AFTER THE PANDEMIC: CHINA-EUROPE RELATIONS

AFTER THE PANDEMIC: CHINA-EUROPE RELATIONS

UK featured in the discussions principally in relation to Huawei. USA also mentioned

Very insightful speech and discussion on 15 July with:
he Chinese Ambassador to the UK, His Excellency Mr Liu Xiaoming
Chairman and Co-Founder of the Official Monetary and Financial Institutions Forum [OMFIF] Mr David Marsh; and
Director of The Centre for European Reform [CER] Mr Charles Grant

The session was made up of 3 parts:
1️ Speech from Chinese Ambassador
2️ Short talk by Director of CER
3️ Question and Answer Session

Saroop Rooprai, Senior Advisor at Shanghai London Corporate Finance [SLCF] attended the Live Stream and picked up the following salient points

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PART 1️ CHINESE AMBASSADOR

·020 is the 45th year of China-Europe Diplomatic Relationships
·Over this period there have been clear tangible benefits for both sides, including World peace and prosperity
·More recently of course the Pandemic has caused a Global crisis and
·impacted c210 countries housing 7bn people
·caused over 13m infections and over 560k deaths
·highlighted a deficiency in health provision and global cooperation
● Instigated an unprecedented likely global contraction for 2020 of around 5%
● The biggest Economy to be hit will almost certainly be Europe’s
● The Pandemic will also cause a severe Global Recession
● there will inevitably be some adverse strains to Global Collaboration & Unity
● China’s is strongly committed to Solidarity & Cooperation, which will be much more cohesive & hence effective than pointing fingers
● Partly related, China has already committed US$2bn in World Aid over the next 2 years
● The China-Europe relationship is incredibly significant to both parties
○ although both Blocs cover 10% of the Global Land Area, they include 25% of the Global Population & more significantly 33% of the Global Economy
○ Each Bloc is the 2nd largest Trading Partner of the other
● Key current challenges from Pandemic:
○ Need for Countries & Blocs to respect each other
○ In relation, need to avoid interference with each others’ internal affairs
○ NB China strongly rejects external interference (as almost any country will)
● Hong Kong-China Internal Affairs: China resents ‘external interference & inappropriate comments’ from a few [Western] Leaders
● It is wrong and unhelpful to view China as a threat
● China strongly endeavours to have Harmonious Relations with other Nations & Blocs
● Hence the China-Europe relationship should be Collaborative not a strive for dominance
● Europe has the great and perhaps enviable facet of being United in Diversity
● Frustrations that several Nations / Blocs view China with suspicion whereas China’s strong objective is for friendly Collaboration

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PART 2️ CER DIRECTOR - CHARLES GRANT

● North America: To all intensive purposes USA has handled the Covid19 Pandemic incredibly badly
● China has naturally suffered a degree of backlash Globally from the Pandemic
● However internally China has handled the Pandemic much better than America
● In particular China contained the spread of the Virus, the fatalities and hence the Economic impact
● State of EU-China Relationship: currently strained
● Some feeling within the EU that China is relatively indifferent to its relationship with the EU
● European Nations have concerns about over dependency on China for Pharmaceuticals and PPE
● Some concern that unfair practices of State Aid being offered allowing Chinese entities to buying into European businesses
● China appears to have used the Covid crisis, for reasons he doesn’t know, to assert their own Global Standing
● Coronavirus has highlighted challenges of Global Supply Chains especially when there is severe multinational demand
● Some feeling within the EU of Chinese Diplomats promising but not actually delivering
● Resentment about recent Cyber Attacks against various EU Countries
● Historically China’s strongest relationship within Europe has principally been with Germany
● Pending key challenge Re UK’s position on Huawei
● US Election in November: Strong expectation Trump will loose the Election

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PART 3️ Q&A - SALIENT / NOTABLE POINTS IN RESPONSE TO QUESTIONS RAISED

● GOOD RELATIONSHIPS: China wants such with all counties including UK, Europe, USA
● HUAWEI Decisions / Directions: Viewed as undermining mutual trust between countries & individuals.  China sees as disappointing & disheartening
● HUAWEI: created 28,000 Jobs over ~20yrs in UK
● HUAWEI: Decommissioning - will be a significant cost to UK of removing IP & Hardware
● HUAWEI: Repercussions - other Chinese Companies already having or wanting UK presence will be closely monitoring the way Huawei is treated
● CLIMATE CHANGE / Paris Agreement: China is firmly committed to work together
● GOLDEN ERA UK-CHINA: So China v disappointed re UK’s announcement on 14 July Re Huawei
● HUAWEI Decision will adversely affect UK-China Relations
● WTO RULES: China-Europe Trade - China is fully committed to follow as agreed
● SERVICE SECTOR Trade with China [as opposed to principal Goods Trade]:’anticipate changes to opening up of Chinese Market
● CHINA-AFRICA: China has helped Africa significantly Re Pandemic & is committed to good relations
● USA’s STANCE ON CHINA: China strongly resents USA’s stance.
● USA-CHINA: China’s objective is firmly for a collaborative relationship
● USA RHETORIC: Repeated references [by Trump] to ‘China Virus‘, ‘We want to get rid of this mess that China sent us’!! Shocking, irresponsible & divisive
● CHINESE STUDENTS IN UK: continued welcome in UK is very important
● HERD MENTALITY: China frustrated by repeated references to negativity towards China in relations to BLOCS; when in reality they can only speak about their own country
● SOUTH CHINA SEA/OIL: 60% of imported oil into China is from South China Sea.  Follows that China committed to strong relationships
● EXTERNAL PERCEPTIONS OF CHINA: China frustrated by rhetoric of being Aggressive or Interfering.  Reality is very much friendly & collaborative
● UK/USA PERCEPTION: Chinese frustrated UK appears to act like football kicked by USA; a spare part accessory of USA
● PERSONAL NOTE: Chinese Ambassador to UK has served for 10 years so far & well known.  Chinese President will ultimately decide whether this tenure is extended