China's Vice Foreign Minister Fu Ying: Chinese Companies Need Good Atmosphere to Do Business in Eastern Europe

Novinite Insider » INTERVIEW | Author: Ivan Dikov |March 21, 2011, Monday // 21:03
Bulgaria: China's Vice Foreign Minister Fu Ying: Chinese Companies Need Good Atmosphere to Do Business in Eastern Europe Vice Minister of Foreign Affairs of China in Sofia, March 21, 2011. Photo by Chinese Embassy

Exclusive interview of (Sofia News Agency) with H. E. Fu Ying, Vice Minister of Foreign Affairs of the People's Republic of China.

Mrs. Fu's area of responsibilities as Vice Minister of Foreign Affairs of China includes: Europe, Hong Kong, Macao and Taiwan-related foreign affairs, translation and interpretation.

Fu was born in China's Hohhot, the Inner Mongolia Autonomous Region of China in January 1953. In 1978-1982 she was a Staff Member and Attach? in the Chinese Embassy in the Socialist Republic of Romania. In 1982-1985, she served as an Attach?, Department of Translation and Interpretation, Ministry of Foreign Affairs (MFA). In 1986-1990, Fu was the Third Secretary, Second Secretary and Deputy Office Director, Department of Translation and Interpretation, MFA. In 1990-1992, she served as the Deputy Office Director and First Secretary, Department of Asian Affairs, MFA. In the period 1992-1993, she was a Staff Member of United Nations Transitional Authority in Cambodia. In 1993-1997, she was a First Secretary, Office Director and Counselor at the Department of Asian Affairs, of China's Foreign Ministry. In 1997-1998 Fu joined the Chinese Embassy in Indonesia as a Minister Counselor. In 1998-2000, she was China's Ambassador to the Philippines. In 2000-2003, Fu worked as the Director-General of the Department of Asian Affairs of China's Foreign Ministry. In 2003-2006, she was China's Ambassador to Australia. In 2006-2009, she served as China's Ambassador to the UK of Great Britain and Northern Ireland, before becoming Vice Minister of Foreign Affairs of the PRC in 2009.

Fu is a graduate of the Beijing Foreign Languages Institute and the University of Kent. She is married, with one daughter. Vice Minister Fu was in Bulgaria on March 20-21, 2011, for talks with Bulgaria's Foreign Minsiter Nikolay Mladenov and Bulgarian government officials.


As major Western powers have launched UN-mandated strikes against Libya's regime of Muammar Gaddafi, China declared that it regrets the military action – even though it did not block the respective resolution of the UN Security Council. How is the Chinese position on Libya different from that of the Western states?

When the UN Security Council voted on Resolution 1973 concerning Libya, China abstained because it's been our long-standing position that we are not in favor of using arms for solving international issues, let alone for trying to solve the domestic issues of other countries. We believe the Security Council should abide by the UN Charter, which respects sovereignty, territorial integrity, and independence of states. 

Still, we did not block the resolution because we understand that the Arab League and the African Union have strong concerns about the situation in Libya. 

According to China, what would have been a better way to enforce the UN resolution than going for air strikes right away?

Maybe mediation and dialogue. I left China almost a week ago. I don't recall hearing any rejection of mediation by any party. I think there must be a way to avoid military action. The hard power solution may have negative implications. We believe that it is always better to use softer means. 

Analysts have been quick to compare the current intervention against Gaddafi in Libya to others in the past 20 years – the 2003 US invasion of Iraq, Afghanistan in 2001, the 1999 NATO air strikes in Serbia and Kosovo, and the First War in Iraq and Kuwait in 1991 against the regime of Saddam Hussein. After the campaigns in 1999 and 2003 didn't get UN approval, do you think the current intervention in Libya represents a reboot of policies for seeking legitimacy through the UN as in 1990-91, rather the "going-it-alone" approach used by the George W. Bush administration?

It's a bit risky to make such comparisons. But, for example, with respect to Iraq and Afghanistan I think it is widely agreed that what we have seen today on the ground in these countries may not be what was aimed at. There is always a great danger of opening a Pandora's Box when you have an international intervention in one country. However, there seems to be a tendency to forget that all governments and states have boundaries.

We don't have an international government so trying to decide for other countries is always dangerous. The people of those countries should be trusted to sort things out. Even European countries had turbulent periods at some stage of their history. We should trust the people. 

