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"Strategic Conversation" between Ambassador Zhang Ming and Dharmendra Kanani, Friends of Europe

On 27 January 2021, Ambassador Zhang Ming, Head of the Chinese Mission to the EU, held an online "strategic conversation" with Dharmendra Kanani, Director of Asia, Peace, Security, Defence, and Digital of the European think tank "Friends of Europe" on issues such as China-EU-US relations, China-EU investment agreement, 17+1 cooperation, Covid-19 and economic recovery. The following is the transcript:

Kanani: A very warm welcome to the Friends of Europe strategic conversation series. This series is about speaking to leaders, thinkers, influencers, decision-makers, commentators, who have a view and ability to shape our societies and our worldview of matters. Today, I'm very pleased to welcome Ambassador Zhang Ming, who is the Ambassador to the EU from the People's Republic of China. I have a great opportunity to spend half an hour with him talking about all matters (on) China. As everyone has known, there isn't a day, a week in the past, however long, where we haven't talked about the role, capacity, implications, and influence of China, both on Europe and the world. Today, especially at the beginning of this year, we know that with the changing relationship across the pond in relation to the new Biden presidency but also in the context of a comprehensive agreement of investment with China, there are a number of issues here in the context of one of the most severe situations we've encountered in the past 130 years, which is an economic and health crisis combined.

So Ambassador, very warm welcome to you and thank you for making the time to speak to me. Warm welcome. Zhang, I want to start with the big question about how the expectations are of China in relation to the EU in the context of a number of points that are affecting global relations and EU-China relations. What do you see as the future of the relationship with the EU especially when every week, every day, there's a hardening of the approach in the sentiments, feelings, and views of your policies in China? What is your sense of the future relationship?

Zhang: Thank you, Mr. Kanani. No doubt, China-EU relations are of crucial importance. 2020 was not an ordinary year. With great difficulties in the international environment and the wide spread of COVID-19, every country and individual are severely affected, coming under huge pressure and challenges. China-EU relations are no exception. Yet looking back, we are happily surprised and proud to find that 2020 saw a robust growth of China-EU relations. High-level exchanges were more frequent than ever before. President Xi Jinping had over 20 phone calls or video meetings with European leaders. The two sides held the 22nd China-EU Summit and launched new high-level dialogues in green and digital fields. The two sides formally signed the Geographical Indications Agreement and concluded the investment agreement negotiations as scheduled. We also joined forces in upholding multilateralism, fighting the COVID-19, promoting economic recovery, and addressing global challenges.

A quote by Charles Dickens seems to be an apt description: “It was the best of times; it was the worst of times”. China-EU relations are advancing against all odds. This reflects what we Chinese believe, that is, from a crisis opportunities arise. To turn a crisis into opportunities, three things are crucial. First, China and the EU have major shared interests and need each other as partners. Second, China and the EU are well aware of their shared responsibilities in safeguarding world peace and prosperity, promoting healthy globalization, upholding multilateralism and improving global governance. Third, China and the EU have a shared commitment to cooperation and dialogue. We commit to promoting cooperation, resolving or managing differences through dialogue rather than confrontation. We reject any destructive attempt to poison international relations or to preach for the so-called new Cold War.

This year, China and the EU have a rich agenda, although challenges never fall short. The two sides need to keep the sound momentum of their relations and make more concrete efforts to promote high-level exchanges, push for the follow-up procedures of the investment agreement, coordinate COVID-19 response on both health and economic fronts, step up green and digital cooperation, and strengthen multilateral governance. This serves the interests of China and the EU and contributes to global stability and prosperity in this uncertain world.

Facts have proved that China and the EU are comprehensive strategic partners, not “systemic rivals”. Dialogue and cooperation for mutual benefit have always been the keynote of China-EU relations. China and the EU are two major forces, markets and civilizations. China-EU relationship has a value of its own and follows its own logic in development. The course of its growth will not be changed due to a particular event at a particular time.

