Responsible Sovereignty: A New Bargain For The International Community
Peking University, Beijing
February 29th, 2008
This speech concludes a memorable five day visit to Hong Kong, Shanghai, Chongqing and Beijing. In each venue, I have seen important changes underway and discussed the next steps in the burgeoning cooperation between China and Britain. Premier Wen and Prime Minister Brown have agreed that our relations have never been stronger, and I am committed to ensure we build on the wide-ranging cooperation underway, deepening our understanding of the challenges we face and developing our joint work in the interests of economic progress, social justice and global security.
Both China and the UK have been major beneficiaries of globalisation.
For China, integration into the global economy has been the driver of the most remarkable story of rapid national progress in human history. 500 million people have been raised out of poverty in just thirty years. Chinese goods dominate European and US markets. Growth rates of nearly 10 per cent a year have propelled China’s resurgence as the fourth largest economy in the world.
For the UK, globalisation has helped address some of the structural sources of our relative economic decline. Foreign capital has tackled the lack of long term investment from weak savings. Foreign talent has filled gaps in skills and management expertise. Foreign products at competitive prices have helped to keep inflation down.
But globalisation, like all complex changes, has its risks and the critics have some persistent, pertinent questions. How to promote stability within our borders without losing the dynamism and prosperity that comes from the free movement of money, ideas, products and people? And how to promote security beyond our borders through international cooperation to meet global threats?
The argument I will make today is that we will be more resilient to the risks from globalisation if we can build an ethos of ‘responsible sovereignty'. The nation state is the founding unit of affiliation and organisation in this age as in the one that has gone before. But national sovereignty becomes responsible sovereignty when nations pay heed both to the domestic demands of their own citizens and to their international responsibilities to citizens of the world beyond their borders. Patriotism requires internationalism.
Responsible sovereignty begins at home because domestic and foreign policy are linked. Economic growth in other countries matters to the rest of us more than ever before. Instability is contagious. Health and environmental problems do not respect national borders. And citizens ask hard questions about countries they are trading with: they want to know about health and labour standards, ethics and foreign policy positions. Chinese domestic policy, because of the size and importance of the country, matters more than most.
China is having a debate about welfare provision. We follow this with interest, not least because the spending decisions of millions of Chinese have an impact on our economy. But we are also interested because we know from our own history that economic and social disparities undermine the cohesion of society.
China is having a debate about political reform: President Hu has called democracy ‘the common pursuit of mankind’. From our vantage point, a voice for citizens within the political system is essential to the maintenance of the legitimacy of that system, as well as a vital check on corruption and the abuse of state power.
And China is also under scrutiny over human rights. It is important to be clear about what this refers to. It means reforming judicial processes, strengthening the rule of law, allowing greater freedom of expression, and extending individual liberties. We feel strongly about these issues. Human rights are a basic democratic value. It is also clear in our experience that individual rights are a vital component of a stable and sustainable, political and economic system.
But my speech today is not about responsible sovereignty at home. It is about responsible sovereignty abroad. It’s very important we find common ground on this. The progress of globalisation is by no means guaranteed. The good that has been done could yet be undone. The rewards of globalisation could yet fall victim to the risks. There are three distinct threats that I want to address today:
The rise of protectionism and the need for openness to be reciprocated between countries.
The threat from climate change to our security and prosperity.
And the risks posed by faltering states – states that are either too weak to maintain the rule of law, or so strong that they threaten the safety of neighbouring states.
We will only resolve these shared threats through a new bargain between major states in the international community, embedded in our bilateral relationships, multilateral institutions, and not least the partnership between China, the world’s fastest growing economy, and Europe, the world largest single market.
Isolation would be a disaster for that process and there is too much at stake. That is why my message to British people back home is simple. Do not boycott the Olympics, celebrate them instead.
But my message to China is equally simple. Do not believe Steven Spielberg is going to wreck the Olympics, however much the Olympics focuses the world’s attention on China. But do recognise that when individuals raise concerns over government policies, this is not borne of desire to pick on China or block its rise but instead see its power used as a force for good in the world. There lies the route to continued international consent and even acclaim.
Responsible sovereignty means these are issues for all years not just Olympic years. And we want to be there with you. Protectionism
The first shared threat we must address is protectionism.