As Japan has suffered the devastating, 9.0-magnitude earthquake, China has reacted very quickly to help. What has been your rationale for that?

China has experienced lots of natural calamities. We are one of the countries most frequently hit by natural calamities. Therefore, we very much sympathize with the people of Japan. What happened there is shocking, it is the most serious earthquake. There was also the tsunami, and then the threat of contamination by nuclear radiation over the crisis at the Fukushima nuclear power plant.

China was among the first countries to send condolences and a rescue team. We have also been sending assistance in kind, around 200 million RMB worth of deliveries and we promise to continue to provide assistance. There is lots of help coming from China.

On the other hand, we are concerned about the nuclear situation. Our Foreign Minister met the Japanese Foreign Minister together with their colleague from Korea at a trilateral meeting held in Kyoto also to show solidarity.

At the same time, we hope that Japan would share information about the problem with us.

Some Japanese are working really very hard in the plant to cope with the nuclear crisis. They are brave people risking their lives to stop the spread of the crisis and they have our high respect. 

As far as China is concerned, we have a number of nuclear reactors and we are building many more. Right now, nuclear energy is 2% of China's energy mix, and the plan is to double it to 4%. But because of the situation in Japan China has halted the approval of new projects due to safety concerns.

It's hard to imagine that the world can totally give up nuclear energy. For many countries this is still one of the sustainable energy choices but the crisis in Japan is a wake-up call to humankind. We need to make extra efforts to guarantee the safety of such facilities.

The relations between China and Japan are a favorite topic for political science scholars and diplomats. Do you expect that tragedy caused by the earthquake and the massive Chinese help for Japan could really bring the two nations closer?

I think these are separate things. In the globalized world we are all in one boat. We have to work with each other. But when history comes in, people in China have memories of the bitter experience of Japanese invasion during World War II.

I think in a civilized world one should be able to face the past. Japan and China should be able to discuss it without hurting each other. Sometimes Chinese people feel hurt when some Japanese leaders pay tribute to the war criminals who inflicted harm on China. Then there will be a problem in the relations.

At the same time the two countries are very closely linked. You won't believe how tightly-knitted our economies are. If the Japanese economy is weak, Chinese factories will suffer. So we have a very close relationship. My belief is that on the one hand we should work with each other, and respect each other. On the other hand, we should be able to face history and then to come out of it instead of being buried in it.

Sometimes the outside world, especially the media, amplify the problems. They like to raise alarms and to voice concerns. In our part of the world, actually, there are a lot of good stories, positive stories. That is very little known here in Europe.

I visit Europe a lot. The questions I get are often about negative stories and problems. Sometimes I ask them back - do you know who are the unsung heroes of China? Who are the film stars in China? What do the people on the street think? What is the dream of every child? They don't know. 

I think there need to be more positive and good stories. China also need to do more to explain itself.

During the China-EU High Level Economic and Trade Dialogue (HED), some EU leaders said the EU hoped China would follow fair trade, respect intellectual property rights (IPR) and abide by its WTO obligations. Do you think such concerns by the European Commission and EU members are justified?

China accepted more rigorous conditions than other developing countries when it acceded to the WTO in 2001. Since then, China have strictly followed relevant WTO regulations and honored its responsibilities and obligations while enjoying its due rights.

By conducting free trade and granting equal treatment to Chinese and foreign products, China provides many business opportunities to foreign enterprises. Over the past 10 years, China has reduced its average tariff from 15.3% in 2001 to 9.8% and opened up more than 100 service sectors. Its export and import grow by 4.9 and 4.7 folds respectively.

China became the world's second largest importer in 2010, importing more than US.4 trillion in goods, or 10% of the world's total trade. If China's WTO accession can be seen as a milestone in its reform and opening-up endeavor, then the ensuing 10 years is a period of common prosperity for China and the rest of the world.

When commenting the third HED held in Beijing at the end of 2010, Vice President of the European Commission Joaqu?n Almunia said that the EU and China reached important agreement both at the strategic level and on substantive matters. He said, "the European Union and China are global partners that have much to gain from each other. It is in our interest to develop economic relations that are mutually beneficial." I agree with what he said.

This HED was constructive, as the two sides had a candid exchange of views on issues of each other's concern, such as cooperation on high-tech trade, stronger IPR protection, energy conservation and emission control.

