Road.
All this calls for shared responsibility and, as President Xi recently said: “adopting a new thinking of building partnerships, so as to jointly open up a new vista of common development and shared security“. This, of course, also opens up the necessity of a more strategic cooperation between the EU and China in the area of foreign and security policy.
Now let me focus more closely on EU-China relations. Speaking after the EU-China summit in June, President Tusk said: “We decided to reinforce our EU-China 2020 Strategic Agenda, which frames our relationship. We have also agreed with Premier Li the priorities for the up-coming year. This is an impressive list. It ranges from trade and investment to human rights and migration; from security and defence to climate change and development. And beyond. Because we share strategic interests. But also because of our commitment to address global challenges together“.
The EU is China’s biggest trading partner, and China is now close to becoming the EU’s largest trading partner as well. In 2014, the total volume of trade in goods amounted to almost 470 billion euros.
Investment both ways is also increasing. The EU is one of the top-five sources of foreign direct investment to China. At the same time, the recent statistics show that China’s investment in the EU has now outpaced EU’s investment in China. Even so, EU-China bilateral investment is only one tenth of EU-US bilateral investment. And our trade in services falls far short of our trade in goods.
In 2013, China and the EU launched negotiations on a Comprehensive Agreement on Investment. If we are to take our relationship forward, ‘to climb another storey higher (‘geng shang yi ceng lou’), we have to increase market access for each other, to give our companies additional opportunities on a reciprocal basis. China will account for one third of global growth in the next 10 to 15 years and has already become an essential pillar of EU companies’ strategies. The Chinese Government has clearly articulated its reform vision to move the Chinese economy up the value chain and innovation is to be one of the most critical drivers. EU industry and research has made and can still make further contributions to the Chinese innovation and modernisation agenda. But that requires a business environment which offers fair and transparent conditions for all economic actors in China.
We are eager to see more Chinese investment in Europe which is the number one destination for foreign investment. The European Commission has put investment at the very heart of its agenda. We have launched an Investment Plan for Europe aiming at delivering €315 billion in extra investment within Europe. China has applied to become a member of the European Bank of Reconstruction and Development (EBRD), as a new way of boosting trade links with Europe and Asia. We welcome that, just as we welcome the fact that many European countries have applied to become founding members of the Asian Infrastructure Investment Bank (AIIB), in order to complement existing multilateral development banks and to contribute to addressing Asia’s need for infrastructure investment.
At the last EU-China Summit in June, our leaders decided to support synergies between each other’s flagship initiatives, namely the Investment Plan for Europe, and the Chinese Belt and Road Initiative. We follow the Chinese initiative with great interest. Improving connectivity, both within and beyond the borders of the EU, is not just one of the most important political objectives of the Union, it is embedded it its very nature. The EU is, at heart, a connectivity initiative and we are glad to see that China is also interested in taking part in this process. We have already agreed on the main principles of how we want this collaboration to move forward. We also need to discuss horizontal issues which affect connectivity, such as technical standards or the existence of a level playing field for our companies.
2. Climate change
Of all the global challenges in front of us, perhaps the most pressing one is the environment and climate change. In Europe we have learned that being ambitious in this area pays off: from 1990 to 2013, EU emissions declined 19%, while GDP grew 45%. That is why tackling global warming should be seen as an economic opportunity. The EU has now pledged to reduce greenhouse gas emissions by at least 40% from 1990 to 2030.
China’s commitment to ensuring a peak in its emissions by 2030 at the latest as well as the increased emphasis on improving the environment evident in the Proposals for the 13th FYP show that we are on the same page. In the EU-China Statement on Climate Change both sides committed to embarking on low-carbon development and cooperate on developing a cost-effective low-carbon economy. We are working together to reach an agreement later this year in Paris on ambitious, binding international commitments to fight climate change.
Climate change is a global strategic challenge. A powerful global agreement at the Paris Conference is vital. But at the heart of this lies co-operation on the environment within China, Europe and in third countries. Strategic commitments to climate change cannot be achieved without effective measures in a wide range of areas such as pollution control, energy efficiency, circular development, changing systems, changing attitudes and many more. This is why the increased weight given to the environment in the draft Five Year Plan is so important. And here our companies, our researchers, our governance experts have much to co-operate over. And forgive me for stressing this once again, but that co-operation will be more easily enhanced if there is greater openness to markets, better protection of IPR and a more transparent and vigorous exchange of ideas. (Intellectual input from experts from Tsinghua University).
3. Foreign policy and security
Foreign policy and security co-operation has been the neglected younger cousin of our relations. This has to change. We now live in a world so complex and so rapidly changing that single players alone simply cannot solve many of today’s problems, even if they are as powerful as the United States, the European Union or China. Global problems require global responses. Global players must take global responsibilities. China is increasingly doing this, something which we support.
We need to work together to create a world based on rules and respect for international order. The multiplication of both global challenges and opportunities requires a strong multilateral system, with the United Nations and World Trade Organisation at its heart. The EU and the People’s Republic of China, both founded in the aftermath of the Second World War, need to work together for a world which is based on the same principles upon which the United Nations was founded in 1945: universal peace, international security guaranteed by international law and the peaceful settlement of international disputes. We need to respect and promote human rights, democracy and rule of law, as well as social progress and better standards of life. In the context of the United Nations’ 70th anniversary, our recent summit also committed to develop further EU-China bilateral exchanges and cooperation on peace and security under the UN umbrella.