As for the European attitude toward China, I believe that in dealing with state-to-state relations, common sense matters. I could tell from my conversations with EU colleagues that they agree with me. We welcome and listen carefully to sensible and constructive criticisms, as such voices could help enhance mutual understanding, reduce suspicions, and make all of us better off. Yet it is totally unacceptable to attack and discredit China by lying for political or personal gains. I hope that European friends, notably think tanks and scholars, could take a closer look at China’s history, culture and realities, see China in an objective, rational and respectful light, bear in mind the importance of China-EU cooperation to the two sides and the world, and enhance public support for China-EU relations.

Kanani: Thank you for that. One of the points that's been clear over the past 4 years is that we've not had a lot of objectivity and rational approach to global relations, especially when one of the biggest players was a significant fly in the ointment, which has now been removed thankfully as many people would concede. With the past passage of Mr. Trump and now the appointment of Mr. Biden as President of the USA, there is a lot of hope attached to that new presidency and a sense of normality in order being returned to global relations. We know that as a result of the Trump era but also what happened around the pandemic, China became the target of a lot of offense and a sense that you are culprits, but also involved in a whole range of different things that you referred to, the whole machinery of fake news that we now have come to know very well. But some of it, as other objective commentators would say, is not all fake. But from your perspective, Zhang, what does the Biden presidency hold for you in terms of not only the dynamic of EU-China relations but also global relations? Because, as you say, it felt like a new Cold War that had emerged in the past 24 months, 36 months that was emerging. We now have a new wind of change that hopefully warms affairs between the east and west. What's your view on the new appointment and the presidency of the US in terms of Biden?

Zhang: China congratulates President Joe Biden on his inauguration and looks forward to working with the new US administration in a spirit of no conflict, no confrontation, mutual respect and win-win cooperation. We hope that the US could join our efforts to step up cooperation, manage differences, and bring China-US relations back to a sound and steady track.

Over the years, for obvious reasons, China-US and EU-US relations have encountered difficulties. China and the EU are both victims of unilateralism and protectionism, and both advocate multilateralism and an open international trade system. The US has decided to return to the Paris Agreement and the World Health Organization. The world today faces both grave challenges and rare opportunities. As President Xi Jinping said at the World Davos Forum virtual event a few days ago, we cannot tackle common challenges in a divided world, and confrontation will lead us to a dead end. In addressing the current crisis and building back better, the whole of mankind must work together in solidarity. Multilateralism is highly relevant at the moment. Multilateralism is about having international affairs addressed through consultation. The future of the world must be shaped by all countries. It is up to all of us to build consensus and join forces in tackling global issues like COVID-19, climate change, economic recovery and digital technologies. We must let the torch of multilateralism light up humanity's way toward a community of shared future. This serves the interests of China, the EU and the US, and benefits all people around the world.

China and the EU have a major role to play in promoting world peace, common development and human progress. China and the EU are comprehensive strategic partners with 45 years of diplomatic ties. China-EU relationship has stood the test of time and has a solid basis and a value of its own. It is not attached to any other major-country relations. I have strong confidence in the steady development of China-EU relations. I notice that the EU is a strong advocate for strategic autonomy and open cooperation. Hopefully, such a spirit will continue to guide the EU’s foreign policy and contribute to world stability and development.

Kanani: Thank you for that. Because time is running out, I want to move to some very important points you have made. So clearly, there is hope that with the Biden presidency we will see a renewed sense of multilateralism, global health, and a view of thinking about the world in that interconnected way, which globalization has presented to us in the past 20 years. There's something here about this hope that the pragmatism perhaps settles the turmoil that we experience in the past, in terms of things that reel the world economy, in terms of trade, industry, industrial relations, values and investment. One of the things that you said the EU-China relationship has effectively been able to address but also stand the test of time is the comprehensive agreement on investment, which Germany, there's no kind of shy away from that,was a key player in making sure there was an agreement on the table. What's your sense now of how that will play out? Because you said, and it's quite interesting, that we need to think about common sense in terms of our approach of pragmatism. But what does the comprehensive agreement say about the view that Europe has of China and China has of the EU? I'm particularly interested in how you deal with the issues around labor laws, the kind of issues that people in the EU are concerned about. So firstly, let's think about what does CAI mean? Does it mean that we have a different kind of approach to China and Asia more widely? But also specifics around what it means for what you refer to, that is the common sense pragmatism about how we relate to each other and the values that we hold dear?

