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Ambassador Liu Xiaoming Answers Questions from Lord Green and the Audience at Asia House Webinar

At an Asia House webinar on 23rd April, Ambassador Liu Xiaoming delivered a speech, followed by a discussion with Lord Green and Q&A with the online audience. Here are the excerpts of the discussion and Q&A session.

Lord Green: Thank you Ambassador Liu and thank you very much to those who are with us. There will be many people who share the appeal for constructive international cooperation and engagement in this unprecedented situation. Unprecedented is a word that is becoming extremely frequently to use, but we think it is unprecedented at least since the Second World War. It poses all sorts of challenges for individual countries. China is the first into it and seems to be the first out of it. I guess caution is always necessary. Britain as you know is still struggling, and Europe is all struggling with this.

It seems to me that there are some short, medium and longer term challenges, some of which are deeply impacted by COVID-19, and some are not. It seems to me that clearly in the short term, we have the question of how to exit from lockdown strategies. This as you know is a topic that gets a lot of conversation in this country and around Europe more generally, and it's causing a lot of anxiety in the US as well, and maybe in some parts of East Asia. Japan has taken a particular route, which is almost explicitly allowing the possibility of a second wave of the virus. So different strategies are all agonising with the difficulty of getting out of the COVID-19 situation, particularly since we all recognise that it will take some while for an effective vaccination to be available against the virus. There are some short term challenges that have to do with the immediate economic impact of COVID-19, which we all wrestle with. For example, how tourism will reemerge as an important economic force; and about the retail industry, to what extent many small businesses will be shut down and so on.

Then there is the whole macroeconomic picture: country after country have released enormous support packages, fiscal and monetary. What are the medium term consequences of those? Does this mean that we face, a little further down the track, a period of renewed austerity, as nations try to repair the balance of their finances? Does it mean higher taxes? Does it mean higher inflation? There are all sorts of questions that will be around. They'll be around for the Chinese authorities, I think, as the Chinese economy rebounds. They are clearly going to be around in the British context, and in a broad European context. The US will face it and it comes with a different way because it's in a special position vis à vis the dollar. And that's the sort of medium term challenge that's created by COVID-19.

I think there are some medium and longer term challenges that are not affected by COVID-19. I think that the trade order is one question. Even before the virus we were all struggling with the fact that the WTO was losing its ability to effectively arbitrate disputes because of the absence of appellate judges. I noticed that, on the 30th March, right in the thick of the pandemic, the EU and China and a number of other nations agreed on the multi-party interim appeal arbitration arrangement. There is a question in my mind about how the UK can get itself involved in that. But I think we should all recognise this is an important step in shoring up the work of the WTO. You talked about the reasons we all recognise about the WHO. I think the WHO is one important international organization, whereas WTO is an equally important international institution that is part of a functioning multilateral order, and we all have some concerns about that. Let's face it, in both cases, America has chosen to take a less constructive view at least temporarily. And I think it's a common interest to re-establish a conviction about the importance of that international multilateral order.

And then finally, I think there is the longer-term question which is in no way going away, and that is about bio-diversity, environmental degradation, climate change. In the short term, we have seen how the decline in economic activity has improved levels of pollution in cities around the world, and has led to a reduction in carbon dioxide emissions, but in no way was it anything other than temporary. I believe that the continuing demographic pressure, the continuing pressure of urbanisation, the continuing pressure of economic development means that we are going to continue to have to grapple with this fundamental longer term challenge and COVID-19 in no way affects that. It's made it more difficult in the short term, of course by forcing China to postpone the Kunming COP15 bio-diversity conference, and forcing the UK to postpone the Glasgow COP26 which was due in November. I hope that those postponements are only for a relatively short period of time, because of all the common agendas you, Ambassador, have quite rightly referred to, this one is perhaps the most important of all. It's the most profound and the longest term. We should not allow COVID-19, and the tragedies and difficulties of the present circumstances, to take our eyes off that ball.

So there's a lot going on; We live in extraordinary times. There are plenty of challenges posed by COVID-19.

There are also challenges that affect international relationships inevitably. The big question of China and America, which we Europeans look at with hope and prayer, but this relationship will only develop on a constructive basis. And I think that there's therefore plenty of need for us to continue to have the sort of dialogues with what this occasion represents. One is here at Asia House, we have an extremely important role in providing a platform for these dialogues, both about shorter term issues from micro to macro economics, and about the medium term issues of the trade order, and about the longer term issues of climate change cooperation and its impact on economic development.

