China-Europe Partnership in Progress
Speech by Vice Foreign Minister Fu Ying at the Lanting Forum

( 2 December 2011 )

Good afternoon, everyone.

It gives me great pleasure to be here at the Lanting Forum.

With the end of 2011 already in sight, we can afford to look back on the course of the year. The world seems anything but business-as-usual and trouble-free. I am not here for a long speech about the international situation. But it's worth noting that, whatever the perspective, the year 2011 will have a very unique place in history for the dramatic changes in the making in the global landscape and the world economy.

We can see Europe in the picture of many "big events" of the year. There are always new perspectives and new tests of China's ties with Europe and how China fits into this evolving relationship.

Recently, the most frequently-asked-questions from my European colleagues are: "What is China's view on Europe?" "Where are China-EU relations going?"

That's going to be the focus of my speech this afternoon.

Please allow me to take you back in time, to the earlier years of our relationship through the thick archives.

In 1974, Chairman Mao Zedong told former British Prime Minister Edward Heath, "We are so happy to see a stronger Europe."

In 1987, Deng Xiaoping said to Prime Minister Rudd Lubbers of the Netherlands, "Europe is a crucial region when it comes to war and peace."

We have been through a lot in the decades since, but Europe is always viewed as a valued partner. China's support for Europe and commitment to our cooperation are consistent and strong as ever.

President Hu Jintao told visiting President of the European Council Herman Van Rompuy last May, "An economically stable and prosperous Europe is in the interest of China and the world."

Yes, we still remember that European countries took the lead in the Western Bloc to recognize and engage the People's Republic. They have been China's important partners in the reform and opening up. China's trade with the European Economic Community was a mere 2.5 billion US dollars at the start of diplomatic ties. And China's trade with the 27-member EU now totals 480 billion US dollars a year. The EU is now China's top trading partner and premier source of technologies and investment.

European countries, in turn, also benefit profusely from China's rapid development. This is even more the case after China's accession to the WTO in 2001. In the decade since, China has imported from Europe an average of more than 100 billion dollars of goods and services every year. That means over one million jobs in Europe.

Europe has a wealth of experience through building and improving modern nation states. Europe has contributed a lot to a global market, to modern legal systems and to a broad range of international rules. China has learnt a lot from Europe in its reform and opening up.

The examples are many:

Building on the outcomes of the China-Germany Rule of Law Dialogue, we have improved some of our own laws and regulations. The Chinese auto industry adopts European exhaust emissions standards. And Europe's experience in regional integration is also useful to the ongoing efforts for East Asia cooperation.

In 2003, China and the EU forged a comprehensive strategic partnership. It provides a basis for cooperation to flourish in various fields. To date, a wide range of dialogue mechanisms covering over 60 areas have been put in place at various levels.

As Premier Wen Jiabao said, whatever the changes of the world, to grow relations with Europe is always of strategic importance in China's diplomacy. My two years working on the European portfolio gives me a deeper understanding of the truth in this comment. These are two years of worsening European sovereign debt crisis. China-EU relationship has not faltered, but rose to the challenges. Our cooperation made new progress in breadth and depth.

In 2011, China and European countries have exchanged visits more frequently and at higher levels. Joint effort to address the crisis has become a strong bond between Chinese and European leaders. President Hu Jintao, Premier Wen Jiabao and other Chinese leaders have had in-depth discussions with leaders of the EU and European countries on many bilateral and multilateral occasions about the situations and corresponding policies. It demonstrates China's sincere care and support for Europe.

While Europe experiences a slow-down in its overall foreign trade growth, China-EU trade continues to grow. In the first 10 months of this year, two-way trade totaled 467 billion dollars, up by 20% year on year.

In fact, China's imports from EU members have grown by about 30% since early 2010.

The EU has surpassed Japan as the top exporter to China, and China is a fastest growing export market for the EU. It's a fact that robust trade with China has been instrumental for the European business community to tide over the impacts of the crisis.