An open global economy has driven economic growth and the rise in living standards across the world. But economic restructuring and adaptation can be painful. The pain is immediate and the benefits are often post-dated. Protectionism is a political temptation and we can see some politicians on the point of yielding in the US and across the EU.
Responsible sovereignty demands that we keep the forces of protectionism at bay. It demands that we dismantle barriers to trade. The UK will, for our part, continue to argue strongly for open trade and investment. But the proponents of free trade need China's help to win that argument in Europe and in the US. In particular, we need China’s full diplomatic weight behind the urgent quest for a new global trade deal that gives the poorest people in the world a share in the benefits of globalisation, and provides the global economy with a powerful engine for growth.
The basis is mutual openness. As Peter Mandelson said in his visit to China earlier this week: “many of the reforms we seek in Chinese trading practices and in broader economic policy – from the conditions for investment, to the development financial markets, or the protection of intellectual property – are central to Chinese interests also.”
Yet we have to acknowledge there is more work to be done. European businesses bemoan that the cost of Chinese barriers to trade is some 20bn euros a year- the equivalent to the total GDP of Bulgaria. The 17th Party Congress pledged further opening of the Chinese economy. That is necessary if we are to persuade the sceptics that trade with China is in our mutual interests. We need to counter the zero-sum rhetoric that suggests Chinese exports come at the expense of European and American prosperity and jobs. Our response to the global financial instability, and rising concerns about the sovereign wealth funds which we welcome to London, must not be to turn our back on the free movement of capital and goods, it must be to deepen our commitments to open, transparent economies. Climate Change
The second shared threat is climate change. Climate change is not just a threat in itself – it acts as a multiplier on existing stresses over scarce natural resources.
Global food prices are rising and this could accelerate as climate change affects harvests around the world. China already suffers from water scarcity but the shortage will increase if the Himalayan ice-glaciers melt. Parts of China’s productive capacity are vulnerable, like Europe’s, to even a small rise in sea levels. Rising oil and gas prices would be a major constraint on stable growth.
I know you recognise the scale and urgency of the problem and I welcome the actions you are taking to increase energy efficiency by 20 per cent by 2010, to increase the share of renewables in China’s energy mix to 15 per cent by 2020 and to increase forest cover to 20 per cent by 2010. I know that you share our goal of accelerating the transition to an energy efficient, low-carbon, high growth global economy.
To accelerate all our efforts, we need an international agreement of sufficient ambition on a post-2012 framework, based on common but differentiated responsibility. By mobilising international investment to support China’s transition to a low-carbon economy, a global deal can help you go further and faster. We need to develop a global carbon market that enables finance and technology to flow from richer countries to support the transition in China and across the developing world. Those countries that have historically been responsible for the greenhouse gas emissions need to help poorer countries adapt to the climate change already in train.
But we must also see this for the historic opportunity it is. The low-carbon transition will be a defining feature of the next phase of industrialisation. China and the emerging economies have the opportunity to leapfrog the industrialised world and move straight to low-carbon development. I am convinced that the benefits in innovation, job creation and even social cohesion of the transition to a low carbon economy far outweigh the costs. We need to have the confidence to seize the opportunity. Once we have done so we will look back and wonder why we were so hesitant.
We have now begun this transition in Europe. We are not waiting for a deal in Copenhagen. The EU has committed to reducing its Greenhouse Gas emissions by 20% by 2020, with the prospect of more if a deal is reached. In the UK, we are making our low carbon targets legally binding. We are the foremost provider of low-carbon finance to China. London is the financial centre for the emerging global carbon market. We are working with you to build in China one of the world’s first coal fired power stations with carbon capture and storage. Faltering States
The third threat comes from what I call ‘faltering states’: states that either too weak to guarantee the rule of law and protect their citizens, or states that are too strong and threaten the safety of neighbouring states.
I believe it is in all our interests to address the poor governance that can give birth to conflict and instability. Decisions to interfere in another country's affairs must never be taken lightly. Diplomatic engagement and aid both to promote good governance and encourage states to tackle inequalities must always be our preference.
In Africa, the challenges are huge but the prospects are brighter than for many years. The number of conflicts has fallen from 17 in 2000 to less than half that number today. Debt cancellation and increased aid has helped put 20 million more African children to go to school between 2000 and 2004. Chinese investment can help propel African countries to the next stage of development and growth.
