Événements

Mr. Chairman, Ministers, Excellencies, Ladies and Gentlemen,

Thank you for your invitation. I think this forum can be very useful and I want to congratulate the organisers.

For a very long time, Europeans have regarded China as a sleeping giant. This time is over. In recent decades, the giant awoke and that process accelerated in the past few years. Today, China is determined to regain its rightful place on the world scene. The 2008 Olympic Games were clearly the climax of that come-back policy. They made visible the major underlying trend of the recent years. Power is somewhat shifting from west to east, the world is no longer bipolar or unipolar but becoming increasingly multipolar. Indeed, we enter a more complicated international system in which several poles - including Brazil, India, Japan, Russia, the US and, of course, China and Europe - have weight or the potential to develop it.

The vital question is to know whether that multipolarity will be aggressive or cooperative. At least two paths seem plausible. As far as China is concerned, Europe has accompanied its renewal through investments and trade, and by helping Beijing to put an end to its diplomatic isolation. But we have seen, too, tensions in the recent years, most importantly on trade issues. How this situation will develop is our common responsibility. We can build a relationship that is based on respect, trust and mutual interest, or we can let the current difficulties develop into lasting misunderstandings and possible conflicts.

The idea I would like to defend is that Europe, which is today the largest economic and commercial power and has no imperial design, and China, which historically in the long term is inclined to be a peaceful giant, need a more sustained dialogue. If we want to develop a strategic partnership, particularly on political and security issues, which to me is necessary, we also need more balanced trade relationships and a broader view of our common interests. Ukraine, because of its situation, can help us to do so.

I. Europe and China : what are the current frictions and difficulties ?

First, I would like to make general comments about the EU. It has a general problem : its ability to manage a foreign relationship as a Union and not only as a collection of different countries. Individually, European countries do not have enough weight to tackle some major worldwide problems and particularly to deal efficiently with China. We must build the institutions, or at least the ways and means, that will enable us to carry weight when we discuss with other parts of the world. The EU can indeed exert a positive influence, which is exemplified by the role it recently played in the Russia-Georgia tensions. The EU needs to reinforce its political will and its common foreign policy. My guess and hope is that in the coming years, the EU will evolve in several directions : it will welcome some new member states ; it will focus on the economy and social issues, on research, on investments - among them hopefully energy - ; it will be more differentiated, i.e. some countries will decide to enhance their cooperation within the EU faster than others ; it will deepen its relationship and association with its close neighbours ; and hopefully it will, step by step, develop a security and defense policy not contradictory but complementary with NATO agreements. Each of these issues is highly debatable and will have consequences particularly on Europe and Central Asia.

Between Europe and China, what are the main difficulties ? In 2007, the EU’s trade deficit with China reached 160 billion Euros, only slightly smaller than the US-China deficit. For European businesses, there remain obstacles to selling and investing into the Chinese market. Property rights are not enough protected. Prices are sometimes dumped to win new markets.

Democracy and human rights issues are another source of concern. You all know that it is part and parcel of the European approach and tradition. The events in Tibet in March 2008 led to demonstrations in several European countries. An open question is : what will be the democratic evolution in China ?

There are questions about China’s foreign policy. Its growing engagement in Africa, Central Asia and the Middle East is largely driven by its need for raw materials. And it is quite logical. But this engagement may also help to sustain a number of rogue regimes. By 2007 China had become the largest trading partner of Iran, North Korea and Sudan, and the second largest of Burma and Zimbabwe.

Yet, the world needs China to solve peacefully several very difficult international problems. China’s reluctance to join some international measures regarding Iran has somewhat reduced the pressure on the Iranian nuclear program. Beijing’s position towards Sudan’s authorities has made it both possible and uneasy to exert pressure about the situation in Darfur. The more influent China becomes, the more international responsibilities it will have to accept.

Regarding the issue of foreign policy, I want to underline, here in Kiev, the meaningful and wise attitude that China has adopted concerning the position taken by Russia in its recent conflict with Georgia about the principle of respect towards existing borders and the integrity of territories. I insist on this rule : for the future, a multipolar world needs stability of borders.

