Resetting the agenda

In a debate hosted by China Daily, experts mull over obstacles to closer ties between China and the EU

It's the great conundrum: China is the world's biggest economy as measured by purchasing power but, going into 2015, this rising dragon looks like a low priority for the fading stars of the European Union. That, certainly, was a concern expressed by a range of China experts in their respective fields who were brought together on Jan 7 by China Daily for a thought-provoking, two-hour debate in Brussels.

The discussion took place against the backdrop of important leadership changes in each of the two powers in the past few years.

In November 2012, China underwent an important leadership transition with the fifth generation of top civil servants being sworn in.

The EU has just undergone a similar major change, with the installation of a new, five-year European Commission.

The two sides may be significant global economic powers but, with an increasingly inward-looking EU pushing China down the list of its priorities, the need for a new "narrative" has never been greater, experts say.

The debate came on the same day as the terrorist attack at the Paris office of Charlie Hebdo, a satirical newspaper, that again highlighted the desperate necessity for new global governance, including the fight against terror, some speakers said. China, with its ability to influence countries in a way that Western governments cannot, is perhaps uniquely placed to play a leading role in this, they said.

But much of the discussion revolved around this question for the EU: With the bloc increasingly focused on its own pressing internal problems, such as the endless eurozone crisis, rising Euroskepticism eroding support for EU integration, and security issues near its borders, will Brussels fully engage with Beijing in the coming 12 months?

The Brussels debate was co-moderated by Belgian-Chinese Chamber of Commerce Chairman Bernard Dewit and Shada Islam, director of policy at Friends of Europe. Islam noted that China, despite being recently described by the International Monetary Fund as the world's biggest economy based on purchasing power, appears to remain a "low priority" for the EU.

"This is a pity," she said, "because China has a crucial role to play in any new global governance."

One possible solution, she and others said, is finding a "new narrative" to shape future relations between the two sides. But the question was raised: What does this mean, and how do you achieve a "narrative"?

Speakers said that many think Europe still views China from an outdated, 20th century perspective, in which China is encouraged to become a "responsible player".

As such, says Islam, the EU's partnership with China is stuck in a "ritualistic" framework based on bread and butter issues like trade, urbanization and investments. Those are all good and valid subjects from a growth point of view, she says, but a very narrow channel given China's increasing global clout and outreach.

Islam says Europe should hash out a "strategic dialogue" with Beijing on issues related to global governance and international terrorism.

"In other words," she explains, "we need a new narrative for EU/China relations which looks at Beijing as one of the world's most important economic, political and strategic actors, not just as another 'emerging' country that needs our advice and guidance."

According to several speakers, including Peter Guilford, executive chairman of GPlus Europe public affairs consultancy, injecting fresh impetus into the stalled EU-China Investment Agreement could also help. Formal negotiations on the agreement began in March. It is one of the first agreements of its kind negotiated at the EU level and could replace the bilateral investment treaties that EU member states have concluded with China.

Many argue it would be best to accelerate this process on the European side. But talks have become bogged down to the point where concerns are growing that the EU may instead look toward signing a similar deal with Taiwan before doing so with Beijing. Guilford also wonders if Beijing itself is yet ready to "put all its eggs into one basket".

Several questions arose from this in light of the current situation of the EU and especially of the eurozone: Is the EU perceived as losing its power and attractiveness? How exactly does China see the EU now that the euro has weakened?

With its new, exclusive ability to negotiate foreign investment treaties, the EU should focus its attention on a treaty that grants European companies more market access than is currently the case in China, says Pascal Kerneis, managing director of European Service Forum, a network of representatives from the European services sector committed to promoting liberalization of international trade in services.

Judging by the comments of several participants, including Kerneis, the issue of market access, or lack of it, remains a major bugbear for Europe's business community, one that needs to be at the center of talks about any new "narrative".

"The feeling," says Kerneis, "is that European companies, particularly those in the services sector, such as banking and telecommunications, are just not welcome in China, and I hope this can change in the coming year."

