China: Plugging into the Global Agenda

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Fourth Session

China: Plugging into the Global Agenda

The Fourth session was chaired by the Chairman Board of Governors, Institute of Strategic Studies Islamabad (ISSI), Mr. Inam-ul-Haque. Participants of this session were; Ms. Farzana Noshab, Research Fellow ISSI, Mr. Hou Hongyu, Research Fellow, Chinese People's Association for Peace and Disarmament (CPAPD), Beijing, and Dr. Shireen M Mazari, Director General, ISSI.

Ms Farzana Noshab, ISSI, Pakistan

In her presentation, Ms. Farzana Noshab highlighted certain issues regarding China and WTO including the challenges that China faces, the policy implications and the policies adopted by China and its trading partners. China joined the WTO as 143rd member on November 11, 2001 and agreed to assume the obligations of more than 20 existing multilateral WTO agreements, covering all areas of trade. She highlighted the "WTO stringent accession obligations," which includes; liberalisation of services sector, removal of export subsidies, reduction of domestic support in agriculture sector, and fulfilment of obligations under standards, property rights and services. Also, such an accession to the WTO, will seem to have a significant impact on; firstly, the WTO as a global institution that will lead to the dispute settlement procedure by China and other countries in relation to the implementation of the WTO commitments; and secondly, on the patterns of global trade, described in terms of an increase in China's share in world exports along with the imports, thereby, affecting its trading partners in different ways.

Furthermore, she gave an overview of the key selected challenges that China is exposed to following its WTO accession with its trading partners which involves; firstly, antidumping and safeguards measures imposed by the US and the EU on the Chinese sectors; secondly, lack of intellectual property rights (IPR) legislation; thirdly, China's higher commitment to the reforms in three services modes (cross border trade consumption abroad and establishment of trade) than other accessing countries; and fourthly, its domestic challenges, during the post accession that have led to major losses in the agriculture sector and sectors dominated by the State Owned Enterprises (SOEs) resulting in income inequalities, unemployment, low productivity, low capital utilisation, distributional imbalances between urban and the rural, and outdated technology. Hence, the potential reforms like the hukou system (system of residence permits regulating movements between urban and rural residence) and other labour market barriers with well defined property rights are highly desirable to overcome the inequities associated with the segmentation of the labour market.

Ms. Noshab concluded the paper on a positive note by saying, "China's accession to the WTO is a defining moment for both China and the WTO. The accession has provided 1.3 billion people of China the access to 143 markets in the world. The WTO has provided China an opportunity to capitalise on and accumulate benefits from the process of reforms that China started in 1980s. Internationally, China has emerged as a big player with increased role in the international economic system. However, the whole process is not free from challenges that China is currently facing and will continue to face for some time due to structural adjustments in the economy. Nevertheless, the pace of its economic growth and other positive macroeconomic indicators suggest that China will be able to sustain the pressures with resilience."

Mr. Hou Hongyu, CPAPD, Beijing

In his presentation Mr. Hou Hongyu stated that international arms control, disarmament and non-proliferation are closely linked with international security. He outlined China's basic policy and position in the field of arms control, disarmament and non-proliferation and attached great importance in reducing the dangers of WMDs through comprehensive disarmament. For this purpose, he said, China maintains that there should be an international legal instrument on the complete prohibition and thorough destruction of nuclear weapons, Nuclear-weapon states (NWS) should commit themselves to no first use of nuclear weapons; nuclear disarmament measures should follow the guidelines of maintaining global strategic balance and stability; the Conference on Disarmament in Geneva should reach an agreement; negotiations on the Fissile Material Cut-off Treaty (FMCT); and to establish Ad Hoc Committees on such issues as nuclear disarmament and security assurances to non-nuclear-weapon states.

He said that China firmly opposes proliferation of WMDs and their means of delivery by addressing both the symptoms and the root causes. All states should resort to political and diplomatic means to solve the proliferation problem. China does not wish to see a missile defence system produce negative impact on global strategic stability, and bring new unstable factors to international and regional peace and security. China believes that relevant countries should increase transparency in their missile defence programme for the purpose of deepening trust and dispelling misgivings. To prevent an arms race in outer space the international community should take effective preventive measures to prohibit deployment of weapons in outer space. China supports the efforts by the international community to ban biological and chemical weapons and has actively participated in the negotiations of relevant treaties or protocols.

