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Transcript of Ambassador Zhang Ming's Exclusive Interview with the Financial Times
2019-01-28 19:19

On 22 January, 2019, Ambassador Zhang Ming, Head of the Chinese Mission to the EU sat down with Alex Barker, Brussels Bureau Chief of the Financial Times (FT), and Michael Peel, FT’s European diplomatic correspondent, for an exclusive interview. The following is the transcript (slightly edited for clarity):

FT: How do you view the state of China-EU relations? How do you describe them?

Zhang Ming: Generally speaking, I must say that China-EU relations are in good shape and are getting better and better. I arrived in Brussels in October 2017. I am lucky enough that in the past one year and four months, our bilateral relations have been going up. Last July in particular, we had a successful summit in Beijing with a joint statement adopted. In the second half of last year, we had very frequent exchanges in different circles. Several EU commissioners and many MEPs visited China. Many Chinese delegations came to Brussels. Between China and the EU, we have over 70 exchanges mechanisms at different levels and in different areas. We keep communication and dialogue to promote bilateral relations. So far so good.

FT: Do you think that Donald Trump has given an impetus into China-EU relations? Are you closer as a result of the political changes in America?

Zhang Ming: Bilateral relationship is a matter of two sides. I don’t think that a third party can play such a significant role. Both China and the EU have the intention and sincerity to strengthen our cooperation in economy, trade, environmental protection, climate change, regional and international issues, and in maintaining multilateralism and resisting unilateralism and protectionism.

FT: In many areas, China-EU relations have not necessarily reached their full potential. There are areas of tensions as well. Some of the areas of tensions are similar to those with the US. How do you see it?

Zhang Ming: China-EU cooperation has reached a high level and has a big size. Still, we have a huge potential. We must work together to bring out the full potential. We must admit that China and the EU have differences, like in all other partnerships. In my view, some differences relate to practical cooperation, like market access, transfer of technology, level-playing field, etc. For these complaints, we are eager to listen to what others have to say to find out what we can and are supposed to do to improve ourselves.

In the past 40 years of reform and opening-up, China has transitioned from the planned economy to market economy. At the early stage of reform and opening-up, we might not have much idea what market access and level-playing field are all about. The transition has been gradual yet firm. The process has been difficult and complex, yet we are taking solid steps forward.

Compared with 40, 30, 20 or even 10 years ago, we have made a big difference in expanding market access and IPR protection. We are making significant progress in this regard. I have some European business friends working in China whose observation is pertinent. They said to me that China is a good learner. The transition toward market economy has been rather fast. China has made a good policy of reform and opening-up. But the policy implementation in some areas might be a bit problematic. I agree. The Chinese leadership and government have made it abundantly clear on many occasions that China will go further in reform and opening-up. We will develop market economy in greater depth.

In this process, China is quite open to constructive suggestions from our partners. Even though the criticism is sometimes harsh, we are open to that, as we believe it will help us do a better job. I often reassure my European friends by saying that their desire is in line with the general direction of reform and opening-up in China. We hope to get more confidence and patience from our European friends. For confidence, I mean that the direction of reform and opening-up is set and clear. For patience, if I may compare China to a big lorry, we must drive it with great caution to make sure that the lorry could move in the right direction and in a safe and sound manner. Otherwise, there might be an accident, which is bad not only for China but for the whole world as well. As a European friend of mine said, direction is more important than speed.

FT: Could you give an update on the investment agreement? Is there any timescale for the reaching of such agreement?

Zhang Ming: The BIT talks is a priority in China-EU relations. Both sides have put in a great deal of effort. Both sides are pushing the talks in good faith. Last year, the two sides exchanged the market access offers. That marked a big progress and brought the talks into a new phase. The talks are still going on. Last year, we had three rounds of formal talks. This year, we hope to make further progress. To conclude the agreement requires both sides to work together in the same spirit. This is a process of making compromise. We hope that our European friends can work together with us.

FT: What compromises are you looking for from the European side?

Zhang Ming: China recognizes the commitment of the European side to trade and investment liberalization and facilitation. We hope that our European friends would not move in the opposite direction, but continue to move in the right way.