Several speakers noted that the EU is the biggest importer of Chinese goods, so China's growth, partly export-led, depends on strong purchasing power in the EU.

The ongoing eurozone crisis thus does not come at a good time for China's economic transition phase and slowdown in growth rates, which Jiang Xiaoyan, spokeswoman at China's EU mission in Brussels, said is expected to be between 7 and 7.3 percent this year.

Even though that would still account for some 40 percent of global economic growth, European leaders could use this relative dependence of China on a prosperous EU to gain more willingness to seek help from their Chinese counterparts, some speakers noted.

Apart from market access, another area cited as crying out for increased EU/Sino cooperation, is in tackling climate change.

As the leader of the one of the world's two biggest emitters of greenhouse gases, the onus is on Chinese President Xi Jinping to do something for the planet, experts say. There is at least one thing on which Xi and the EU's new leaders can agree: In the run up to a key climate change conference in Paris, the pressure on China to make good on summit promises will build, they noted.

This is the hope of Jo Leinen, a veteran German Socialist member of European Parliament who chairs that body's China delegation. Leinen said that the climate talks in Paris in December "offer a great opportunity to decarbonize our societies."

Xi has said China is too dependent on the West for critical technologies and 2015 is expected to see a push for homegrown innovation, something Leinen says would be particularly welcome.

Another participant, Hungarian MEP Istvan Ujhelyi, said the hoped-for new narrative between the EU and China should also take into account the growing rise of Europe's regions, such as Catalonia, the autonomous region in Spain, and the newly empowered Scotland, which secured additional powers in the wake of its independence referendum.

Underlying all such ambitions are the potential rewards of the China market, many pointed out. Not just its own 1.3 billion consumers but also many livelihoods all over the world depend on China's direction.

With China heading toward 700 million Internet users, many of them shopping on their smartphones, it means the first time such an enormous middle class has been born connected.

China's strengths are apparent and in 2015, China's ambition and confidence in delivering huge infrastructure projects will be felt around the globe - from a high-speed rail network in Nigeria to a canal across Nicaragua.

Andre Loesekrug-Pietri, founding chairman of A Capital, is among those calling on Beijing and Brussels to work toward more "common projects", such as in Africa.

"Africa, let's remember," he said, "is a continent that had been largely forgotten by the rest of the world but was put back on the map by China. Africa now wants to diversify its relations beyond China and this presents an opportunity for Europe."

The EU and China, both strong actors on the global scene, have enjoyed a flourishing partnership in recent decades.

Nevertheless, there have been several issues that have detracted from the harmony of the relationship, several mentioned. Issues that have been seen by China as problematic in the past are criticism from the EU of China's human rights record, the perceived lack of recognition of China's impressive development up to now, and the refusal of the EU to accord China the status of market economy, as well as the feeling that the EU wants to "Westernize China".

At the same time, China has increasingly recognized the EU as a global power, even if only a limited one, and as a possible model for its own development.

The EU is the top export destination for Chinese goods. China is the EU's second-largest trading partner and there is a mutual interest in deepening the EU-China trade relationship in 2015.

Despite all this, Glyn Ford, a former long-standing British MEP and now executive director of the international relations consultancy Polint, told the Brussels debate that those in the EU who might be considered "friends" of China are "an endangered species".

But a new year is the time for new optimism and Ford believes the EU's new leadership, spearheaded by European Commission President Jean-Claude Juncker, presents an opportunity to "reset the agenda" for Beijing and Brussels.

With a summit at the end of March and the 40th anniversary this year of the EU-Sino accord, 2015 is a good time to find that elusive new narrative.

But, tellingly, Ford, who has visited China on no fewer than 60 occasions, cautions that failure to tackle issues highlighted at the debate runs the real risk of condemning these two world powers to "five years of poor relations".

Contact the writers through fujing@chinadaily.com.cn

(China Daily European Weekly 01/16/2015 page16)