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REPORT     
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4 March 2002
PE 309.633 A5-0076/2002
on the Commission communication on an EU Strategy towards China: Implementation of the 1998 Communication and Future Steps for a more Effective EU Policy
(COM(2001) 265 – C5‑0098/2001 – 2001/2045(COS))
Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy
Rapporteur: Vasco Graça Moura
PROCEDURAL PAGE
 MOTION FOR A RESOLUTION
 EXPLANATORY STATEMENT
 OPINION OF THE COMMITTEE ON INDUSTRY, EXTERNAL TRADE, RESEARCH AND ENERGY

PROCEDURAL PAGE

By letter of 8 September 2000, the Commission forwarded to Parliament a report on the implementation of the communication 'Building a Comprehensive Partnership with China' (COM(2000)552 - 2001/2045(COS).

At the sitting of 15 March 2001, the President of Parliament announced that she had referred the communication to the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy as the committee responsible and the Committee on Industry, External Trade, Research and Energy for its opinion (C5‑0098/2001).

The Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy appointed Vasco Graça Moura rapporteur at its meeting of 20 March 2001.

By letter of 7 June 2001, the Commission forwarded to Parliament a communication on an EU Strategy towards China: Implementation of the 1998 Communication and Future Steps for a more effective EU policy (COM(2001) 265 - 2001/2045 (COS)).

At the sitting of 6 September 2001, the President of Parliament announced that the title had been changed and that she had also referred the report to the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs for its opinion.

At the sitting of 17 January 2002, the President of Parliament confirmed the referral made on 6 September 2001.

The Committee of Foreign Affairs, Human Rights, Common Security and Defence Policy considered the Commission communication and the draft report at its meetings of 23 January and 25/26 February 2002.

At the latter meeting it adopted the motion for a resolution by 53 votes to 1, with 2 abstentions.

The following were present for the vote: Elmar Brok, chairman; Baroness Nicholson of Winterbourne, Geoffrey Van Orden and Christos Zacharakis, vice-chairmen; Vasco Graça Moura, rapporteur; Ole Andreasen, Niall Andrews (for Jean-Charles Marchiani), André Brie, John Walls Cushnahan, Rosa M. Díez González, Pere Esteve, Giovanni Claudio Fava (for Alexandros Baltas), Pernille Frahm (for Luigi Vinci), Michael Gahler, Jas Gawronski, Vitaliano Gemelli (for Gunilla Carlsson), Alfred Gomolka, Ulpu Iivari (for Véronique De Keyser), Marie Anne Isler Béguin (for Per Gahrton), Efstratios Korakas, Joost Lagendijk, Catherine Lalumière, Armin Laschet, Jo Leinen (for Glyn Ford), Nelly Maes (for Reinhold Messner), Hanja Maij-Weggen (for Alain Lamassoure), Pedro Marset Campos, Miguel Angel Martínez Martínez (for Klaus Hänsch), Emilio Menéndez del Valle, Philippe Morillon, Pasqualina Napoletano, Arie M. Oostlander, Doris Pack (for Franco Marini), Jacques F. Poos, Mechtild Rothe (for Magdalene Hoff), Lennart Sacrédeus (for Hugues Martin), Jannis Sakellariou, José Ignacio Salafranca Sánchez-Neyra, Ulla Margrethe Sandbæk (for Bastiaan Belder), Jacques Santer, Amalia Sartori, Jürgen Schröder, Elisabeth Schroedter, Ioannis Souladakis, Ursula Stenzel, The Earl of Stockton (for Gerardo Galeote Quecedo), David Sumberg, Ilkka Suominen, Charles Tannock, Maj Britt Theorin (for Linda McAvan), Bob van den Bos, Johan Van Hecke, Paavo Väyrynen, Demetrio Volcic, Karl von Wogau and Matti Wuori.

The opinion of the Committee on Industry, External Trade, Research and Energy is attached; the Committee on Citizens' Freedoms and Rights, Justice and Home Affairs decided on 13 September 2001 not to deliver an opinion.

The report was tabled on 4 March 2002.