The Chinese government takes IPR protection very seriously as a national strategy. The Outline of the National Intellectual Property Strategy was formulated in 2008. With the establishment and improvement of relevant laws and regulations in the past two decades, China has put in place a fairly full-fledged and relatively advanced IPR protection system, covering as many fields as its counterparts in Europe.

It is true that there is still room for improvement in law enforcement. And improvement is taking place. We have conducted many special campaigns against internet IPR and copyright infringement. We also need to raise people's awareness on IPR protection.

I believe all these will be better along the way. The Chinese government will continue to create a stable and well-managed business environment and better protect foreign investors and rights holders. We hope to have the continued cooperation and supervision of foreign businesses throughout our efforts.

In fall 2010, some Western media such as the New York Times and the Deutsche Welle as well as the German Council on Foreign Relations and the Committee on Eastern European Economic Relations of Germany warned against the so-called intrusive investment from China in Eastern Europe, saying that China is exploiting the economic crisis to buy influence and strategic position in this region. Some in Western Europe is accusing Chinese companies of using the Chinese government's unfair national assistance and price dumping to win tenders and contracts. How do you view such accusations?

There was a heated debate among Chinese scholars about foreign investment in China in the early days of reform and opening-up, in particular in the early 1990s when foreign investment surged in China. Many people found it hard to understand, let alone accept the government policy of attracting foreign investment, fearing that it may jeopardize China's interests. But there is no such debate today.

China has benefited a lot from foreign investment in the past 30 years or so. It has boosted China's economic and social progress, improved people's livelihood and helped the Chinese people learn new things and look at the world in a new way.

China's enduring social and political stability, in turn, guarantees the interests of foreign investors. An important reason for them to invest in China is the high profit they always get in the Chinese market. Some reports at the Davos World Economic Forum held not long ago pointed out that despite certain complaints about China's investment environment, China remains the most profitable and most attractive market for European businesses.

Nowadays Chinese businesses have begun to show interests in investing in the European market. However, by the end of 2009, China's investment in the 13 countries in Central and Eastern Europe was only 0.25% of China's total investment overseas and 10% of China's investment in the EU. Central and Eastern European countries are friends of China. And China values economic cooperation and trade with them on the basis of equality and mutual benefit. These countries need technologies and investment in infrastructure and energy, and this is what China can offer.

In China, the government's role is to serve the businesses, not to make decisions for them. Companies make investment overseas independently in a market economy. It is only natural that Chinese companies win the bid for some projects thanks to the quality yet affordable Chinese equipment as well as applicable Chinese technologies. There is nothing unfair about it.

Contrary to what you said about the concern over Chinese investment, what I hear from Central and Eastern European countries are words of welcome, saying that there is too little, not too much Chinese investment. But Chinese companies do face some difficulties in the European market.

For one thing, they are not familiar with the political, legal and social environment in Europe and do not have adequate managerial expertise, therefore need help from local companies and legal protection.

For another, some European media accuse them of ulterior motives. This dampens their investment enthusiasm. As a result, they would rather head for elsewhere for opportunities, since the investment environment in Europe is not considered favorable. We try to convince these companies that the reports by some individual journalists do not represent the view of Europe as a whole.

What I am saying is that Chinese companies need to have a good atmosphere to do business in Central and Eastern Europe. And I hope that Bulgaria and other friendly countries will give them more support.

China has been on the receiving end of the global outsourcing for decades. Has China already started to outsource itself? Will Eastern Europe be one of the regions where Chines businesses will be very active?

We have been receiving investment for years. At the beginning there was a debate about: foreigners come in and make more money than we do. Some Chinese people felt we were exploited. But the opposing argument was that if we didn’t let them come in, there would be no jobs.

So we opened up and we’ve been trying to attract as much investment as possible for three decades. Now we have reserves, and we need to spend it. Chinese people like saving money. Now we need to learn to invest.

Chinese companies started investing abroad in the past 5-10 years and it is building up gradually. But our companies weakness is not to have sufficient information, experience, and personnel. For example you want to invest in Bulgaria, you need to have someone who speaks Bulgarian, etc. It is a learning process.

The Chinese people are very affectionate people, and relationship is important for them. We believe that person-to-person trust is the most important thing. That’s why we are investing more in Africa. We’ve known the Africans for decades. We treat each other as equals. The comfort level is high. Now a lot of Chinese investment is going to Latin America because they, too, treat us like brothers.

