Trilateral Relationship of China, EU and U.S. in Transition

Mr. Dominique de Villepin

Trilateral Relationship of China, EU and U.S. in Transition

Mr. Dominique de Villepin

Thank you very much to receive me among you to present today. I’m very pleased about the opportunity to exchange with you some ideas on global cooperation between China,EU and the US, which is one of the major challenges in the coming years. It won’t be easy but is necessary to re-invent positive and constructive relationships. We’ve been going through important and difficult time. I’d like to start with a few dates to give you a perspective on the kind of changes I would like to talk about.

I would mention three turning points, namely, the year of 1989, 2001 and 2008. First, nothing can compare to the US superpower at the end of the Cold War. But the perspective that the fall of the Soviet Union means “the end of history,” or that it means the full success of liberalism and capitalism, is totally wrong if we look back today. Second, when the US suffered from the 9·11 terrorist attack, the world became divided into two camps again, the western world and the Islamic world. Downfall came at a time of US full prime. The Iraq War ended the illusion by the neo-conservatives that the US was able to re-organize the world order by force. Currently, the Middle East, which is one of the most important and strategic regions, is more divided than ever.Third, the financial crisis is a rendezvous for the West and the slow growth may prolong for many years. The West presents a heavy bill which is hardly affordable. On the other hand, the emerging powers such as China are in a different situation. Theytake advantage and make profits from the crisis. Therefore, the new division is not a political one, but a division between the rising and the declining economies.

In the context of transforming power structure, there are three scenarios in front of us, namely, competition, confrontation and cooperation. First is the competition scenario. The world follows in the same line of what we have today. We will see China increase its power and try to use it in the next few years in order to fully develop, which means lifting people out of poverty and reducing regional differences within China. China should find a way to make its own model of development acceptable to the Western world. China has also to increase its capacity of solving its own problems. So, the competition stays as it is. But this scenario doesn’t take into account the reality that the West can’t solve problems by themselves. It means that the scenario of competition only will not answer the problems of the world.

Second is the confrontation scenario. The Europe and U.S.won’t just stay looking, they want to protect themselves from the consequences of China’s development. The rising protectionism is partially a response to China’s strong economic advantage in trade surplus and low cost exports. Furthermore, China does not face the same constraints that the West does due to environmental concerns. So this could lead to a strong reaction on the part of the West as the West may accuse the competition of being unfair and demand for a change of the rules.

Third is the cooperation scenario. Cooperation means finding what is in the best interests of both. Cooperation means trying to find what’s good for all of us. Cooperation means compromise.Now, China lays emphasis on its status as a country looking for development. But China can’t hide the fact of its growing power and strength. Today, nobody in the West sees China as an developed nation, it is perceived as a leading world economy if not the first. We have to find a quick way to go from an announced confrontation to a strong cooperation by reaching a ground of common interests. However, we haven’t found a common ground on which we could work together yet.

Not only economy but also politics is important to China and the West in a global world. We need a strong capacity for settling our economic problems in a way that will also enable us to approach our political issues in a positive and dynamic framework. Obviously, Tibet, Taiwan and Xinjiang are still subjects of tension, and it’s clear that we have not yet found a good balance while addressing these issues. But actually, none of these are primary subjects for the West. The problem is that when the economic situation is as difficult as is at the current moment,and since we can’t find the right tune of approach, there will be more emphasis on politics and the global relationship between China and the West will become more difficult to both sides, both economically and politically. It’s very important that we find common interests in social and economical challenges, because, if not, strong tensions will be nurtured in overall global relations.

We need to make significant progress not only in treating political and economic issues, but also in building a new framework for our relations. This framework has to be multilateralism and global governance. In these respects, Europe is China’s strong ally. That’s where Europe stands with China and may have difficulties with the US. Many people in the US and some parts of the Anglo Saxon world are not interested in changing anything in the global system, because the existed financial system is in their hands and to their advantage.

The US is fearful of a new political governance, that’s why they invented the new concept, which is not multilateralism but“multi-partnership”. Someone also raised the idea of G2, which I regard to be completely stupid. It might be in the short-term interest of the US but certainly not in the interest of China. The concept of “multi-partnership” enables US to avoid criticism of unilateralism. But, in fact, the idea is a rejection of multilateralism because it still aims at helping US maintain its global domination by allowing the US to choose its own partner and to create the possibility of dialogues while avoiding global competition and confrontation. However, this might be dangerous for them in the end.

