192 ESC 05 E Original: English NAT O   Pa rl ia me n ta ry  As s e mb l y DRAFT RESOLUTION on FORGING A TRANSATLANTIC POLICY TOWARDS CHINA presented by Hugh BAYLEY (United Kingdom), Acting Co-Rapporteur and John BOOZMAN (United States), Co-Rapporteur The Assembly, 1. Acknowledging  that  China’s  rapid  development  has  become  a  critical  factor  in  global economic  growth  and  is  changing  many  underlying  assumptions  that  long  shaped  the  post-war international system; 2. Recognizing that, by extension, China’s economic progress is having a locomotive effect on many developing countries, particularly those in Asia; 3. Yet acknowledging that some developing countries lack the capabilities to adjust to China’s commercial  challenge  and  will  require  increased  aid  and  "special  and  differential"  treatment  to safeguard livelihoods and encourage growth; 4. Understanding that a market-oriented China has become a more open and pluralist society and  that  China’s  civil  society  today  enjoys  far  greater  latitude  for  autonomous  action,  at  least outside the realm of politics; 5. Yet  concerned  about  the  slow  pace  of  political  reform,  the  lack  of  democratic  dialogue, pervasive  corruption  particularly  at  the  provincial  and  local  levels,  and  ongoing  human  rights abuses, all of which are generating enormous social pressures that could ultimately limit China’s development potential and even undermine its stability;   6. Recognizing as well that China’s economic rise could further alter the strategic balance in East  Asia,  particularly  if  its  leaders  were  to  use  their  country’s  new  found  economic  strength  to underwrite a massive arms build-up; 7. Lamenting the recent transatlantic dispute over lifting the embargo on arms sales to China and the lack of a genuine transatlantic strategic dialogue on China; ECONOMICS AND SECURITY

192 ESC 05 E 2 8. Applauding  China’s  role  in  the  Six-Party  Talks  in  persuading  North  Korea  to  give  up  its nuclear weapons programme; 9. Commending  China’s  willingness  to  adopt  a  legal  regime  conducive  to  the  free  trade obligations it has accepted as a new member of the WTO; 10. But  regretting  China’s  problems  in  implementing  some  of these  obligations,  particularly  at the provincial and local levels; 11. Applauding China’s recent decision to abandon the hard dollar peg, but recognizing that the renminbi may still be overvalued; 12. Noting   that  China  is  both  the  world’s  second  largest  consumer  of  oil  and  producer  of greenhouse gases but that it is still significantly behind the United States in terms of overall energy use; 13. Yet  recognizing  that  China’s  energy  consumption  is  expanding  inexorably  because  it  is growing  so  quickly,  uses  energy  inefficiently  and  has  embraced  the  norms  of  a  mass  consumer society,  and  will  thus  very  likely  surpass  the  United  States  in  terms  of  absolute  energy  use  and emissions production between 2020 and 2030; 14. URGES member governments and parliaments of the North Atlantic Alliance: a. to  initiate  a  discussion  that  will  facilitate  a  more  coherent  and,  when  possible,  co-ordinated approach  on  strategic,  diplomatic  and  economic  issues  in  which  China  has  become  an important player; b. to make use of the North Atlantic Council to facilitate this discussion; c. to acknowledge that an approach to China premised solely on a policy of military containment will  be  counterproductive  and  could  even  encourage  the  emergence  of  a  more  aggressive China; d. to recognize that the United States is playing a critical role in preserving peace and security in a Pacific region that is gripped by a range of strategic uncertainties; e. to  forge  a  common  arms  export  strategy  towards  China  based  on  a  genuine  transatlantic strategic dialogue on China; f. to develop further the nascent and informal NATO-China dialogue in order to build confidence and identify areas of mutual interest and possible co-operation; g. to encourage deeper dialogue on a range of economic governance issues with China, under the auspices of the OECD; h. to encourage China and its people to build a more open, pluralist and ultimately democratic system commensurate with the ever more open society and very liberal economic system that is  swiftly  emerging  in  China,  and  to  make  Western  financial  resources  and  know-how available for those purposes; i. to  encourage  China  to  integrate  fully  in  the  multilateral  trading  order  and  to  implement  its WTO obligations in areas like product piracy and investment rules;

192 ESC 05 E 3 j. to accept our own obligations to build a liberal trading order by acknowledging that Western states  and  industries  cannot  rely  on  protectionist  tools  to  deal  with  China’s  competitive challenge; k. and thus to respond to this challenge in ways that ultimately render our own economies and societies more competitive, productive, fiscally balanced, educated, innovative and wealthy; l. to assist the developing world in making the difficult structural adjustments needed in a world changed by China; m. to  engage  in  an  energy  dialogue  with  China  to  mitigate  the  risks  associated  with  energy rivalry; n. to develop common energy strategies that will help China and the OECD countries to reduce significantly  their  reliance  on  carbon  fuel,  further  delink  economic  growth  from  energy  use, and thus meet long-term energy needs in a sustainable manner.