It is often the case of two steps forward, one step backwards in Europe because whenever China does something, some media would say, “Oh, there is a threat, there is danger, there is a plot. So the Chinese think, “Why should I go there? Is it safe? If people don’t like us, why should I risk my money? I will go somewhere else.”

There is more knowledge in China for Eastern European countries. But still, it takes time to build up experience for investing here. We need to have one or two success stories, and build up on that.

The other difficulty in Europe may be efficiency. Sometimes it takes long time to get things done and that doesn’t help attracting investment.

At the China-EU Summit last October, Chinese Premier Wen Jiabao asked the EU not to join the US and some other major countries in urging the RMB to appreciate. Do you think that the EU better understand China's position on this "currency battle"?

The RMB appreciated 55% between 1994 when China started the exchange rate reform and the financial crisis in 2008. But China's trade surplus increased rather than decreased during this period. The exchange rate reform was suspended during the financial crisis, yet our trade surplus fell. This shows that there is no sure correlation between a country's exchange rate and its surplus.

Whether a country runs deficit or surplus depends upon the international division of labor and the trade structure. At the moment, the moment is not ripe yet to have a sharp RMB appreciation. Let me also take this opportunity to underscore that the exchange rate is a sovereign issue. For China, a country in the process of financial reform, exchange rate reform cannot be completed overnight.

Some countries tend to blame China and the RMB exchange rate for their own domestic problems. This view has been refuted by a number of prominent economists, including Nobel Laureate Joseph E. Stiglitz. Should the RMB appreciate drastically, myriads of Chinese exporting companies, whose profits margin are as low as 2% to 3%, would go out of business. China's social stability will bear the brunt of a problematic economy, and the EU will have nothing to gain from that. I hope that the EU, as China's major trading partner, would understand China's position.

China has taken measures to help restore financial stability to countries in the euro zone. What does a stable euro and euro zone mean to China's long-term interests? And what do you think can still be done to maintain the stability of the euro?

China supports the EU integration process consistently and values China-EU comprehensive strategic partnership. We are willing to work together with the EU to handle global challenges, including the international financial crisis.

Not long ago, some EU countries ran into a sovereign debt crisis. Out of friendship with European countries and the overall interests of China-EU relations, China bought the government bond of Greece, Iceland and Spain.

Chinese leaders also pledged that China will keep holding and, in light of the evolving situation, buy more new bond. This is also in the interest of China, since our economic growth is largely dependent upon a stable external environment.

I've accompanied several Chinese leaders in their visits to Europe since last year. A consistent message was sent through all these visits, that is, China firmly supports European countries in tackling the sovereign debt crisis, as well as the stability in the euro zone. China believes that a stable euro is indispensable to sound China-EU cooperation. We are confident that the EU and euro zone countries can maintain the stability of the euro.

During the Beijing Olympics, you said that the West should not "demonize" China. Do you think the West is still "demonizing" China now? Is it an upward or downward trend?

At a press conference of the just-concluded annual session of the National People's Congress (NPC), Foreign Minister Yang Jiechi said that it was difficult to be a Chinese.

After the outbreak of the debt crisis in Europe, some European friends hoped that China would extend a helping hand, yet some European media claimed that China's buying of the government bond of European countries had its hidden agenda and was a threat. Then, to buy or not to buy, this is a question. It seems that there will always be some one pointing fingers at us whether we buy it or not. This is hard to understand.

Western media has growing coverage of China today, many of which are self-contradictory though. On one hand, they ask China to expand domestic demand; on the other hand, they accuse China of consuming too much resources. On one hand, they accuse China of having no freedom of press; on the other hand, they blame rising nationalism among Chinese netizens for expressing dissatisfaction with the West. On one hand, they insist that China shoulder international obligations together with Europe; on the other hand, they call for maintaining EU's arms embargo on China. China finds these contradictory views confusing.

After the outbreak of recent turmoil in North Africa, some Western media tried every means to seek "revolution" in China. As it turned out, those at the center of the so-called "protest" in Beijing are the foreign journalists. It has been a joke among the Chinese people.

The root cause of these problems is that the West does not accept China's political system. Though there are at best mixed results among developing countries with the Western system, the West keeps finding faults with China as long as it is considered "different".