MOTION FOR A RESOLUTION

European Parliament resolution on the Commission communication on an EU Strategy towards China: Implementation of the 1998 Communication and Future Steps for a more Effective EU Policy (COM(2001) 265 – C5‑0098/2001 – 2001/2045(COS))

The European Parliament,

–   having regard to the Commission communication to the Council and the European Parliament (COM(2001) 265 – C5‑0098/2001),

–   having regard to the Commission communication of September 2001 entitled 'Europe and Asia: A Strategic Framework for Enhanced Partnerships' (COM(2001) 469),

–   having regard to the Commission's report (of 8 September 2000) to the Council and the European Parliament on the implementation of the aforementioned communication (COM(2000) 552),

–   having regard to its resolution of 12 June 1997 on the Commission communication on a long-term policy for China-Europe Relations (COM(1995) 279)(1),

–   having regard to the Commission communication of March 1998 on 'Building a Comprehensive Partnership with China' (COM(1998) 181),

–   having regard to the Council conclusions of 29 June 1998 endorsing the above communication,

–   having regard to the EU-China Bilateral Agreement of 19 May 2000 paving the way for China's accession to the WTO,

–   having regard to the numerous EU-China cooperation projects, in particular, but not exclusively, in the field of human rights,

–   having regard to its resolution of 20 January 2000 on the human rights situation in China(2),

–   having regard to the tens of thousands of Chinese citizens transported each year by criminal traffickers across Asia and Eastern Europe to the European Union,

–   having regard to its earlier resolutions on China, Hong Kong, Macao, Tibet, East Turkestan (Xinjiang) and Taiwan,

–   having regard to its resolution of 15 December 1992 on the situation in Tibet(3),

–   having regard to the address to the European Parliament by His Holiness the Dalai Lama on 24 October 2001,

–   having regard to its resolution of 5 July 2001 preceding the decision of the International Olympic Committee (IOC) on the site of the 2008 Olympic Games(4),

–   having regard to the Fourth EU-China summit held in Brussels in September 2001,

–   having regard to the exchange of views on EU-China relations held in the European Parliament on 12 September 2001,

–   having regard to the discussions held in China during the visits of the EP's Delegation for Relations with the People's Republic of China in November 2000 and of the Chinese Delegation to the European Parliament in September 2001,

–   having regard to the decision taken at Doha, Qatar in November 2001 on the admittance of China and Chinese Taipei to the WTO,

–   having regard to the 7 January 2002 meeting of the Shanghai Cooperation Organisation (SCO) on an anti-terrorism strategy,

–   having regard to Rule 47(1) of its Rules of Procedure,

–   having regard to the report of the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy and the opinion of the Committee on Industry, External Trade, Research and Energy (A5‑0076/2002),

A.   whereas there is a need for continuing, enhanced cooperation between the EU and China, based on an intense dialogue, taking account of their vast mutual interests,

B.   whereas policy towards China must necessarily take the following three key factors into account: economic considerations, China's role in world politics and regional order and security issues, together with the development of human rights and of the rule of law,

C.   whereas the European Commission has been examining ways of furthering the EU-China partnership, and whereas the European Parliament fully supports the EU's position, in particular as expressed in the EU-China summits, held annually since 1998, which have provided a platform to give added momentum to the EU-China relationship; and whereas separate dialogues and meetings between the relevant officials on both sides on numerous issues of mutual concern take place,

D.   whereas an overall framework for political dialogue between the EU and China was first formalised in 1994 through an exchange of letters,

E.   whereas the thus far successful political, social, economic and cultural experiences of Hong Kong and Macao represent a significant and concrete start to such dialogue and cooperation,

F.   whereas the 16th National Party Congress is due to be held in China in 2002 and significant changes in the country's leadership can be expected,

G.   whereas the Olympic Games to be held in China in 2008 will be a major opportunity for the deepening of cooperation in all fields,

H.   whereas the human rights situation in China still causes serious concern, as the crackdown on fundamental freedoms continues and torture, ill-treatment, arbitrary detention and executions are still used to punish peaceful dissent,

Introduction

1.   Welcomes the Commission communication on an EU Strategy towards China: Implementation of the 1998 Communication and Future Steps for a More Effective EU Policy;

2.   Welcomes the new progress made in developing EU-China relations over the last three years;

3.   Takes note of China's positive response to the communication and urges China to take the necessary concrete steps to demonstrate its willingness to tackle a broad swathe of issues which are of major concern to the EU;

4.   Welcomes China's support in the international fight against terrorism and, in particular, its recent rapprochement with India over mutual security issues, in spite of long-standing territorial disputes and notwithstanding its long-term friendship with Pakistan; but stresses that anti-terrorist measures can never excuse human rights abuses, such as repression of ethnic groups;

5.   Welcomes China's undertaking to assist in the reconstruction of Afghanistan; believes that this project could serve as a specific benchmark for cooperation between China and the EU;

6.   Recalls its resolution of 13 June 2001 on ASEM(5), and in particular as far as ASEM enlargement is concerned; urges the Chinese Government to take a more favourable attitude to the early enlargement of ASEM, in particular as regards India and other countries;

7.   Recognises that the partnership between the EU and China on the basis of equal status and mutual advantage has expanded considerably in recent years; notes that it is necessary, however, in order to consolidate these relations on the basis of partnership, to strengthen and further develop dialogue in the political, economic, scientific and cultural fields;