Take the FDI screening legislation. Of course, the EU has the right to make such legislation. But we hope that the final outcome would be in line with the spirit of free trade and investment facilitation. We don’t hope to see a legislation that is targeted at a specific country. Otherwise, it would be discriminatory.

Back to the BIT talks. Usually, the negotiating parties tend to set an ultimate goal. Reaching the goal takes quite some time. We could take a more flexible approach by setting phase-based targets. We could have some early harvests and get something done first, which, I believe, would be followed by more to come.

FT: Are you worried that the current FDI screening proposal risks being discriminatory and being targeted at China?

Zhang Ming: That’s not my personal view. There is a lot of media coverage in that direction. That may get some Chinese investors worried about the potential trend. If that becomes a reality, it would not be a good thing to bilateral cooperation.

FT: How would China respond if it felt that this measure was discriminatory against China?

Zhang Ming: As I said earlier, we have many mechanisms for communication between China and the EU. If the final outcome turns out to be discriminatory, we would first resort to these mechanisms to seek solutions through consultation.

Let me give you more examples. Many media reports we are reading now are about the so-called forced transfer of technology. We should also discuss the issue of forced non-transfer of technology.

Furthermore, the EU has yet to fully finish its work to fulfill its obligations under Article 15 of China’s WTO accession protocol. It has yet to abandon the analogue-country practice in anti-dumping investigation. The EU is still having high-tech export control and arms embargo against China. All these are discriminatory in nature.

We view the EU as our partner, and we are ready to discuss these issues through the mechanisms we have. If we fail to address them through bilateral channels, we still have multilateral mechanisms. So my point is that China and the EU both uphold the spirit of multilateralism. We both want to resolve the issues through communication instead of resorting to unilateral actions.

FT: Do you mean that if the problems are not resolved bilaterally, China would take the EU to the WTO or other international organizations? How damaging is it to the relationship if these measures you say are discriminatory are not abolished?

Zhang Ming: It is an interesting question. You seem to know something about Chinese culture. Traditionally, two friends do their best to avoid lawsuits. If they go to the court and make their disputes open, that would be hurtful to their relationship. But under the conditions of market economy, we believe that the multilateral system, like arbitration, could be a helpful way to resolve disputes. Of course, Chinese people prefer face-saving options. So we would seek bilateral communication first.

FT: You mentioned the arms embargo. It has been in place for almost 30 years. Is it anything more than symbolic? Does China really have an interest in buying arms from the EU? Or is this just about principles?

Zhang Ming: China’s interest is about fair play. We want fairness, justice and free trade. We care most about principles, not buying and selling arms.

FT: Of course the EU has its own complaints about some of China’s behaviour, as you know, like on trade, but also on the 16+1 initiative which some people in Brussels and some capitals see as an attempt by China to divide the EU. This is something that is quite important. Is China trying to use the 16+1 to divide EU to find a more manageable sub-regional group to deal with?

Zhang Ming: In the past six years since its inception, this cooperation mechanism has made good progress, and it has been well received by the sixteen central and eastern European countries.

We believe that cooperation is mutually beneficial by nature. This is not only a good thing for the sixteen and the one, but also contributes to the balanced development of Europe as a whole. Eventually, that will be conducive to the EU integration process. So this cooperation mechanism, initiated by the sixteen CEE countries and China, is well intentioned. It is not geopolitically driven at all.

To divide Europe is not in the interest of China. Actually from day one of China-EU diplomatic relations over forty years ago, we have long commitment to the policy of supporting European integration. China has never changed such a position, whether when the European integration process was in a good time or met headwinds. You can have a check for our performance in this regard in the past forty years. The reason is simple. The European integration is conducive to a multi-polar world. A prosperous, united, and strong Europe is in the interest of China. A strong euro is also in the interest of china.

FT: How damaging do you think is Brexit to the European Union?

Zhang Ming: Well, by Chinese tradition, we do not want to see the separation of any couple. Chinese people prefer to see getting together than getting separated. We always believe that cooperation stands to benefit all. And confrontation may lead to a lose-lose situation. European people have the wisdom to handle Brexit well so as to avoid a lose-lose situation. This is what China wants to see.

