On March 30, 2023, Ambassador Fu Cong, Head of the Chinese Mission to the EU, had an exclusive interview with Sam Fleming, Brussels Bureau Chief of the Financial Times (FT), and his colleagues, Henry Foy and Andy Bounds. The transcript of the interview is as follows:

FT: It’s very good to meet you. Thank you. I guess I’ll start. So you’ve been here for about three months?

Fu Cong: Four months. 

FT: Given your experience so far in Brussels, it would be helpful if you could spell out how you see the trajectory of EU-China relations over the past not only four months but the past year also.

Fu Cong: Thank you. Indeed, I’ve been here for four months now, and during these four months, I’ve been doing a lot of out-reaching. I’ve spoken to politicians, to professionals in the EU institution, and also to diplomats in the Permanent Missions of the member states, and also to academics and the business community. 

I have to say that my impression is that we have a very good foundation for Sino-EU relations. We also have a lot of political support for that. At the same time, we must be frank that we have met some resistance and difficulties. But on the whole, I’m quite optimistic that China-EU relations will develop in a positive direction, as you can see that a host of European leaders are visiting Beijing. We have the Prime Minister of Spain and the President of France, and President von der Leyen is also going. Before that, we had President Michel and Chancellor of Germany. So all these actually demonstrate that there is a strong wish on the part of the European countries to develop good relations with China. 

On our part, we have always said that China and the EU are two major forces for world peace and two big markets for the global economy. In our mind, at a time when the world is going through turmoil and the global economy is also going through a quite gloomy period because of the pandemic and many other factors, it is all the more important that China and the EU should join hands in dealing with global issues and in reviving the global economy. So in a word, I’m quite optimistic about the future of our relationship.

FT: We’ve obviously seen the US, in particular, taking a much tougher line in its relations with China, and vice versa. Do you see the EU is following a similar course in its policy to that of the US, and do you sense that the EU is influenced by this?

Fu Cong: Yes. In our relations between China and the EU, there is a very important third party, and that is the United States. We all know that. There is no secret that the United States is exerting a lot of pressure on European countries and trying its best to force Europe to decouple from China, as the US is basically doing nowadays. 

But one EU official reassured me that decoupling is not the policy of the EU, and they said that, in their words, it is quite dangerous. Decoupling would be dangerous. Good relations, especially economic relations, between China and the EU, are the foundation of prosperity for both sides. Actually, this sentiment has been echoed by a great number of top leaders and politicians. So I’m not so worried about decoupling. But we know that the US is putting a lot of pressure on European countries. They try to stop or create obstacles to normal trade, both in goods and technology. 

Of course, the most recent example is the semiconductor issue. Actually, what the US is doing in that sector, by restricting both the product and the equipment for producing these products, was a fly in the face of all the rules of free economy. Some European countries have yielded to the pressure of the United States. I’m talking about the Netherlands. The Netherlands, for hundreds of years, has been priding itself in advocating free trade. They even say that free trade is a foundation for the country. But unfortunately, on this issue, they are actually contravening all the principles concerning free trade they have been preaching for hundreds of years. 

So it is a pity. That shows that the United States will stop at nothing in trying to prevent the normal relationship between China and the EU and we firmly believe that this is not in the interest of the European countries. Frankly speaking, I don’t think it is even in the interests of the United States. 

We have always believed that the world is big enough to accommodate two big powers, like China and the United States. So the competition between China and the United States doesn’t have to be a zero-sum game. I think that is an important point. But unfortunately, given the political environment in the United States, sometimes it’s really difficult to talk sense into some of the politicians. 

But we do hope that the European governments and the European politicians can see where their interests lie and then resist the unwarranted pressure from the United States and persist in their strategic autonomy, which they have been talking about for the past few years. 

Of course, we will have no problem with the United States and European countries developing their relations, as we would like to develop our relations with Europe and the United States. But when developing its relations with the United States, the European countries should not be doing that at the expense of China or the expense of their relations with China. I think that is the point that European politicians need to bear in mind because that will not be in anybody’s interest.

FT: You mentioned the export controls, the US export controls, and the Dutch measures, which were also recently announced. How do you anticipate China will respond to the Dutch measures when it comes to semiconductor-making equipment?