8.   Notes the need for an intense cultural dialogue between Europe and China; proposes in this context that Member State universities create/expand their departments of Chinese studies and invites the Commission to study the possibility of enlarging the existing programmes, e.g. Tempus, in order to promote projects for reciprocal university exchanges;

9.   Acknowledges that the beginnings of democratic representation at municipal level constitute a step in the right direction towards participative democracy at both regional and national level;

10.   Cannot over-stress the fact that the EU has a profound interest in a stable, prosperous, open China which embraces democracy, free market principles, human rights and the rule of law, and that it must pursue policies which help China further endeavours in this direction;

11.   Notes that the dialogue between the EU and China on the rule of law, civil society and democracy is becoming increasingly intense; this dialogue should be accompanied by public and/or private initiatives and measures such as exchanges of schoolchildren and students, the setting up of contact groups of Members of Parliament and stronger cultural links;

12.   Stresses the importance of the successful experiences of the Hong Kong and Macao regional and special autonomies in widening and deepening cooperation between the EU and China in the political, cultural, economic and social fields;

Trade

13.   Congratulates China on its recent accession to the WTO, and expresses its support for the progress made so far in its economic and social reforms, but stresses that much greater progress on the application of the rule of law in China is essential to the full integration of China into the global market place;

14.   Is fully conscious that WTO accession marks a major development in China's relations with the rest of the world and that it will change both China's existing trading system and China itself; notes that the next few years will test the regime's capacity to adapt to a changing world on its own doorstep, but takes the view that economic progress can only succeed in tandem with political and social progress; expects China to give evidence that it is able to deal satisfactorily with the social and labour problems which will arise as a result of WTO accession; is convinced that in the longer term the EU, the US, Japan and other industrialised countries, working together with China, will have to develop and implement programmes in the rural and disadvantaged areas, outside the booming cities, to combat increasing inequalities and create educational opportunities for the majority of the Chinese population who live there;

15.   Recognises nonetheless that, despite improved economic prospects for many Chinese, this has not alleviated the need for more economic restructuring and a more even geographical spread of economic development to reduce the threat of even higher unemployment and social displacement in the future;

16.   Expresses its concern at the steady rise in the number of industrial disputes since 1998; urges the PRC to authorise the establishment of independent trade unions and to institute at the earliest opportunity a social protection system geared primarily towards the unemployed, whose numbers are set to swell as a result of China’s accession to the WTO;

17.   Notes the claim sometimes made by Community documents and officials that China's accession to the WTO is creating a dynamic economic environment in China and transforming its economy into an export‑driven economy, but also realises that China's potential rests with a vast territory and a population where only the inhabitants of the richest areas located along the coast form a market, both characteristics of a 'continental economy' driven by internal demand, meaning that there is a need for the Chinese authorities to build up efficient internal cohesion policies;

18.   Is aware of the fact that with China's entry to the WTO, WTO rules and procedures will define a new context of economic and political relations of China with the US and EU (and Hong Kong, Macao and Taiwan as well), and China will have to separate business from government, which will imply a serious change in the framing of economic development of China;

19.   Welcomes in this regard the cooperation agreements that the EU has with China in the field of social security, given the high level of unemployment already existing in China, which is likely to grow;

20.   Notes that China and the EU are already major trading partners and welcomes the continued growth in EU-China trade and the rising levels of EU direct investment in China; expects that the implementation by China of its terms of accession will contribute in a major way to reducing barriers to trade and investment, and entail a more balanced trading relationship;

21.   Notes that, while existing programmes such as the EU-China Scholarship 2000 Project Programme and the Junior Managers Project Programme between the EU and China to promote reciprocal exchanges in the field of technology and know-how have achieved some success, they must be stepped up;

22.   Notes that the strengthening of EU-China relations and the expansion of EU-China dialogue across the board render the existing EU-China trade and cooperation agreement largely obsolete, and calls on the Commission to bring forward proposals for an updated partnership agreement, in line with the development of a consistent and comprehensive EU common strategy towards China;

23.   Recognises China's leading role with the G77 countries and calls on the Chinese Government to fulfil this role within the WTO whilst respecting the legitimate economic concerns of neighbouring countries;

24.   Is seriously concerned about the high levels of pollution caused by China's industries and expects China to take serious measures to protect the environment; emphasises that Trade and the Environment is an essential component of the WTO agreement and urges the Chinese Government to play a full and positive role in promoting sustainable development, as required by the WTO agreement, both within China itself and globally; welcomes the general willingness of the Chinese Government to cooperate on environmental protection, and also the wide range of activities by the existing NGO community in this area; therefore calls on the Commission to ensure that sufficient support and know-how relating to environmental protection are channelled in China's direction; calls on the Chinese Government to continue and reinforce its dialogue and cooperation with the EU on global environmental issues, e.g. climate change;