But to make this sustainable the investment needs to promote better governance, less corruption and improved accountability. The attacks on Chinese owned oil facilities in Ethiopia last spring, or the kidnappings of Chinese and British oil workers in Nigeria demonstrate the need for governance and the rule of law to underpin investment. African leaders have made their commitments to improve transparency and governance. China, the EU and Africa's other partners must use their engagement to support these goals.
But when the incentives of global engagement do not work, there will be cases for applying pressure.
Burma is on your border. You know it well. But let me set out our view. Aung Sang Sui Kyi's party won the elections freely and fairly in 1990. The regime has been brutal. The announcement of a referendum on a constitution in May and elections in 2010 will be seen by some as progress. But if the process is to bring long-term stability and if it is to be credible, Aung San Suu Kyi and other political prisoners must be released immediately and allowed to participate in drafting the constitution and in the subsequent referendum campaign. We hope that UN Special Envoy Gambari will be able to facilitate the process during his forthcoming visit.
The case of Iran is different. The actions of its government are of concern to all of us determined to counter the threat of nuclear proliferation. The UK and China are working together with other Security Council members to address Iran's uranium enrichment programme. The commitment to cooperation remains on the table. But Tehran's rejection of the June 2006 offer by the E3+3 means the international community must now step up the pressure on Iran through further UN sanctions.
There are also acute cases that require our attention. Sometimes, responsible sovereign nations must be prepared to intervene together where they see a risk to regional stability and where a state is unable or unwilling to address the problem itself. That is why in Darfur, the international community is united on the need for a UN/AU force to protect the people. Some Chinese and other peacekeepers are already on the ground. But the Government of Sudan has to facilitate their entry in sufficient numbers and ensure that they can do their job properly. This means cooperating with the UN on the full deployment of the UNAMID force and an end to the bombings in west Darfur. The rebels have responsibilities too: all sides must cease violence, respect their responsibilities under international law and engage constructively in peace talks. And both the government of Chad and the government of Sudan need to stop supporting rebel leaders in each other’s countries. A New Bargain
My argument so far has been that globalisation has created shared threats and interests that necessitate deeper obligations both within states, to their own citizens, and between states.
But the challenge is to translate shared interests into shared action.
Here we are hampered by the mismatch between the international institutions designed in the aftermath of the second world war and realities of the new millennium.
Interdependence is the defining feature of our age. It requires a different type of international politics. Not the old idea of a bargain based on competing interest, but a new bargain based on mutual shared interest. Not the old international system based on balance between opposing powers, but an international system that enshrines shared commitments.
The UK can nurture this new bargain through our bilateral ties with China. In the past, the UK was seen as a bridge between Europe and the United States. I believe, in what may come to known as the Asian Century’, Britain must become a global hub. That means it has to deepen its relationship with China and other emerging powers. The popularity of the English language and UK universities, the UK's world class science base, and the global financial hub provided by the City of London provide a basis.
So too does Britain’s position within international institutions. In per capita terms, China may still be relatively poor. But in aggregate terms it is already huge, and a major factor in the global economy. It makes no sense to discuss the management of global economic problems without China at the table. That is why we want the G8+5 to function better, giving an equal voice to all involved in it. For similar reasons, we are pushing for international financial institutions to give China the weight it deserves in voting shares, and seeking to make the IMF and World Bank more relevant to our shared threats of financial instability and climate change.
But there is also a major opportunity for Britain to engage with China over the next decade through the European Union. The EU is the world’s largest single market and the EU is China’s most important trading relationship. China is the fastest growing major economy. We have deeply aligned interests, as energy constrained, open economies that depend on imported oil and gas. By harnessing our market power together to accelerate EU/China trade and investment in low carbon goods and services, we could set standards for the global transition to low carbon. This would not only boost the climate effort, and make possible a stronger agreement in Copenhagen. It would also bring enormous benefits to us both as early movers in the new low carbon global economy.
But there are blockages that we must address together.
First, Europe itself must be able to speak with one voice. The institutional changes provided by the Lisbon Treaty, in particular, the introduction of a permanent President of the European Council, and the creation of the position of High Representative for Foreign Affairs and Security Policy is a major opportunity for Europe to translate common interest into common positions.
Second, we need to deepen the EU-China dialogue so that it addresses not just the technocratic challenges, but bigger political choices and opportunities. Only through deeper, more regular, more structured, more strategic engagement will we foster trust and cooperation.