Fu Cong: Actually, the negotiation is still ongoing. We do hope that the Dutch government will, to the extent possible, reduce or limit the scope of the export control. At the same time, they should abide by the contract they have already signed. Actually, this contractual spirit, I would say, is a basis of modern society. So if even that is not respected, I don’t know how much credibility we can give to these governments and companies. This actually undermines the foundation for trade between European countries and other countries, not only with China. Other countries will see how the European companies and European governments are acting in this case. So even for their own image, for their own credibility, they need to be careful.

As I said, the negotiations are ongoing, so it is too early to prejudge what actions China may take in response to the measures that the Netherlands is going to take. But they need to be mindful of the fact that China cannot just sit there and see its own interest being trampled like this without taking any actions in response.

FT: There’s a question of whether what the Dutch government has done could be replicated at an EU level. Do you have indications that it is a possibility? And again, how would you respond if it were? 

Fu Cong: Actually, we have heard the rumors that the Dutch government is trying to elevate this to the EU level. Let me first say that we are firmly against this, and we don’t think this is warranted. Secondly, I don’t even think this is necessary. Because as far as we know, the Netherlands, or the company ASML, is the only company that produces high-quality lithography machines. If this export control only affects one country, why does it have to be elevated to the EU level, so that it could be applicable to all countries? There is no point. Right? 

The bad effect would be that if it were to be adopted as an EU policy, this would actually take away any flexibility the Dutch government may have, right? They may modify whatever measures, at the end of the day, they decide to take. But then, if the situation warrants, they may modify all these measures. But if it were at the EU level, that would require the unanimous support of the member states for any modification.

So I don’t think it is, from whichever perspective, something that is necessary. Of course, as a matter of principle, we oppose these possible measures of export control, either it’s national or at the EU level. At the EU level, it could only be worse. At the national level, we are also firmly opposed to them.

FT: Just on the trade more generally, as well as chip controls, we have a series of measures, CBAM, forced labor act, and foreign subsidy instrument. A lot of these appear to be drawn up with possibly your country in mind. What do you think the EU is trying to achieve here? And is it a good thing? What can be the consequences? 

Fu Cong: Indeed. We are following all these development very closely, and quite frankly, we are quite concerned. Of course, they always say that these measures are universal. They are not targeted specifically at China. But we see that when all these measures are in place, at least China will become one of the main countries that are mostly affected. Right? As I said, we’re following this, and we do notice that there is a rise in the protectionist tendency within the EU. Actually, if you study these measures, many of the measures are in violation of the WTO rules. For instance, the CBAM is against the principle of the most favoured nation.

Of course, different regulations are aimed at different issues. Some are for climate change. But we do hope that such measures will not become another trade barrier, the green trade barrier. We don’t think that should be the purpose. That would adversely affect the development of the economy of developing countries.

There are other regulations that are purely politically motivated, like the forced labor you mentioned. When they talk about forced labor, they always talk about Xinjiang. Actually, I would say that the information they have received is false information. So they base their legislation on false information. As you may know that China has ratified the two international conventions against forced labor. 

In the case of Xinjiang, the most recent example is that the CEO of Volkswagen China went to Xinjiang and he personally inspected the factories. He said that he didn’t find any sign of forced labor. But some of the politicians insisted on adopting such legislation only to harm a normal trade relation between China and the EU. There are other Acts that are being proposed, like the Net-Zero Industry Act and the Critical Raw Materials Act.

We do believe that some of them are in violation of the WTO rules, like non-discrimination. That is one of the basic principles underlining or undergirding the WTO. But some of the provisions in these Acts are in direct contravention of these principles. For instance, one of these laws says that they give a 65 % ceiling for any raw material from any third country. This actually goes against the principle of non-discrimination.

FT: On the Comprehensive Agreement on Investment (CAI), which was the positive part of the trade relationship, what’s your offer to try to break the deadlock over ratifying the CAI?

Fu Cong: First, let me say that this agreement is a groundbreaking agreement. Actually, both sides have shown great flexibility. On the part of China, we have made commitments to provide market access to all industries. In the past, it used to be only the manufacturing industry. Now it has been expanded to financial services, to cloud computing and to new energy vehicles. A variety of new industries are open for foreign investment.

