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China: Speech by High Representative/Vice-President Josep Borrell at the EP plenary on the AFET report on EU-China relation
Honourable Members of the European Parliament, certainly this very important topic will require maybe a little more of time and a better psychological environment, and not at ten o’clock by night when everybody is tired, and the hemicycle is not very full. But it is not me, neither you, it is the political groups who decided to discuss at ten o’clock such an important issue. We are not going to exhaust it. We will have to come back to it.
I want to thank Ms [Hilde] Vautmans and all other Members who have actively contributed to this report on EU-China relations.
China will mark this century for sure. I am just coming back from China, by the way. I was there five days ago, I came back last Saturday. I attended the EU-China Summit. It is the first time that it takes place in person since 2019, and talking to China face-to-face at the highest level was a good experience and [is] essential in order to have constructive and stable EU-China relations, and to understand better where we are [and] which are our positions.
So, I was very happy to have this opportunity. I had been there before – one month before – to [hold] the Strategic Dialogue which is part of our Summit.
What can I say? The least I can say is [that] our bilateral relations are broad and complex, and how we manage [them] will be crucial for us, crucial for China, and crucial for the whole world, given the importance of our relations and the global challenges we must face together.
[There is] no way to solve the climate issue without a strong engagement from China, because China is burning today more coal than the rest of the world together and 90% of the new coal plants in the whole world are being built in China. So, if you want to solve the climate issue, count on China, otherwise you will not be able [to]. This is one aspect of our complex relationship.Once again, we repeated this famous triptych [of] being a partners, competitors and rivals – that China does not like a lot because they claim that they are not rivals, that they are partners and maybe competitors, but certainly not rivals. Every time, I talk with my Chinese friends, I spend quite a long time trying to explain what we mean to be a rival and then I use the example of Real Madrid and [FC] Barcelona – they are rivals when they play football. Because being rivals means that they have different goals and each one wants to win.
But maybe in Chinese, the word “rival” has a different connotation than in English. Maybe the world “rival” in Chinese is a stronger assessment [and] it looks more like being an enemy than being just someone that is competing systematically.
In any case, we discussed a lot what does it mean to be rivals, and I wanted to convince our partners that we can be partners and rivals at the same time, that there is no contradiction. Because one thing is to be systemic rivals, because our systems are rivals, and another thing is to be in a systematic rivalry. Une chose c’est être des rivaux systémiques, une autre chose c’est être dans une permanente “[systematic] rivalry” [rivalité systématique]. We are not. We are not confronting every day on everything. On the contrary, on some things, we have to cooperate. On others, we have to compete, but to compete, we compete also with the United States. Competition is with everybody in the world – economic competition at least, another thing is political competition.
But we are rivals because our values and visions are different on key subjects, on democracy and on the universal character of human rights. These two things are important enough to justify rivalry. We are rivals because we have different political systems, including the way people are electing their people who rule the governments, and we are considering human rights differently.
At the same time, we must work with China, because today’s global challenges – I said – cannot be solved without China and our economic ties and common political responsibilities are too big. So, we have to manage our relations constructively.
For example, [our] trade relationship is critically imbalanced, but this imbalance has been growing in the last 20 years. In 20 years, it [the imbalance] has been increasing ten times, but in the last two years it has doubled. In the last two years, it has doubled so there has been a strong acceleration of the imbalance. The imbalance was a trend – a logical trend – because China is exporting more and more high added-value products, and it makes the trade deficit increase.
But in the last two years, it has doubled and when something doubles in a couple of years, “Wow, something is happening.” Because if it is an accident, if it is just the consequences of the re-balancing of the world economy after the pandemic – well -, but if it is structural and it is going to double in the next two years, then we have a problem. And that is what we talked [about] with the Chinese: is that the result of a fair competition, or [is] this the result of market access which is being obstructed and hampered by regulations? This was an interesting discussion.
What does it mean “overcapacity”? “Overcapacity” over what? We also have overcapacity if we consider that, in some sectors, we produce more than what we consume. “Overcapacity” means that you have capacity to produce more of what you need to consume and [what] you export then, it is true, we have also overcapacity. But when you count the capacity of the Chinese economy to produce cars and you see that they are able to produce 50 million cars a year, this is an extraordinary capacity – much bigger than the internal consumption. It is about 20 [or] 30 million cars that can be exported on a yearly basis. So, everything is relative and we have to discuss what do the words mean in practical terms, taking into account international trade rules.
