China: EU Committee Report

Baroness Kinnock of Holyhead Excerpts

Wednesday 9th June 2010 Lords Chamber

[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 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. 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 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.