Multi-partnership is just another version of unilateralism, it’s not a new system that we need. To create new governance is the real challenge, and to the global player that China is today, it’s an absolute necessity. China needs a new governance as much as the EU. History teaches us that, no matter how powerful it is, no country has the capacity to monitor the world alone. You will have to pay the price alone. You will be responsible for the problems of the entire international community. But at the end of the day, we are going to be responsible altogether.

Since China is going to be a superpower in the coming years,it’s in China’s interest, cultural spirit and capacity to contribute to global governance. As an ancient country with a very old culture,China has its own history and experience. Some Chinese people might believe that maintaining the status quo, which is the negative version of harmony, can be the best solution. But I argue that we have to look for the positive version of harmony, which means, initiatives.

At the same time, we also want results. We need to monitor the international agenda to alleviate people of the burden of suffering. We need to have a global conscience, to care about what’s going on all around the world, and to show that all together we can solve the problems. Global governance is not only about state or personal satisfaction, but is about creating tools and ability to solve the problems in the world as well. I believe this is the real challenge for all of us. We do have the capacity as well as the responsibility.

Today, China is one of the two or three main global players and is going to be very soon the first global player, which means an equal share of responsibility. China cannot escape its responsibility. Even if the governments around the world very often are blind, the people are not. China has to answer to the questions and expectations both of its own people and of other peoples and countries.

Questions and Answers between Mr. de Villepin and the Audience

Mr. Chen Dongxiao, Vice President, Shanghai Institutes for International Studies：

I’m deeply impressed by your enlightening remarks and proactive prescription for global cooperation. It is indeed a major progress for the US to start adopting a multi-partnership approach,yet we must bear in mind that China is still a rising power with a multitude of domestic socioeconomic problems on hand.Regarding how we can work together, a few points should call our attention: First, whether or not the current crisis really helps us recognize, we’ve already stepped into a new era and thus it’s time to reflect on various models of development. During my visit to Vietnam just a few days ago, I was shocked at the fact that the younger generation tends to regard Westernization as the only passage to prosperity. But the Chinese people have come to realize that there’re alternative ways of development. Second, how we can reach a strategic understanding among each other. Although history has demonstrated that China is a peaceful nation, the West is still skeptical of China’s intention with its rise of power. And third, what can we do to substantially extend our cooperation while exploring ways to address such global issues as the spreading nationalism and protectionism? With so many challenges confronting us, it’s safer to remain cautiously optimistic for now.

Mr. Dominique de Villepin:

I can’t agree more with you that one shouldn’t copy other countries’ model of development. The idea that the Western model is the best is already outdated. It is proven to be a total failure in many parts of the world such as Africa. As to your second point, I must say that the West’s fear of China’s potential power is mounting with time. If we want to stop that, we’ll have to find solutions on the world level—if we fail, we may face problematic reactions on the state level. That’s why I believe we must be proactive in economic and political cooperation. A mixed tension of competition and confrontation always exists among countries. If we can’t find new fields of cooperation, even benign competition will turn out to be confrontation sooner or later. Thus,we must work hard to accumulate strategic trust through more institutionalized mechanisms such as dialogues on a monthly or even daily basis. You simply can’t have a strong relationship with a country by occasional visits between the leaders, neither by such non-institutional groups as G8 and G20. Even the minister-level UN Security Council doesn’t help much, as those diplomats can’t act beyond the sovereign framework. To solve problems requires taking risks to break through the framework for new perspectives and actions. Our timetable is tight—if we don’t act today, we’ll face more problems tomorrow. During the la-belle epoch (good times) before World War I, no one could imagine a war was already looming over Europe. Now we’re faced with increasing problems as well. Workers in the US and Europe are growing more anxious as they know they’re going to lose jobs. China is also troubled by the widening gap between the rich and the poor.In the modern world where people have the real power, populism is what happens when leaders don’t listen.

Ms. Yu Xintian, Chair of Academic Committee, Shanghai Institutes for International Studies

I agree with you that a good foreign policy should strike a balance among economy, politics and values. You also touched upon the misunderstanding between China and the West. Some Western people tend to believe that the Chinese hold totally different values from them. But the fact is, China shares many Western values and has been working hard for the common interests of the world. China’s eagerness to listen to and learn from the Western wisdom is a ready example. Since France is renowned for its public diplomacy, I’d like to hear your advice on how China can promote a mutual trust with the West and dissolve their misperceptions about China’s rise.