Taiwan

25.   Is convinced that the EU's adherence to the one-China policy is directly linked to its commitment to a peaceful resolution of the dispute through negotiation, dialogue and confidence-building measures without any threat of force, and therefore cannot accept President Jiang Zemin's recent remarks that China reserves the right to use military force in its disputes with Taiwan;

26.   Draws to the attention of both parties the indisputable fact that a peaceful resolution to the Taiwan question is crucial if political and economic stability in the region is to be reinforced and maintained in the medium- to long-term;

27.   Recognises the exemplary nature of the democratic process in Taiwan and takes note of the results of the December 2001 parliamentary elections; stresses that the results should clearly convince Beijing that there is no alternative to talking with President Chen; urges the two parties to engage in talks as soon as possible;

28.   Emphasises that any arrangement between China and Taiwan can only be achieved on a mutually acceptable basis; expresses the view that the future of cross-Straits relations will depend on both sides' willingness to demonstrate flexibility, and on their capacity to be imaginative in proposing steps to resume dialogue; takes the view that, given Taiwan's achievements as regards the establishment of a fully-fledged democratic system, social pluralisation and the rule of law, the will and approval of the 23 million people in Taiwan must be respected and accounted for in the light of a hopefully peaceful solution between the parties;

29.   Deplores the fact that in November 2001 the EU's Member States did not grant visas for President Chen Shui-Bian to visit Europe; urges the Council and its Member States to honour their commitment to the fundamental rights of freedom to travel and issue visas to the President and all high-ranking officials of Taiwan for private visits to the European Union;

30.   Welcomes PRC Vice-Premier Qian Qichen's recent speech on cross-Straits ties and the wish expressed therein that direct mail services, trade, air and shipping links across the Straits be activated as soon as possible in order to promote all types of exchanges and other confidence-building measures;

31.   Notes that Taiwan eased restrictions on direct investment in the PRC in November 2001 and plans to take further liberalisation steps from early 2002, including the introduction of direct trading links; notes, however, that Beijing has yet to respond to the move; urges the PRC to respond favourably, particularly in view of the accession of both China and 'Chinese Taipei' to the WTO and in the interests of improving cross-Straits relations;

Human rights

32.   Notes that China has signed and ratified the UN Covenants on Economic, Social and Cultural Rights and urges China to ratify as well the UN Covenant on Civil and Political Rights without delay;

33.   Endorses the human rights dialogue between the EU and China as a useful tool to engage China on this issue, but recognises that it has yet to lead to many tangible results and remains extremely concerned with the overall situation of human rights in China; consequently instructs its Human Rights Division to draw up an annual report on the development of human rights in China to be discussed by its competent committee, and instructs its competent committee to ensure that the Commission and the Council are properly represented and participate fully in the discussions on these reports;

34.   Urges the Commission to propose at the next EU-China summit an increase in the number of joint ad hoc programmes aiming at fostering democracy and civil society, developing the rule of law and respect for human rights and supporting independent media;

35.   Expresses its indignation at the increasingly high number of executions in China, in particular of public executions, and at the links to the supply of body parts for human transplantation, and demands that the Chinese Government abolish the death penalty, declare a moratorium on the execution of persons already sentenced to death, and accelerate judicial reforms in order to eliminate the use of torture and the violation of human rights in the country; furthermore condemns the 'widespread and systemic use of torture against political dissidents, Tibetan activists, migrant workers, people accused of violating the one-child-per-family policy, and Falun Gong followers', as documented in a February 2001 report from Amnesty International;

36.   Notes with concern the strict rules imposed by the Chinese authorities on media and electronic communication; calls on the Chinese Government to lift the restrictions that limit citizens' access to the Internet;

37.   Calls on the Commission and the Council to ensure that, in all their dealings with the Chinese Government, it cooperates fully with the competent authorities within the EU and also within those countries, notably of the former Soviet Union, which serve as transit routes, on the elimination of illegal migration of Chinese nationals towards the EU, not only to prevent all forms of human trafficking, exploitation and suffering, but also to eradicate criminal activity;

38.   Hopes that the 2008 Olympic Games will be an excellent opportunity for China to take steps forward both at the level of general cooperation and in the field of human rights; calls for a monitoring procedure to be put in place to ensure that China honours its international obligations in the field of human rights in the run-up to this event; draws attention to the importance of preserving Beijing's architectural heritage while large-scale infrastructure projects are carried out ahead of the Olympic Games;