According to the European Union Chamber of Commerce in China, 59% of the surveyed European companies operating in China saw their earnings grow last year and 70% benefited from China's economic growth.

Chinese investment is coming Europe's way too. From January to July this year, China's non-financial direct investment in Europe topped one billion dollars, opening new horizons for bilateral economic cooperation. Nevertheless, it is learned from the 2012 World Economic Outlook Forum in Beijing that Chinese companies invested 56.5 billion dollars overseas in 2010, adding the last five years' total to 215.9 billion dollars. China's investment in Europe, therefore, is still quite modest.

I still remember when China signed the agreement with Greece on the management of the Piraeus Container Terminals, some local residents rejected it and even held protests. But today, despite serious unemployment in Greece, workers at the Port have secure jobs and they even get organized on their own to maintain order at work.

When many in the world may frown at the future of the Euro and the EU, I have noticed that most people in China give Europe a vote of confidence.

Europe remains the strongest, richest and best integrated region in the world with solid economic fundamentals, manufacturing base, advanced science and technologies, high-quality human resources and robust reform and innovation capacity.

In the past, Europe went through numerous crises, and invariably met the challenges and moved on. We have reason to believe that Europe has the wisdom, capacity and resources to make it this time by accelerating adjustment and reform. New progress of European integration may be just waiting around the corner of the crisis. The future of Europe is, after all, in the hands of Europeans.

The crisis, admittedly however, also lays bare the troubling lack of trust between the two sides.

For instance, in the run-up to the G20 Cannes Summit, people in China heard many conflicting statements from Europe:

Some Europeans thought China should help Europe out of the current plight.

Some worried that China would put an extortionary price tag on its help.

Still others claimed that it would be a humiliation for Europe to seek help from China.

This triggered a wave of discussion among the Chinese public too. People ask, how can China, a country with a per capita GDP of a little more than 4,000 dollars, help Europe whose per capita GDP is higher than 30,000 dollars?

China is no "old-fashioned power". China has no intention to seek power through financial means. China-Europe cooperation benefits both sides. As Europe tackles the sovereign debt crisis, China has contributed to IMF resources, purchased bonds issued by European countries, increased imports and expanded investment in Europe to support Europe to create jobs and restore growth, from which China can also benefit. China will continue to work with the international community and Europe to fight the crisis.

Stronger economic cooperation with China is what Europe needs to overcome its difficulties. Then why so much political negativity about such normal, helpful and healthy interactions between us? Such stereotyping can do nothing but disrupt decision-making on the Chinese side and deny bilateral cooperation its true potentials.

It reflects the two opposing forces long at work in Europe with respect to developing relations with China: one that promotes cooperation, and the other that spreads doubts and suspicion. It hamstrings Europe in making bold steps to remove obstacles in its relations with China, and it also makes European media's view on China vacillate between bearish and bullish extremes.

China and Europe have had their interests so closely intertwined today that both see the importance of cooperation and its compatibility with their respective interests. Leaders of both sides have expressed clear political will of and confidence in supporting and working with each other.

It was the firm belief in world peace over 30 years ago that bonded the older generation of Chinese and European leaders together. Today, 30 years later, our common effort to address the crisis gives us a fresh opportunity to enhance trust and cooperation.

Efforts could be made in three aspects:

First, we need to build an awareness of mutual respect and equality. It is easier said than done.

Europe needs a stronger appreciation of and respect for the level and path of China's development. It took the West 300 years to industrialize and an extended process of institution building too. Some capitalist countries once suffered from serious class clashes and income polarization, and not all of the problems have already been resolved in these countries.

China started its industrialization on the basis of a socialist system. We have started to work on such issues as fairness in distribution, social welfare and democratic decision-making as early as in the middle stage of industrialization, and with a population twice as big as that of Europe. So far we have been successful, but the problems and challenges we face are also unprecedented. Therefore, when looking at China, Europeans should put things in a historical perspective and show respect for China's choice in development path and its ongoing strenuous and important efforts.

