I appreciated Xi Jinping's knowledge of the EU's way of working and his clear support for the improvement of the EU-China Strategic Partnership. HERMAN VAN ROMPUY, president of the European Council Xinhua 2011 File Photo

Foreign politicians are looking to China's new leaders for clues on the direction of the world's second-largest economy.

As President Xi Jinping, Premier Li Keqiang and the other members of China's new leadership team get down to work, politicians and influential thinkers across the globe have speculated about the direction in which Xi and his colleagues will lead the world's fastest-emerging power.

In response, China's new leaders signaled their views about cooperation and peaceful development during a series of conference calls with the leaders of the United States, Russia, France, Germany, India and other countries directly after their election and endorsement process ended on Sunday, as the annual session of the National People's Congress came to a close.

Politicians overseas have been considering these questions since they watched the leadership transition in China, which began in November, when the new Party leadership was elected at the 18th National Congress of the Communist Party of China and Xi replaced Hu Jintao as the country's top political leader. The past few days have seen changes to the composition of the nation's highest legislative body, political advisory body and cabinet. Faced with such a massive reshuffle, top politicians overseas are curious about the reforms and policy changes the new leadership may implement to cope with the mounting challenges of economic restructuring and social issues. Meanwhile, they are also keen to see how any new policies will affect their economic activity with China.

Moreover, amid growing global interdependence, foreign politicians, especially those in the European Union, are also eager to learn what new input the leadership will provide for the global role of the world's most-populous nation and second-largest economy.

The challenges facing Xi and Li are huge, said Herman Van Rompuy, president of European Council, in an exclusive interview with China Daily. China has achieved extraordinary results since it began the policy of reform and opening-up and lifted hundreds of millions of people out of poverty. However, the economic, social and environmental challenges are still enormous, and are linked with the magnitude and the speed of the progress made in the past 20 years.

"The Chinese Government has now embarked on a difficult, but necessary, process to move from an export-led economy to a domestic consumption- and welfare-oriented model," said Van Rompuy.

He urged China's new leadership to address social disparities, wealth distribution and the environmental challenges.

Urbanization challenge

For Romano Prodi, former president of the European Commission, Xi and Li's priority should be to focus on urbanization. "China is experiencing such big challenges. The priority in this phase is how to manage the greatest process of urbanization ever undertaken in history," he said.

Official statistics show that the urbanization rate in China is approximately 50 percent, and in the coming decade, more than 300 million people, roughly equivalent to the size of the US population, will move to the cities.

"China is facing huge environmental and resource constraints in this regard," said Prodi, who added that the development of medium-sized urban areas is of crucial importance and a more pressing issue than the development of larger metropolitan areas. "But this is a project that will require a great deal of skill and lots of political unity," said the former Italian prime minister.

Prodi said that the challenge of urbanization is contingent on the new leaders' determination to reduce provincial differences across China, adding that the disparity in incomes between large cities such as Beijing, Shanghai and less developed areas such as Guizhou and Gansu province, are substantial.

"This great movement toward urbanization must be completed by a process of greater equality of income across different regions," he said.

The rapid pace of urbanization has imposed huge pressures on Chinese cities and their infrastructures, according to the European Commissioner for the Environment Janez Potocnik. However, the move offers a unique opportunity to improve the lives of the future city dwellers, or "urban billion". As the 2010 Shanghai Expo put it, to create a "Better City, Better Life".

"One of the most important lessons we have learned in Europe is that cutting air pollution does not necessarily mean cutting economic growth," said Potocnik, who added that it is definitely possible to decouple economic growth from pollution growth.

For Potocnik, that realization is an important starting point for any country considering policies to tackle poor air quality: "The measures being taken by the Chinese authorities to reduce vehicle emissions are very similar to our policies in Europe, and we have cooperated in this area for many years by sharing expertise and best practices."

As part of that cooperation, Europe and China have become strategic partners in the promotion of sustainable urbanization, a point emphasized when Li Keqiang and Jose Manuel Barroso, the president of the European Commission, signed the Joint Declaration on Urbanization in May 2012.

Environmental issues

Jean-Marie Le Guen, a member of the Foreign Affairs Committee of the French National Assembly, said China's new leaders have the experience to meet the challenges facing them.

Le Guen said he had noticed that Xi Jinping has already forged a strong relationship with the people, one that will generate trust and hope, and that France welcomes the Chinese government's intention of boosting internal consumption.

"We believe it is a necessary step in satisfying the needs of the Chinese people in terms of education and healthcare, while maintaining sustained growth over the long term," he said.

The environmental issue also should be one of the main concerns for the future. France is very willing to cooperate with China to mutually point their economies in the direction of sustainability. "Given its unquestionably central role in international relations, we are looking forward to a fruitful collaboration with China, so that it can fully play its role in a peaceful and constructive environment," said Le Guen.