We asked China to act to address the root causes of this trade deficit, which has reached the astronomic figure of €400 billion a year and it is not sustainable. So, either they open more their economy, or we will have to close ours. It is one thing or the other: either they open more, either we will have to protect ourselves which means closing.
Then, there are many other demands about, for example, [the mechanism for] clarifying cross-border data flows, to open procurement markets – including medical devices -, abandoning preferential treatment of Chinese firms, to take action on regionalisation of food products. A lot of issues that need to be mended.
But your report on China is much [more] extensive than just about economics, trade and deficits. You put forward recommendations in three areas: human rights, European open strategic autonomy and engagement on global challenges.
[On] human rights: This is the area where our systemic rivalry is most pronounced, based on how we consider and implement international law. We continue calling on China about the respect of human rights, and to guarantee [that] all human rights are being equal and not selective.We raised serious concerns on [the] human rights situation in Xinjiang, in Tibet, and Hong Kong and the treatment of human right defenders across China, mentioning some very concrete and specific cases. And we will continue doing so.
Then, on the strategic autonomy, there comes the debate about de-risking and decoupling. I tried to explain to them – and it is important – that we consider that de-risking is not an anti-China plot.
De-risking is not something that we use as a “combat banner”. It is just common sense.
They are practicing de-risking. We invented the word, they invented the matter. They started de-risking much before us.
They started diversification. And I mentioned some sentences from President Xi [Jinping] himself: the circular economy and the need to be self-sufficient, which is about de-risking. De-risking means to avoid over-dependencies that can become critical vulnerabilities, like we discovered when the [COVID-19] pandemic came, and we realised that in Europe we were not producing one single gramme of paracetamol. Or when Russia invaded Ukraine, we discovered that we were depending [by] 40% on Russian gas. Two strong dependencies can become vulnerabilities and it is indispensable for us to ensure our security. This was also an important discussion because it is a matter of “You don’t trust me. I trust you, but…”. There is always a “but” when we are talking about economic dependencies. Because yes, the market will provide, unless there is a big crisis and, then, the market does not provide – that is what happened with paracetamol during the pandemic.
We discussed about security [and] the war of aggression against Ukraine. We expect China to use its influence on Russia to stop this war, to convince Putin that he has made a big mistake with this war. They say that they have an “unlimited friendship”. Well, in practical terms, it is more limited than unlimited because they ensure us that they are not part of this military alliance. They are not in a military alliance with Russia to fight this war and they are not [providing] direct or indirect military support to Russia. But we continue pressing China to make clear that this is a war of aggression and using its influence on the aggressor to stop this war.
With regard to Taiwan, our One China Policy remains unchanged. We are opposed to any attempt to change the status quo unilaterally, by force, by coercion or intimidations. Tensions should be resolved through meaningful dialogue. The same is true for the South China Sea, and we call on all parties to resolve disputes through peaceful means in accordance with international law.
Lastly, on global challenges, I insisted at the beginning that there is no alternative to [working] with China. China is at the same time the most important investor in renewables – it is the champion of renewables – and at the same time, it is the champion of coal. Both things are true. They are developing renewables at the strongest pace in the world, and they are doing the same thing with coal. And we have to tell them that it is a problem. Then, the discussion comes about climate change [and] who produced the problem.
It is true that today, we are not [the problem] because we produce only 8% of the world’s emissions but if we have a look at the cumulated amount of emissions, it is a different story. In any case, for their own interests – because they have a strong pollution problem – they have to reduce emissions. And it is important in global health, debt restructuring, they play an important role that they have to play.
If tomorrow there is a debt crisis and there is a big restructuring of the developing countries’ debts, China is the greatest creditor. The biggest creditor in the world today not being member of the Paris Club is China. The biggest bank of the developing world is no longer the West, it is China. It is important to have the ability to work with China on these global challenges because it will define the 21st century, for sure.
So, this report is a very important one. I think that the Parliament has to look for another occasion to continue discussing on it because I do not think that tonight we are going to exhaust the issue. I think that the Parliament will close the doors and lights before we finish discussing about China.