If Brexit is a result that cannot be changed, then we hope that the EU and the UK can handle this process in an orderly fashion, so as to minimize the impact on the British, European, and the global economy.

FT: Are you now more worried about a Brexit without a deal?

Zhang Ming: I think it's only natural for anyone to have some concerns in this regard, whether they are inside the EU or outside this region. This issue, if mishandled, might have some impact on the global economy. Both the UK and the EU are China’s partners. So that's why we hope that Brexit can be dealt with in a prudent and sound way so as not to affect China-EU and China-UK cooperation.

FT: A diplomat here who once worked in China said there are some parallels between the Brexit negotiations and how the EU deals with other countries in the world. Sometimes Britain has had a softer message from European capitals than from the EU institutions in Brussels. Have you taken any lessons from how this negotiation has played out, how to deal with the EU?

Zhang Ming: Well, in the past one year and more, I have gained some experience in engaging with the EU institutions. The biggest thing I have learned is that it’s important to engage with the institutions with great sincerity. We have shared interests, and we also have differences sometimes. But the shared interests far outweigh the differences we have. So whether in terms of promoting our shared interests or managing our differences, sincerity always holds the key and that really works.

FT: This is linked in part to the investment screening. You’ve seen concern about Chinese business inside the EU going into many other areas of EU policymaking, even in areas like competition policy now, mergers between European companies are being seen through the prism of Chinese competition in the future. Is this a concern for you, or do you think this is a natural thing for the EU to take into account?

Zhang Ming: As you referred to the concerns about the investment screening, actually I have communicated sufficiently with European friends about that. I emphasized that it is important to abide by the multilateral spirit. As for the European decisions on certain M&A cases, what I can do is to observe.

FT: On the one hand you are saying that in the political sense, integration is good presumably because it means a stable, multi-polar world. But for example when you have a case like the Siemens-Alstom merger, that is not good for China because that is something to compete with China and to prevent the CRRC from expanding in the EU. This must be a development that is worrying you?

Zhang Ming: Actually I have no worries in this regard. I just described to you how China has transitioned from the planned economy to market economy in the past 40 years. In this process we have learned a lot from our European partners, like the laws and principles governing market economy. In a market economy, we have cooperation and we also have competition. So we do not reject competition. Because this process may propel all the participants to improve themselves, eventually leading to an all-win situation. We do not fear competition.

Our world provides a very big global market. There is not simply one single player like Alstom, Siemens or the CRRC. We need to cooperate together and compete together so as to provide better services to the whole world.

FT: Do you envisage the CRRC expanding further in the EU. Is rail in Europe an industrial priority for China?

Zhang Ming: Why not?

FT: How big presence do you expect the CRRC to have in 5 or 10 years time?

Zhang Ming: This is a process that is driven by market forces. It’s not something I can forecast.

FT: On the subject of infrastructure, clearly several countries particularly in Central and Eastern Europe have done a lot of infrastructure projects with Chinese companies. We spoke about 16+1 earlier. One developing theme is that some members in that group are not so happy about either the cost or quality of some Chinese projects that have been done. Poland is in the most obvious example in this. We’ve heard rumors that it may leave the group because of this. Obviously this reflects some of the wider issues that China has with the Belt and Road outside Europe. Is this something that worries you: that there is now a backlash in Europe against the finance and infrastructure projects that China has been doing a lot in the Europe over the past 10 years?

Zhang Ming: Personally I’m optimistic about infrastructure project cooperation between Chinese companies and their global partners, either in the framework of 16+1 or the Belt and Road Initiative. Because I know very well that Chinese companies usually have very good competence in this regard. I don’t know whether you have been to China or not. As far as I know, many foreigners in China are deeply impressed by the infrastructure in China. I still remember that we built the first highway in the middle of the 1980s. After that in a short span of 30 years, we now have a nation-wide network of highways. The construction is very fast and of high quality. We have a railway network of 100,000 km, of which 30,000 km are high-speed railway. The length is No.1 in the world, so is the speed.