Let me stop there. I wonder if any of what I've just said resonates with you. Ambassador?

Ambassador Liu: Yes, Lord Green. You've touched upon many areas. I would say that I quite agree with you on many of these areas, and your points.

You talk about the challenges in each country. I think each country is different from the other. The UK is different from Germany, Italy, or France. We follow the situation very closely. But despite the differences, I think there's a commonality between countries in fighting against this virus. I talked, in my presentation, about China-UK collaboration. I think that also applies to China's collaboration with other countries. When we're faced with these common threats, countries should work together.

First, I think we should support each other. In terms of medical supplies, when China was at its critical moment, the UK government sent two shipments of most needed medical supplies. But now you are fighting your battle, we reciprocate your support. Just as Minister Gove said, you received much more than what you donated to China. Currently I think the ventilators are badly needed. 750 ventilators have already been shipped to the UK, and there are more to come. There are other medical supplies and equipment that we are ready to supply to the UK and to the world.

The other area is the sharing of experience. China is one of the first countries which have achieved important progress, and we'd like to share with other countries our experience on how to contain the virus, and how to treat the patients. I'm very pleased that we are keeping constant communications between the two sides. Secretary Matt Hancock just had a telephone conversation yesterday with his counterpart Ma Xiaowei, the Chinese Health Minister. They had a very productive and in-depth discussion on collaboration between China and the UK in fighting against the virus, shared experience and compared notes.

The third area is international cooperation. I touched upon that in my presentation. You used the word in a very polite and very British gentlemanly expression about the unconstructive approach by the United States. We are very disappointed by the US decision, but we believe that the WHO plays a very important role, especially at this critical moment. We need to support the WHO in leading the international response against this virus. I'm pleased that the UK government decided to continue to support the WHO. So China and the UK share this common position.

In addition to the 20 million US dollars, just a few hours before our event today, the Chinese government announced that we are going to donate another 30 million US dollars to the WHO. Maybe they knew that the Asia House and you are going to have this event, so I can share with you firsthand information. (Laughter) Especially, we hope it will be used for the developing countries in Africa and in some other places.

The fourth area where China and the UK can cooperate and also the international community can enhance its collaboration is what you said macro economic policy, in a way to ensure that the world economy will resume growth.

In China, the major industries have already resumed production by 99%, and the government introduced more policy measures to support small and medium sized businesses – that is also very important. What's more, to support the WTO to ensure trade liberalisation and facilitation is still our goal. We would also like to work with the UK.

Climate change is very important on our agenda as well. It's a pity that we have to postpone both conferences, COP15 and COP26. At the very beginning of this year, I regarded it as a year of China-UK collaboration on climate change. As a matter of fact, our two countries worked very closely and coordinated with each other despite the virus.

Although we have to postpone the conferences, the preparation work is still going on. I keep very close communication with Secretary Sharma. He is designated as the President for COP26, and we have got a new Minister of Environment. So I tried to get the two connected. The working teams of our two countries are still talking to each other online. This is an issue that we should not ignore.

The other important issue is that when we are enhancing international collaboration on fighting against COVID-19 virus, we should also be on guard against a political virus. Like I said in my speech, some politicians and some forces try to find a scapegoat and to play a game of blaming in order to shirk their responsibility. You know we call on governments of all countries to focus on fighting the virus, on protecting the lives of its people, rather than fighting each other, rather than undermining the international collaboration. That is also very important. So we are very disappointed, and are rejecting these so-called accusations by some of the American politicians. We don't think this disinformation against China serves the purpose of international response to this virus.

On China-US relations, we have every reason to have a sound and good relationship. President Xi had several telephone conversations with President Trump. We always believe that China and the US will gain from cooperation and lose from confrontation. We also believe it is not only in the interests of China and the US to have a sound and good relationship, but it's also in the interests of the world. We would like to have a good relationship with the US, based on mutual respect, non-confrontation and mutual collaboration, and we are working towards this goal. But you need two to tango, right? You know, while the Chinese leaders, or Chinese ambassadors, Chinese diplomats are spreading the words of community of shared future for mankind, and are trying very hard to shore up the confidence of international community, some politicians, some people are trying to spread disinformation and rumors in the world - that is not helpful at all! So we really hope that China and the US could work together, and the international community could work together for the common goal that serves the interests of all mankind.

