New Chinese leaders keen on cementing ties, promoting innovation, experts say

Rebalancing and strengthening China's ties with Europe should continue to be a top priority for the new leadership in China, several leading European experts say.

Though Chinese President Xi Jinping and Premier Li Keqiang along with his cabinet have reiterated their intent for cooperation and peaceful development in their discussions with the leaders of Russia, France and Germany, experts are still waiting for clear signals to emanate.

One reason for the questions in Europe over the new leadership in China is the country's increasing importance in global and economic affairs. With China holding the key to global recovery, experts in Europe are worried whether the new leadership will press ahead with more reforms or opt for a conservative growth policy.

Though firm announcements have been yet to be made, it is clear that China's priorities will lie more in improving its scientific and technological prowess to increase productivity and offset rising labor costs.

Herman Van Rompuy, president of the European Council, says huge challenges await the new leadership.

"China has achieved extraordinary results since its opening-up policy lifted hundreds of millions of people out of poverty. However, the economic, social and environmental challenges it faces are still enormous, and linked to the magnitude and the speed of the progress made in the last 20 years.

"The Chinese government has now embarked on a difficult, but necessary, process to move from an export-led economy to a more domestic consumption and welfare-oriented model," he says.

According to Van Rompuy the new leadership should focus more on social disparities, wealth distribution, environmental challenges and promotion of the rule of law.

Romano Prodi, former Italian prime minister and former European Commission president, says the top priority for the new leadership is urbanization.

"China is experiencing huge challenges and its immediate priority should be on how to manage the process of urbanization." Official statistics show that China's urbanization rate is around 50 percent, and in the coming decade, more than 300 million, or equivalent to the population of the United States, will migrate to the cities.

"China has been facing huge environmental and resource constraints in this regard," Prodi says.

It will be more important to develop the middle-sized urban areas than the big metropolitan areas, he says. "But this is a project that needs lots of skills and lots of political unity."

The urbanization challenge also needs to take account of the income disparities across various provinces.

"The income differences across cities like Beijing, Shanghai, Guizhou and Gansu are very substantial. The urbanization process should be achieved through a process of income equalization across different areas," Prodi says.

Janez Potocnik, European commissioner for the environment, says that though high-speed urbanization is a challenge, it is also an opportunity. In the words of the 2010 Shanghai Expo motto, the process aims to create a "better city, better life", he says.

"One of the important lessons that we have learnt in Europe is that cutting air pollution does not necessarily mean cutting economic growth," Potocnik says, adding that it is possible to decouple economic growth and pollution.

He believes that this is an important starting point for any country when considering policies to tackle air quality in cities. "The measures being taken by the Chinese authorities to reduce vehicle emissions are very similar to the policies in Europe, and we have cooperated in this area for many years, sharing expertise and best practices," Potocnik says.

Jean-Marie Le Guen, member of the Foreign Affairs Committee of the French National Assembly, says China's new leadership is experienced enough to tackle the challenges.

Xi has got off to a good start by forging close bonds with the Chinese people, thereby generating trust and hope, Le Guen says. "We (France) believe that boosting internal consumption is a necessary step for fulfilling Chinese people's needs in education and healthcare, while maintaining sustained long-term growth."

Countries such as France can also expect increased exchanges in sectors like environment as China is committed to sustainable growth in the future.

"Given its unquestionable central role in international relations, we are looking forward to more fruitful collaboration with China," Le Guen says.

Peter Ho, chair professor of Chinese economy and development at Delft University of Technology in the Netherlands, says due to the entwining of China's economy with the rest of the world, the US in particular, its economic influence through its global investments, the internationalization of the renminbi and the rise of its domestic market can only be expected to grow in the long term.

"With that economic rise, will come a political, social and cultural rise in influence as well."

Ho says there are numerous, almost daily cases on China's weibo, or micro-blog, and other Web accounts, where instances of corruption and social inequity are signaled and almost instantaneously go viral.

"From these cases we can clearly see that China is going through a fundamental normative change. As such, the change in governance style is also imperative for China's long-term and stable development," Ho says.

