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1. Denmark-China – a mutually beneficial partnership

Denmark’s cooperation with China is based on reciprocity and respect. China and Denmark face a number of global challenges which call for strengthened cooperation of mutual benefit.

Securing welfare and prosperity for the future requires that Denmark succeeds in a globally competitive world and utilises the opportunities that growth and development in Asia offer.

In implementing the strategy, “Denmark in Asia – Opportunities for the Future”, the Danish Government has decided to elaborate an action plan for increased and focused efforts in China.

The action plan for Denmark’s cooperation with China sets out specific initiatives that aim to enhance Denmark’s position in China and contribute to safeguarding and promoting Danish interests in the cooperation with China, including in regard to the major challenges facing China.

The action plan is not a catalogue of all existing Danish cooperation with China, but focuses on areas and efforts that will be assigned special priority in the coming years.

Denmark and China – diplomatic relations

  • The first exchange of letters took place in 1674 between Emperor Kangxi and King Christian V.

  • The present official diplomatic relations were established in 1950

  • The overall Danish diplomatic mission in China is Denmark’s largest Danish overseas presence

1974: Chairman Mao Zedong meets Prime Minister Poul Hartling 1974: Chairman Mao Zedong meets Prime Minister Poul Hartling
1986: China’s leader Deng Xiaoping meets Prime Minister Poul Schlüter 1986: China’s leader Deng Xiaoping meets Prime Minister Poul Schlüter
2000: President Jiang Zemin meets Prime Minister Poul Nyrup Rasmussen 2000: President Jiang Zemin meets Prime Minister Poul Nyrup Rasmussen
2004: President Hu Jintao meets Prime Minister Anders Fogh Rasmussen 2004: President Hu Jintao meets Prime Minister Anders Fogh Rasmussen
Photos: Courtesy of Christopher Bo Bramsen from the book ’Peace and Friendship’.

1.1 Today’s China

In 2008, China celebrates the 30th anniversary of its decision to open itself to the outside world. During this period, China has successively implemented market-economic reforms within agriculture, industry and trade and has experienced impressive growth with an average of almost 10 per cent annually. This rapid economic development is expected to continue. Today, China ranks number two on the list of the world’s largest economies in terms of purchasing power parity, surpassed only by the USA, and China is predicted to be the world’s largest economy within the next 10-20 years. According to the World Trade Organisation, China was the world’s second largest exporter of goods and third largest importer of goods in 2007. Today, China has the world’s largest currency reserves and is increasingly likely to use this surplus to make investments abroad.

The consequences of China’s development have not gone unnoticed around the world, and China’s position in the international community is changing in line with this development. This presents China and the international community, including the EU and Denmark, with new challenges, but also new opportunities.

China on the rise…

  • The world’s fourth largest economy in nominal GDP and the second largest in terms of purchasing power parity

  • An annual GDP growth of approx. 10%

  • Among the world’s largest recipients of foreign direct investment

  • The world’s largest currency reserves

  • Moving up the global value chain

  • Over 250 million Internet users

  • 600 million mobile phone subscribers

  • Largest number of gold medals at the 2008 Olympic Games

Within foreign policy, China’s rapid economic development in recent years is translating into an assertive, engaged and active foreign policy profile. Stability in China, in the region and internationally is a priority for China, as it provides the best framework conditions for securing continued economic growth and domestic stability. China’s foreign policy approach is also undergoing change. Today, China values multilateral cooperation and engagement considerably higher than before and participates actively in this area – also as an instrument for securing Chinese positions. In connection with the Six-Party Talks on North Korea’s nuclear weapons programme, China has played a constructive role as host and mediator and has contributed to driving the negotiations forward. China’s traditional position of non-intervention, however, continues to be the foreign policy doctrine.

The new foreign policy profile has meant that China faces a dilemma between, on the one hand, international expectations that China must behave as a responsible stakeholder in international conflict situations and take active responsibility, and, on the other hand, the traditional Chinese principle of non-intervention as well as the Chinese wish not to play a dominant role in the international political arena. This presents not only a challenge for China, but also a challenge for the international community, including Denmark.

Economically, China is moving up the global value chain. The Chinese leadership and large sections of the Chinese population are becoming increasingly aware of the opportunities and challenges that a globalised world offers, as well as the demands this places on competitiveness, creativity, technological development and adaptability.

China finds itself in a transition phase from “Made in China” to “Created in China”. This is reflected in an increasing and strategic focus on research and education. In the period 1997 to 2005, China’s total investments within research and education rose from DKK 31.2 billion to DKK 153.8 billion – a rise of 0.64 per cent of GNP to 1.34 per cent. In the same period, the number of registered university students rose from 3.2 million to 15.6 million. Parallel with this, the number of patent applications rose from 114,208 to 476,264, whilst the number of scientific publications rose from 35,311 to 153,374. This is a priority very much in keeping with ancient China’s innovative focus that brought the world the four great inventions: the compass, gunpowder, paper and the art of printing.

China has a rapidly growing middle class, which in 2015 is expected to number more than 300 million people with an ensuing rise in domestic consumption. This is supplemented by increasing Asian regional trade. For Denmark, this means rising competition and challenges, also within knowledge-intensive areas. At the same time, China’s comparative advantages in labour-intensive areas remain fundamentally intact. These are important opportunities and challenges that Denmark must benefit from.

yet still faces major challenges

  • No. 72 in Transparency International’s index of least corrupt countries

  • Rapidly increasing energy consumption

  • Widespread pollution. The world’s largest emitter of CO2 in 2007

  • Rising inequality. A Gini coefficient of 0.47

  • Frequent incidents of social unrest resulting from inequality, environmental problems and local corruption

  • Rising proportion of elderly people ssLimited civil, political and human rights

Continued economic growth is the main priority of the Chinese leadership. Despite many years of high growth, there continues to be a huge need for economic development in China, where more than 100 million people still live below the poverty line. Continued economic growth, however, is also important in regard to ensuring internal stability and thus the government’s legitimacy in the eyes of the population. Political and governmental continuity is defining the China we see today, which is underlined by relatively smooth changes in the top political leadership.