Third, we must be honest about the terms of a new bargain between Europe and China. Europe can open up its markets to China and push others to do so. But European member states will struggle to stave off the rise of protectionism or argue for financial transfers for climate change, unless they can show their citizens that China is a responsible sovereign nation. Bargains between nations can no longer be done behind closed doors. The more our publics see China using its growing influence around the world to pursue vital shared interests – from African development and Korean denuclearisation to low carbon growth – the greater will be the public support for increased market opening. Conclusion
In 1910, the Nobel Prize Winner Normal Angell, argued in his book The Great Illusion that the legacy of 19th century globalisation would be interdependence. We were on the threshold, he argued, of an age of cooperation and shared interest in which conflict between nations would dissolve.
It only took four years for the hope to be vanquished when the failure to integrate the rise of Germany into the global order precipitated the most terrible destruction.
Today, we face a similar historical moment. We might look back on these years as the beginning of co-operative and effective interdependence. It might be an age in which responsible sovereign nations learned, together, how to cope with the risks of globalisation.
I’ve concentrated today on the risks. But let’s imagine for a moment that, this time, the better outcome does not turn out to be a great illusion. Think, for the moment, of the rewards.
Imagine a world where, in ten or twenty years time, my local bank is as likely to be the China Construction Bank as it is the Royal Bank of Scotland and yours is as likely to be Barclays as the Bank of China.
Where as many people in Europe read Caijing Bao as read the Economist online in China.
Where a Chinese actress wins an American Oscar for a British film made in France.
Where our children work together on their latest geography project across the internet.
Where the EU Emissions Trading System and your technology have stabilised emissions in Europe and China and moved us towards low carbon development.
Where our brightest have a degree from Peking University, and yours from Sciences Po' or LSE.
Where NATO soldiers work with Chinese helicopters and pilots to bring peace in a conflict zone.
We can see what we need to do. We need to exercise our sovereignty with responsibility in recognition of the ties that now bind nations together. If we do so, then we will have banished the era of zero-sum international relations, and made a new start where a win for any us is a win for all of us. I believe the partnership between our great nations and I believe it can be done.
Peking University, Beijing
February 29th, 2008
This speech concludes a memorable five day visit to Hong Kong, Shanghai, Chongqing and Beijing. In each venue, I have seen important changes underway and discussed the next steps in the burgeoning cooperation between China and Britain. Premier Wen and Prime Minister Brown have agreed that our relations have never been stronger, and I am committed to ensure we build on the wide-ranging cooperation underway, deepening our understanding of the challenges we face and developing our joint work in the interests of economic progress, social justice and global security.
Both China and the UK have been major beneficiaries of globalisation.
For China, integration into the global economy has been the driver of the most remarkable story of rapid national progress in human history. 500 million people have been raised out of poverty in just thirty years. Chinese goods dominate European and US markets. Growth rates of nearly 10 per cent a year have propelled China’s resurgence as the fourth largest economy in the world.
For the UK, globalisation has helped address some of the structural sources of our relative economic decline. Foreign capital has tackled the lack of long term investment from weak savings. Foreign talent has filled gaps in skills and management expertise. Foreign products at competitive prices have helped to keep inflation down.
But globalisation, like all complex changes, has its risks and the critics have some persistent, pertinent questions. How to promote stability within our borders without losing the dynamism and prosperity that comes from the free movement of money, ideas, products and people? And how to promote security beyond our borders through international cooperation to meet global threats?
The argument I will make today is that we will be more resilient to the risks from globalisation if we can build an ethos of ‘responsible sovereignty'. The nation state is the founding unit of affiliation and organisation in this age as in the one that has gone before. But national sovereignty becomes responsible sovereignty when nations pay heed both to the domestic demands of their own citizens and to their international responsibilities to citizens of the world beyond their borders. Patriotism requires internationalism.
Responsible sovereignty begins at home because domestic and foreign policy are linked. Economic growth in other countries matters to the rest of us more than ever before. Instability is contagious. Health and environmental problems do not respect national borders. And citizens ask hard questions about countries they are trading with: they want to know about health and labour standards, ethics and foreign policy positions. Chinese domestic policy, because of the size and importance of the country, matters more than most.