I worked in Africa for some years. The good development of China-Africa cooperation is partly about infrastructure. Some African capitals might be just a few hundred kilometers away, but sometimes you have to fly to Paris or London to make transfer and fly back. But with the cooperation between China and Africa, this situation has been greatly improved. That gives a boost to the flow of personnel, information and capital, and that gives a big impetus to Africa’s development.

FT: So why then do you think we hear these complaints from Poland and other countries?

Zhang Ming: I’m not aware of the case you referred to. That might be an individual case, and individual cases do not represent the whole picture.

FT: Let’s turn to security. One of the issues that have been rising onto the agenda is the role of Chinese technology companies, including Huawei, in the EU. There is clearly concern among diplomats in some countries about its security implications, both at the bilateral level and the bloc’s level. We saw the recent arrest in Poland and the call for broader EU actions. Does China think these concerns are fair? Does China worry that these trends will undermine the China-EU relations? And how will China respond to the EU’s concerns on this?

Zhang Ming: First of all, I want to thank you for your interest in Huawei. This is an important issue. As a government official, I would not speak for a specific enterprise. You may have noticed the interview by the founder of Huawei, Mr. Ren Zhengfei. It’s a very good interview, very frank and open. I noticed that the FT covered the interview.

I would rather talk more about the trends as indicated behind the case of Huawei. As we discussed for some times, in today’s world, we are seeing the rising trends of unilateralism and protectionism. That has brought a chill into global economy. Now someone is sparing no effort to fabricate a security story of Huawei. However, as a matter of fact, I do not think that this story has anything to do with security, and the so-called security concerns are not supported by any fact or evidence. Rather I believe that it is an act of protectionism with a political sense. That indicates a pushback against globalization. Such a move is trying to turn a business issue into a political one or even a security one indiscriminately, and that completely violates the principles of free and fair competition.

Unlike the sculpture on this table, which is obviously a Chinese technology, the 5G technology is a product of global open cooperation. It is an outcome of high-tech innovation by the whole international community. It is a good thing for the whole world. The global industrial, supply and value chains are highly intertwined in this area and cannot be artificially and deliberately cut by anyone. Doing so would be very irresponsible, as that may be hurtful to the rules-based global order and multilateral economic and scientific cooperation. Therefore, that merits vigilance of all people.

Cyber-security is a shared concern of all mankind, and is also an important component of cyber-technology. Cyber-security can only be jointly preserved in an open and transparent manner and on the basis of trust. It is not helpful to make slandering, discrimination, pressuring, coercion or speculation against anyone else. China and the EU are comprehensive strategic partners. Both sides act in the spirit of multilateralism and preserve the rules-based global order. Actually the EU in itself is a product of multilateralism. So I believe the EU knows clearly where its own interests lie in this issue. We hope that our EU partner will take a rational and objective approach and abide by the principles of openness, fair play and free competition. We hope that the EU will continue to provide a level-playing field for the economic and scientific cooperation and avoid any exclusionary and discriminatory arrangements. As I said, the EU and China are partners to each other. What we need is globalization instead of tribalization.

FT: If what the EU does is considered as discriminatory by the Chinese side, how will China react?

Zhang Ming: We will make the best of the existing communication channels to talk about this issue. The key point is that we believe that the EU values multilateralism and the rules-based global order.

FT: You see it as a protectionist measure, to protect European companies that are less technologically advanced?

Zhang Ming: It could be a measure to protect from foreign competition. But anyway, I don’t think that protectionism is a good way out. Cooperation is.

FT: Could you be a little bit more specific about where you see the trends going and what actions would really concern you in this area? What steps would you see as discriminatory ?

Zhang Ming: We do not want to see the principles of market economy and the multilateral system being undermined, which will have an impact on not only China, but also the EU, the US, Asia, Africa and everyone in the world.

FT: Can you see any justification in some of the security concerns that the Europeans have raised? Are there arguments that they made that are sound, or do you think any controls in these areas are unjustified?