It also contributes to building a transparent, legally based, predictable and enabling business environment for foreign investors. China has done a lot in that agreement. Especially given the current economic situation and the global situation, we would hope that having this agreement ratified will help the businesses of both sides. 

Unfortunately, some politicians are trying to create obstacles to this. We all know the background, so I don’t want to go deep into this. The proposal from us is that we lift the sanctions simultaneously so as to remove the political obstacles to the ratification of this agreement. But at the same time, we also say that if this is not going to work with some politicians, we will also be willing to listen to the views or proposals from the other side.

We are still waiting for responses from the EU side. By talking to the EU side to different people, I have the feeling that there are strong forces quite in favor of having this agreement ratified. But there are also people who are working feverishly against this process. We do hope that the politicians, especially the leadership on the EU side, can master enough courage and also a political force in order to have this agreement ratified. I’m still optimistic. We do hope that President von der Leyen’s visit can create a good atmosphere for the bilateral relationship, so that it will be easier for us to achieve some concrete results, including the CAI.

FT: Do you see any prospect of China taking unilateral action in terms of lifting sanctions in order to unblock this? Or is it a basic requirement that it is a reciprocal effort?

Fu Cong: We are trying to explore all options with our EU colleagues. As I said, we will be open to all solutions so long as it is based on reciprocity and equality.

FT: One thing that we’ve reported recently is the question of outbound investment screening. It’s something obviously we’re seeing being discussed in the US. In certain areas, there could be screening or controls on outbound investment from the US into other countries, which presumably would include China. It is reported that the EU is also considering such a measure. How would you view such an initiative coming from the US when it comes to outbound investment, especially in the context of this effort to unblock the CAI?

Fu Cong: Actually, the two-way investment between China and the EU has been quite robust in 2022. 10 billion USD investment from the EU to China last year. That was a year-on-year increase of 96.6%. And the Chinese investment in Europe is 6.9, almost 7 Billion USD, and an increase of 23.7% year on year. You can see that the two-way investment between the two sides has been quite strong. So we are quite confident. With the new policies in place in China, and also with the lifting of all the travel restrictions imposed because of the pandemic, I’m sure the environment for investment can only improve.

So there will be more investment. Actually, as we speak, there is now a very high-level meeting being held in Beijing. It’s the China Development Forum, and quite a number of CEOs of the top companies are in Beijing. They are quite optimistic about the Chinese market. We are quite confident. We all know that the Chinese economy is staging a robust rebound. Our own projection is a 5% increase in our GDP, but the IMF’s projection is 5.3%, even higher than the Chinese one. Our contribution to the growth of the world economy will increase, and it will constitute one third of the growth.

So we are quite confident. In the past three years, not many foreigners have gone to China. But if you go to China after three years, you will find that the environment for everything, like the natural environment, the ecological environment, and also the environment for investment, has been greatly improved. The infrastructure of China has improved dramatically in the past three years. I’m sure China will remain one of the most attractive destinations for foreign investment. We are also mindful of the danger of political interference in this. So having all these legislations may not be good for the outbound investment to China. 

I said I’ve been reaching out to people from all walks of life. One of them is the business community. I got very encouraged, and I was even touched and moved by the enthusiasm of the business community here in Europe toward investing in China. So I don’t think the politicians should work against this sentiment. If they do, that would be working against their own interest, I would say, right? Who in their right mind would abandon such a thriving market as big as China? It will only be at their own peril.

FT: Mr. Ambassador, thank you for your time this morning. I want to ask about Russia’s invasion of Ukraine. Given the different ways in which the EU and China have responded to that invasion, do you recognize it as a potential turning point in relations between Europe and China?

Fu Cong: First, let me explain our position on the Ukrainian crisis. Our position actually boils down to one word: peace. That’s why we say that the most urgent thing to do now is to stop fighting and save lives. We think that is the most important thing to do because we see on TV every day the senseless killings of soldiers and civilians. This crisis has a complicated background. We may not be able to resolve all these differences all at once. But what we can do is stop fighting and stop killing.