Zhang: As Chinese President Xi Jinping said during the recent video conference with EU leaders, the investment agreement will widen market access, improve the business environment, strengthen institutional safeguards, and create a brighter prospect for cooperation for Chinese and EU investors. The agreement is the first high-standard investment agreement between two of the top three economies in the world, and therefore, could serve as a good example.

The agreement will further remove barriers to the two-way investment between China and the EU, and contribute to a large investment ecosystem across Europe and Asia. The agreement will not only benefit China and the EU, but also give a strong boost to global economic recovery, promote trade and investment liberalization and facilitation, and enhance global confidence in economic globalization and free trade. It represents a major contribution to world economic openness made by China and the EU as two big markets. This is indeed a valuable asset, given that the world economy and globalization are hard hit by the COVID-19 and the rise of unilateralism and protectionism.

The agreement is essentially about investment, not a geopolitical tool. For China and the EU which are comprehensive strategic partners, reaching an investment agreement is not something surprising and was a decision made independently. The agreement conforms to the megatrend of economic globalization and investment facilitation and aims to deliver benefits to all. An investment agreement between two major economies like China and the EU brings added-value to free trade, multilateralism and the welfare of Chinese and EU citizens and businesses.

As for whom Europe should cooperate with, it is entirely up to Europe to decide. I don’t think it is an either-or question, but a multiple-choice question. Europe is able to answer the question in an independent and mature way.

Kanani: Thank you. What does the agreement say for the 17+1 plan now that we have the agreement in place? What does the future hold for those 17+1 plans?

Zhang: As I said, the investment agreement is crucial for China, the EU and the whole world. After entry into force, the agreement will cover all the 27 EU member states, including twelve 17+1 members, and therefore give a boost to investment cooperation between China and CEE countries. In fact, capital interflows between China and Europe including the CEE region, are rather small compared to bilateral trade. Further tapping into the potentials in this regard could promote growth in China, EU, and CEE countries and contribute to the European integration process. This is something China will be glad to see.

Since its establishment 8 years ago, 17+1 has produced early harvests and major results in nearly 20 areas. China is of the view that 17+1 is part of China-Europe cooperation and is a useful supplement to China-EU cooperation. The mechanism was launched by China and CEE countries of their own will and in response to their mutual needs. We have no interest to reinvent the wheel or pursue a geopolitical agenda. The 17+1 is open, transparent and inclusive. The EU and the relevant countries are invited to observe every 17+1 leaders' meeting. 17+1 cooperation follows widely accepted international rules, market principles and EU standards. China sincerely welcomes European countries and the EU to engage in 17+1 cooperation, in pursuit of common prosperity and progress.

Kanani: Thank you, Ambassador. Can I just now, as we conclude this conversation, refer to the major issue as you started with: the pandemic and economic recovery? It'll be interesting to hear from you. China has been known for long-term planning. It's one of the only economies, alongside India, that's done better in the past 8 months than anywhere else in the world. There's something about your economic planning and recovery and your long-term planning that others may wish to learn from. But from your perspective, Ambassador, tell us, how are you reconciling the pandemic recovery with long term economic planning? What can others learn from your approach?

Zhang: China's GDP grew by 2.3% in 2020, crossing the mark of 100 trillion yuan, or 13 trillion euros for the first time. China's economy achieved a V-shaped recovery in 2020, from the 6.8% contraction in the first quarter to the 6.5% growth in the fourth quarter.

This is not easy by any means, especially against the backdrop of the COVID-19, severe global economic recession and rising unilateralism and protectionism. Such achievement would not have been possible without the hard work and solidarity of the 1.4 billion Chinese people, and our efforts to balance epidemic containment and economic and social development. This is also attributable to China’s cooperation with Europe and other global partners.

In 2020, China’s trade in goods exceeded 4 trillion euros, up by 1.9% from the previous year. China’s trade in goods with the EU was nearly 600 billion euros, up by 5.3%, more than double the average growth rate of China’s trade with its global partners. China is now the EU’s largest trading partner. This fully speaks to the strong resilience and importance of China-EU economic and trade cooperation.