Zhang Ming: As I said earlier, issues like cyber-security is a shared concern for everyone in the world, not only specifically to Europeans, but also to Chinese, Asians, Africans and all people around the world. But to resolve the concerns, we need to act in an open, cooperative, trustful and transparent way rather than through discriminatory actions or groundless accusations.

FT: On a wider question of security, a group linked to the PLA is allegedly behind a recently disclosed hack of EU diplomatic data. Don’t incidents like this undermine the trust that you are trying to build with the EU?

Zhang Ming: What you mentioned is a good example of the fabricated stories of security. As our great friend said: fake news. (Journalists laugh.)

FT: It’s fake in what sense?

Zhang Ming: It’s simply a story.

FT: You are saying that they are not linked to the PLA?

Zhang Ming: They are making such stories just as a political maneuver. There’s not any proof or evidence.

FT: What about the arrest in Belgium and the extradition of a Chinese citizen, who was accused by the US of being Chinese Ministry of state of security operative? What’s China’s response to this allegation? Is China comfortable with the role of the Belgian authorities in facilitating the extradition of this man?

Zhang Ming: We have already expressed concerns about this case with the Belgium authorities and performed the duty of consular protection. We hope that the legitimate rights and interests of the person in question could be protected and the case should be handled through legal means.

FT: I understand that it might be a bilateral issue, but isn’t that potentially a multilateral issue as well? It’s quite an unusual case, an alleged spy accused by the US arrested in the EU. Is it the first time that has ever happened? Is there any concern in Beijing that this might be a start of a trend? We see what happened in Canada, the arrest of the Huawei executive. Is there a concern from China that the US could do this again in the EU, and use the EU to get hold of Chinese citizens it accused of doing wrong?

Zhang Ming: Judiciary and politics should not be mixed up.

FT: European elections are coming up. There are a lot of focuses in Europe and concerns about rising populist parties that want more disintegration. Is that a concern of China? Is that political trend working in China’s interest?

Zhang Ming: China is of course closely following what is happening in Europe. But after all, the developments here are internal affairs of Europe, China respects the European way of dealing with the issue and we will not interfere. We hope to see peace and development in Europe and see European people living a good life.

FT: But clearly more protectionism in European politics is something that China would want to avoid.

Zhang Ming: Indeed protectionism and unilateralism are rising around the world and even going rampant in some parts of the world. Both China and the EU are important forces for resisting protectionism and unilateralism. We both believe in multilateralism and the rule-based global order. We will step up cooperation in this regard.

FT: That leads neatly into the question which I have about the Iran nuclear deal. There are attempts going on to keep it alive among China, Russia and European signatories. How close your contacts have been with the Europeans on this? What do you think of the efforts? Would you see Chinese companies or even Chinese government organizations joining the special purpose vehicle which the Europeans say they will launch soon?

Zhang Ming: For years China and the EU have maintained close cooperation regarding the JCPOA. The agreement is an important outcome of multilateral diplomacy. It is a good example of settling regional hotspot issues and preserving regional peace through political and diplomatic means. We commend the important role of the EU in this regard. This agreement was endorsed by the UN Security Council. It should be implemented in a thorough and earnest way. It helps preserve the global non-proliferation regime and the Middle East peace. And it is in the interest of the international community.

After the withdrawal of the United States and the resumption of unilateral sanctions on Iran, the remaining signatories including China and the EU still act in a responsible manner to deliver on the JCPOA and maintain normal business ties with Iran. I know that the EU has made a great deal of efforts in this connection. That includes the SPV that you just mentioned. China applauds the efforts made by the EU and we hope to continue to work with the EU to fulfill due responsibilities and obligations to keep the JCPOA alive. As for the SPV, I believe Chinese companies will be interested.

FT: I know you have a great deal of Middle East experience. Are you worried at all that the JCPOA could be threatened by the rising skepticism in many European countries about Iran’s behavior in other fields? There is a rising anger about what European alleged to be assassination plots orchestrated by Iran and long-standing grievances over Iran’s missile programs and role in regional conflicts. Are you concerned that this might gradually unravel the JCPOA?

