Deeper Mutual Understanding for Win-Win Progress
Mr. Chairman Bernard Vergnes,
Ladies and Gentlemen,
I am delighted to join you at this session of the European Executive Council and share with you my views on Europe and the European Union.
I often say that relations between China and Europe are nourished by our history and culture. Europa represents beauty in the Ancient Greek mythology. Interestingly enough, we have a Chinese version of Princess Beauty whose name is Nuwa. She was known as the goddess who patched the cracks in the sky so people on the earth could live in peace and happiness.
Despite of the far distance, these shared value brought China and Europe together more than 2000 years ago through the famous Silk Road. This was also how silk and porcelain, for the very first time, were introduced to the western civilization. Marco Polo’s travelogue 700 years ago brought China even closer to the European people.
Looking back, China has also been profoundly influenced by Europe throughout the history. Matteo Ricci and Schall von Bell from Italy and Ferdinandus Verbiest from Belgium introduced advanced technologies and ideas from Europe to China, an achievement more prominent than their missionary efforts. Particularly, Matteo Ricci was regarded as the first person for China-Europe intellectual exchange and commended enormous respect from the Chinese people for his modesty and respect for the Chinese culture and way of life. Today, I find the wisdom we take from the past inspiring on how we handle our current relations.
In the last century, Sun Yat-Sen, Zhou Enlai, and Deng Xiaoping were representatives of a great number of people from China who traveled to Europe to study science and technology, thoughts and philosophies, which they believed indispensable for building a stronger and prosperous China. There were painful chapters of the opium wars and invasions, but the Chinese people always take an equal, open and friendly perspective in view of Europe. They also accepted more culture from Europe, transliterating words by Chinese characters.
Over the years since the founding of the People’s Republic of China, on the basis of equality and mutual respect, relations between China and Europe has grown from none-existent to the comprehensive strategic partnership by 2003, and our all-dimensional, extensive, and multi-layered practical cooperation were constantly expanding and deepening.
Ladies and Gentlemen,
It is fair to say that the EU integration and China’s reform and opening up were two major events in the last century. We follow very closely how the EU proceeded with its integration, and learn from what you did here to improve the effectiveness of our policy in reform, opening up, and development. On the part of China, the importance of the EU as a major strategic partner extends to the following four aspects.
First and foremost, the EU is our partner for world peace and development. China and Europe established diplomatic relations in 1975 at the peak time of the Cold War. Then-Chinese leader Deng Xiaoping clearly stated that Europe is a force of peace, because it went through the scourge of two World Wars. We hope to see a Europe that is united, strong, and developed. In this connection, the establishment of diplomatic ties between China and the EU bears great significance for safeguarding world peace and development. 35 years later, in the face of the changing international environment, such significance, and our consensus and objectives in promoting world peace and development remains unchanged. We all stand for resolving disputes through dialogues and negotiations and oppose hegemonism and willful use of force.
Secondly, the EU is our partner for mutually beneficial cooperation. Both China and the EU benefit from our economic complementarities and mutual growth. Investment, technologies and managerial expertise from the EU help China attain economic growth, and in return, China’s growth provides huge market and business opportunities for the EU. The financial crisis last year has not overwhelmed the steady growth of our business ties. For seven years in a row, the EU remained China’s largest trading partner. The EU statistics shows that among the EU’s ten largest export markets, only exports to China are on the increase by 4%, dwarfing the 16% drastic fall of the EU’s overall exports volume. Trade deficit of the EU also dropped by more than 20%. Apart from these, the Chinese government has altogether sent ten “Trade and Investment Facilitation Delegations” to the EU for purchase orders and expanded investment. The survey from the EU Chamber of Commerce in China also suggests that European companies are making good profits in China and many of them are sorting out strategy for further investment and expansion. Mercedes’ sale was up by 77% last year. Volkswagen will invest 4 billion Euros in the Chinese market over the next three years.