Mr. Dominique de Villepin:

You raised a good but difficult question. We must find out the basis of such misunderstanding first. I assume ignorance is certainly a part, but the real problem is fear, which provides a strong incentive to demonize China while simplifying or even ignoring the reality and complexity it has to face. That’s why I believe it’s urgent for us to identify what common interests China holds with the world. There are global common interests outside our respective interests, and no doubt, China should be in a good position to defend these public goods. Although many people thought it might take China 20 to 30 years to take the leading role in the world, the financial crisis has driven China to the front stage over the past year, which has entirely changed the way you talk and behave. Now you can’t just speak on behalf of China, you must have others in mind as well. You can’t just go on saying that“we’re poor” or “we have lots of problems,” because you’re perceived as a strong presence and you have to be ready for more responsibilities. People are looking to China for solutions.

I agree with you that we share many common values. It reminds me of Zhao Wuji, a famous Chinese painter living in France, whose paintings perfectly integrate Western elements into the Chinese vista—a transcendence of the East-West dichotomy. I totally identify with the emotions in art forms and works presenting the lives of other cultures and people, so I believe we can bridge the gap between us. But we must do our homework:first, we have to find ways to renew our own identities. The biggest challenge for China is to reconcile its past and present, no matter how much pain this process might incur. History and modernity can’t be kept apart; they have to be mixed and accepted.For instance, it’s great for Chinese leaders to emphasize “green economy” in recent years, since urbanization is not a solution but will create even more costly problems in the long run. We also had a debate in France on the French identity, which was a very painful struggle. When we are able to accept our own complexity,we’ll be ready to reach out for others. This capability of embracing diversity is going to be immensely useful to China. A key element of a lasting love relationship between two people is not about loving the good parts of each other, but rather about living with the difficult parts. We shouldn’t be afraid to confront each other in our views on difficult issues, because in the end, it’s not the core values, but economic and political constraints and time frames that separate us. The capability to put on the table our differences will give us ability to imagine new solutions. I’m convinced that China will invent a new political model in the coming years. I don’t believe what we’re doing now is the best, but it’s what we can, and we can do better tomorrow.

Mr. Xu Mingqi, Deputy Director of Institute for World Economy Studies, Shanghai Academy of Social Science:

At the moment, China faces a lot of international pressure,from both the US and EU, for example, to appreciate our currency,to take up more responsibility, etc. But I feel that the international community has to understand that we need time to get ready for these responsibilities and requests, which, in my view, are not rational and well-meaning demands all the time. How do you suggest that China respond to these mounting pressures?

Mr. Dominique de Villepin:

China needs to listen to these messages from the world. It is an urgent matter that China answers to the needs of the international community. The world expects cooperation from China. It expects China to take initiatives. On what issues or in what scope, that is something to be discussed. We have a wide range of issues to choose from, but, first of all, China needs to establish a positive and proactive image for itself. To communicate effectively with the world, China also needs to be able to explain your goals of development, perspectives and policies in a way that is clear and accessible to the rest of the world. It means you should not just talk to the government; you should also be able to get your views across to a wider global public. For now, you only have a few people who can do that. They are intellectuals and academics whose influence on the public opinion is quite limited.The government and the public are two different things, and public opinions and feelings are, indeed, more difficult to change.If you face a growing fear in the public, this might be very difficult to reverse.

Mr. Dai Bingran, Professor of Fudan University:

I have two questions. My first question is about a recent proposal to create a European version of IMF. You seem to deem the current one an extremely inadequate institution. Then, why another IMF? What’s the use of producing a new copy of something that has already failed? My second question is about China-Europe relationship. We’re getting the impression that Europe is increasingly convinced of the need to take a tougher stance regarding China. How will that sentiment influence our bilateral relationship?

Mr. Dominique de Villepin:

In Europe, we believe that the first crisis is over but we might fall prey to a second attack of crisis if we are not able to find a structural solution in time. U.S. does not have the incentive to reform the current financial system; they would like to keep the status quo. We are not clear whether the US will recover quickly from the current crisis, but we are pretty sure that, in the long run,the US will be declining in power. Its ability to adapt is at a low point, as it is focused on holding onto its power rather than on trying to create a new financial governance system. But Europe is quite the opposite. We want to restructure the system, that’s why we proposed to set up a new currency system which can offer a basket of different currencies rather than being pegged to a single currency. The main vision behind the proposal to set up a European IMF aims at financial independence for Europe. We want to build an independent financial governance institution that can fund and protect European countries in times of crisis.