Zhang Ming: For years we have seen many hotspot issues in the Middle East. It is fair to say that without a peaceful Middle East, there would not be a stable world. That is exactly why China and the EU have the shared commitment to the peace process in the Middle East. That explains why we made great efforts to conclude the JCPOA. It is our firm belief that regional hotspot issues could only be properly settled through cooperative, political and diplomatic means. It contributes to regional peace and global stability. This is what China and the EU see eye to eye each other and we will stick to such commitment.

FT: Do you support then the growing EU threat of action on Iran’s behaviour outside of the JCPOA? We’ve already seen sanctions this year over the alleged murder plots in Europe. There may be sanctions on missiles and other things later. Do you think this is the right road to go down on this?

Zhang Ming: The right way to go down is the continued political and diplomatic efforts. It is important to preserve the results of multilateral diplomacy. Only in this way can we have peace and stability.

FT: Does the EU approach achieve that?

Zhang Ming: I am confident that the EU believes in multilateralism and commits to political and diplomatic approaches.

FT: Another point of tension between the EU and China for a long time has been human rights. The EU has criticized what it calls the deteriorating human rights situation in Xinjiang. It says it expects China to respect freedom of religion, freedom of expression, and the rights of ethnic minorities. How does China respond to this?

Zhang Ming: The Chinese government is committed to protection and promotion of human rights. I’m proud to say that China is actually doing a good job in protecting human rights. In the past 40 years of reform and opening-up, we have successfully lifted more than 700 million people out of poverty. In the field of human rights, that could be quite a feat. Our efforts contribute to poverty reduction in other developing countries and the broader international community.

It’s not easy for China to deliver education, medical, elderly and housing services to the 1.4 billion Chinese people. Without a strong sense of responsibility to protect and promote human rights, it is impossible to finish such a daunting task. China is a multi-ethnic country. According to China’s Constitution, all ethnicities are equal. The Chinese government attaches great importance to the development of all ethnicities and regions. We have done a lot of work to help preserve the indigenous languages and cultures of ethnic minorities. Xinjing is just a case in point.

FT: Are you saying the EU criticism is unfair?

Zhang Ming: They either have little knowledge of the actual situation, or try to turn a blind eye to what China has achieved.

FT: There have been more and more reports since that statement was issued in October, alleging very serious abuses in that region. This is something that the EU diplomats must be raising with you more and more. This has emerged as something of great concern in Brussels and among European member states, hasn’t it?

Zhang Ming: There are many media hypes about the situation in Xinjiang. I know that some EU officials have been to Xinjiang recently to see what is happening in the vocational education and training institutions with their own eyes. Xinjiang is the westernmost province in China, home to many ethnic minorities. As you are aware, in China we still have a development gap between different regions. Especially in some remote regions inhabited by ethnic minorities, there is still a lot of room for improvement. One reason is that some young people have been radicalized. They don’t go to school, they fail to land a job, and they have been seriously affected by extremist ideologies. That could have an impact on China’s stability.

Over the years, there have been several terrorist attacks on the Chinese soil, like what happened in Paris, Brussels and London. So China is also a victim of terrorist attacks. The Chinese government is resolute in fighting terrorism. In addressing terrorism, we address not only the symptoms but also the root causes. We help these young people gain skills and knowledge, find jobs to support their families, so that they will stay clear of the impact of terrorist ideas as quickly as possible.

FT: You said some EU officials had visited the region and seen the re-education camps with their own eyes. Who were you referring to there?

Zhang Ming: From the EEAS.

FT: One final question. We talked a lot about multilateralism and its importance. How surprised are you to hear British politicians making the argument that Britain can leave a multilateral system like the EU, and can prosper and succeed on its own?

Zhang Ming: Wait and see.

FT: It must be unusual to watch this process from here unfold in Britain.

Zhang Ming: Maybe. I have colleagues in London observing this. Anyway, according to Chinese tradition, we don’t encourage any couple to separate. The separation will hurt both. But it’s your internal affair and we cannot interfere. If you insist on separation, ok, make it smoothly, and less influence to yourselves and to the world.

FT: Thank you very much!

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