China needs to approach criticisms from Europe in two ways. We will accept reasonable ones for our own improvement, and at the same time, make our argument heard where there are misunderstandings and biases. China needs to have a more open mind for the world and stronger capacity to participate in world affairs.

Second, we need to stay committed to the principle of mutual benefit and take business cooperation to a higher level.

China is implementing its 12th Five Year Plan and Europe its Europe 2020 strategy. They have many converging areas, both emphasizing shift of development models, consumption, innovation and sustainable development.

In the five years from now, China will import eight trillion dollars worth of goods and its annual outbound investment is projected to top 100 billion dollars. This is an invaluable opportunity not to be missed by farsighted European business leaders.

Forward-looking efforts are already underway between China and some European countries. In 2011, China and Germany established a strategic partnership for electric vehicle and a life science innovation platform. China and France discussed long-term strategic cooperation in aviation and nuclear energy. China and Central and Eastern European countries had their first business cooperation forum, expressing their wish to step up cooperation in infrastructure development and energy. At the 14th China-EU Summit, the two sides will discuss expanding cooperation in urbanization, energy, environment protection, green economy and other areas, making them new growth areas of China-EU business cooperation.

China pays a lot of attention to addressing the concerns of European businesses in China and expects the European side to take steps to facilitate and assist Chinese investors in Europe.

Third, we need to actively promote people-to-people exchanges to enhance mutual understanding between Chinese and Europeans.

The China-Europe Youth Exchange Year in 2011 has helped youths from different countries deepen their mutual understanding and forge bonds of friendship through trips, workshops and various gatherings.

China has now nearly 240,000 students in EU countries. Last year, 30,000 students from EU member states came to study in China. Three million tourists from EU members visited China, and 1.5 million Chinese tourists made EU member states the first stop of their travel. Seventy flights are shuttling between China and Europe every single day. There have been closer people-to-people exchanges.

China's "Culture Year" and "Language Year" events with Italy, France and Spain have also been very well received.

China and the EU will launch the high-level people-to-people exchange and dialogue mechanism next year, which will help plan and advance friendly exchanges between Chinese and Europeans in a wider scope.

This year marks the beginning of the second decade of the 21st century. According to Professor Nicholas Boyle of Cambridge University, "previous five centuries have hinged on events that took place in the middle of their second decade". As we enter the second decade of the 21st century, our world is undergoing profound changes.

One prominent change is that more and more developing countries are joining rapid industrialization and that capital, technology and resources are diffusing around a wider world thanks to globalization and technological progress. I feel it may become the second wave of industrialization. What's new about this wave is that all this is going on peacefully. Most of the fast growing developing countries have maintained political stability at home. And instead of causing major turmoil or conflicts in the world, they have become an important force for world peace.

European countries and other developed countries should reflect on how to seize such an opportunity to conduct win-win cooperation with emerging economies and developing countries at large. I believe the right choice is to accept and welcome the rise of emerging countries and make the best use of the rise to locate new sources of growth for Europe.

During his visit to France in October last year, President Hu Jintao said that the 21st century should be a century of peace, cooperation and development. Such an ambitious vision from China is based on our belief that the trend of stronger cooperation and economic development in the world will continue to prevail.

In the past 30-odd years, China succeeded by acting in line with the trend of peace and development. Going forward, China will remain committed to the path of peace, reform and opening up, and shoulder its international responsibility to help the world move in this direction. We need Europe and other partners in the world to work together for world peace and stability.

China and Europe are at the far ends of the Eurasia continent, but our shared destiny and future are as solid as the vast landmass that joins us.

I am convinced that as long as the two sides work in the same direction on the basis of mutual respect and mutual trust, we will develop a stable, lasting and cooperative relationship to the benefit of the people and the whole world.

Thank you.

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