China is having a debate about welfare provision. We follow this with interest, not least because the spending decisions of millions of Chinese have an impact on our economy. But we are also interested because we know from our own history that economic and social disparities undermine the cohesion of society.
China is having a debate about political reform: President Hu has called democracy ‘the common pursuit of mankind’. From our vantage point, a voice for citizens within the political system is essential to the maintenance of the legitimacy of that system, as well as a vital check on corruption and the abuse of state power.
And China is also under scrutiny over human rights. It is important to be clear about what this refers to. It means reforming judicial processes, strengthening the rule of law, allowing greater freedom of expression, and extending individual liberties. We feel strongly about these issues. Human rights are a basic democratic value. It is also clear in our experience that individual rights are a vital component of a stable and sustainable, political and economic system.
But my speech today is not about responsible sovereignty at home. It is about responsible sovereignty abroad. It’s very important we find common ground on this. The progress of globalisation is by no means guaranteed. The good that has been done could yet be undone. The rewards of globalisation could yet fall victim to the risks. There are three distinct threats that I want to address today:
The rise of protectionism and the need for openness to be reciprocated between countries.
The threat from climate change to our security and prosperity.
And the risks posed by faltering states – states that are either too weak to maintain the rule of law, or so strong that they threaten the safety of neighbouring states.
We will only resolve these shared threats through a new bargain between major states in the international community, embedded in our bilateral relationships, multilateral institutions, and not least the partnership between China, the world’s fastest growing economy, and Europe, the world largest single market.
Isolation would be a disaster for that process and there is too much at stake. That is why my message to British people back home is simple. Do not boycott the Olympics, celebrate them instead.
But my message to China is equally simple. Do not believe Steven Spielberg is going to wreck the Olympics, however much the Olympics focuses the world’s attention on China. But do recognise that when individuals raise concerns over government policies, this is not borne of desire to pick on China or block its rise but instead see its power used as a force for good in the world. There lies the route to continued international consent and even acclaim.
Responsible sovereignty means these are issues for all years not just Olympic years. And we want to be there with you. Protectionism
The first shared threat we must address is protectionism.
An open global economy has driven economic growth and the rise in living standards across the world. But economic restructuring and adaptation can be painful. The pain is immediate and the benefits are often post-dated. Protectionism is a political temptation and we can see some politicians on the point of yielding in the US and across the EU.
Responsible sovereignty demands that we keep the forces of protectionism at bay. It demands that we dismantle barriers to trade. The UK will, for our part, continue to argue strongly for open trade and investment. But the proponents of free trade need China's help to win that argument in Europe and in the US. In particular, we need China’s full diplomatic weight behind the urgent quest for a new global trade deal that gives the poorest people in the world a share in the benefits of globalisation, and provides the global economy with a powerful engine for growth.
The basis is mutual openness. As Peter Mandelson said in his visit to China earlier this week: “many of the reforms we seek in Chinese trading practices and in broader economic policy – from the conditions for investment, to the development financial markets, or the protection of intellectual property – are central to Chinese interests also.”
Yet we have to acknowledge there is more work to be done. European businesses bemoan that the cost of Chinese barriers to trade is some 20bn euros a year- the equivalent to the total GDP of Bulgaria. The 17th Party Congress pledged further opening of the Chinese economy. That is necessary if we are to persuade the sceptics that trade with China is in our mutual interests. We need to counter the zero-sum rhetoric that suggests Chinese exports come at the expense of European and American prosperity and jobs. Our response to the global financial instability, and rising concerns about the sovereign wealth funds which we welcome to London, must not be to turn our back on the free movement of capital and goods, it must be to deepen our commitments to open, transparent economies. Climate Change
The second shared threat is climate change. Climate change is not just a threat in itself – it acts as a multiplier on existing stresses over scarce natural resources.
Global food prices are rising and this could accelerate as climate change affects harvests around the world. China already suffers from water scarcity but the shortage will increase if the Himalayan ice-glaciers melt. Parts of China’s productive capacity are vulnerable, like Europe’s, to even a small rise in sea levels. Rising oil and gas prices would be a major constraint on stable growth.
I know you recognise the scale and urgency of the problem and I welcome the actions you are taking to increase energy efficiency by 20 per cent by 2010, to increase the share of renewables in China’s energy mix to 15 per cent by 2020 and to increase forest cover to 20 per cent by 2010. I know that you share our goal of accelerating the transition to an energy efficient, low-carbon, high growth global economy.