Let me cite a positive example: the UN Security Council’s authorisation of Member States to intercept vessels off Libyan coast suspected of migrant smuggling. After the vote – and China voted in favour – the Chinese representative said that the causes of illegal migration were complex and urged an integrated approach, focused on poverty, social unrest and conflict. Communications with regional and sub-regional organisations were important.
Let me tell you that European action in the region goes exactly in that direction. Not only did we launch operations to fight human smugglers, but also – at the last week’s Valetta summit with African countries – we launched the EU Trust Fund with a minimum of 1.8 billion euros. This comes on top of EU and Member States’ development assistance to African countries of 20 billion euros every year. The fund will help promote economic opportunities, development, security and a better management of irregular migration in partnership with African countries. China’s economic engagement in Africa should be another stabilising factor in the region, and we should seek coherence of our actions on the continent. We all know that destabilisation and insecurity travel very quickly and have potentially devastating consequences.
There is, however, wider scope for cooperation, and both the European Union and China have a host of experience to share. Since the creation in March 2002 of the European Union Police Mission in Bosnia and Herzegovina, some 30 civilian and military missions and operations have been launched under the Common Security and Defence Policy, including in the Democratic Republic of Congo, Central African Republic, Chad, South Sudan, Somalia, Mali, Niger, Afghanistan and Iraq.
China, over the years, has sent more than 30,000 peacekeepers to 24 different peacekeeping operations, and today it provides around 3,000 of the more than 106,500 U.N. troops, police and advisers deployed by all countries, making it the ninth biggest contributor of peacekeeping personnel. China is certainly playing an increasing important role: recently, China dispatched an infantry battalion of 700 soldiers to South Sudan to protect civilians, United Nations employees and humanitarian workers as part of the peacekeeping force there. And, at the United Nations General Assembly, President Xi announced plans to set up a United Nations permanent peacekeeping force of 8,000 troops and provide $100 million to the African Union over the next five years to create an immediate response unit capable of responding to emergencies.
We need also to increase our common diplomatic efforts. Back in June, at the summit, we agreed that the conflict in Ukraine could only be solved by diplomatic means and through full respect for international law. This is an area where both China and the European Union should continue to use our influence to ensure full implementation of all points in the Minsk Agreements by all sides.
The deal we reached last summer on Iran’s nuclear programme shows the way: when global powers from all continents cooperate – Europe, Russia, China and the US – the chances of success escalate. The Iran deal, although primarily a non-proliferation deal, is a model for addressing other problems, including how to provide security for the One Belt, One Road strategy, which will require that sort of all round cooperation. The same applies to Syria – and indirectly the refugee crisis in Europe. On Syria, the EU and China need to work hand in hand, all of us playing our respective roles, be they financial assistance, constructive participation in the Vienna Conference. This will contribute to putting an end to the suffering of the Syrian people, the physical destruction of Syria, the destabilisation of the region, the resulting increase in terrorists drawn to the fighting in Syria, the refugee crisis.
This brings me to combatting terrorism. In the last couple of months we have witnessed heinous terrorist attacks in Ankara, Beirut, on a Russian plane in Sinai and finally, last week, in Paris. The spread of terrorist organisations and acts of terrorism directly undermine the maintenance of international peace and security; they endanger our efforts to strengthen the global economy and to ensure sustainable growth and development. They have also underlined once again the need for increased international cooperation. Terrorists cross borders; counter-terrorism efforts must cross borders too.
As agreed in G20 last Monday, we must tackle the financing channels of terrorism and address the conditions which breed terrorism. We must counter violent extremism, combat radicalisation and recruitment, hamper terrorist movements, counter terrorist propaganda and prevent terrorists from exploiting technology, communications and resources to incite terrorist acts, including through the internet.
Fighting terrorism is seen as operations on the ground, such as in Syria. If we are to be honest we need to state one thing clearly. It was not the moderate Syrian opposition which carried out the attacks in Paris. It was the so-called Islamic State or Da’esh. We need to concentrate our actions on Da’esh and the phenomenon of foreign fighters, including Europeans and Chinese fighting in Syria. But it is just as important to prevent the conditions which allow terrorism to breed and fester to develop or persist. Economic opportunity is an important tool, but so too is a greater understanding and tolerance of religion, culture and way of life. Our experience inside and outside the EU is that one of the major causes of radicalisation which leads to terrorism is making a minority feel left out from society as a whole. Getting this balance between control and latitude is very difficult and I have no easy answer, but it must be attempted.
5. International development
Another important area for our collaboration is the issue of the post-2015 development agenda. The past 10-15 years have seen an impressive increase in the public domestic resources available to a number of developing countries. But still, many of those countries have not been able to step up public expenditures in a sustainable way and to achieve development goals, despite sustained growth rates and abundant natural resources. China has shown the way to success. In a little more than three decades it has lifted 600 million out of poverty.