39.   Underlines the demand made in its resolution of 15 December 1992(6) concerning the autonomy of Tibet and invites the Chinese Government to accept the five-point plan of the Dalai Lama as a basis for negotiations on Tibet;

40.   As regards Tibet, is aware of a slight relaxation recently of religious restrictions on lower-level government employees, students and State company workers; however, notes that in both the regions of Xinjiang and Tibet, religious freedom continues to be severely restricted and people suspected of nationalist activities or sympathies are still subject to particularly harsh restrictions; is furthermore extremely preoccupied at the large number of nuns and monks who remain imprisoned and by the ongoing question of religious, political and cultural freedom; draws the attention of the Chinese Government to the importance of protecting the natural environment and the religious and cultural heritage of Tibet; appeals to the Chinese Government to further respect and protect the religious and cultural identity of the people of Tibet;

41.   Welcomes, in this regard, the consistent stand of His Holiness the Dalai Lama as regards realising genuine self-government for Tibet within the People's Republic of China through peaceful negotiations, shares his grave concern at the systematic destruction of the Tibetan environment, traditions, culture and religion, at the ever-worsening political situation of the Tibetan people and at the deteriorating human rights situation in Tibet, and endorses his appeal for urgent international pressure on Beijing, as expressed in his address to the plenary session of the European Parliament of 24 October 2001; urges China, in this connection, to halt immediately the controversial plan of large-scale immigration to Tibet with regard, in particular, to the 20 000 people who are due to move into the Dulan region of Qinghai Province; calls on the Chinese Government to resume direct negotiations with His Holiness the Dalai Lama or his representatives without preconditions, with a view to defining a new, real statute of full autonomy for Tibet, with the only exceptions being foreign and defence policy;

42.   Calls on the Chinese Government fully to recognise and respect fundamental social, cultural and political rights of religious, ethnic and other minorities as well as their cultural specificities, including the freedom of religious practice;

43.   Reiterates its view that greater economic freedom cannot yield lasting benefits without the concomitant fundamental human liberties and rights as laid down in the various UN covenants and other relevant international agreements and conventions, including those covering the protection of the global environment, which China has now signed;

44.   Urges China to respect its obligations as a signatory to the CITES convention and to pay more attention to cruel and inhumane treatment of animals;

45.   Reiterates its call to the Council to appoint an EU Special Representative for Tibetan Affairs so as to contribute effectively to the peaceful resolution of this issue, facilitating the resumption of negotiations and cooperating with the Tibetan Government in exile;

46.   Reiterates its call to the Commission, the Council, the Member States and the international community in general to give serious consideration to the possibility of recognising the Tibetan Government in exile as the legitimate representative of the Tibetan people if the Beijing authorities and the Tibetan Government in exile do not, through negotiations organised under the aegis of the Secretary-General of the United Nations, sign an agreement on a new statute for Tibet;

47.   Instructs its President to forward this resolution to the Council, the Commission, the governments of the Member States, the Government of the People's Republic of China and the Chinese National People's Congress.

(1)OJ C 200, 30.6.1997, p. 158
(2)OJ C 304, 24.10.2000, p. 209
(3)OJ C 21, 25.1.1993, p. 78
(4)Texts Adopted, Item 16
(5)Texts Adopted, Item 11
(6)OJ C 21, 25.1.1993, p. 78


EXPLANATORY STATEMENT

1.   General comments

The deepening of relations between the European Union and China reflects the genuine interests of both parties. Such a deepening is therefore possible and desirable. The context in which it is able to take place has long since been provided by the outcome of many initiatives and documents, the key elements of which your rapporteur has sought to take into account. This setting provides increasingly encouraging prospects, although there are some points on which a genuine convergence of views has not yet been reached.

It appears vital to take account of two recent occurrences: the events of 11 September and the launch of the fight against international terrorism, and China's entry into the WTO. The first leads us to hope that, according to the stance taken by the Chinese authorities, China will play an active part in the international efforts to eradicate the strongholds of terrorism. The second, which was already expected, places us in a new situation which cannot but have a positive effect on international cooperation in general, and on relations between the EU and China.

Alongside these aspects there is a whole range of subjects which have long been under scrutiny: China's role in the Far East, its relations with the ASEM countries and other parts of Asia, the internal political situation, its trade and cultural relations with the EU, the development of the rule of law, respect for human rights, the changes that can be expected with effect from the next National Congress of the Chinese Communist Party, and the running of the Olympic Games in 2008. The European Parliament must foster optimistic hopes of seeing the main issues stemming from the above resolved satisfactorily, although it must be understood that some of these goals will take longer to achieve than others.

Finally, it may be hoped, taking into account the broad thrust of the Commission's most recent communication, which addresses all these problems in a judicious and balanced manner, that it will make a very positive contribution to the development of relations between the EU and China.

