High Representative/Vice-President Josep Borrell delivered a speech at the Peking University, entitled ‘How can we make our interdependence less conflictual?’
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Mr President,
Professors,
Students,
Friends,
Ladies and Gentlemen,
I am delighted that my long-awaited visit to China is finally going ahead!
Firstly, because I will always have excellent reasons for coming to China. This time I have come for the Strategic Dialogue, which I hope will help to lay the ground for the European Union-China Summit.
Secondly, because – as the Chinese proverb says – ‘To those who wait, time opens every door’. That is exactly what is happening today. I waited and the doors of Beida have opened up – what an absolute honour to be here.
Beida is a prestigious university established back in the late 19th century: a symbol of China’s long and rich history.
History is important to understand each other because, ultimately, we are the product of our respective histories.
While history may be a precious guide that can help us understand and respect each other, it is not a straitjacket that can explain and justify everything.
We need to remain faithful to our respective histories and cultures: that is who we are.
But at the same time we must be aware that the success of international relations – and its power – depends on each of us being able to transcend constraints or differences, so that we can work together for a prosperous and sustainable common future.
We need to work with China, just as China needs to work with us.
That is all the more necessary since the world in which we live has become both more interdependent and more conflictual.
EU-China relations are no exception to this trend, which I would call ‘conflictual interdependence’.
So how can we make our interdependence less conflictual?
That is precisely why I have come to China.
So that we can set out our respective visions of the world, be frank about the major obstacles faced by Sino-European relations and consider the ways and means of improving them, or at least of managing them more effectively.
Ladies and Gentlemen,
Let me start by telling you, in a few words, what the European Union is and how it sees the world.
As you know, the European Union is a unique entity.
It is not a super-State, each country that belongs to the European Union remains a sovereign state.
At the same time, those countries have chosen to pool their policies in a number of areas to become much stronger and more effective, especially on the world stage.
Far from weakening countries, this approach makes them stronger at the international level.
In international negotiations such as those on trade, a united Europe is much stronger than its Member States would be if they each individually negotiated a trade or investment agreement.
Consequently, Europe – which was initially merely a trading power – has become a genuine economic power.
However, the war in Ukraine has made Europe a geopolitical power.
When I say ‘geopolitical power’, I mean that our worldview now takes even more account of the strategic and military balance of power.
Why did that happen?
Simply because, by attacking Ukraine, Russia has made us realise that our own security is under threat.
Consequently, this war has opened our eyes even more to the real dangers of a world where rules (and borders) are violated.
At the same time, it has made us much more self-confident, as we have demonstrated an unprecedented united front capable of delivering aid – both humanitarian and military – to Ukraine.
Against that background, I would say that we are not afraid of a multipolar world as it is now.
It reflects the fact that we live in a world in which wealth has spread to an increasing number of nations – including China, of course – and we welcome this.
By the same token, Europe is not opposed to the extraordinary economic rise of China.
And nobody has a right to a permanent monopoly on power.
However, I urge you not to jump to the false conclusion that Europe is declining.
We have great assets. We account only for 6% of the world’s population and more than 15% of global wealth.
We are a very powerful trading power.
We are also what we call a normative power, carefully but quickly setting standards in many areas that pay no attention to geographical borders: data protection, artificial intelligence and much more.
The idea of European or Western decline was one of Mr Putin’s biggest mistakes. He believed that we were weak, afraid of war, and far too dependent on Russian energy to take any action. However, in threatening us he has made us much more resilient.
We have a distinct European perspective to offer.
There is indeed a European way of life, a European social model, a European approach when it comes to regulation of market activities.
We live in a multipolar world. But it also requires regulation.
Therefore, we need to agree on basic common principles and we call it multilateralism.
The real problem is that while multipolarity has increased, there has been a decline in multilateralism.
To explain the crisis in multilateralism, some have suggested that many international rules are obsolete because all they do is reflect a world that was dominated by the West.
But does it mean, for example, that the principles of the UN Charter are obsolete?
Does it mean that the Universal Declaration of Human Rights is obsolete?
Does it mean that the United Nations’ agencies Funds and Programmes, the WTO, the WHO and the ILO are all obsolete?
People want to change these institutions, they must explain very concretely why they want to change them and, more importantly, what they would replace them with.
We do not question the need for reform of many international institutions, including the UN Security Council because when many of these rules were adopted, many countries were still colonies and others were economically less relevant.
And we should work on that constructively all together.
We must make sure, though, that we do not throw the baby out with the bath water.
The G20 is a good example of a political forum that brings together 20 countries that account for 80% of the world’s GDP.