Secondly, we advocate peaceful negotiations. By that, we do hope that the territorial integrity of all countries needs to be respected and legitimate security interests of all countries should also be respected. And all international law, including the UN Charter, should be respected if you really want to have durable and sustainable peace. We do hope that we can stop fighting and start the negotiation. That is our position.

We understand that some European countries see this differently from China. But actually, EU officials said that whatever differences we may have, there is one thing that is common in our approaches, which is that we should try our best to achieve peace. I think that is the basis for our joint efforts. We still believe that there is room for negotiation and even for China and the EU to join hands in promoting peace. This is one thing I want to emphasize.

Another thing I want to emphasize is that the China-EU relationship should not be seen only through this prism, as I always say. Our relations, both with Russia and with the EU, are multifaceted. I don’t think it is a rational approach for the EU to link its relationship with China solely to the Ukrainian crisis. As a matter of fact, China is also a victim of this crisis. The trade between China and several countries is adversely affected, including our relations with Ukraine.

Actually, China is a friend of both Russia and Ukraine. I don’t think China’s position on the Ukrainian crisis should be the basis for a turning point. I can’t see that. China is an independent country. China’s relationship with Russia is non-aligned, non-confrontational, and not targeted at any other country. We are not in a military alliance with Russia, and we may not see eye to eye on all issues with Russia. 

In the case of our relationship with the EU, it is not targeted at any third country, and it should not be subjugated or controlled by any third country. So why should we subject our relationship solely to the issue of the Ukrainian crisis? As a matter of fact, if you really study the issue, China is not alone in taking the position we are taking. More than 100 countries in the world, including India, Brazil, South Africa, and a host of other countries. They’re taking similar positions. I don’t see Europe describing their relationship as depending on these countries’ attitudes or positions on the issue of the Ukrainian crisis. Why should they do that to China?

Of course, some people may have some misgivings about Chinese President Xi’s visit to Moscow. But as we have explained, that was a trip for cooperation, friendship, and, moreover, peace. We advocated peaceful negotiation. In the joint statement that the two sides have signed, Russia said that it is open to peaceful negotiation at any time. We don’t think that China’s positive role in the Ukrainian crisis should be seen from a negative perspective.

FT: When you discuss the idea of peaceful negotiation, could you then explain why President Xi visited Moscow and had many conversations with President Putin but has not had a single conversation with President Zelenskyy since the war began? How can you talk about peaceful negotiations if you only talk to one side?

Fu Cong: Actually, we have maintained good communication with the Ukrainian side. The Foreign Ministers speak to each other on several occasions. Our Ambassador there is speaking to the government. And also, Mr. Wang Yi, who is now the Director of the Office of the Central Commission for Foreign Affairs of the CPC, is talking to the senior officials. We are working with Ukraine, and the purpose is to promote peace. We don’t exclude any possibilities either when it comes to meetings.

FT: So when Mr. Zelenskyy invites Mr. Xi (to Ukraine), which he did this week, is that invitation well received in Beijing?

Fu Cong: Well, I don’t know because I’m now based in Brussels.

FT: Do you anticipate a call, a discussion, or a visit coming up between the two?

Fu Cong: I can’t give you any information because I don’t have any. But let me say this, as I said, the line of communication between the two sides is open. Whether the two Presidents are speaking to each other at one specific moment, I can’t say.

FT: My final question on this topic. Do you understand why people in the EU would look on you more favorably if such a conversation were to take place? Would it burnish your credentials as a peacemaker?

Fu Cong: Yes, I understand that. That’s why I say that no possibility is excluded. But actually, if you talk about this, you have to be aware that when China wants to make a move. You see, when China tabled this 12-Point plan, we expect that at least countries should look at this plan objectively. But you see what the US has been doing. 

When China was trying to facilitate peace, the first move the US made was the ICC issuing an arrest warrant for President Putin. Then there were rumors about China providing military equipment to Russia. All these actually are undermining the prospect of peace. Whatever moves or gestures China is going to take to promote peace, I don’t know how the US will respond and how much this would be appreciated by the Western countries, including the EU. 