For China, stability is the precondition for development and the very foundation of everything we do. Stability is like the number "1" in figures as large as 100, 1,000, 1,000,000 or even 100,000,000, while development is the many "0"s that follow. Without the "1", no matter how many "0"s there are, it amounts to nothing but zero. China will not allow anyone or anything to stir up social turmoil and upset social stability.

I know you once worked in Bucharest. Can you tell us how China views the Balkan region from the political and diplomatic perspective? Is West Balkan still seen as a region of great instability?

I used to travel to Bulgaria when I worked in Romania early in my diplomatic career. The trip this time brings back many fond memories.

Despite the long distance between China and the Balkans, we have been enjoying friendly relations with countries in the region. And the friendship among the peoples endures in spite of the ups and downs we each encounter in our respective countries. This has not come easily and should be cherished.

Thanks to our joint efforts, China and countries in the region have maintained friendly exchanges and close cooperation in international and regional issues over the years. China respects Balkan countries' independent choice of development path. And countries in the region are committed to the One China policy. We both want to further deepen pragmatic cooperation in the political, economic and cultural fields on the basis of equality and mutual benefit. I am optimistic about the prospect of this relationship.

West Balkan countries are committed to European integration and a peaceful settlement of problems through dialogue. I am confident that countries in the region and their peoples are fully capable of addressing their problems to promote peace, stability and common prosperity of this region.

Bulgaria is the second country in the world to recognize the People's Republic of China, and the year 2009 marks the 60th anniversary of our diplomatic relations. Vice President Xi Jinping visited Bulgaria in October 2009 and met with Prime Minister Boyko Borissov. His visit is seen as a prelude of further exchanges between the two countries. How do you evaluate China's relationship with Bulgaria now?

Vice President Xi Jinping visited Bulgaria in October 2009, the 60th anniversary of our diplomatic relations. He had a good talk with President Georgi Parvanov and Prime Minister Boyko Borissov during his visit and reached broad consensus with them on further developing our traditional friendship and conducting pragmatic cooperation across the board. This consensus is either implemented or in the process of being implemented.

Prime Minister Boyko Borisov and Premier Wen Jiabao had a meeting on the sidelines of the UNGA last September and charted the course for further growth of bilateral relations. I think this relationship is good, and can be even better compared with the expectation of the leaders and the people of both countries.

I wish to make a special mention to a recent event as a symbol of China-Bulgaria friendship. As the situation in Libya deteriorated, the Chinese government organized an all-out evacuation campaign, and successfully evacuated 35,860 Chinese nationals out of Libya after working round the clock for nine days and eight nights.

We also received friendly assistance from Bulgaria in this process, as 10 Chinese citizens left Libya onboard the special plane of the Bulgarian government. I want to take this opportunity to thank the government and people of Bulgaria again for this testament of friendship.

Bulgaria hopes to see more Chinese investment and presence in major economic cooperation projects. What are the projects that China is most interested in?

The recent years have seen smooth progress in economic cooperation and trade between China and Bulgaria. Many Chinese companies have invested in Bulgaria, including large companies like Huawei Technology, ZTE and Great Wall Motor as well as some small and medium sized private companies. For instance, Wiscom System and Polar Photovoltaics jointly built a solar power station in Ihtiman, which is already on grid.

Since the beginning of this year, a number of Chinese companies have come to Bulgaria to seek cooperation in wind power and solar power projects. Shanghai, Guangdong and other localities in China have also shown an unprecedented interest in Bulgaria in infrastructure, renewable energy and local specialties. I hope cooperation in these areas will materialize and bring more tangible benefits to our peoples.

I think there are good opportunities in infrastructure for example which facilitates economic growth. China has the experience and expertise and we will be very happy if we can help you with railways and highways. It is good business for both sides.

The second one is tourism. Last year 60 million Chinese traveled abroad. Very soon their number could reach 100 million. And Bulgaria is such a beautiful place, so calm and quiet.

Bulgaria had 43 Chinese children from the 2008 Sichuan earthquake zone here for recuperation. That made your name in China. It was on the news, and everybody was saying, "Oh, look at Bulgaria!" It was very good promotion. You should capitalize on that good image. I am confident and optimistic that there are a lot of things we can do together.

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Tags: RMB, euro zone, EU, People's Republic of China, China, Vice Minister, Fu Ying, outsourcing, Eastern Europe, infrastructure, tourism

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