Chinese official: ‘Without a strong WTO, connectivity means nothing’

Xuejun Guo is deputy director-general of the Department of International Economic Affairs in the Ministry of Foreign Affairs of China. He attended the EU-Asia connectivity forum on 27 September. [China Ports Magazine]

The EU and Japan have launched a new strategy to strengthen ties between Europe and Asia, seen as an alternative to China’s ‘Belt and Road’. But in view of the ongoing global trade disputes, for senior Chinese diplomat Xuejun Guo, the priority is nonetheless the renovation of the World Trade Organisation’s appellate body.

Xuejun Guo is the deputy director-general of the Department of International Economic Affairs in the Ministry of Foreign Affairs of China.

Mr Guo spoke with EURACTIV’s Jorge Valero on the sidelines of the EU-Asia connectivity forum in Brussels.

It is expected that the WTO will publish soon the volume of tariffs that the US can impose on Europe as a response to the subsidies given to Airbus. Could this worsening of the trade dispute bring closer the EU and China? Will it affect the WTO reform?

Both China and the EU are working together to maintain the WTO’s dispute settlement body. It is an existential issue, and whether we are going to have a functional WTO or not. This is our major concern. This is a priority on how we can cooperate within the WTO framework.

Do you mean the renovation of the judges of the appellate body?

That’s extremely important. I said to my colleagues in the European Council that, without a strong and functional WTO, connectivity means nothing. Our connectivity must be supported by a strong rules-based multilateral trading system.

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The EU-Asia connectivity initiative could be seen as an alternative to China’s ‘One Belt, One Road’ strategy. Do you think both plans will compete?

I can only say that I am deeply impressed by the address by this excellent Herman Van Rompuy, He said that more connectivity means more openness. And we must support multilateralism and the rules-based international trading system. These are very, very important principles for connecting Europe, Asia and the whole globe. China fully shares these principles.

The new EU partnership underlines the importance of environmental and financial sustainability. ‘One Belt, One Road’ has been criticized for fueling national debts and failing to meet environmental standards with its projects. Have you improved these aspects?

Now it’s called “High-Quality Belt and Road Cooperation”. It’s almost six years old, so quality must be high. That is the rationale in the development of the initiative. The difference now is that we are focusing more on the quality of the projects. With regards to sustainability, I want to remind you that, if you look at the joint communique by 40 leaders during the “Belt and Road” forum last April, you may find the language that says “we will ensure the economic, fiscal, social and environmental sustainability of the ‘Belt and Road’ cooperation”. That’s a political commitment by China and other leaders.

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The EU and Japan signed on Friday (27 September) a holistic partnership to promote investment projects based on rules-based and sustainable principles, and to counter the risks posed by the US and China.

But the Chinese leadership admitted in the past that some aspects needed to improve. Is that correct?

“Belt and Road” is a market-driven initiative. Ever since the beginning, our government encourages market players to focus more on sustainability and corporate social responsibility. This is our government’s position ever since the beginning. Now we combine all our ideas together with the new principle of high-quality cooperation. Sustainability is just a part of high-quality cooperation.

How do you foresee the cooperation between the EU and Japan’s connectivity initiative with Asia and China’s plans?

Japan is working with China on third markets under the “Belt Road” initiative, for example in Thailand. Japanese companies are also taking advantage of the China railway express to Europe. In addition, EU and Chinese leaders agreed to forge synergies between “Belt and Road” initiative, and the EU-Asia connectivity initiative. That has already bear low hanging fruits.

How?

First, we have set up a connectivity platform. It’s a government-to-government platform. Second, we have signed a lot of documents with EU countries on building the “Belt and Road” or on cooperating in third markets. And third, we have conducted certain projects in European countries. And European countries also invested in some factories in China. In addition, we jointly set up a co-investment fund, which is already supporting projects in seven European countries. There will be more low hanging fruits.

In regard to the joint statement signed last April by the EU and China, there were several points that required further work. One of them was subsidies, which was an issue of concern for the European side. What progress has been made to eliminate the subsidies?

I’m not an expert in the follow up of the bilateral agreement signed by the leaders. What I know is that I’m here to support the connectivity initiatives proposed by the European Union. We support each other, and we are going to forge the synergy between the “Belt and Road” initiative, and the EU strategy on connecting Europe and Asia. This was also a political consensus of our leaders last year.

Are you aware of the progress made to conclude in the near future the EU-China investment agreement?

I don’t know about the latest progress. I only know that there’s a strong political will and commitment between the two sides to come up with a good result.

EU, China agree on joint statement as Beijing makes last-ditch concessions

EU leaders were set to sign a joint declaration with Chinese leadership on Tuesday (9 April), after Beijing made last-minute concessions to bolster the rules-based international order and to tackle industrial subsidies, European officials told EURACTIV.com.

[Edited by Zoran Radosavljevic]

"Both China and the EU are working together to maintain the WTO’s dispute settlement body. It is an existential issue, whether we are going to have a functional WTO. This is our major concern," warned China's Guo Xuejun.

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