At the current moment, the tensions between China and Europe are real. With bad economy and high unemployment rate at our doorsteps, Europe is in a sensitive moment. We fear China’s competitive edge which we perceive to be quite “unfair” because it is an edge based on low wage, weak social welfare infrastructure, and substandard environmental norms. We are not just picking on China. As a matter of fact, EU nations have also criticized Germany strongly for lifting up export volume by means of keeping low the costs of wage and welfare expenses. Of course,China has a right to full development, we anticipate that, but we also have a right to be let live. That’s why China and Europe have to take cooperation seriously; it has to be more than just a few talks. We need cooperation to develop real solutions and to find the right answers. It is essential for us to devote more time, energy,and resources to create a relationship of full engagement. Without cooperation, confrontation will take over soon. And I think, if China makes up its mind about who to cooperate with, it will be a lot easier if China works with Europe first. Europeans are open to many solutions. We are willing to experiment with different approaches in order to find the right tune.

Mr. Chen Dongxiao, Vice President, Shanghai Institutes for International Studies

Europe scholars in China are divided in their views on the impact of the global financial crisis on Europe’s power. Some are of the perception that the crisis has set Europe on a downturn,while others think that Europe is simply in the middle of a special transition. What’s your assessment of the prospects for Europe in a post-crisis world?

Mr. Dominique de Villepin:

It’s important to analyze perceptions so as to understand how they are formed. In coping with the crisis, we, both China and Europe, have more advantage over the Americans, because our civilizations have undergone real revolutions and transformations in our respective histories. Of course, we got anxious and impatient under current circumstances. But an important thing is that, we still have hope, a hope that comes from our ability to reinvent the system, to learn from our past, and to put into place a new world. Talking about Europe, we have the capacity to cope well with crisis. We have geographical and political proximity to many world crises going on today; we have historical references guiding us on the dos and don’ts in times of crisis. The United States has lost ground everywhere, and the instruments of their power are becoming less and less effective. However, the US elites do not seem to be fully aware of their precarious situation.

What’s going on with Europe today? The enlargement of EU,for example, demonstrates our effort to increase our strength and to build a more efficient governance system. We also passed the Lisbon Treaty, but I think the Lisbon Treaty is not the answer for EU. Soon, we will find ourselves in need of new treaties. Lisbon Treaty does not give us the tools to solve our problems. For instance, to have a president of the EU Council elected is not the solution. I believe we have to have a new treaty in place to grant people the power to choose who shall become the president of the Council. If that happens, it will be a dramatic boost to our ability to achieve true global governance. We do face a huge challenge in finding an adequate economic governance model for Europe. The problem today is that, we have as many economic models as the number of EU’s member states. The rise of China, in particular, is a stimulus to Europe, as it makes us realize that we have to take new steps and measures, and the actions have to be taken fast. If you keep growing fast, we will feel compelled to catch up.

Mr. Ye Jiang, Director of Institute for Global Governance Studies, Shanghai Institutes for International Studies

Chinese people’s hard work is at the back of China’s fast economic growth. Do you think that European society might have to revamp your welfare system as well as to learn to adopt China’s work ethics? Also, could you talk about technology exportation and cooperation between China and Europe?

Mr. Dominique de Villepin:

In Europe today, we have the world’s most refined and sophisticated way of life. The US lifestyle in the 1950s used to be a global dream, the dream of having a house, a car, and a TV. What we know is that you can have all these without having a life.We’ve come to realize that possessing all these things is not enough, because we’ve witnessed the outcomes of different lifestyles. We know we also need time to think, to relax, to spend with family, to breathe. We’ve seen the damages of modernity to our countries. China will one day find itself fighting for good air,pure water, a better environment rather than for material possessions. For modernization, we pay a price. It is not only paid in the quality of life, it’s paid in our health, social security, political stability, and mental well-being. It seems that Europeans want a life, the US power, and China the jobs. In terms of our needs, we are on different planets. Of course, Europeans do not want to lose our jobs, but we are neither willing to sacrifice our life. We want to have both. The challenge is how to make both stay? And to accommodate our different needs, we must build an architecture that can deliver to all. Someone has to be in charge and take initiatives, because no one feels that global governance is his responsibility. But someone has to come forward. Global governance today is the work of the world’s big leaders, of which China is one. Global governance is a task that can’t be ignored,because no one can arrive at the solution by themselves today.