Mr. Hongyu gave a track record of China's participation in international, regional and bilateral instruments of arms control and disarmament and other related treaties and obligations. China joined the NPT in 1992 and has faithfully honoured all its obligations. China joined the IAEA and signed the Additional Protocol in 1998 and became the first nuclear-weapon state to complete the relevant procedures. In the 1990s, China closed down a nuclear weapon research and development base in Qinghai Province. China's development of nuclear weapons has always been for the purpose of self-defence and committed to No-first-use of nuclear weapons. China calls upon the other nuclear-weapon states to unconditionally provide positive and negative security assurances to all non-nuclear-weapon states. China respects and supports the efforts by relevant countries and regions to establish nuclear-weapon-free zones or WMD-free zones on the basis of consultations among themselves and voluntary agreements in light of actual regional conditions. China firmly supports the Comprehensive Nuclear Test Ban Treaty (CTBT). In July 1996, China declared a moratorium on nuclear test.

China has unswervingly pursued a national defence policy that is defencive in nature, and made the decision to downsize its military personnel by one million in 1985. By 1990, the number of armed forces had been cut down to 3.199 million, downsized by a total of 1.039 million. From 1979 to 2004, the percentages of China's defence expenditure to its financial expenditure of the same period followed a downward curve on the whole. China's overall defence expenditure remains at a relatively low level in the world.

At the end of his presentation Mr. Hongyu described China's role in non-proliferation export control. In October 1997, China joined the Zangger Committee. In June 2004, China joined the Nuclear Suppliers Group. In September 2004, China officially submitted its application for membership of the Australia Group. In April 2004 and May 2005, China held two rounds of dialogues with the Wassenaar Arrangement in Vienna, exchanging views on the principles of export control on conventional weapons and related dual-use items and technologies, the control list and "the best practice." China's legislation on export control widely embraces such international practices as licensing system, end-user and end-use certification, list control and "catch-all" principle. In non-proliferation export control, China adheres to the principle of enforcing the law strictly and punishing all offenders. Since the end of 2002, China has dealt with scores of cases of various types concerning illegal export of sensitive items and technologies. Competent authorities have put the companies involved in these cases on a "watch list" so as to prevent the recurrence of similar activities.

Dr. Shireen M. Mazari, ISSI, Pakistan

In her presentation, Dr. Shireen M. Mazari considered rise of China on the world scene as a global economic power as one of the most remarkable transformations in modern history. She termed China's emergence as a great power, an undeniable fact and said that it would impact upon the geopolitical and economic relationships within Asia and beyond. Also, most of the neighbours of China have formed their perceptions based on their historical experiences, China's exhibited intentions and evolving regional and global trends, besides the long-term international interests of China.

She focused on the Chinese stress on the "inclusive nature of multilateralism, its procedure of consulting and consensus-building and its pursuit of common security." The new approach to multilateralism has allowed China to play a major role in the Asia Pacific Economic Cooperation (APEC), the ASEAN Regional Forum (ARF), Confidence Building Measures in Asia (CICA), the Council on Security Cooperation in Asia, and so on. Also, post the Mao-era, China has signed the Nuclear Non-proliferation treaty (NPT); the Comprehensive Test Ban Treaty (CTBT); the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. China also became a member of the World Trade Organisation (WTO), in 2001. Another CBM has been China's announcement of the "Code of Conduct" in the South China Sea and ensuring that the exploitation of natural resources will be done on consensus basis. China is also an active architect of the BOAO Forum for the private sector cooperation among Asian countries as well as the Asian Cooperation Dialogue (ACD), initiated by Thailand. On the political front, China has become the chief facilitator of the Six Party Talks on the Korean nuclear issue. During the 1994 ARF meeting in Bangkok, China also proposed certain principles and measures for Asia-Pacific security cooperation, such as, establishing interstate relations on the basis of the UN charter, and the five principles of peaceful coexistence.

As far as the UN-China is concerned, China has become an active member of the UN and other international organisations. China's position on the UN and its reforms as well as related issues has been put out in a Position paper issued by the Chinese government on June 7, 2005, which includes that reforms should be favourable to multilateralism; the reforms should facilitate the realisation of Millennium development goals; the reforms should accommodate developing states and fifth, Reforms should be carried out in a way that leads to a consensus-building among the members. In addition, on issues such as reform of the human rights bodies of the UN, China is supportive of such reform because it seeks to depoliticise human rights issues and rejects double standards. For China reforms of these bodies require a cooperative rather than a confrontational approach with more resources being geared towards human rights technical cooperation projects and countries' human rights capacity building.