To accelerate all our efforts, we need an international agreement of sufficient ambition on a post-2012 framework, based on common but differentiated responsibility. By mobilising international investment to support China’s transition to a low-carbon economy, a global deal can help you go further and faster. We need to develop a global carbon market that enables finance and technology to flow from richer countries to support the transition in China and across the developing world. Those countries that have historically been responsible for the greenhouse gas emissions need to help poorer countries adapt to the climate change already in train.
But we must also see this for the historic opportunity it is. The low-carbon transition will be a defining feature of the next phase of industrialisation. China and the emerging economies have the opportunity to leapfrog the industrialised world and move straight to low-carbon development. I am convinced that the benefits in innovation, job creation and even social cohesion of the transition to a low carbon economy far outweigh the costs. We need to have the confidence to seize the opportunity. Once we have done so we will look back and wonder why we were so hesitant.
We have now begun this transition in Europe. We are not waiting for a deal in Copenhagen. The EU has committed to reducing its Greenhouse Gas emissions by 20% by 2020, with the prospect of more if a deal is reached. In the UK, we are making our low carbon targets legally binding. We are the foremost provider of low-carbon finance to China. London is the financial centre for the emerging global carbon market. We are working with you to build in China one of the world’s first coal fired power stations with carbon capture and storage. Faltering States
The third threat comes from what I call ‘faltering states’: states that either too weak to guarantee the rule of law and protect their citizens, or states that are too strong and threaten the safety of neighbouring states.
I believe it is in all our interests to address the poor governance that can give birth to conflict and instability. Decisions to interfere in another country's affairs must never be taken lightly. Diplomatic engagement and aid both to promote good governance and encourage states to tackle inequalities must always be our preference.
In Africa, the challenges are huge but the prospects are brighter than for many years. The number of conflicts has fallen from 17 in 2000 to less than half that number today. Debt cancellation and increased aid has helped put 20 million more African children to go to school between 2000 and 2004. Chinese investment can help propel African countries to the next stage of development and growth.
But to make this sustainable the investment needs to promote better governance, less corruption and improved accountability. The attacks on Chinese owned oil facilities in Ethiopia last spring, or the kidnappings of Chinese and British oil workers in Nigeria demonstrate the need for governance and the rule of law to underpin investment. African leaders have made their commitments to improve transparency and governance. China, the EU and Africa's other partners must use their engagement to support these goals.
But when the incentives of global engagement do not work, there will be cases for applying pressure.
Burma is on your border. You know it well. But let me set out our view. Aung Sang Sui Kyi's party won the elections freely and fairly in 1990. The regime has been brutal. The announcement of a referendum on a constitution in May and elections in 2010 will be seen by some as progress. But if the process is to bring long-term stability and if it is to be credible, Aung San Suu Kyi and other political prisoners must be released immediately and allowed to participate in drafting the constitution and in the subsequent referendum campaign. We hope that UN Special Envoy Gambari will be able to facilitate the process during his forthcoming visit.
The case of Iran is different. The actions of its government are of concern to all of us determined to counter the threat of nuclear proliferation. The UK and China are working together with other Security Council members to address Iran's uranium enrichment programme. The commitment to cooperation remains on the table. But Tehran's rejection of the June 2006 offer by the E3+3 means the international community must now step up the pressure on Iran through further UN sanctions.
There are also acute cases that require our attention. Sometimes, responsible sovereign nations must be prepared to intervene together where they see a risk to regional stability and where a state is unable or unwilling to address the problem itself. That is why in Darfur, the international community is united on the need for a UN/AU force to protect the people. Some Chinese and other peacekeepers are already on the ground. But the Government of Sudan has to facilitate their entry in sufficient numbers and ensure that they can do their job properly. This means cooperating with the UN on the full deployment of the UNAMID force and an end to the bombings in west Darfur. The rebels have responsibilities too: all sides must cease violence, respect their responsibilities under international law and engage constructively in peace talks. And both the government of Chad and the government of Sudan need to stop supporting rebel leaders in each other’s countries. A New Bargain
My argument so far has been that globalisation has created shared threats and interests that necessitate deeper obligations both within states, to their own citizens, and between states.
But the challenge is to translate shared interests into shared action.