In September, in the margins of the landmark 70th session of the United Nations General Assembly, world leaders adopted the 2030 Agenda for Sustainable Development, which outlines a new framework for national and international action for global poverty eradication and sustainable development. The agenda acknowledges our shared responsibilities and our shared destiny, is accepted by all countries and is applicable to all, taking into account different national realities, capacities and levels of development and respecting national policies and priorities. The goals will stimulate action over the next fifteen years of critical importance for humanity.
6. Human rights
As a sign of maturity of our relationship, the EU and China can also talk about more difficult issues including human rights. As President of the European Parliament Schulz said earlier this year in his speech to CASS, “Maybe one of the greatest achievements of the last 40 years is exactly the fact that we are able to discuss human rights in an open and frank way.” I hope that these exchanges can continue to show mutual respect and can be ever more constructive, leading to the fulfilment of both sides’ obligations under UN human rights mechanisms. So I am looking forward to the next round of our human rights dialogue at the end of this month. We do not approach these dialogues in the manner of someone lecturing. We do not seek to impose our values. But we do want to discuss – calmly and maturely – how both sides can fully implement the commitments they have made under international conventions. This is not interference in the internal affairs of the other side. Just as personal friends should be frank, so should countries. China wishes to strengthen its soft power; how it treats lawyers, whether defendants are given access to legal counsel or visits from relatives, these sorts of actions raise serious questions about China’s stated commitment to strengthening the rule of law, and thereby diminish China’s soft power and reputation.
Long-term partnership between the European Union and China would not be possible without the ‘lao bai xing’, the man and woman in the street, seeing clear benefits. All the elements which leaders and officials put emphasis on, trade, strategic or environmental co-operation, are unattainable without the support of the people. If we do not understand each other, do not appreciate the differences in our culture, if we cannot communicate successfully, then all sorts of interactions will be hindered.
The framework is important, yes. We hold the EU-China High Level People-to-People Dialogue (September was the last occasion). But what makes the real difference is the vast number of interactions and exchanges which we in government and officialdom cannot see. All we can do as governments and officials is boost the conditions which encourage them to take place.
That means more academic contacts. There are 300,000 Chinese students at European universities; our universities are keen to welcome more.
At the same time we welcome China’s providing opportunities for our young to study in China and to get to know Chinese people. This is an invaluable investment for the future. Currently there are 50,000, but their number is growing, as the interest in China grows. We are increasingly opening our exchange programmes to foreign students. We are proud that as of last year, our flagship programme Erasmus+ opened up credit mobility to all countries in the world. This year 1,329 Chinese students will benefit.
Tourism is another important way of getting to know each other better. Europe is the number one tourist destination in the world. We want more Chinese tourists. 6 million people travel yearly between Europe and China, and there is clearly scope for even more.
And let us both work towards a far greater volume of cultural exchange. Both China and the EU have long and glorious cultures.
This lecture has partially veered away from the global to the bilateral. I make no apology for that. I am talking to China’s most intelligent students and you will have already related what I have said to the wider context: what applies to the relations between the EU and China, applies as much to relations between the EU and Africa, the EU and the US; between China and Latin America, China and Australia. Pick your combination.
I have also talked about the traditional areas of co-operation. But again, your brains are faster than mine and will have seen that what I have said about them applies just as much to new areas of global co-operation, or if we are foolish, new areas of global confrontation: space, cyber, polar regions, the deep seabed, and some we may not yet have foreseen.
If we are to manage traditional and new areas of relations, in this far more complex, multilateral, less bilateral fashion, then we are going to have to make ‘win-win’ more than a catchy slogan; it has to be a real guiding philosophy. And that will involve some painful rethinking. For the EU, for China, for America, for everyone. For example, within Europe we shall have to get better at putting our collective interests before the interests of our member states – a smaller share of a bigger pie is a bigger gain. Another example, we cannot call on China to assume a greater share of global responsibilities without giving China a greater say in necessary changes to economic or other aspects of global governance. And yes, China too will need to put its wider longer term interests in front of narrow immediate gains, be it in ensuring true reciprocity in economic opening, or in submitting claims to international arbitration.
And this process of global sharing and compromise, of multilateral over bilateral, will continue to change and evolve, more quickly than in the past. The world of flexibility, innovation, mutual understanding and compromise is what Tsinghua University has to prepare its students for.
Thank you for giving me the opportunity to talk today. Forgive me if I mention another university. In April, to mark the 40th anniversary we inaugurated “The EU-China Friendship Garden” in a ceremony on the Beijing Foreign Studies University campus. For this occasion, a total of 29 trees were planted: 28 ginkgo trees representing the 28 EU Member States, as well as one oak tree, representing the EU-China partnership. Ginkgo Biloba trees symbolise longevity and tenacity and have been cultivated in China for over 1,500 years. The oak tree, also known as the Tree of Life, is a symbol of strength and endurance and was regarded as a sacred tree in many parts of Europe in ancient times. Its roots penetrate deep into the ground and its branches reach high to the heavens.
Let me wish the same for the future of the EU-China partnership, leaders in a global partnership.