Regarding China's position on global agendas and issues, the author focused on certain facts. Firstly, China supports the idea of the UN evolving a new security concept based on "mutual trust, mutual benefit and equality and coordination." Secondly, on the issue of counter terrorism, again China sees the UN in a leading and coordinating role. China stresses on the need to tackle the root causes of terrorism and to avoid politicisation and double standards. Thirdly, on the Iran's nuclear issue taking centre stage of the non-proliferation and arms control and disarmament agendas, China's position is based on a non-discriminatory and non-intrusive approach. Fourthly, China's position on the Fissile Material Cut-off Treaty (FMCT), which has still to be negotiated, is also very interesting because it shifted from the original position to the UNGA resolution calling for an FMCT in 1993 to seeing the call for an FMCT as an important step towards disarmament by July 1994. China has however, linked the negotiation of a FMCT to the issue of nuclear disarmament and a Prevention of Arms in Outer Space (PAROS) treaty. This approach is vehemently opposed by the US, so one cannot expect any quick progress on the FMCT in the UNCD.

In conclusion, she said that China's growing focus on multilateralism and the UN reflects a soft approach towards projecting its growing power and role in international relations both within its own region and beyond. Also, this multilateralism is tempered by the importance China places on its bilateral relationships and its trilateral relations within the "great powers" framework, especially in terms of the security paradigms. China has also shown a cautious approach to international interventions and intrusiveness because of its assertion of the sovereign right of states to deal with their own internal issues. Finally one major purpose for China becoming more active in multilateralist frameworks is the desire to balance the bilateral US security relationships in China's operational strategic milieu. In addition, the Chinese approach towards international organisations is an interesting contrast to the Indian approach. While China, as it is gaining in strength and confidence, is moving increasingly towards multilateralism and international consensus-building, India is seeking to move out of the non-aligned grouping and to join and strengthen the hierarchical power-based international system within the UN and beyond. Hence, at a time when the US is undermining the principles of multilateralism and international consensus-building, China's support for international institutions and a multilateral approach to global agendas is going to be critical in the future direction of the international system.

Questions/Answers/Comments

Q: What is your comment on the outcome document just passed by the UN world leaders' summit and also on the future of the UN reform?

A: The outcome of the UN document was very disappointing and not much has happened in substantive terms on the UN reform. One area, on which the UN and the International Community (IC) by and large has been so committed to the disarmament and arms control, since 1945, has been totally removed by the Americans. It reflects the future of the UN unless the other States are assertive; Mr. John Bolton is going to carry out the US agenda of sidelining the UN because the Americans feel that the notion of coalition of the willing is much more viable for the Bush Administration's global policy agenda. Hence, the report has been highly disappointing.

Q: Since there is an extension of the triangular relations within the Shanghai Corporation Organisation (SCO), what exactly is the US, Japan and the EU willing to do about it?

A: It depends on how the Triangular relations develop within the SCO? If the triangular relations focuses or puts pressure on the US to move out of Central Asia, it would lead to negative implications for the US. It seems not to challenge Japan or the EU unless the latter forces under NATO in Afghanistan come under pressure for the removal. We are also concerned with the fact that for how long the American forces will remain within Central Asia? Hence, it depends on the nature of the triangular relations within the SCO and how they are developed.

C: The triangular relations with the SCO do not have any impact on Japan. Also, the latter's attitude is quite clear that it would like to see stable democratic developments in Central Asia because the root cause of terrorism is poverty and it is hoped that Japan would proceed towards further developments.

Q: As a nuclear weapon state, China only talks about "not attacking" other countries, what about the attacks within its territories like Taiwan? Does China recognise India and Pakistan as nuclear weapon states? If not then; does it commit itself to never use nuclear weapons against India and Pakistan?

A: There are different views about India and Pakistan's nuclear status. Majority of the IC, US and European countries believe that Pakistan and India should join the NPT as non-nuclear weapon State. China will not use nuclear weapons against India and Pakistan, neither would it use them within the territories.

A: Since China agreed to Resolution 72, it does not recognise India and Pakistan as nuclear states and will not use any nuclear weapons against India and Pakistan. Also, if the question was asked in the context of the 18th July's agreement between India and the US, it is still in the evolutionary process and the US Congress has still not declared its decision.

Q: Elaborate on China's position on the Proliferation Security Initiative (PSI)?

A: I think China shares the consent of the PSI. We attach great importance to the non-periphery of the WFP. We have our own concerns and do not wish to participate.

Q: What are the practical measures taken by China to raise its anti-dumping status?

A: China will negotiate bilateral agreements with the concerned countries. The US and EU has already accepted it and imposed duties.

Q: How does China perceives US-EU relations?

A: China is aware of US-EU relations and all related problems. China will move gradually to settle down the issues. Multilateralism is the only option by which weaker states would benefit and developed nations would be strengthened.

C: EU has a code of conduct and equal laws are applicable to every country of the region.

C: China is also equal to other countries. EU sells weapons which are going to all countries, but EU is not happy about it.