2.   Content of the Commission communication

The communication provides a framework for the furthering of EU-China relations: it reiterates the EU's long-term policy objectives as defined in its 1998 communication 'Building a Comprehensive Partnership with China' and the subsequent Council conclusions of 29 June 1998, which stressed the Union's fundamental interest in strengthening relations with China; it sets out recent developments both in the EU and in China; it reports on the implementation of the 1998 policy; and, in order to 'contribute to a comprehensive and forward-looking review by the Union of its short and medium term objectives', it makes proposals on key issues where EU policy could 'usefully be adjusted and/or streamlined or where new elements could be added'(1).

The key suggestions are: engaging China further in the international community through a continued strengthening of political dialogue; supporting China's transition to an open society; integrating China further in the world economy; making better use of EU cooperation programmes with China; raising the EU's profile in China by strengthening all aspects of EU information policy vis-à-vis China.

The document also sets out recent developments in EU-China relations (including annual EU-China summits and numerous agreements with China such as the recently signed EU-China Village Governance Project to promote the development of democratisation), and develops the individual action points more fully. It concludes by restating the obvious, but important, fact that relations with China will be 'a major opportunity and challenge for the EU for years to come'.

3.   Specific points

Space restrictions prevent your rapporteur from commenting in specific detail on all the points raised in the communication; below he highlights issues he considers to be of major importance.

3.1   China's participation in the fight against terrorism

When considering China, it is impossible to ignore its relations with the United States. Relations between the two have in recent years 'roller-coasted' (the US sees China as a rising power to be kept in check; China, as recently as October 2000, identified the US as its principal threat in a defence white paper; it has supported regional groupings which exclude the US, rather than pan-Pacific ones, even setting up its own version of Davos at Boao on Hainan Island, to which no Americans were invited).

The April 2001 US spy plane incident did little to help relations; however, on the 'emollient' side, US Secretary of State Colin Powell has stressed America's adherence to the 'one China' principle, which rules out US recognition of Taiwan. Both sides are now anxious to show that relations are on a positive trajectory, as evidenced by the Bush-Jiang Zemin meeting on the fringes of the October 2001 Shanghai APEC summit. What is of particular significance is China's willingness to participate fully in the international fight against terrorism. In December 2001, China welcomed the Bonn accord on an interim Afghan Government and has pledged to provide necessary assistance 'within its capability'. Your rapporteur finds this a positive development.

3.2    WTO/The political and social consequences

China finally joined the WTO in December 2001. China is in transition, both due to its new WTO commitments and to an internal dynamic (e.g. the implications of social reforms). While the past two decades of liberalisation have improved conditions for many, poverty is still rife. The rapid economic growth now foreseen - which involves the further dismantling of state-owned enterprises and a general opening-up to the outside world - will see an increase in tensions and further, hitherto unimagined, sweeping changes. The capacity of the regime to adapt to this changing world will be severely tested in the coming years, although it appears to be serious about reform.

China's potential is not simply that of an international trading economy but also very much that of a vast continent, with its population of 1.3 bn, an average annual income of US$ 950 per capita and huge disparities in wealth. It now hopes - and needs - to unify its still fragmented, disjointed economy and infrastructure. Communications are improving: internet use, although tiny, is more than doubling every year, and this will eventually help reduce the time needed to modernise the economy.

On the financial side, the Government has bold plans to develop equity markets and to reform state banks. Flotations of large companies e.g. Petrochina, China Mobile, have taken place, preceded by huge restructuring. Hopes in China have foundered before. However, due to its WTO membership, there will be clear ways of measuring progress: China will have to honour its commitments, to continue to separate business from government, to work to develop capital markets, and to extend privatisation.

In late 2000, China's Academy of Social Sciences drew attention to the 'new contradictions and problems' in Chinese society, stating 'If there are no channels for letting off steam, the repressed discontent of individuals could well up into large-scale social instability'. Given its political system, there was no democratic scrutiny which would have identified more clearly potential losers (from WTO membership) and the nature of their losses. The losers had no voice in the ratification process but will find one when their livelihoods are at stake. The run-up to China's hosting of the 2008 Olympic Games will also provide them with a platform.

Political reform is also essential. There are huge divisions, both within the party and outside, over how best to allow participation in politics without causing China to collapse as did the Soviet Union. Few are calling for the overthrow of the Communist Party and the rapid introduction of a western-style democracy. The mainstream view is that change should be gradual and confined within current political structures.

However, the world will be watching China for evidence that it is able to deal satisfactorily with the social and labour fall-out resulting from WTO accession, although it is unlikely that either the current leadership - or any future contenders - will take any politically 'risky' moves between now and the 16th National Party Congress later in 2002.