Looking ahead, I’m fully confident of the prospect for China-EU business cooperation. There is a huge potential in the post crisis era. Joint research from the US Chamber of Commerce in China and the Pricewaterhouse Coopers shows that the market size of clean energy in China may increase to half to 1 trillion US Dollars in annual terms. The EU Commission also forecasted that this year, 150 million Chinese people will enter the middle-income bracket. They also said that the market size of high-end consumer goods would exceed 1 trillion Euros with a further annual growth rate of 12%, and the service market 500 billion Euros with a 14% growth rate.
Now I wish to draw your attention to the trade imbalances between China and the EU. I have heard many complaints. I would say the problem is attributable to many reasons, international industrial and trade diversion being the major one. For instance, in 2006 alone, turnover of the EU businesses in China reached 206.6 billion US Dollars, far higher than the EU’s 91.7 billion trade deficit to China that very same year. What I’m trying to say here is we should not merely fix our eyes to the trade in goods. The EU has actually a large surplus against China in trade in services. What I know for sure is that on our part, we do not deliberately seek for trade surplus, and in the future, China will continue to actively increase import from the EU to smooth down our trade imbalances.
Thirdly, the EU is our partner for social progress. There are many aspects that China can learn from the EU in statecraft and administration. Existing exchanges and cooperation in this aspect has already proved to be effective. For instance, many government officials in China, either from the central government or local ones, came to Europe to study the advanced industrial and social management. Their experiences later became valuable input in the early days of China’s reform and opening up effort. Even in recent years, we have taken in a lot of practices of the EU in establishing and reforming our health, pension and other social security services. We continued to forge ahead with our cooperation in education and people-to-people exchanges. Highlights in this respect include the China-Europe International Business School, China-EU School of Law, and last year’s Europalia-China Art Festival and the Frankfurt Book Fair where China was invited as the main guest of honor.
Fourthly, the EU is a partner for resolving global issues. The world is getting smaller and more interconnected. Global problems like the financial crisis, climate change, energy security, nuclear nonproliferation are becoming so pervasive and demanding that it is impossible for any country to keep away from these challenges, nor is it possible for any country to resolve them by acting alone. It is therefore all the more imperative for China, the largest developing country, and the EU, the largest bloc of developed countries, to step up cooperation and coordination at this front. This serves our mutual interest, and will help build a new international political and economic order that is fair and just.
In recent years, China and the EU have established the regular consultation mechanism for nuclear nonproliferation, maintained close communications on the Iranian nuclear issue and other hotspot issues. The China-EU partnership for climate change dates back as early as 2005. Together we have worked to strengthen the development of clean energy and low-carbon economy. In the wake of the financial crisis, we once again joined hands to tide over the difficulties to maintain economic growth in ways that we deem to be appropriate. We tried to better coordinate our policies under frameworks like the G20, and pursued greater cooperation and coordination to promote the reform of the international financial system.
Ladies and Gentlemen,
The world is changing and the EU is in the “dual-transition” period—that is post-crisis and post-Lisbon Treaty transitions. Until recently, we have seen more positive and favorable comment on the EU integration since the Lisbon Treaty went into force, and some people feel the EU is finally back on the fast track. On the other hand, I have also observed quite a few pessimism and disappointment. Some people are discomforted by the EU’s falling international influence and the complication of its internal relations. The ongoing Greece’s financial crisis and other outstanding difficulties that the Union is facing even brought people to such assertions that the EU integration process has lost dynamism and is heading to an end.
We in China take a historical, evolutional, and comprehensive approach to view the EU integration. Despite of all the complications and difficulties, we always see the EU as an important force in today’s world. In 2009, the GDP of the EU scored 15.99 trillion US Dollars, 12% higher than that of the United States, and more than three times of the Chinese figure. The soft power of the EU bears global influence. That being said, we are also fully aware of the fact that the EU integration has never been a plain sailing. The flight has been tortuous. But I believe that in the new globalized international environment, people in Europe will find new vigor in pursuing economic recovery, sustainable development, and strengthening international appeal. In my view, the Lisbon Treaty will not bring about a head-to-toe change of the EU overnight. But in the long run, it will make this Union more democratic, effective, and capable of exercising its full potential.