China's economy is now so deeply entwined with the rest of the world, and the US in particular, that the country's economic influence, through global investment, the internationalization of the renminbi and the rise of the domestic market, can only be expected to grow during the coming years, according to Peter Ho, professor of Chinese economy and development at Delft University of Technology in the Netherlands.

"With that economic rise, there will be an increase in political, social, and cultural influence as well," he said.

Ho said there are numerous, almost daily, examples on weibo, the Chinese equivalent of Twitter, and other social media, where instances of corruption and social inequity are highlighted and go viral almost instantaneously. "From these cases we can clearly see that China is undergoing a fundamental normative change. As such, a change in the style of governance is imperative for China's long-term, stable development. The other side of this story is that we should never forget that socioeconomic and political changes take a long time to take effect, and China will be no exception."

China will always walk a tightrope in this regard; the country needs to change and respond to calls for change, but it also needs to change in accordance with the possibilities determined by time and place, he said.

China's leaders have also been urged to engage with the rest of the world. Van Rompuy said he had already met Xi and Li before their elevation to the highest office, and they exchanged views on a wide-ranging agenda, but particularly on global issues.

"I appreciated Xi Jinping's knowledge of the EU's way of working and his clear support for the improvement of the EU-China Strategic Partnership," said Van Rompuy, who noted that at his meeting with Li Keqiang, the two men shared the opinion that the EU and Chinese economies are so closely intertwined that cooperation is essential to promote growth and jobs.

"As China continues to develop and emerge as an economic power, its political role assumes an even more important significance in today's world," said Van Rompuy, adding that the EU has constantly supported China's transition toward the role of an active and responsible global player.

Economic imbalances, climate change, terrorism, nuclear proliferation and food security are just a few of the challenges that will require coordinated global cooperation. "China has a key role to play within the international community in addressing them. Increased power goes hand in hand with increased responsibility," said Van Rompuy, "I am looking forward to working together with the new Chinese leadership."

Moving up the scale

Hugo Swire, a member of Parliament and minister of state at the British Foreign Office, said the UK is committed to boosting national prosperity through trade and investment and that China will clearly play a crucial role. "China is changing at a rapid pace and opportunities will increase as the economy rebalances," said Swire.

He was confident that the products in which the UK excels - luxury goods and cars, advanced machinery and educational services - will easily meet the demand from China's expanding middle class.

Swire said Chinese companies are also going global and operating successfully in the UK. According to the UK Ministry of Commerce, the country was the fifth-largest destination for Chinese investment last year. "We will continue to encourage more; we want to move up that scale from fifth to first, and we're working on it," said Swire.

Prodi echoed Swire's view and urged China's leaders to prioritize Europe as an economic partner because the EU is generally more open than the US when it comes to accepting Chinese investment and exports.

Prodi said he had met Li Keqiang twice in recent years. "He has a very open, direct personality, is a specialist in economic affairs and has deep political experience," he said.

Li's grasp of the importance of good relations between the EU and China was crucial. "He (Li) understood how important it is, not only for Europe, but also for China, for us to have strong relations," he said.

Dacian Ciolos, the European commissioner for agriculture and rural development, said the world faces a common challenge in terms of food security and ensuring agricultural productivity and competitiveness, while minimizing the impact on the environment.

Ciolos said the EU and China can learn a lot from each other and share ideas on the optimum development of rural areas and a balanced rural-urban development, in addition to increasing investment into agricultural research.

Meanwhile, Maire Geoghegan-Quinn, European commissioner for research, innovation and science, said research and innovation are key to sustainable growth and jobs and a higher quality of life in the future, both for the EU and China.

"We see the government of China as being very committed to developing the dialogue," she said. Geoghegan-Quinn expects to see real progress this year and in 2014 in ensuring that research bodies and industry in China and the EU can better cooperate to develop the real innovations that people need.

She said that China has a strong science and technology base and is one of the world's leading nations in the registration of patents and the knowledge-based economy: "One of the hurdles we must overcome is the creation of the right environment to boost innovation."

For example, if the EU and China can create common standards for different products it will be easier for them to market those technologies, a factor that would provide greater incentives for industry to invest in them. "The development of those conditions will be something we can discuss in our dialogue on cooperation in innovation," she said.

Van Rompuy also said China's confidence in, and support of, the process of European integration - especially now, during the ongoing debt crisis - has been of great importance to the EU and has further promoted cooperation between the trading bloc and China.

"Of course, partnership is a two-way street," he said.

Tuo Yannan and Liu Jia contributed to this story in Brussels.

Contact the reporters at fujing@chinadaily.com.cn

(China Daily 03/18/2013 page9)