3.3    Human rights/treatment of minorities

It is ironic that every Chinese constitution since 1954 has guaranteed certain basic political rights to its citizens, but in practice these 'fundamental' rights have generally been ignored/ restricted within the confines of the 'Four Basic Principles' interpreted by Deng Ziao Ping in 1978/79 whereby political rights are guaranteed as long as they do not conflict with 'the socialist road, the people's democratic dictatorship, the leadership of the party and the essence of Marxism-Leninism-Mao's Thought'.

Concern about human rights has been a major theme of EU-China relations, highlighted since the events in Tiananmen Square in 1989. While China's record has improved somewhat, the EU remains actively committed to seeing further improvements and seeks to support China's transition to an open society based on the rule of law. An EU-China human rights dialogue was set up in January 1996 and, after an initial hiatus, several rounds have taken place. The Commission supports the process by providing a human rights cooperation programme and programmes to support the strengthening of the rule of law by setting up training schemes for Chinese lawyers.

The ongoing dialogues appear to cover all issues of concern to the EU such as disregard for fundamental freedoms (e.g. freedom of expression, religion and association, arbitrary detention and re-education through labour, torture, the crackdown on pro-democracy activists, the situation of minorities, and capital punishment).

However, the rapporteur highlights the need for these dialogues to inform all the EU's dealings with China i.e. there must be a linkage between negotiations on, for example, trade and human rights. He stresses, too, that the social, cultural, political rights, and the cultural specificities of all minorities must be fully respected.

3.4    Taiwan

The EU has endorsed the 'one China' principle, as per the 1999 Council conclusions(2). This principle may offer a way of achieving a solution to the Taiwan question. In the first instance, however, only constructive dialogue can lead to anything like a peaceful solution and it is in the interests of both parties to engage in talks without further delay.

4.   Conclusions

Despite some of the major obstacles in the way of democratisation for China - the lack of historical experience with democracy and of a legal tradition, the monopoly of the CCP, widespread poverty - there are factors which appear to favour the onset of a more democratic society: long-term economic reforms have already weakened centralised control over society; the effects of WTO membership; the rapid changes elsewhere in Asia accompanying economic growth have encouraged the rise of an educated middle class. In turn, this new class has demanded - and obtained - democratic reforms.

Economic ties are already binding China to reform and to the rest of the world. Two-way trade between the EU and China has increased more than 20 times since reforms began in 1978: the EU is China's second largest export market and China is the EU's third non-EU trading partner after the US and Japan, and the EU has been the largest foreign investor in China excluding Hong Kong, for the past three years. In addition, the EU-China cooperation budget (supporting China's reform and liberalisation process) amounts to approximately € 60 million per year.

Further constructive cooperation in all areas can only benefit EU-China relations: combating terrorism/illegal migration, tackling environmental concerns such as global warming, helping China strengthen good governance/the rule of law, providing cooperation in human resources/information technology.

There are other, less formal, ties, to consider. Some 50 000 Chinese per year currently study at US universities; while Europe, for linguistic reasons, cannot hope to match this, greater efforts should certainly be made to increase the numbers of Chinese studying in the EU by offering scholarships, and to further cultural links by promoting projects for university exchanges; the Commission should be encouraged to use all the relevant instruments at its disposal to further this aim.

China's ties with the rest of the world are becoming ever more complex to manage but this is surely preferable - and safer - for all than few, or no ties, at all.

(1)COM(2001)265 fin, p. 3
(2)Council declaration on Taiwan of 20.7.1999.


OPINION OF THE COMMITTEE ON INDUSTRY, EXTERNAL TRADE, RESEARCH AND ENERGY

25 October 2001

for the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy

on the report from the Commission to the Council and the European Parliament on the Implementation of the Communication ‘Building a Comprehensive Partnership with China’

(COM(2000) 552 – C5‑0098/2001 – 2001/2045 (COS))

Draftsman: Carlos Westendorp y Cabeza

PROCEDURE

The Committee on Industry, External Trade, Research and Energy appointed Per Gahrton draftsman at its meeting of 27 February 2001.

It considered the draft opinion at its meetings of 28 August,18 September and 15 October 2001.

Prior to taking the final vote, Mr Per Gahrton stated that given the fact that the amendments adopted had changed his initial position on the subject, he thus could not continue as draftsman. The Committee then appointed its chairman, Carlos Westendorp y Cabeza, draftsman.

At the last meeting it adopted the following conclusions by 18 votes to 5with 1 abstention.