Remarks by Mr. Haryo Subianto, Assistant to Special Staff of the President for International Affairs, Office of the Cabinet Secretariat, Jakarta. EN-GB">

According to Mr. Haryo Subianto, after two day's discussions, a consensus has been reached on the fact that China is ready to assume its role, responsibility, and maturity in a very measured way. Asian region has never reached a level of comfort in relations with China, the way it can be enjoyed today in economics, politics and security sectors. Such a level of comfort has stemmed from different sources, such as growing economic interdependence, higher degree of predictability and improved confidence between China and the rest of the world.

Mr. Subianto emphasised on the fact that some critical challenges could be seen to our relationships within the region if we want to make China a great power in emerging Asian century. These challenges are; first, improved and a stable US-China relations as the back bone of regional and global security; second, a healthy relationship between Japan and China because both are considered to be the engines of growth within the Asian century, and also because the smaller powers do not want to be "sandwiched" between the two; third, improved Pakistan-India relations which is the key to the regional stability; fourth, the widening gap between East and West; fifth, it would also be imperative to take into concern the incoming competition between the thirsty China and other developed and developing economies over energy, within the region; and sixth, Indonesia and Southeast Asia should try hard to avoid "strategic congestion," in the region and that is the reason why Indonesia will 'continue to play a role as "strategic interlocutor," because we are least threatened and more acceptable to all other major powers.'

While the relations between China and the region are manageable at a strategic/micro level, a lot has to be done at the lower level, such as, functional arrangements to deal with common problems like transnational crimes, environmental degradation and new threats to security need to be intensified through coordinated efforts. Finally, Mr Subianto concluded that "as always evil is in the details and the challenges ahead is with us, together."

Concluding Remarks by Mr. Inam-ul-Haque

Mr Inam-ul-Haque proceeded with his remarks by posing certain questions; How does China view itself? Does it regard itself as a world power? Does it wish to play a major role in the world affairs today, or is it waiting for a more opportune time? According to him, China regards itself as a developed country. It has set itself the target of becoming a middle-income country by the year 2050, with its GDP revolving around 1.6 trillion dollars. Externally, China does not pose a military threat to other countries, either in its neighbourhood or internationally. On the nuclear issue, in the Six Party talks, China has been the lynchpin of holding the talks together and as far as the issue of terrorism is concerned, China has joined the International Community (IC) in fighting International terrorism.

Mr Inam-ul-Haque, further emphasised on China's relations with other countries. Firstly, one does not see any particular reason to undermine the relationship between China and the US, which is developing so strongly, particularly in the economic area. But the US is also trying to contain China because all major countries prepare contemporary plans to defend their perceived interests. Consequently, China is taking counter measures to come out of the possible containment at some future stage. Secondly, as regards the US-India relations and its impact on China, the most significant development in that has been the defence cooperation agreement on 28th June and joint statements between President Bush and Prime Minister Manmohan Singh on the 18th of July.

In addition, the significance of such agreements is known to be its 'breadth.' Firstly, of course is the possibility of the subversion of the NPT by the US through a fringe nuclear technology to India while continuing to deny others; secondly, there is an issue of missile defence in which India and the US, have agreed to cooperate which could lead to a nuclear arms race; thirdly, India and the US have also agreed on unilateralism and pre-emption; fourthly, they have also agreed to promote democracy in the world. However, one can be sceptical about the US to promote democracy in Middle East.

"Is India becoming a surrogate of the US?" It is felt that India is a too large country to subsume its policies into the policies that US might wish to pursue. But one negative indication has been India's vote in the IAEA in the context of the Iranian nuclear programme. After vocally opposing the efforts to take the matter to the UN Security Council, India changed its vote and voted in favour of the resolution that was adopted by the IAEA, on which about twelve countries abstained. Interestingly, India is also playing both sides of the same coin. There is the so-called Russia, China and India triangle, which means that India is not quite ready yet to play the American game of this region. It is also relevant to note that all three countries have a stronger relationship and a greater investment in the relationship with the US than with each other. Hence, they will not sacrifice their relationships with the US to develop a new triangle to counter the US.

Finally, the question arises, "What is the future?" It was stressed that the topic of 'China in the Emerging Asian Century' should have been referred to as "China in the humanities century." However, it should be noted that the title does not indicate an "exclusive Asian century," but emphasises on the fact that Asia has begun, and would continue to play a larger role in terms of political and economic security in the world and would assume a rightful place in the community of nations. Finally, the question arises, "Where is China's place in this new world?" It is felt that this unipolar world will not break up very quickly. The US has openly expressed its opposition to the emergence of multipolar world and in any event, there is no particular country or any group of countries who can take on the US. So, we could look at the possibility of the US remaining the sole superpower for the next ten to fifteen years with the possibility of a group of countries at the second-tier as being major powers in the world that include countries like Japan, China, India, EU and some others.