In the future, it is likely too that governments will have to take into account more and more public opinion. European public opinion raises questions about China. At the same time, the Chinese people saw with anger the protests in Europe, triggered by the Olympic flame relay. I mention those issues to underline the necessity for a renewed Euro-China dialogue. There is undoubtedly a need and space for a bilateral improvement.

II. A new dialogue for a strategic partnership

In 2003, the EU and China decided to forge a strategic partnership and, since they announced that objective, there has been a blossoming of “strategic dialogues”, both bilateral and multilateral. These have ensured that broader strategic and geo-political issues are now on the agenda when China talks to the EU and to the leading member-states.

Time has probably come for new steps. We need to find ways of translating this dialogue into an expansion and deepening of cooperation at practical level. As I see it, Chinese and Europeans may focus on a limited number of critical subjects that are of concern for both sides.

1) Global warming

We must make global warming a priority of our long term strategic partnership. This area has a great potential for fruitful co-operation, and at the same time there is room for confrontation and conflict. It is clear that our efforts to construct a global system for limiting global warming after the Kyoto protocol expires in 2012 would be doomed without Chinese participation.

If we want to persuade various countries to join the post-Kyoto system, we must convince China, but also the US, India and others to participate in this world effort and first show that we, Europeans, take our responsibilities seriously and that we are ready to help emerging countries to make their economy greener and more energy efficient. I have in mind, in particular, the transfer of “green” technologies.

Our key message should be that if climate change gets out of control, everybody will suffer. Given the specificity of those problems and civil society in China, it could take some time before environmental issues take the lead among the priorities, but it is essential.

2) Weapons proliferation

Weapons proliferation is another major area where there has been progress in the recent period. Until about ten years ago, China, like some other countries, had an embarrassing record. Yet, in the past few years China has introduced stringent and effective controls on the export of sensitive materials and technologies.

China’s role in the diplomacy surrounding North Korea’s atomic weapon programme has been undoubtedly positive. Last year, Beijing leaned on Kim Jong Il to sign up to a package of measures that should lead to North Korea giving up its nuclear weapon facilities and this action must be underlined.

On the issue of Iran’s nuclear programme, China’s role has been more uncertain. Being, as I said, Iran’s largest trading partner, China has not accepted to use its economic relationships to support the efforts of the EU diplomacy. We must use our strategic dialogue to urge every leader to do more to influence Tehran. We should highlight how an Iranian bomb could set off a cascade of nuclear proliferation in the Middle East, making the region more unstable, terrorism more menacing everywhere and ultimately threatening everybody’s interests.

3) Africa

Outside Asia, Africa is the continent where China’s new global role is most visible. Its quest for natural resources has led to massive investments, growing aid programmes and thickening political ties with a host of countries. The impressive spectacle of leaders from 48 African countries gathering in Beijing two years ago attracted much attention in Europe, particularly in France which has had for long vested interests in Africa, and emphasized China’s new role.

In 2007, in response to western criticism, China started official dialogues on Africa with the EU, and, separately, with Britain and France. It is important that these meetings continue and are upgraded. In these discussions, our top priority should be to encourage all parties to see that a greater focus on governance and security would benefit them and the Africans.

4) Global governance

The faster China develops and gains a larger influence in world affairs, the sooner China must accept responsibilities in global talks on issues like trade or climate change.

We should use our dialogue on global governance to bring China closer to existing economic institutions, while at the same time discussing how they can be reformed to give China and some other countries better representation. We should also start a dialogue on the creation of new institutions, such as those that will be needed to manage the global system for curbing carbon emissions.

In a multipolar world, strong global rules are indeed in our mutual interest. Europe and China need effective institutions to ensure, in particular, that trade and investment can flow smoothly across borders.

This brings us back to the economic and trade issues.

III. The need for a more pragmatic approach to EU China economic relations

For now, the core of the EU-China relationship remains trade and investment. Figures are well known ! They show that these relations are unbalanced. Many, including in Europe, argue that Europeans are blaming the Chinese for their own failure to be competitive on global markets. The reality is complex.

