The EU And China: Shaping The Future Together

José Manuel Barroso President of the European Commission
Chinese Communist Party Central School Beijing
27 November 2007

The EU and China: shaping the future together

Mr. President,

It is a great honour for me to be here, in this prestigious School which plays a central role in the forming of men and women who shoulder the heavy burden of leading this country and pursuing China's reforms and opening up to the rest of the world.

The last 25 years have witnessed spectacular developments in China. Hundreds of millions have been lifted from the infernal cycle of poverty and underdevelopment, and today China can look to her future with confidence.

Since its beginnings, the EU has actively supported China's opening up and reform policy. We have opened European markets and our companies helped with your economic revitalisation and employment in China, as well as by transferring technology and know-how through our investments. We have developed cooperation in all fields: from scientific research to education, from energy to the environment, from transport to tourism, and in many other areas.

We have supported China's accession to the WTO and have welcomed China's increasingly important role in various international organisations. In other words, we have demonstrated, through our policies and actions, our interest in your stability, prosperity and success. We will continue to engage in China's development, just as we wish for China itself to become more and more engaged in global affairs, in a way that its China's growing global position.

I would like here to welcome your recent 17th Party Congress. The Congress caught the attention not only of the Chinese people, but also of the whole world, because what happens in China is now of interest to the whole planet. We noted the arrival of new talent in the Party's leading organs, as well as the concept of "scientific development".

Scientific development has a positive connotation in Europe, because science was the basis for Europe's industrial revolution, which led to so many economic, social and political advances. Still today in Europe, we proceed on the basis of this method, making use of the great diversity and social experience which can be found in European countries, drawing common lessons for Europe as a whole. As you know, today the EU has 27 member states. We started 50 years ago with six, now we are 27.

Europe and China do not share the same political system. Even so, we believe we face the same political and social challenges: to manage complex issues and our citizens' increasingly diverse aspirations, to solve conflicts of interest between groups of citizens and the general interest, while at the same time preserving our common future in terms of the environment and scarce resources. So we are in a situation where we have a global problems. To solve global problems we need global solutions And we must work together even when there are differences in our political systems.

Energy is a good example of a common global problem. It is relatively easy to build an electric power plant or a big dam. But the greatest source of energy nowadays is energy savings. Energy savings policy, as we pursue it in Europe, involves a multitude of actions: technology first, but accompanied by good pricing policy and fiscal policy, standards in construction, transport, heavy industry, informing and mobilising citizens, incentives, and sometimes even financial sanctions for waste of energy

The EU has fixed extremely ambitious objectives for ourselves to deal with climate change and substantially lower our greenhouse gas emissions; we have set ourselves a target of 20% reduction compared with 1995. In order to achieve these objectives, we count on our scientists, engineers and architects, but also "social architects" such as legislators and civil servants, business leaders, and citizen groups capable of mobilising our societies.

In Europe, despite all the economic progress, we find that around 20% of our GNP is devoted to social protection, and although we have the most advanced social security systems in the world, we need civil society and NGOs to complete the State's actions in these fields. Each day in Europe, we see how the development of associations and non-governmental groups, how a free and independent press and a strong and independent judiciary complement the actions of governments, political parties and institutions to promote the rule of law, to strengthening the social tissue and harmony in our societies, and to fighting more effectively against crime and corruption.

We see great similarities between your concept of "scientific development" and what we usually call in Europe "sustainable development". We have considerable experience in these fields so I see immense scope for cooperation and exchange of experience between us, involving our companies, universities, researchers and civil societies.

Tomorrow we will open the 10th EU-China Summit. This will be an opportunity for us to assess what we have done together over the last ten years and to launch a new stage in our strategic partnership.

On both sides, we approach the Summit with confidence because, whatever our divergences on certain issues, our partnership has proven its worth and our dialogue and cooperation have expanded accordingly, as demonstrated by the considerable numbers of visits by European Commissioners and high-level civil servants from the European Commission as well as the high numbers of Chinese leaders and high-level officials who have visited us in Brussels.

In Europe, the recent agreement on our new Reform Treaty, the Lisbon Treaty, which aims to increase its effectiveness and visibility, is a great step forward. Throughout Europe, reforms are progressing and economic growth is on a sound macroeconomic basis. As you know we have recently enlarged our number to 27 member states. Our most recent members are enjoying excellent growth rates and our common currency inspires global confidence, there are even some Europeans who say the euro is too strong.

Therefore we are determined to make progress together with China both on our bilateral relationship and also global issues, notably the problems of energy and global warming, the effective dynamic and fair trade system and also development aid in the world.

Together, we have made achievements across the board. One issue, however, deserves sustained political attention from leaders on both sides: the growing trade deficit between the EU and China. The current situation is not sustainable. We need to work together, in a spirit of reciprocity, to eliminate obstacles preventing the access, in many sectors, of European goods and services to the Chinese market. We believe that your growth model also puts too much accent on savings and overinvestment, relying on exports to the detriment of internal consumption. We see your unsustainable levels of trade surplus and monetary reserves, excessive liquidity in your system which encourages stock market or real estate speculation.

Even as we speak, today, a dialogue on macroeconomic and monetary issues is taking place, for the first time, between the highest financial and monetary leadership representatives of the Euro Zone and their Chinese counterparts. I trust this dialogue will lead to our better mutual understanding and alleviate several of our mutual concerns.

For my part, I want to make things in a way that European citizens view China positively and in no way as a threat. This reservoir of goodwill allowed us, for example, to face the recent crisis about the quality of products imported from China, in a spirit of responsibility and partnership. As China recognised, the EU dealt with this issue without any resort to protectionism, our sole concern being the protection of our consumers. We need to keep public opinion on both sides favourable to the further deepening of our cooperation. But the considerable and growing trade deficit is adding to EU citizens' anxiety about globalisation, and is growing in political importance. Indeed there is a risk that the economic emergence of China is seen by Europeans as a threat. That is why we need to deal with this question responsibly to avoid protectionist pressures which would be very difficult to contain.

Another challenge that we must address is climate change. We all now recognise that global warming is real, that it is the consequence of human activity, and that its consequences are universal and will be felt first and foremost by the poorest on our planet. Yes, it is true that the state of our planet today is a result of industrialisation that began generations ago in developed countries. At that time none of us was aware of the consequences. But now we know, and we know that there is no solution without unity, because we only have one planet. The European Union, responsible for only 14% of greenhouse gas emissions, is acting but cannot act alone. We have fixed new and very ambitious objectives for ourselves but these will serve little purpose if other countries, including China, a huge consumer of fossil fuels, do not join in common actions. Yes, there is a cost to reducing emissions, but the cost of climate change is far higher, including for China. Furthermore, policies and investments dedicated to energy saving as well as renewable sources of energy will also foster growth, technological development and employment.

Mr President, by coming here today, I demonstrate the high esteem I attach to the role of this Central Party School. We are ready to work with the Chinese authorities on the most important questions for China and the EU.

One issue that is a matter of concern for China is the question of Taiwan. As you know, the EU has a clear and consistent One China Policy which we adhere to in every aspect of our relations.

I am convinced that stability across the Taiwan Straits is integral to the stability and prosperity of East Asia and the wider international community. We welcome initiatives by both sides aimed at promoting dialogue, practical co-operation and increased confidence building. I therefore noted with great interest President Hu Jintao's recent comments at the 17th Party Congress on this subject.

I am looking forward to my discussions tomorrow with President Hu Jintao and with Premier Wen at the Summit, which will be an excellent opportunity to review our relationship and chart the course for the future.

Thank you

ENDS

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