As to the issue of technology export and cooperation, I admit it’s a delicate area. But the situation has changed significantly today. Neither Europe nor U.S. used to believe that China would be able to close the technology gap between us so fast. We used to think that China would continue to focus its advantage in manpower. Today, however, our thought is proven to be wrong.China is not only able to challenge the Western power in technology; it also has the capacity to innovate. Also, when China comes along, you often come along not only with a technology as good as or even better than ours, but oftentimes one with a lower price. What shall we do then? This changes the nature of our relationship significantly. China’s growth worries Europe because Europe is, indeed, worried about its own future. If you are able to catch up so fast, where would that leave Europe? But I believe in cooperation. I believe that to find our common interests and common grounds as soon as possible are the key to defining a new kind of partnership between China and Europe.

Mr. Wang Wei, Chair of Department of International Politics,Shanghai University of Political Sciences and Law:

I want to ask about Europe’s foreign policy to China. For many Chinese analysts and students alike, we feel that France’s foreign policy to China is mysterious, characterized by lots of uncertainties. What’s your comment on Sarkozy’s foreign policy?If you win the next election, do you have any framework in your mind for foreign policy to China?

Mr. Dominique de Villepin:

The Dalai Lama issue, Tibet issue, and Taiwan issue, are not the real challenge. With what methods to approach these issues,where are the limitations of diplomatic instruments, and what abilities are brought to the problems, are more challenging than the issues themselves? Over the course of time, these issues have been handled differently, depending on the personalities of the leaders and the context of media opinions. Media likes to make drama. For instance, I said that I don’t think Dalai Lama or Tibet is a real issue for the West because everyone in the West admits that Tibet is part of China. However, beyond this international acknowledgement, China has to find out a way to address the problem at the domestic level, in this respect, it is China’s own problem and own responsibility. Of course, we need to put into place rules of respect for each other, but we also have to get accustomed to these situations.

I believe that Tibet, Xinjiang or Taiwan will only become hot buttons in the relations between China and Europe or China and the US when we fail to find common grounds and solutions in the economic area. Economy is what demands our priorities and we need to work on building concrete mechanisms that can help us cooperate and find solutions. Of course, we do emphasize different values. Human rights is a fundamental value in the West,however, it is a value we don’t respect very well ourselves. The thing is, we not only share values, we also share problems, and the need to solve our problems is more urgent perhaps. Certainly, we have to respect each other’s values, but at the same time we also need to make real progress. In the final analysis, we need more cooperation to make that progress happen.

Mr. Dai Bingran, Professor of Fudan University:

China is not just developing for its own good; our development has contributed significantly to world growth. And you talked about Europe’s fear about China’s competitiveness, but competition is not something to be feared. Economically, it can have a stimulating effect. My comment is that I don’t think Europe’s fears about China’s fast growth is well justified. After all,where China is most competitive, the labor-intensive manufacturing sector is a phase that will inevitably fade out in U.S.and Europe as you move up to more advanced stages of industrialization. Why is Europe so worried then?

Mr. Dominique de Villepin:

It is not how Europe looks at this. Fear is widespread acrossmany European countries, and we’re simply not prepared,because everything just happened so fast, leaving us with little time to respond. Even though labor-intensive industries will eventually fade out in Europe, the process of transition and change is painful and difficult. Of course, we need to do our homework. But still, what will the new economic system look like if all manual jobs are monopolized by China? I think to set up a new European government is necessary and this government has to have a design for Europe. It means we need to find ways for our interests to be able to complement each other. That’s why cooperation between us is important, which is needed to help us fight fears, make adjustments, point out the possibilities, and reach a mutual understanding.

H.E. Dominique de Villepin served as Prime Minister of France from 31 May 2005 to 17 May 2007. This is his presentation and Q&A at the Roundtable on Trilateral Relationship of China, EU and U.S. in Transition held at Shanghai Institutes for International Studies (SIIS) on 17 March 2010.