Adam Keswick from Jardine Matheson Holdings: Hello Ambassador. Thank you for your words, and Stephen, yours too. I thought it is very encouraging to hear everything you've said. I hope that the networks of communications that have been put in place to fight this virus can be continued to promote the economy after we've tackled this, which I'm sure we will. Ambassador, your views of what China will be doing, all of which I took a lot of comfort from. But more specifically, I feel that the eyes of the world will be watching the upcoming NPC meeting whenever that takes place. But presuming it will be sometime later in May, it would be very interesting to get your views on what specific messages, do you think, are going to come out of that meeting that the rest of the world can take further comfort from in terms of battling the virus, and also a return to some form of economic normality. Just be interested to have your views on that.

Ambassador Liu: I think this will be very important. We call it the two sessions. It has been postponed. It will set policies and the guidance, not only for the development of China for this year. I think it will draw the plan, or what we call the 14th Five-Year Plan. So, the significance of the two sessions will go beyond this year. Of course, the COVID-19 will be high on the agenda. And I wouldn't speculate what others will be on the agenda. But as I said in my speech that COVID-19 not only poses challenges to China but also creates opportunities for the development. I think both delegates of the National People's Congress and deputies of the People's Political Consultative Conference will focus on what are the new areas, what are the new points of growth for the future development. So, I would recommend you to follow these two sessions very closely.

Emma Roberts from BHP: Ambassador, it is very good to hear your summary of China's economy as it's moving out of the crisis and BHP obviously has very strong relationship with its Chinese customers for its commodities. So far we've seen this demand remain rather stable even during the peak of the crisis within China. BHP has been able to work with its customers to continue that supply. However, I think there's certainly some concerns and there's been some recent press report about whether that demand from China may ease off towards the later part of the year. Perhaps China experiences dropping in exports from Western economies as Western economies try to come out of their lock down and struggle to get their economies up and running. What's your thought on China's continued emergence from its crisis and the continued risk of China's economy? Do you see a dipping in that as the western economies struggling to get back, or remain rather steady and strong?

Ambassador Liu: I think China will continue to play a role, as a powerhouse of the world economy, as China gradually resumes its production. As 99% of the major industries have resumed, China will continue to play a role as the world factory. China is a huge market. So we will contribute to the resumption of global growth. The outbreak of Covid-19 really brings some opportunities for us to restructure our economy. Some areas might have great potentials, including stay-home economy, digital economy, AI and also medical area. Here's an example. From March 1st to April 10th, China exported about 7.2 billion masks, 35.57 million protective gowns, 20,000 ventilators and 13 million goggles. So China is really a source of medical supplies. That is also China's contribution, not only to the global response to the virus, but also it will help build the industrial and supply chain in the future.

China is committed to building an open world economy. China has achieved success in the past 40 years because of the policy of reform and opening up. I think China will stick to this policy to continue its success. There's no reason for China to close its door or discontinue the reform. So reform will be going on and China will be open wider to the world. The 127th China Import and Export Fair will be held online in June. And also the third China Import Expo will be held in November. These will be very valuable opportunities for China to engage with the outside world. I've been talking to British senior officials from Department of International Trade, as well as business leaders in the UK, inviting them to participate in these two events. It will provide enormous opportunities for our two countries to work together to resume the momentum of economic growth.

Laura Mann from AstraZeneca: Thank you so much for your excellent remarks. AstraZeneca places very high value on partnership with China before and during COVID-19. We've been able to donate nine million masks around the world, and to the countries most in need, in partnership with the World Health Organization and World Economic Forum. I wondered, in your head, what do you see as the further opportunities to continue to strengthen the bilateral relationship between the UK and China? For example, in health care and life sciences.

Ambassador Liu: As I said earlier, our two countries keep talking to each other at the very high level. You know, President Xi Jinping had two telephone conversations with Prime Minister Johnson within just a bit more than one month. That was very rare. I've been here as ambassador for more than 10 years, and I've never seen our top leaders have such intensive communications in such a short period of time. On the ministerial level, we are having very intensive communications, as Director Yang Jiechi talked to Sir Mark Sedwill, and State Counselor and Foreign Minister Wang Yi talked to Secretary Raab. And here in London, I kept very close contacts with ministers and secretaries. We compare notes and share experiences.

And, China and the UK are working very closely on developing the vaccine. The scientists of our two countries are working very closely. Imperial College, Oxford and Cambridge are working very closely with their counterparts. While the Chinese medical team was here, they had online discussions with the British experts and doctors. So we have very intensive interactions with each other. In addition to supplying medical equipment, vaccine is really the final solution to the battle. Both President Xi and Prime Minister Johnson expressed their support for the scientists of the two countries to work together in this very important area.