The following were present for the vote: Carlos Westendorp y Cabeza, chairman; Nuala Ahern and Peter Michael Mombaur, vice-chairmen; Konstantinos Alyssandrakis, Felipe Camisón Asensio (for Giles Bryan Chichester), Concepció Ferrer, Francesco Fiori (Dominique Vlasto), Christos Folias, Per Gahrton (for Nelly Maes), Neena Gill (for Glyn Ford), Alfred Gomolka (for Werner Langen), Michel Hansenne, Rolf Linkohr, Caroline Lucas, Eryl Margaret McNally, Erika Mann, Elly Plooij-van Gorsel, John Purvis, Mechtild Rothe, Jacques Santer (for Jaime Valdivielso de Cué), Konrad K. Schwaiger, Claude Turmes (for Yves Piétrasanta), W.G. van Velzen, Alejo Vidal-Quadras Roca.

CONCLUSIONS

The Committee on Industry, External Trade, Research and Energy calls on the Committee on Foreign Affairs, Human Rights, Common Security and Defence Policy, as the committee responsible, to incorporate the following points in its motion for a resolution:

1.   Welcomes the new progress made in developing EU-China relations over the last three years.

2.   Expresses its satisfaction with the positive results of the fourth EU-China summit and welcomes the fact that both sides expressed their resolve to expand and deepen further EU-China cooperation in all areas on the basis of equality and mutual benefit.

3.   Recognises that the partnership between the EU and China on the basis of equal status and mutual advantage has expanded considerably in recent years. It is necessary, however, in order to consolidate these relations on the basis of partnership to strengthen and further develop dialogue in the political, economic, scientific and cultural fields.

4.   Notes that the dialogue between the EU and China on the rule of law, civil society and democracy is becoming increasingly intense. This dialogue should be accompanied by public and/or private initiatives and measures such as exchanges of school children and students, the setting up of contact groups of members of Parliament and stronger cultural links.

5.   Urges both trading partners to take measures to boost the volume of trade between the EU and China. The partners must create the necessary basic conditions for that purpose, including improved market access and legal certainty for direct investment. Great importance should be attached, accordingly, to consolidating the requisite legal, economic and social conditions.

6.   Notes that, while existing programmes such as the EU-China Scholarship 2000 Project Programme and the Junior Managers Project Programme between the EU and China to promote reciprocal exchanges in the field of technology and know-how have achieved some success, they must be stepped up.

7.   Supports China's imminent accession to the WTO. However, the EU attaches particular importance to China not only bringing its legislative, regulatory and administrative structures into line with WTO standards, but also improving social conditions in the field of employment relations. To that end, there should be dialogue between the EU and China at all levels. Notes that the European Parliament has no say in connection with China's entry into the WTO system. Given the resulting democratic deficit and the economic implications of China's accession to the WTO system for the whole of Europe and the world, that is a shortcoming which the Treaty of Nice did not remedy, and which it will be essential to remedy by means of future changes to the Treaty.

8.   Points to the fact that bilateral relations between the EU and China since the enforcement of the communication on ‘Building a comprehensive partnership with China’ have improved substantially and the prospect of China's accession to the WTO has attracted the interest of the EU business community.

9.   Notes the claim sometimes made by Community documents and officials that China’s imminent accession to the WTO has created a dynamic economic environment in China and transformed its economy into an export‑driven economy, but also realises that China’s potential rests with a vast territory and a population where only the inhabitants of the richest areas located along the coast form a market, both characteristics of a ‘continental economy’ driven by internal demand. This means there is a need for the Chinese authorities to build up efficient internal cohesion policies.

11.   Is aware of the fact that once China joins the WTO, the WTO rules and procedures would define a new context of economic and political relations of China with the US and EU (and Hong Kong, Macao and Taiwan as well), and China will have to separate business from government, which would imply a serious change in the framing of economic development of China.12.   Welcomes in this regard the cooperation agreements that the EU has with China in the field of social security given the high level of unemployment already existing is China, which is likely to grow.

13.   Considers that China (and Taiwan as well) should be permitted to attend the 4th Ministerial meeting of the WTO in Qatar in November pending their accession and expresses the hopes that in the future they become reliable partners within the WTO.

14.   Recognises that China within the WTO will mean a dramatic change, as well as a huge challenge, for its 1.3 billion citizens and a complete new structure in at least three fields: capital markets, privatisation of industry and sector-by-sector development – such as energy, research and development and technology-induced services.

15.   Expects to be asked for an opinion on the proposal to extend the Euratom Loan agreement to China and considers it of a very high strategic interest for Europe to be the preferential partner of China in its efforts to cope with its present and future needs in the energy sector.

16.   Welcomes China’s participation in the Union’s research activities on the basis of the existing scientific and technical cooperation agreement, but calls on China to exercise prudence in relation to the applications of biotechnology, taking account of the precautionary principle as it is understood by its European partners.

Last updated: 1 October 2002Legal notice