Here we are hampered by the mismatch between the international institutions designed in the aftermath of the second world war and realities of the new millennium.
Interdependence is the defining feature of our age. It requires a different type of international politics. Not the old idea of a bargain based on competing interest, but a new bargain based on mutual shared interest. Not the old international system based on balance between opposing powers, but an international system that enshrines shared commitments.
The UK can nurture this new bargain through our bilateral ties with China. In the past, the UK was seen as a bridge between Europe and the United States. I believe, in what may come to known as the Asian Century’, Britain must become a global hub. That means it has to deepen its relationship with China and other emerging powers. The popularity of the English language and UK universities, the UK's world class science base, and the global financial hub provided by the City of London provide a basis.
So too does Britain’s position within international institutions. In per capita terms, China may still be relatively poor. But in aggregate terms it is already huge, and a major factor in the global economy. It makes no sense to discuss the management of global economic problems without China at the table. That is why we want the G8+5 to function better, giving an equal voice to all involved in it. For similar reasons, we are pushing for international financial institutions to give China the weight it deserves in voting shares, and seeking to make the IMF and World Bank more relevant to our shared threats of financial instability and climate change.
But there is also a major opportunity for Britain to engage with China over the next decade through the European Union. The EU is the world’s largest single market and the EU is China’s most important trading relationship. China is the fastest growing major economy. We have deeply aligned interests, as energy constrained, open economies that depend on imported oil and gas. By harnessing our market power together to accelerate EU/China trade and investment in low carbon goods and services, we could set standards for the global transition to low carbon. This would not only boost the climate effort, and make possible a stronger agreement in Copenhagen. It would also bring enormous benefits to us both as early movers in the new low carbon global economy.
But there are blockages that we must address together.
First, Europe itself must be able to speak with one voice. The institutional changes provided by the Lisbon Treaty, in particular, the introduction of a permanent President of the European Council, and the creation of the position of High Representative for Foreign Affairs and Security Policy is a major opportunity for Europe to translate common interest into common positions.
Second, we need to deepen the EU-China dialogue so that it addresses not just the technocratic challenges, but bigger political choices and opportunities. Only through deeper, more regular, more structured, more strategic engagement will we foster trust and cooperation.
Third, we must be honest about the terms of a new bargain between Europe and China. Europe can open up its markets to China and push others to do so. But European member states will struggle to stave off the rise of protectionism or argue for financial transfers for climate change, unless they can show their citizens that China is a responsible sovereign nation. Bargains between nations can no longer be done behind closed doors. The more our publics see China using its growing influence around the world to pursue vital shared interests – from African development and Korean denuclearisation to low carbon growth – the greater will be the public support for increased market opening. Conclusion
In 1910, the Nobel Prize Winner Normal Angell, argued in his book The Great Illusion that the legacy of 19th century globalisation would be interdependence. We were on the threshold, he argued, of an age of cooperation and shared interest in which conflict between nations would dissolve.
It only took four years for the hope to be vanquished when the failure to integrate the rise of Germany into the global order precipitated the most terrible destruction.
Today, we face a similar historical moment. We might look back on these years as the beginning of co-operative and effective interdependence. It might be an age in which responsible sovereign nations learned, together, how to cope with the risks of globalisation.
I’ve concentrated today on the risks. But let’s imagine for a moment that, this time, the better outcome does not turn out to be a great illusion. Think, for the moment, of the rewards.
Imagine a world where, in ten or twenty years time, my local bank is as likely to be the China Construction Bank as it is the Royal Bank of Scotland and yours is as likely to be Barclays as the Bank of China.
Where as many people in Europe read Caijing Bao as read the Economist online in China.
Where a Chinese actress wins an American Oscar for a British film made in France.
Where our children work together on their latest geography project across the internet.
Where the EU Emissions Trading System and your technology have stabilised emissions in Europe and China and moved us towards low carbon development.
Where our brightest have a degree from Peking University, and yours from Sciences Po' or LSE.
Where NATO soldiers work with Chinese helicopters and pilots to bring peace in a conflict zone.
We can see what we need to do. We need to exercise our sovereignty with responsibility in recognition of the ties that now bind nations together. If we do so, then we will have banished the era of zero-sum international relations, and made a new start where a win for any us is a win for all of us. I believe the partnership between our great nations and I believe it can be done.
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