We interviewed the Ambassador of the People’s Republic of China in Italy, Li Junhua, on the relations between China and Europe, and in particular with Italy, and on the outcome of the Chinese legislative period.
During the Two Sessions, China announced a 6% growth target. What is the relevance in this perspective of the “dual circulation” set out by President Xi Jinping?
At a time when China is entering a new stage of its development, “dual circulation” is the necessary path and meets an implicit demand in the realization of the new high-quality development model. In the more than 40 years since the launch of the Reform and Opening-up Policies, China’s economy has been fully integrated into the global economy and has made important contributions to global economic growth. As the second largest economy in the world, China and its development model cannot rely solely on the traditional strength of low production cost, but also needs new levers such as innovation, a high-quality supply chain and creating new demand.
We must build a new model of development that has as its pivot the circulation of goods and products at the national level, and at the same time creates a synergy of mutual promotion between national and international circulation. Obviously, “dual circulation” does not mean decoupling from the rest of the world, an “internal circulation” closed in on itself; on the contrary, it means achieving a high degree of openness to the outside world through the development of the potential of domestic demand. It means creating a better interconnection between domestic and international markets and a large circulation with mutual promotion.
In the next 5 years, China expects to import services worth more than $2.5 trillion. In the next 10 years, China expects to import products worth more than $22 trillion. We invite more and more Italian companies to seize these opportunities, enter the Chinese market and share in the profits of its development.
Beijing and the European Commission have come to an agreement on CAI that will need to be ratified by the European Parliament. How would European companies be benefited by this agreement?
The Investment Agreement between China and the EU, reached after seven years of negotiations, is a comprehensive, balanced and high-level investment agreement. The two sides have expressed their utmost commitment and made important promises creating an unprecedented reciprocal framework. For example, China, for the first time, has promised openness to companies in all sectors, including those in the service industry, using the form of negative lists. As another example, the EU and China, in most sectors, have agreed not to impose restrictions on management or local R&D, creating an optimized business environment.
Currently, the volume of China-EU bilateral investment is small, accounting for about 5% of the total foreign investment that each side attracts. On one hand, this is a situation that is ill fitting for the weight of China and the EU in the global economy, and, on the other hand, greater Sino-European investment cooperation holds enormous potential for development. It can be expected that the entry into force of the China-EU Investment Agreement will provide greater market access for China-EU bilateral investment, create a higher level business environment and stronger systemic guarantees. At the same time, after the Agreement enters into force, it will inject a great energy boost to promote global economic recovery in the post-pandemic period and promote the liberalization and facilitation of global trade and investment.
For Italy in particular, which Chinese economic sectors could see an increase in interchange between the two countries?
Sino-Italian economic and trade cooperation has an excellent basis and a positive trend. Last year, bilateral trade reached a new record, exceeding $55 billion. I believe that sectors such as the digital economy, environmental protection, health, as well as culture, tourism and sports all have enormous potential for development. China’s 14th Five-Year Plan indicates that annual investment in research and development will be more than 7%, and will continue to increase investment in big data, artificial intelligence and electric cars.
China has already stated its goals of peaking carbon emissions in 2030 and achieving carbon neutrality in 2060. We will deliver on these promises. These goals are well aligned with Italy’s “green transition” goal. Today’s China faces the challenge of an aging population, and consumer demand in the health sector is growing steadily. Moreover, 2022 will be the Year of Italy-China Culture and Tourism, and in the next five years, China and Italy will take turns in hosting the Winter Olympics. Therefore, “culture, tourism and the snow economy” will become the key concepts.
Regarding China and the U.S., will it be possible with Biden to have a more civilized dialogue, able to bring U.S.-China relations back to normal?
China and the United States are the world’s top two economies and permanent members of the UN Security Council. If they are able to communicate and cooperate effectively with each other, this is directly linked to the well-being of the peoples of the two countries, but also to the peace, stability and prosperity of the entire world.
During the Chinese New Year, President Xi Jinping had a telephone conversation with President Biden and stressed that China intends to focus on cooperation with the United States and managing differences with mutual respect and cooperation, rather than rivalry and conflict, in order to promote the healthy and stable development of bilateral relations. China and the United States have already set March 18 as the date for the high-level dialogue.
Prejudice and antagonism cannot bring hope. Instead, respect and cooperation are the high road to common benefits. We are willing to engage in honest and fair communication with our American counterparts. We hope that the U.S. will look at China and Sino-U.S. relations objectively and reasonably and work together with China. This is in the interest of the Chinese and American peoples and in line with the expectations of the international community.
China is being criticized by European countries and the U.S. regarding Hong Kong, particularly with respect to the reform of the electoral system that will be voted on in the NPC. Can you tell us why they shouldn’t be concerned about that?
Hong Kong is part of China. The Chinese Constitution and the Basic Law together form the constitutional basis for the Hong Kong Special Administrative Region. In recent years, we have seen unrest in Hong Kong. Hong Kong’s electoral system has clearly shown flaws and holes, which have become opportunities for anti-China disruptors in Hong Kong.
The only correct solution was to perfect Hong Kong’s electoral system to ensure the lasting and stable implementation of the principle of “One Country, Two Systems” and the principle of “The People of Hong Kong rule Hong Kong,” with patriots as the cornerstone. This is part of the power and responsibility given to the National People’s Congress by the Constitution, so it is entirely reasonable and legitimate.
Just think—what country would put its local jurisdiction in the hands of people who do not recognize, who do not respect their country, and incite or carry out separatist activities that harm national interests? The facts show that Hong Kong’s transition from chaos to order is helpful in protecting the rights of Hong Kong citizens and is an important safeguard of the legitimate interests of foreign investors. Foreign companies operating in Hong Kong, including Italian companies, will enjoy a more stable and secure business atmosphere and environment.
If certain countries have no political temptations, why should they be “concerned” about Hong Kong’s stability and prosperity? Hong Kong’s affairs are purely China’s internal affairs, in which no outside interference is allowed.