It was set up to enhance economic coordination in the face of global crises requiring global responses.
And it worked.
But the last couple of years have shown that greater representativeness does not always guarantee consensus.
At the root of these divergences lie differences in values.
Here China and the European Union are clearly not on the same page.
China often says that each society has its own values – a view that I fully share.
However, is it not also true that universal values go beyond the values of individual countries?
They are bigger – more valuable – than any one of us.
China often misunderstands why we refer to China as a systemic rival.
China tells us that we are strategic partners, but not rivals.
In reality, we are both partners and rivals, and competitors too, in some areas.
Allow me to elaborate.
In the UN Human Rights Council, China seeks to promote the idea that economic and social rights take precedence over political rights and individual freedoms.
We take a very different view – that all rights are equal and indivisible and that economic rights are compatible with political rights.
By definition this means we have different views.
Now we are both seeking to advance our respective standpoints with other parts of the world, because we have different views.
Here we are rivals.
Fortunately, this remains a peaceful rivalry.
It is a rivalry rooted in a lack of compatibility between our values.
It is not a gesture of hostility.
And even while this rivalry persists, it should not prevent us from working together.
I shall return to this important point later.
Our real challenge is to build a form of multipolarity on the foundation of shared rules, without which power politics – the rule of strong over weak, will prevail.
Rules exist precisely to protect the small against the big, the less wealthy against the rich.
The European Union’s commitment to multilateralism is is backed up by our record of accomplishment.
The UN Secretary-General has said that the European Union is the United Nations’ greatest ally.
As far as we are concerned, abiding by the rules, living by multilateralism, cannot be based on cherry picking – namely accepting the rules of the WTO but not those of the UN Convention on the Law of the Sea.
Multilateralism itself should be indivisible.
The other topic I would like to speak about is our economic relationship, which to be honest is far from satisfactory.
We are a major export market for China, on a par with the United States.
China therefore needs the European Union.
The problem arises from the fact that this trading relationship has for many years been an imbalanced one, and that imbalance continues to worsen.
Our trade deficit has gone up by 60% in one year: a considerable rise, which cannot simply reflect a productivity gap between our economies.
An imbalance is not only quantitative.
It is also qualitative, since it affects sectors – or sub-sectors – in which we enjoy a comparative advantage, from medical devices to chemicals.
If the problem is not rooted in a simple difference in productivity, then what is its cause?
To my mind, it is the result of the persistent difficulties experienced by European companies in gaining access to the Chinese market.
There are many difficulties, which I shall not list here but which have been brought to the attention of the Chinese authorities, repeatedly and from different constituencies.
On top of this enormous trade deficit we have seen a sharp downturn in European investment in China, which is at its lowest level since 2018.
Companies that are still investing in China are those that were already here.
They reinvest their profits in China.
And there are hardly any new entrants on the Chinese market.
Without better access to the Chinese market, European investors are turning away.
On the same token, there is the question of de-risking, something on which so much has been written lately.
First of all: what is de-risking?
It is essentially an attempt to diversify the risks resulting from excessive dependence on one market.
It is also learning the lessons from COVID and the Russian invasion, where we had to diversify at incredible speed, and at a high cost.
The EU-China economic relationship is deep – 2.3 billion euros of trade per day – and has benefitted both sides.
But we must be alert when 95% of our imports in key sectors come from one only source.
Especially when these are products that we need for our industrial green transition: between 93% and 97% of imports of magnesium, lithium and rare earths used in Europe come from China.
So it is common sense to widen our base of supplies.
I am sure that in a similar situation China would do the same thing.
In fact, China has been pursuing industrial and technological ‘self-reliance’ for years, you just did not use the term ‘de-risking’.
Such precautionary measures are not taken for political reasons.
They are simply taken to protect our economies when we consider that we have become too dependent on a limited number of markets.
Once again, de-risking is an instrument to increase our resilience, not a hostile measure against China.
President Xi expressed a similar view when he said in 2020 that “China must build a domestic supply system that is independently controllable, secure and reliable so that self-circulation can be accomplished at critical moments”.
It is de-risking with Chinese characteristics…
Beyond technicalities, let me draw your attention to a much more important problem concerning European public perception of the role played by China today.
If the public concludes that the trade imbalance with China is so great as to endanger key sectors, or place our transition towards climate neutrality at risk, it will demand more drastic protectionist measures.
Since our leaders are elected, they are naturally sensitive to what their voters want.
We are one year away from the European elections and the topic is sure to come up.
It is therefore in our interest to find common ground, to redress the imbalance in our economic and trade relations.