Actually, when President Xi went to Moscow, we said up front that the Ukrainian issue was going to be high on the agenda and we were going to urge peace. We don’t see any positive response even on that one. So that is what happens. Whenever China wants to make efforts for peace, someone would always come out to undermine that.

FT: There have obviously been reports discussing the possibility since the war that Russia could use a tactical nuclear weapon. How would China respond to such an event, and what message has China given to Russia on this?

Fu Cong: China’s message is very clear that we are against the use of nuclear weapons. I’m sure that point has been heeded by all sides, including Russia.

FT: On a different topic, I noticed on the walking here photographs of President Xi meeting various Presidents of the EU. Are preparations set in train for President Xi’s visit to Brussels this year?

Fu Cong: No, actually, this time, the summit will be held in Beijing. We alternate between Brussels and Beijing, and this year it should be China hosting. We are preparing for the summit. The two Presidents, President Michel and President von der Leyen, are planning to visit Beijing. We are talking about the dates now.

FT: Could you give us a rough idea of the dates?

Fu Cong: No. You need to ask the EU side for the dates because it is them who have not decided. Originally it was June. Later on, we heard the news that this might not be feasible. That is the situation. We are still waiting for the EU side to come up with specific dates.

FT: From the Chinese perspective, what would you see to achieve in such a summit?

Fu Cong: This summit is going to be an important event. As we know, because of the pandemic, this annual event has been unable to be held (in person) for the past three years. So if this is held, it’s going to be conducive to the relationship. 

China and Europe are big players in the world. There are many things that the leaders could talk about, both bilaterally and globally. China and the EU are partners in tackling many global issues like climate change, biodiversity, health, and many other issues. Bilaterally we have many things, especially in promoting each other’s economy, stabilizing the economy, and promoting growth. So there are many things that the two sides can talk about. I’m sure it’s going to be a great boost to the bilateral relationship.

FT: So you talked earlier about Chinese investment into the EU. Do you see the Net Zero Industry Act and the green transition in the EU is actually an opportunity? Because China has great advantages in electric car battery making, wind turbines and solar panels. Many Chinese companies want to come to the EU to invest and build facilities. Do you worry again about the political risk of doing that?

Fu Cong: That’s true. We see opportunities, but we also see obstacles. Chinese companies have a great interest in investing in Europe. But because of all these political factors, including the enactment of all these legislation, the business environment for Chinese investors has been deteriorating.

We have a China Chamber of Commerce in the EU. According to the report that is issued by this Chamber, for the past three years, the investment environment for Chinese investors in the EU has been deteriorating. That’s sad. Actually, I do know that China is quite advanced in green technology. But again, as I said, for all those Critical Raw Material Acts, they set a ceiling, and that will inevitably hamper China’s ability to invest in the European market. That’s why we say that this borders on protectionism, frankly speaking, and we don’t like it.

FT: Do you anticipate bringing cases to the WTO to try to change the rules? 

Fu Cong: Actually, on the CBAM, China, in WTO, has already put forward the proposal that this issue be discussed within the framework of WTO and to see whether any of the provisions have violated the WTO rules. We do hope that whatever legislation the EU may adopt can really abide by the WTO rules.

FT: One topic that the EU and the US have been very vocal on is the sanctions regime on Russia, and their concerns are that all countries abide by the sanctions regime. Can I get a sense of whether there’s been any dialogue at all between the US and the EU, and China on China’s approach to the sanctions that the G7 have applied on Russia and your attitude to this topic?

Fu Cong: The simple answer to your question is no. There is no dialogue. Because our position is very clear. We are opposed to unilateral sanctions. Any unilateral sanction outside the UN Security Council is illegal. The US and the EU like to talk about coercive measures. These, in our view, are coercive measures.

You see what damage, what harm all these unilateral sanctions have done to many countries. Cuba is the biggest example, and China is also on the receiving end of the US sanctions. We are opposed to unilateral sanctions. That’s our basic position. So there is no discussion between China and the EU on this. But we are also aware that the EU is thinking about sanction circumvention issue. The other day, I talked about this with a senior EU official. He assured me that this would not affect normal trade between a third country with Russia. I think that is an important point that they need to bear in mind. So we are against long-arm jurisdiction of any coercive measures.