What China has achieved is good news not only for China but also for the whole world. For years, China has contributed to over 30% of global growth. China's recovery is a source of global confidence. I am glad to see that many European companies in China have regained profits thanks to the growth of the Chinese market.

You mentioned China’s long-term economic planning. Indeed, making long-term planning is an important way of governance in China. Despite the impact of COVID-19, we managed to meet the major targets set in the 13th five-year plan, and most notably, we have eliminated extreme poverty in China as scheduled. This year, we will kick-start the 14th five-year plan and enter a new phase in development. We have also set out long-range objectives through 2035. The watchwords include green, low-carbon, innovation, opening-up at a higher level, and expansion of domestic consumption. You may find many commonalities between Chinese and EU visions and approaches. This means enormous opportunities for cooperation, which must be seized and translated into actions.

China and the EU follow different paths of development, as a result of different historical, cultural, political and developmentbackgrounds. The two sides could learn from each other. But it does not necessarily mean that one’s experience would work perfectly well in the other. What matters is to find a way that suits one’s own national conditions. Mr. Good is not necessarily Mr. Right, while Mr. Right is for sure Mr. Good.The EU has put forward an ambitious recovery program. China hopes to see an early delivery of the program. I believe that as long as China and the EU look at each other and handle differences in a spirit of equality, mutual respect and openness, we could develop and prosper together through cooperation and healthy competition, and find the right approach to relations between major powers.

Kanani: Thank you very much, Ambassador. Clearly, at Friends of Europe, we felt that for some time that when we think about global relations, not only geopolitics but in terms of trade and industry markets, the EU ought to be looking more to the east rather than the west, because of the demographic changes, the market progress of India, China and other countries in the east. But also there is something about creating a greater balance in the globe in terms of different perspectives and an approach to multiculturalism. What you've said has given us some clues as to what we should be thinking about in future relations. The 14th (Five-Year) Plan, as you said, the openness, mutuality, digital, green, etc, are key areas for recovery. What were the last messages you'd like to leave this conversation, Zhang? Because you know the headlines at the moment, there's a whole debacle about vaccines. You've had an incredible program of vaccines. At the moment, Europe is struggling with some of the companies, commercial companies, and Europe continues to be locked down as with the United States. Any messages from you in relation to (it)?What can you say about vaccines rollout and what we can learn, but also what you can contribute, and any other wider messages which that many people will be listening to this conversation to have clues of the future relationship between the EU and China, and the EU and the US.

Zhang: I believe that the vaccine is a very significant tool for the international community to fight against the epidemic. And for this area, in the international community, we are supposed to strengthen our cooperation. We have to work in solidarity and to help make the vaccine as effective as possible. This is the right way to fight against the pandemic. Last but not least, I wish to thank Friends of Europe and Mr. Kanani for inviting me here. I enjoy the conversation very much. As you may know, we in China are going to start the Year of Ox in a few weeks, a symbol of hard work and prosperity. Let's work hard together in this new year for a more prosperous China-EU relationship. Thank you.

Kanani: Ambassador, thank you very much. That was really helpful. Thank you for spending the time with me. These are conversations which are very important to have. I hope that, as you said, you've enjoyed it, but also it's important for those who are going to watch, listening to this, watching this, to have your voice heard in terms of your perspective, and on a range of issues about China and the globe. I think everyone will be looking forward to what changes, develops and improves in the coming years. But you've given us some insights as to your commitment and vision of how this relationship should develop and improve over the years to come and, as you say, has stood to the test of time as represented in the comprehensive agreement on investment. Thank you for your time. And we wish you well and look forward to engaging with you again perhaps later in the year. Thank you very much.

Zhang: Thank you.

Kanani: I would want to thank all our viewers. I hope you enjoyed this particular version of our strategic conversation. Go to our website, visit it and see the next set of conversations we have planned, but also a range of events that we have in the pipeline for you to engage in debate and connect on issues that matter to the world and in Europe. Thank you very much. My name's Dharmendra Kanani, director of Friends of Europe and look forward to seeing you again.

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