Corruption remains a problem. Internally in the Communist Party, corruption is regarded as one of the most serious potential threats to the party’s legitimacy in the eyes of the population, on a par with the growing social inequality.

Tackling the growing inequality is one of the greatest domestic policy challenges facing China today. This applies to growing inequality both between rural areas and urban areas and between the different provinces in China. This applies also to continued reforms of the health, education and pension systems with a view to ensuring a more uniform coverage of basic needs. In 2000, China launched the development strategy, “Go West”, with the aim of ensuring a more positive development of central and western China.

The large number of demonstrations and incidents of social unrest that have been reported in recent years, partly caused by corruption, growing social inequality and environmental pollution, have, however, not weakened the central leadership’s control of the country.

The high economic growth has created an extensive need for energy and raw materials in China. Securing access to a stable energy supply has therefore also become an important foreign policy priority for China. Today, China is the world’s second largest energy consumer. However, by 2010 the country is expected to become the world’s largest consumer. According to the International Energy Agency (IEA), China’s share of the world’s total primary energy consumption is expected to rise from 10 per cent in 2000 to approx. 22 per cent in 2030. Two-thirds of China’s energy consumption is derived from coal. As China’s energy needs are expected to continue growing, so too is the necessity to find sustainable, environmentally friendly and energy-saving solutions; a necessity also prioritised by the Chinese leadership.

At the same time, the high economic growth has had serious environmental and climate-related consequences. The use of coal as a primary energy source, which in many areas is utilised inefficiently and without regard for the environment, meant that China assumed the position as the world’s largest emitter of CO2 in 2007. The Chinese government is aware of the environmental challenges and is targeting increased investments in environmental improvements at national, provincial and local level.

Similarly, the development in China is characterised by an urbanisation that is historically unprecedented. This takes the form of the world’s largest migration from rural to urban areas and the growth of a large number of cities and mega-cities, putting the infrastructure and the social structure under pressure.

Photo: Colourbox
Photo: Colourbox

By 2025, more than two-thirds of China’s population are expected to live in cities, and more than 220 cities are expected to have a population of more than 1 million people compared to the present day level. The strong urbanisation combined with rising prosperity and energy consumption among the Chinese population also has major adverse implications for the environment in the cities. Waste management in particular, is a growing problem in many Chinese cities.

An individual Chinese citizen’s personal opportunities have dramatically improved within the economic and social sphere over the past 30 years.

The rule of law has been strengthened particularly through reform of the criminal law code and the law of criminal procedure. In addition, the right to private property has been inserted into the Chinese constitution. This offers new opportunities for each citizen to secure their rights.

The political freedom of each citizen, however, remains considerably restricted. The same applies to the freedom of expression and the freedom of the press, and the media in China is under strict state control.

Protection of human rights was inserted into the Chinese constitution in 2004, but the actual implementation continues to fall short, including at local level and through the absence of independent supervision of, among other things, the activities of the police.

In June 2007, China passed a labour contract law which is designed to ensure better conditions for employees. However, also here, the actual implementation of this law is inadequate. Furthermore, it is still not possible to form independent trade unions.

Despite movement towards a greater degree of freedom of religious worship, strong action continues to be taken to suppress unauthorised religious movements – especially if the movements are seen to be in opposition to the Communist Party.

Similarly, the use of the death penalty and administrative detention continues to pose human rights problems in China.

In general, China has over the past 30 years tackled enormous political, economic and social changes and challenges. There is also no doubt that China will also face immense challenges in the coming years. The way these challenges are managed will be of great importance not only for China itself, but also for Asia and the world as a whole.

1.2 China’s development and Denmark’s objectives

Denmark must strengthen bilateral cooperation with China, be actively engaged and involved in China’s development, draw benefit from the development we see in China, and also contribute to helping China manage the major social and economic challenges that China faces domestically. This was the backdrop for the decision taken by the Ministry of Foreign Affairs of Denmark in 2007 to strengthen both the political and the trade-related competence at the Embassy in Beijing, for the opening of an Innovation Center in Shanghai in 2007, and for the establishment of a Trade Commission in Chongqing in central China in 2005. Also in Copenhagen, the Ministry of Foreign Affairs has strengthened its focus on China, partly by assigning increased resources to Chinese language training. In a large number of areas, partnership agreements have already been concluded between ministries and institutions in Denmark and in China. However, the cooperation can and should be strengthened.

How China manages its domestic and foreign policy challenges has great importance for the entire world and also for Denmark. Denmark must therefore be an active partner and constructive actor in China’s development and change process.

Denmark must, on the one hand, play a role in China’s continued progress and draw benefit from this development, whilst on the other hand it must seek to influence this development with a view to promoting global security, stability, climate protection, democracy and human rights. Denmark will contribute to creating the conditions for a positive engagement of China in solving global challenges and conflicts.

In the following, the main areas that Denmark will focus on in strengthening cooperation with China will be presented.

This page forms part of the publication 'DENMARK - CHINA' as chapter 1 of 3
Version 1.0. 15-10-2008
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