1) Trade restrictions

While Chinese tariffs have gone down significantly as a result of China’s WTO accession, European exports still face some tariff and non-tariff barriers to trade and restrictions on investment. Barriers to market access are preventing a completely reciprocal trading relationship.

In spite of efforts in the manufacturing and services sectors, European investors are still prevented from setting up wholly owned foreign enterprises. In the telecoms and financial services sector, EU firms have been unable to expand significantly because of complex approval procedures. In the manufacturing sector, some investment restrictions are maintained on some key industries for Europe. These difficulties must be overcome.

2) Competition

EU companies sometimes find themselves competing on unfair terms in China. Inadequate legal protection poses problems. Policies on the environment, social standards, currency valuation and natural resources can distort trade.

While China has made progress in setting up an intellectual property regime, effective implementation and enforcement of laws is often still lacking.

China’s race for natural resources abroad has also become and will remain a major phenomenon. China is now the second biggest fuel importer. In some cases, it is subsidizing the import of raw materials conferring advantages to its industry. At the same time, it limits exports of certain domestically abundant natural resources which can distort availability and price of raw materials in world markets.

3) The general need for more reciprocity

Europe is also to blame for that situation. The EU has favoured for too long a one-sided free-trade approach. It opened its markets without focusing on reciprocity. The idea behind that attitude was that opening oneself would automatically lead others to do the same. This is not always what is happening.

I think we need today to create a level playing field. Europe must defend its interests in the same way as China defends its own. We must discuss issues like the revaluation of the Renminbi, which remains too low in spite of a progressive improvement, the protection of property rights and environmental and social standards.

Conclusion

As a friend of China and a supporter of Euro-Chinese dialogue, I tried to speak frankly. The current situation is that, on some issues, Europe and China are currently drifting apart. But nothing is written for the future. We can and must act so as to overcome the difficulties and Ukraine can help us both to do so.

To reach that objective, we need a sustained dialogue at high level. I welcome the UE-China Summit that will take place on December 1st in Lyon, France. I hope it will provide an opportunity to imagine new ways and means for a structured dialogue between European and Chinese leaders.

But, when you discuss about these subjects, things are not black and white. Both Europe and China have a responsibility. On the part of the Europeans, the challenge is to build a better capacity to speak with one voice, which is not easy because, as I said earlier, a larger EU is necessarily a “differentiated” EU : there is no other way if we want to carry weight and to contribute to shaping together the new and hopefully stable world system. Our challenge is also to stabilize the relations with our neighbouring countries which are not, at present, members of the EU, but which must have close relations with the EU, such as Ukraine. In the long run, China and Europe can have convergent interests. The future of our economies and even of our security is at stake.

I have insisted mainly on the direct relationship between Europe and China. But it is obvious that, on many issues, the problems must be tackled on a triangular or even multipolar basis. In many areas, the future design will also depend on the third side of the triangle, i.e. the United States of America. Here, too, the ideal scheme is rather clear : China - a model for developing countries -, Europe - a model for cooperation between countries -, and the US - a model for economic and scientific development - working together for a more stable world. The reality could prove to be different. Each of these so called models can be discussed and a cooperative scheme can be replaced by a more antagonistic one. A deep financial, social, environmental and energy crisis can modify that scheme.

Let’s add that the global players may not be three but four, or more. The evolution of Russia will be a decisive factor, and particularly its action in the energy sector, where China seeks legitimately to acquire more security and Europe too through investments, agreements and pipelines. This is too where Ukraine and Central Asia can play a major role in helping Europe and other parts of the world to improve their energy security. I make a plea for an ambitious and efficiently decided European energy policy. If we do not decide it rapidly, the geopolitical margin of action will be reduced because of the domination of the energy resources by few predominant actors. Europe, provided it has and implements a strategy, can play an important part in favour of the cooperative scheme.

And there lies my final message. It is essential, if we want to face the challenges of the future, particularly for Europe and China, to develop the reciprocal knowledge of our countries and of our civilisations. This is why forums like this one are important. It is imperative on these matters to avoid short term views and to foster long term approach and strategy. I am convinced that, in the long run, China and Europe have convergent interests. Let’s work in that direction and our work will have been useful.