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Jorge Toledo: “We need China to rule the world”

By Robert

July 17, 2022

Jorge Toledo Albignana is the new Ambassador of the European Union to China. On September 1, if the pandemic allows, he will arrive in Beijing to take up his position, one of the most important that Spanish diplomacy has held in the EU foreign service. On Monday, he was at the Equestrian Club of Barcelona to deal with problems related to his new position. One of the main ones will be China’s conviction that it is one of the countries that benefited most from the world order that emerged as a result of World War II, and that cooperation with the West must continue.

Can China be a rival and a partner at the same time?

The EU strategy defines it as a partner. It is important and necessary that China rule the world. Without your help, we will not be able to cope with such global challenges as the pandemic and the climate crisis. It is an important partner in reaching an agreement with Iran on nuclear weapons.

But the EU also defines it as a commercial and systemic rival.

China is the second economy in the world in terms of GDP and the first in terms of purchasing power parity, that is, what can be done with the dollar.

Are we commercial competitors?

The EU and China are the most important trading partners in the world. Trade between the EU and China is more than 2,000 euros per day. This is more than trade between China and the US or between China and India. However, we are also competitors. But we should not fight, but negotiate so that European companies that export to China have the same conditions as Chinese companies that export to Europe, which is not happening now.

Is there a risk of separation?

Yes, but not by the will of China. It was Western businessmen who saw the need to rethink production. The pandemic has exposed the vulnerability of value chains. States, for their part, are reluctant to over-rely on materials such as rare earths and technologies that could be sanctioned. However, China’s exports to Europe continue to grow. Chinese foreign trade continues to grow. That is why disconnection will cause a cataclysm. Despite ongoing deglobalization, the world is extremely intertwined. We depend on each other.

What about systemic competition?

The EU defines China as a systemic rival because we are societies with very different values ​​and political systems. We don’t want you to export your model, but that doesn’t mean we have to push for regime change in China.

NATO accuses China of undermining the security, values ​​and interests of its allies.

China is no longer playing for time and hiding its power, as it was in the days of Deng Xiaoping. For several years it has shown its strength, especially in the South China Sea, and this creates very important geostrategic problems in the most important area of ​​​​international trade and economy. We cannot tolerate the fact that China violates the norms of international law accepted by all and occupies territories that do not belong to it. This does not mean that we cannot agree with her.

How do you see President Xi Jinping? She made an alliance with Russia, today the main enemy of Europe and NATO.

President Xi is the leader of one of the world’s great powers, and we must come to terms with him.

But Xi is Putin’s ally.

What is happening in Ukraine does not suit China at all. The territorial unity of the country is fundamental to China. Xi is pushing for this to demand reunification with Taiwan. Therefore, for consistency, Russia’s aggression against Ukraine should be condemned.

But he doesn’t and threatens Taiwan with force.

China has seen the invasion of Ukraine met with one of the most powerful reactions from the EU, the US, Canada, Japan, Korea and many other countries. I’m not saying that Ukraine is an example of what can happen in Taiwan, but China was surprised by such a united reaction. Also, Taiwan is a mountainous island, not a flat country with wide land borders like Ukraine. It is to think about it.

How will the EU react to a possible Chinese attack on Taiwan?

The EU is not defending Taiwan independence, but peaceful reunification. We believe that there should be only one China, but in the event of a military invasion, we have made it very clear that the EU, together with the US and its allies, will introduce the same or even more serious measures than those that we have now taken against Russia. .

Is the EU fulfilling US orders in China or does it have its own agenda?

The EU has its own geopolitical profile. We are the largest market in the world. The greatest regulatory authority in the world. We use this power to be someone on the geopolitical scene. The fact that we are US allies does not mean that we agree with Washington on everything. The EU stands for multilateralism, for the work of international institutions such as the World Trade Organization, which have brought so much to China.

The Chinese economy appears to have structural problems. It’s not as competitive anymore.

China has lifted nearly 800 million people out of poverty. This is the success of the free market, not communism. However, as with any country that develops very rapidly, there comes a point when it cannot continue to grow as rapidly. The demographic pressure on the economy is enormous. Labor becomes more expensive, competitiveness is lost.

But now China is producing more value-added products.

Yes, it has gone from making lots of textiles to making lots of technology, but it no longer has the endless army of workers it used to have. The real estate sector is also overweight. This is 30% of GDP. There are problems with bank financing in the sector. A crisis can explode at any moment.

As it happened in Japan in the nineties. You know Japan well. At that time he was the secretary of the embassy, ​​and until recently the ambassador.

Japan, when I arrived in 1995, had a per capita income 50% higher than the US. Today it’s the other way around. The US has 50% more than Japan.

Was there a demographic reason?

This was an important reason. The population has aged, as it is now aging in China, where the birth rate is very low. In Japan, every year there are 550,000 fewer people. It has 125 million inhabitants, and three years ago there were almost 127. At this rate, in 2050 there will be 80 million. In 1989, the Nikkei reached 36,000 points. Today, 32 years later, there are more than 26,000 of them. He has not yet regained lost ground.

Progress has not brought democracy to China, is a recession possible?

Ambassador Eugeni Bregolat argued that development would lead to democracy, but this did not happen. Political freedoms in China are not the best, but not the worst either. The big question is whether the Chinese social contract will hold up. That is, if prosperity and well-being continue to compensate for the sacrifice with political and social freedoms. I dont know. I dare not answer it.


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