FT: I appreciate you, the Ambassador to the EU. But, if I may, there’s another institution in this city of which many members of the EU are also members, known as NATO. NATO, over the last year, has brought China into its agreement, which referred to China in its strategic document as a challenge. How do you respond to that move? Do you think this is another example of US pressure? What do you think? Is this Europe working outside of its strategic area to look for potential threats?

Fu Cong: Exactly. NATO is a regional organization, calling itself a regional defensive organization. There is a clear demarcation of its geographical application. So NATO should abide by that.

Of course, nowadays, they talk about NATO being a regional organization taking a global approach. This to me is more like a mission creep. That’s why they are actually trying to expand their influence in our part of the world, in the Asia Pacific. They have actually set up the so-called center of excellence on cyber security with Japan and South Korea. Maybe some other entities. They are also thinking about setting up such centers.

For us, this is a quite alarming development. We urge NATO to really strictly abide by its geographical application and should not try to expand its footprint, as we call it, outside the transatlantic area.

In our view, being a defensive organization, anything that happens outside of its zone of defense would have nothing, whatever, to do with it. I think that is how we see this. If you take a global approach, how do you reconcile this regional nature of this organization with a global approach? Right? We don’t buy that argument. For us, as I said, this is a mission creep, or even sophistry, if you like. How can the regional organization take a global approach? Is it going to be regional anymore?

FT: How might China respond?

Fu Cong: We are being alert. We’ll keep our alert and see how this develops. There is another tendency. What the US is trying to do is actually to set up NATO-like military alliances, like the AUKUS, like the Quad. They are actually setting up similar regional military groups and that can only destabilize the regional situation.

FT: Just to come back to the Ukraine war, at what point does China believe that its efforts for peace are not being heard in Moscow?

Fu Cong: Our concern is not being heard in other places as well. As I said, during President Xi’s visit to Moscow, President Putin was open to China’s call for peace and for negotiations. But what we hear from this side is that this is not a time for peaceful negotiations. Right? China’s call for peace is to everyone. That’s why, in our dialogue with the EU, we also urge European countries to make efforts for peace.

FT: Can there ever be peace if Russian troops are inside the territory of legal Ukraine?

Fu Cong: As I said, this is a very complicated issue. There are certain principles.

FT: Why is it complicated? I mean, one country crosses the border of another. They were within internationally recognized borders.

Fu Cong: I don’t want to defend the Russian position, because their diplomats will do a better job defending their position. But I’ll give you my personal assessment. As an outside observer, there are complicated causes for any military conflict. This one is no exception. That’s why in our principal position, we say that territorial integrity needs to be respected and the legitimate security interest also needs to be respected.

Only then can you achieve sustainable peace So it is not as black and white as some people think it is or portray it to be. Actually, I don’t even believe that some people really believe that it is as simple as that.

If you look at the history, starting from the end of the Cold War, there are reasons why Russia is concerned about its security. If you deny that, I don’t think there is any possibility for Europe to set up a regime or architecture for durable peace. If you really want to have a peaceful negotiation, all these issues need to be put on the table. What kind of security architecture is Europe going to have in order to ensure peace? This would inevitably come into the solution of the Ukrainian crisis, because we can’t shut our eyes to some basic facts. Right? That’s how we see this situation. 

If you really want to resolve this issue through peaceful negotiation, we need to talk about all these things. It’s not as simple as withdrawing from the territory, and that will be the end of it. How about the Minsk agreement? Why was the Minsk agreement put in place in the first place? Why was the Minsk agreement not implemented? Right? All these things actually proceeded, at least chronologically, to what happened in Ukraine now. So shouldn’t we study all these issues as well in order to achieve peace?

So as I said, I'm not here to defend the Russian position. It’s their diplomats’ responsibility to do that. But our advice is that if Europe really wants to achieve sustainable peace, you need to study the root causes of the whole situation, and then come up with a solution that can satisfy the concerns of all sides. Only then can you have durable peace. It is not as simple as black and white. That’s our view.

FT: Ambassador, thank you very much.

Fu Cong: Thank you.