Otherwise, de-risking may indeed accelerate far more than is good, as the public opinion will increase its pressure on political leaders to disengage more from China.
Which brings me to my final, and fundamental, point: the level of trust between China and the EU.
Trust is at the core of any relationship.
This trust has been eroded.
We therefore have work to do, as trust does not return miraculously – it must be restored gradually.
So how could this be done?
Rebuilding trust
Trust starts with human interactions.
It is therefore important to resume human exchanges between Europe and China, be they personal, economic, or scientific.
They are currently at an incredibly low level, considering the scale of our relationship.
China often complains that it is misunderstood.
Maybe.
Then help us to understand you better.
If you want us to understand you better, it is not enough to exchange official delegations.
Our people need to interact with each other.
More Europeans need to come to China to study Chinese.
Human interactions are fundamental.
Unfortunately, they are currently limited, as European companies wishing to send expatriates to China face considerable difficulties.
Decoupling at the human level must be avoided too.
And here too, China really holds the keys to prevent it.
I was pleased to learn that China is planning to amend its legislation on the transfer of data by foreign companies.
We consider this a useful step in the right direction – although we will have to wait to see how the measures in question are implemented in practice.
But gestures of this kind are what we need if we are to restore trust.
Which leads me naturally to talk about political trust.
In this area too, there is plenty of work to be done.
Especially since the outbreak of the war in Ukraine, Europeans have felt that China, while not openly supporting Russia, has not been using its unique influence to persuade Russia to halt its aggression.
China’s ambivalent position with regard to both Ukraine and Russia has been difficult to understand, given the simple fact that one country is being attacked and the other one is attacking.
This refusal to choose between the aggressor and the victim has not gone down well in Europe.
We are, of course, well aware of China’s policy constraints.
China’s relations with Russia since the 19th century have not always been harmonious, to put it mildly.
We are not asking China to adopt the same standpoint as the EU.
However, we do consider it essential that China makes a major effort to convince the people of Ukraine that China is not Russia’s ally in this war.
Why doesn’t China step up its humanitarian assistance to Ukraine?
China could for instance propose a high-profile cultural initiative to the Ukrainian people, whose historical and cultural heritage is being ruthlessly destroyed by Russia.
Doing so would improve China’s image in Europe.
It will improve dramatically China’s image in Ukraine.
In addition, such gestures will put China in a good position to contribute to the reconstruction of Ukraine.
In Ukraine, China’s interests are different from Russia’s.
China wants to engage with Europe.
Russia seeks to demonise it.
We all know the Russian narrative about NATO.
But as you know, the Russian aggression has reinforced the Atlantic alliance: two new nations are joining, in part because they know they cannot trust Russia which is now seen all over Europe as a bully and a source of fear.
Russia will never win this war.
Because the Ukrainians know what they are fighting for, just as the Chinese knew what they were fighting for in the 30s and 40s when they were occupied.
Russians, by contrast, do not.
That makes all the difference.
Security is an important aspect of the relationship of trust between Europe and China.
This means that we express our concerns to you.
However, I am also here to listen to your concerns – the most important of which, of course, is Taiwan.
Regarding Taiwan, the European Union position is clear.
Allow me to reiterate it.
It is based on six points 3 no’s and 3 yes:
No recognition of Taiwan as an independent state.
No to intimidation, coercion and provocation from any side.
No to use of force.
Yes to bilateral ties with Taiwan, which do not imply any kind of political recognition as an independent country.
Yes to resolving tensions through meaningful and open dialogue.
Yes to keeping channels of communication to prevent misunderstandings and to de-escalate tensions.
I think we cannot be clearer on this matter.
Finally, the restoration of trust must ultimately translate into cooperation between the EU and China on all of the critical global challenges on which any decoupling is not only undesirable but also impossible!
This is clearly the case when it comes to climate change – an issue where the commitments made in Paris in 2015 must be honoured.
The positions China will adopt at COP 28 – especially if it features more ambitious climate-related targets – will send out a very important message to the rest of the world, given your country’s strong global influence, and your pivotal position as the world’s largest greenhouse gas emitter.
Once again let me stress that our attitude towards China is in no way driven by a desire to curb its development or rise.
We want China to become more involved in a multitude of issues such as climate change, global health and the challenge of reducing debt in developing countries.
Of course we will always protect our interests and security.
However, we believe that, despite our considerable differences – the scale of which should not be underestimated – there is scope for us to work together.
It is up to us to broaden that scope.
That is the purpose of my visit too.
Europe takes China seriously.
It expects the same in return.
Thank you.
Link to the video (starting from 6:50): https://audiovisual.ec.europa.eu/en/video/I-247574