And also on the international arena, China and the UK both work very closely. We're both supporters for multilateralism and the full supporters of the WTO. You know, Lord Green cares for it very much. We see the UK as a partner for China on the Belt and Road. We are now working with the countries along the Road to build a "silk road for public health".

I think there is another area that China and the UK can share experience and can work together, climate change, as I said. China and the UK are leaders in environmental protection. We're supposed to host COP 15 and COP 26. They have been postponed, but not canceled. We're still working. You know, when this pandemic is over, the two countries will host these two conferences. They will set agenda and direction for climate change and for environmental protection. So, there are enormous opportunities between our two countries.

And the trade between us. I think there's still a great future for the trade between our two countries. Last year, the bilateral trade set a new record and increased more than 7%, despite the downturn of global growth of the trade. The UK is now the third largest trading partner of China within the EU. China is the third largest export market for the UK. Chinese investment is also increasing. In the past five years, the total Chinese investment is bigger than the previous 30 years combined. Now, the UK is the number one destination in Europe for Chinese investment. Chinese businesses here are very active. A few days ago, I participated in the online donation event held by the China Chamber of Commerce in the UK. They donated ventilators, face mask, goggles and protective gowns to the NHS. And that shows their global vision and sense of social responsibility. We encourage all these interactions between China and the UK.

David Sayer from KPMG: Thank you. I'm about to say, I enjoy this remarkable technology and for that I want to address a question. You've said to me in the past that every challenge has an opportunity. And I do think, this remarkable technology allows us to have a much more direct and immediate dialogue with Chinese firms. I've been talking to clients in the UK that I can bring my Chinese partners into a virtual meeting, far more easily and far more acceptably than it's been in the past and I think that's one of the changes we'll be seeing. Virtual dialogue is becoming, and proved it's workable. It's becoming utterly acceptable. And in the past having a dialogue with Chinese firms has always involved 20 hours on planes and the rest. I think one of the things coming out of this is the potential to accelerate dialogue between the UK and China across so many dimensions. And I just wonder the ways in which we can celebrate the facilitation of that, and whether the Embassy can play a role.

Ambassador Liu: Yes, I'm very pleased that you are one of the beneficiaries of this new technology. Once you have a Huawei participating in your 5G development, the speed and quality of these online meetings will be even better. I know that Prime Minister Johnson has a very ambitious plan to have a full 5G coverage in the UK by 2025. I think Huawei will be a big help on this. You know, we encourage online meetings, discussions. We do hope that not only the leaders of our two countries talk to each other, but also business leaders. I had several online meetings. As a matter of fact, this Asia House is really one of those webinars I have attended, and soon I will have another one with CBI. And then another one with the CBBC. I already had one with the British Chamber of Commerce in China. We had this real time discussion. I think we benefit greatly from this technology. This is very important. We should stay committed to free trade, to building our business friendly environment. The UK is well known for supporting free and open economy. That's very important. That's why the UK can become No.1 destination for Chinese investment. I had a meeting with many Chinese business leaders. I asked them, "Why are you here, compared with other European countries? And why do you put your money here?" Take Jingye. I just participated in Jingye's acquisition of the British Steel. They told me they found the UK very open, transparent, and the political leaders, business leaders, local leaders and local community welcome Chinese business with open arms. That's the secret of success of the UK. So, I do hope that this trend will continue. It is really not only for the benefit of China-UK collaboration. It is also for the benefit of the UK people.

James Landale from BBC: You placed great emphasis on international cooperation. Will China, as a result, cooperate with any independent international investigation into the origins of this pandemic? Will China provide any investigators with full access to all the relevant data, locations and witnesses?

Ambassador Liu: China has been open, transparent and responsible from the very beginning. We have invited the WHO experts to come to China. They visited not only Wuhan but also other places and cities. They came up with a very extensive and comprehensive report about their study in China.

I hear quite a lot of speculation and disinformation that the Chinese are covering up and hiding something. This is not true. I do not know if you have read the WHO report. Some people already have a prejudgment. Each time they hear American politicians accusing and criticizing China for hiding or covering up, they just turn to them. But when Chinese spokesman spoke about the fact, I read very little coverage here in Western media. They already had a prejudgment and bias against China. That's the problem.