"The other side of this story is that we should never forget that socio-economic and political changes take a long time to take effect, and China will be no exception."

Ho says China will always walk a tight rope in this regard. "It needs to change, it needs to answer to calls for change, but it also needs to change in accordance with the possibilities determined by time and place."

Rana Mitter, professor of history and politics of modern China, Institute for Chinese Studies, University of Oxford, says China's growth will continue but at a slower pace. It will be immensely important to implement convincing social welfare policies to stabilize society as it becomes more urbanized, as well as create more transparency in government.

"The newly stated intentions of China's leadership are good to hear," Mitter says. "However, observers will be waiting to see how life changes on the ground. It will be important to demonstrate real changes in the ways that the bureaucracy deals with the wider population."

Mitter says that China needs to understand its role as a rising power in the region and deal with the concerns that some of its neighbors feel. "Sometimes it is important to restrain power to gain greater influence. This will be an important lesson that China can learn from and, in turn, teach others."

Van Rompuy says: "I appreciate President Xi Jinping's knowledge about the EU and his clear support for enhancing the EU-China Strategic Partnership."

Premier Li shares the view that China and Europe are closely interconnected and that cooperation is essential to promote growth and jobs, he says.

"As China continues to develop and emerge as an economic power, its political role assumes an even more important significance in today's world," Van Rompuy says, adding that the EU has always supported China's transition toward being an active and responsible global player.

Economic imbalances, climate change, terrorism, nuclear proliferation, food security - just to name a few - are global challenges that require coordinated global cooperation. "China has a key role to play in the international community in addressing them. Increased power goes hand in hand with increased responsibility," Van Rompuy says.

Hugo Swire, minister of state at the British Foreign and Commonwealth Office, says Britain is committed to boosting its prosperity through trade and investment, and China will clearly be a crucial part. "China is changing at a rapid pace. Opportunity will grow as the economy rebalances," Swire says.

He expresses confidence that luxury products, cars, advanced machinery and educational services, which Britain excels in, will meet the demands of China's expanding middle class.

Many Chinese companies are now going global and operating successfully in Britain, he says.

According to the Ministry of Commerce, Britain was the fifth largest destination for Chinese investments last year.

"We will continue to encourage more companies from China," Swire says.

Prodi wants Chinese leaders to give priority to Europe as an economic partner as it is generally more open than the US in accepting China's investment and exports.

Prodi says he has met Li Keqiang twice in recent years.

"He has a very open and direct nature, with extra interest in economic affairs. He also has rich political experience.

"He understood how important it is for China and Europe to forge strong relations," Prodi says.

European Commissioner for Agriculture & Rural Development Dacian Ciolos says China and the world now face common challenges such as food security and how to ensure agricultural productivity and competitiveness, while minimizing the impact on the environment and keeping the countryside vibrant.

Ciolos says the EU and China can learn a lot from each other and share ideas on how to develop rural areas and have balanced rural-urban development, and increase investment in agricultural research.

Maire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science, says for the EU and China, research and innovation hold the key to sustainable growth and jobs and for better quality of life.

"We see the Chinese government very committed to developing dialogue in this regard," says Geoghegan-Quinn, expecting to see some progress this year.

"One of the hurdles we must overcome is how to create the right environment to boost innovation in China," she says.

Geoghegan-Quinn says that if China and Europe can create common standards for different products, it will be easier for both sides' industries to market them.

"Such conditions will be something we can discuss in the dialogue on innovation cooperation scheduled later this year."

Van Rompuy also says the confidence and support that China has shown toward EU integration - including during the difficult period linked to the crisis of the eurozone - is of great importance to the EU, further promoting cooperation between the EU and China.

"Of course, partnership is a two way street," he says.

Tuo Yannan and Liu Jia in Brussels, Zhang Chunyan and Cecily Liu in London, and Li Xiang in Paris contributed to this story.

fujing@chinadaily.com.cn

(China Daily 03/22/2013 page6)