Beijing issues stark warning on EU-China relations

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Just days after the EU openly criticised China for boycotting the Nobel Peace Prize, the Chinese ambassador in Brussels slammed EU policymakers for being unable to "shut their mouths".

"We should resolve our disputes through dialogue rather than confrontation," said Ambassador Song Zhe, who has been managing relations with the EU for the past three years.

The top diplomat was not shy in saying that the row did not help the way EU leadership is perceived in Bejing.

"The Chinese are struck by the fact that people here cannot shut their mouths," he said, stressing that strong European reactions had undermined the image of Europe among Chinese people.

Speaking to a handful of journalists over lunch, Ambassador Song issued a convincing pitch that China is changing, but that change is happening only gradually. The Western world took centuries to perfect its democratic system, recalled the ambassador, insisting that China was in favour of more rules and regulation but this could not be implemented overnight.

"Human rights and democracy must be seen in light of history," he said, noting that for China, a rights-based society starts with relieving people from poverty and allowing them to get food and shelter.

According to Bejing's data, the booming economy has taken roughly 150 million people out of poverty. "Developing our economy goes hand in hand with political reform," added Song, stressing however that the end result would not be Western-style democracy based on individualism, but rather founded on collectivism.

"Everyone who is fair to China would acknowledge the tremendous progress it has achieved over the past 30 years," he said, hinting at a lack of understanding on the part of the EU.

The top diplomat conceded that the EU can be a positive force in world governance, but its actions should neither be dictated nor controlled by others, he said, alluding to the United States' forceful entreaties not to lift an arms embargo on China, as suggested by the Spanish EU Presidency earlier this year.

Recently, European policymakers – in unison with the United States – have also pressed China to appreciate its currency more quickly to rebalance the world economy. 

"Europe cannot decide on its own, this is why people have no respect for Europe," the ambassador scathingly said, noting that the embargo was more detrimental to Europe as it was losing business to other parts of the world.

Bilateral trade in green tech

In the first 10 months of this year, bilateral trade between Europe and China grew by nearly 33% year-on-year to $388bn, an 8% increase compared to the same period in 2008. It is estimated that by the end of 2010, this figure will top $450bn.

"Europe remains China's largest trading partner and export market, and China is the second largest and fastest growing export market among the EU's top five export destinations," said the top diplomat.

Economists agree that China's soaring demand for mechanical equipment and luxury goods has become an important driving force for economic recovery in many European countries.

The ambassador sees potential to expand EU-China cooperation in the green economy.

According to the World Resources Institute (WRI), European companies still have a stronger foothold in China's growing clean technology market than their American counterparts, especially when it comes to wind energy and clean coal technologies, which are mainly purchased from Siemens, Mitsubishi and Toshiba.

China has in a very short period of time developed a huge clean technology market with a systematic strategy. Beijing first identifies a clean technology that it reckons to be good for the country and then provides R&D support to Chinese universities and companies, WRI's China expert told EURACTIV in an interview.

Rare earth exports 'not a bargaining chip'

Responding to criticism that China is trying to reduce rare earth exports, seen as critical for EU high-tech and eco-industries, the Chinese ambassador gave reassurances that the country would not ban exports, but would exert pressure on other countries to open their markets.

"We will not use it as a bargaining chip," said Ambassador Song, but acknowledged that China cannot continue exporting cheap rare earths and continue to be the international sole market provider.

"It is high time for others to open their market," he said.

China has gradually reduced export quotas for rare earths as part of an effort to keep more of them for domestic industry, a policy that has raised alarm among nations with industries that depend on them for high-tech and military applications. 

 

EU relations with China were established in 1975 and are governed by the 1985 EU-China Trade and Cooperation Agreement and seven other legally binding agreements.

The EU is China's biggest trading partner, while China is the EU's largest source of imports and second largest two-way trading partner. 

In 2003, an EU-China comprehensive strategic partnership was launched. To reflect the depth and breadth of this strategic link, the EU and China decided in 2010 to upgrade their bilateral relations on foreign affairs, security matters and global challenges such as climate change and the global economic recovery.

Summits and regular dialogues are held every year, including over 50 sectoral dialogues.

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