I would advise the media including the British media to be balanced and objective. I'm not calling on you to be friendly to China, but just to be balanced. While you are reporting what the US Secretary of State is so-called "criticizing" but actually "stigmatizing" China, you should also report the counter argument of China. You should also report the WHO's comment on it. When the media have this bias, they only report something they would like to hear. They don't report the other side of the story. That's the problem.

The Chinese government has been transparent and open, and has responded very quickly. When Americans complain that China has not shared information and has not reported to the WHO and international organizations one month after the outbreak, that's not true. The virus was first reported on 27th of December by Dr. Zhang Jixian. She reported much earlier than Dr. Li Wenliang. We recognize Dr. Li as a hero and he gave his life fighting this virus. But he did not report to the authorities and he shared the story three days after Dr. Zhang Jixian reported to the local health authorities. Then the government adopted very strict and swift actions, notified the WHO four days later, and shared information with Americans seven days later. So that's how Americans could take actions to take their nationals back and to close the border. If you check the timeline on what China was doing, you will find we have been transparent, straightforward with all the information.

You're talking about independent investigation. It's up to the WHO. We support the WHO. We believe we should play by international norms and international rules, not by some other countries' rules. Some other country even sues China at its local court. It's absurd. I've been posted twice in Washington. This is not the first time that some politicians want to play world police. This is not the era of "gunboat diplomacy". This is not the era when China was still in a semi-colonial and semi-feudal society. This is the third decade of the 21st century. Those people cannot understand it. They think they still live in the old days when they can bully China and the world. If the WHO does not act their way, they stop their support and criticize the WHO to be "China-centric". That's simply not right. So we are calling for international cooperation. That's the only weapon and only way out to win this battle against the virus. Not by scape-goating, not by playing games, not by politicizing the virus, not by spreading political virus. We have to guard against this while fighting this invisible enemy.

China is not an enemy of the United States. China is a friend of the United States, a partner for the United States in fighting against the virus. If they regard China as an enemy, they choose the wrong target. Despite these politicians spreading disinformation about China, China has provided 1.8 billion face masks. That means six face masks per person in the United States. We still try to lend a helping hand to American people when they need us.

Iolo ap Dafydd from CGTN: You mentioned some of China's priorities after this pandemic. Where specifically do you think does China want to prioritize?

Ambassador Liu: First we need to resume production. We strike a balance between fighting against the virus and ensuring a gradual resumption of production so the social order and normal life will return to the normal track.

That is a top priority. But we also have to guard against the recurrence of the virus, because the risk now is more about imported cases. The government has adopted some measures to take care of the imported cases and we also need collaboration from other countries to achieve our goal. We have to be careful to ensure that the hard-won progress will not be reversed by suddenly lifting restrictions. In Wuhan, the ban on outbound traffic has been lifted, but there are still some restrictions on some sectors. Schools have not fully resumed. There are certain requirements. If you meet the requirements, you can gradually resume.

And also, we engage actively with the rest of the world. On diplomatic engagement, we have important agendas in front of us like climate change. I'm working now with Secretary Sharma and other senior officials on how we can engage with each other to pick up the momentum and where we left before the outbreak. We also work very hard with the Department of International Trade on the free trade agreement between China and the UK after Brexit. I'm talking to the Ministers and the Secretary of State. So, we have a very busy agenda ahead of us. Most of them are online now. We want to make sure once this is all over, we can pick up the momentum. If we do not have these online preparations, we'd lose the momentum. That is what we are focusing now.

Lord Green: Ambassador Liu, it has been a remarkable discussion. I've enjoyed enormously. Your final remarks are extremely good ones, to end on that powerful reminder that there is a huge range of issues on which we have every opportunity to cooperate effectively, and that we need to keep the momentum up. And remember, there will be a time after COVID-19, lots of lessons to be learned about it, lots of shorter term issues about repairing macro economic damages. There will also be fundamental longer term issues on which we have so much in common and where we have so many opportunities to work together. So I really appreciate, on behalf of Asia House, your taking the time to be with us. And I look forward to many future engagements. You mentioned that you were in your 101th year here. That means you know this country extremely well. And I have always enjoyed your comments on this country, because you have great insights into it and into the dynamics of the relationship. There are lots of, tremendous, opportunities for us in the midst of this crisis. And we need to never lose sight of that.

So, thank you for joining. And thank you to all of our guests. Thank you to our corporate members and all of our guests for joining us on what I think is an extremely valuable session. Thank you.

Ambassador Liu: Thank you.

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