For years, China has always been a supporter of the EU integration. We respect the strategic decisions made by the European people. No matter what happens in the international community, and no matter how things will proceed with the integration process, this position we will never waver. We sincerely expect an internally well-adjusted EU, a stronger Europe, and greater vitality in China-EU relations.
Ladies and Gentlemen,
Having talked about all the progress we have made in our relations, it is not that we don’t have any problems. Frankly speaking, sometimes, I’m rather confused by the acts or perceptions of Europe on many issues related to China. China is more than willing to have a good relationship with Europe, yet very often, our enthusiasm and goodwill were met by unpleasant remarks and gestures from the other side. I still cannot forget all the disruptions we encountered when the torch for the Beijing Olympics Games passed through Europe. The harsh images of thugs attempting to plunder the torch from a weak handicapped Chinese girl even until today bothers many.
From time to time, there are people stepping out finger-pointing the Chinese government on issues related to Tibet, which is a pure and sure internal matter of China concerning sovereignty and territorial integrity. However, the violent activities by the Tibetan separatists were hardly condemned but connived and even supported.
When China strived its utmost to make a deal until the very last minute on the Copenhagen Conference, certain politicians and media began to wantonly make groundless accusations of China, blaming us for “kidnapping” the conference. These acts confused and even seriously irritated many Chinese people. Back home, many people asked me why China isn’t harvesting any return for all the sincerities conveyed. Why can’t relations between China and Europe grow stronger through mutual respect and understanding? Our people don’t understand this because we see no conflict of fundamental interests between China and the EU, and we never take a partner as a threat.
Recently, there have also been some criticisms from Europe on the exchange rate of the RMB Yuan. Here I want to say that the exchange rate of a national currency is determined by that country’s overall economic condition. The RMB has, since July 2005, already appreciated 21% against the US dollar, with 16% appreciation of real effective exchange rate. It is a great contribution of China to the world economic recovery to maintain a stable exchange rate during the financial crisis. The exchange rate of the RMB is not the cause for trade imbalance. Finger pointing is not helpful. Only equal consultations could make everyone leave the table as winners. There will be no way out to force or press a country to appreciate its currency. In fact, such tactics might be just counterproductive.
As for my general observation of the mutual perception between China and the EU, I find that because of our geographical distance, China and Europe very often perceive each other from a virtual telescope. For the Chinese people, we are sincere, friendly, open, and tolerant. We want to see, through our telescope, a real, welcoming, and positive Europe. Unfortunately, some people on the other side wished for just the opposite. China in their telescope is distorted, insignificant, and unappealing. Why is it? One European friend told me: “they got the telescope overturned.” My advice would be to try the other end of the telescope to check if it is held in the right direction. If one won’t let go his ideological bias or stereotype, or bends on looking at China through colored lens, he will only be able to see what he wanted to see. Should this be the case, one can never see a real but distorted China.
A TV anchorwoman from Hong Kong Phoenix TV used to say, when people see me from different perspectives and angles, they see all different kinds of me, even though I am always the same one. Only by combining the images of me in the eyes of all different people can one have a grasp of what a real me would be look like. In the same way, we should take multi-dimensional perspective when looking at China. Otherwise, our objective perceptions will be hindered by subjective presuppositions. I hope that the people who have bias against China will remove their colored lens and dispose the mentality of imposing one’s ideas over the others, because only by perceiving each other in the spirit of equality and mutual respect, could we find sincerity and tolerance that will allow us to go deep into each other’s heart.
Ladies and Gentlemen,
Both China and the EU are in the crucial period of development. Our relationship is now at a new starting point. By working together for a stronger tie, we will better safeguard our shared interest and make the world a more peaceful, stable, and prosperous place. Our business communities will have much to offer in the time ahead. You are the foundation, the bridge, and the bond for a better China-EU relationship. To conclude, allow me to say that may we join hands for stronger cooperation in China-EU relations and an even brighter future!