Title: The Diplomacy of Economy
Description: Spain-China Bilateral
Spain (MTTezla) - August 8, 2012 12:06 AM (GMT)
The Palacio de Santa Cruz was an impressive structure in central Madrid, though not as imposing as much of the contemporaneous architecture in the Spanish capital. Instead, the home of the Spanish Ministry of Foreign Affairs and Cooperation, as it was optimistically known in the Spanish Constitution, was rather harsh, with two short iron towers. The palace, after all, had originally been a jail, and continued to carry some of that in its short, sturdy design. Jose Garcia-Margallo often wished that a Ministry ostensibly dedicated to making foreign guests feel comfortable was wise enough to move its headquarters out of a building designed to make guests feel... less comfortable.
In any case, the formal meeting room was well-decorated, prepared well for a meeting not involving a head of state. Garcia-Margallo believed that Chinese cooperation would be key in the establishment of Spanish proposals internationally, but was potentially more than that. If the Americans were going to continue to recede internationally, leaving behind their European partners, and if Germany was going to continue to abuse the abandoned European nations, then Spain's allegiance needed to shift, and quickly. China was a quick rising power, one with friends in oil-rich places, and one with more than enough financial stability to help break Southern Europe out of the iron grip of Berlin.
In any case, such thoughts were probably not for this meeting, but for ones years down the road. For now, Garcia-Margallo stood as the Chinese Foreign Minister entered the room, and cordially welcomed him to Madrid.
China (Schwerpunkt) - August 8, 2012 04:01 AM (GMT)
Yang felt beat down from the mediocre results and the intense timetable. Tehran was a disaster, Berlin was underwhelming, Paris was still up in the air, Moscow was a mediocre-at-best success, Ankara went about as well as could be expected, Tel Aviv went fairly well, and Switzerland... well, Switzerland was Switzerland. It would either pay dividends a hundred times over or it would careen off the rails, taking Yang's career with it, and smash itself to a billion tiny pieces at the bottom of a mountain. The imagery in the Chinese ambassador's head was as grim as his mood. So Spain's jail-turned-palace certainly fit the bill for what he expected on an emotional level if not on an objective level.
Any hope of a particularly impressive return on investment had long ago been dashed upon the rocks like so many disfigured Spartan children by his latest tour. His trip had thus far seemed like the culmination of Murphy's Law plus four decades of compound interest. He didn't expect a damned thing out of this meeting. Oh, he would go through the motions -- he would make his sales pitch with the practiced ease of a veteran, and he would do his damnedest to secure a 'win' for his home town -- but he was not optimistic at all. But Spain did provide a few opportunities worth the hassle. Potentially. Plausibly. Well, not really. It was a snowball in the dark, but maybe that horribly mixed metaphor would pay off. Somehow.
But when it was game time, so to speak, none of that showed. He dusted off the experienced diplomatic smile and went through the motions with the Spaniard. Photo-ops, handshakes, and such dominated the next fifteen minutes. And when they were finally sequestered in some office or other that looked like it had been furnished in the mid-to-late 60's, Yang made his opening move.
"Allow me to begin by addressing the elephant in the room: Beijing's choice to decline the offered invitation to the forum you planned. It has already been alluded to via diplomatic communique, but our choice was motivated by a need to avoid frustrating Brussels and Berlin by endorsing what may have been seen as a schismatic sub-section of the European Union. But our faith was apparently misplaced; the Germans were... icy in their reception of our proposals. It would seem, Jose, that Merkel is inclined to ask Beijing for several billion dollars to contribute to the Eurobonds program but is not inclined to hear what we would ask for in return.
"In other words, Beijing now understands exactly what has given rise to the anti-German sentiment in Europe. From the outsider's point of view, it seemed almost irrational -- Berlin was bankrolling most of the efforts intended to mitigate this crisis. But we now see that 'reform' is something addressed less like it is occurring between friends and allies and more like it is occurring between sovereigns and suzerains. And, simply put, Beijing is not going to kowtow to Berlin.
"I have no intentions of inflicting more of that upon you; it is not the type of relationship China wants with the European states. But, at the same time, there are certain matters about the relations between China and Europe that are... inappropriate. It often seems quite like smug politicians sitting in Brussels atop their moral high horses are busy throwing stones at China, not attempting to pursue real multilateral relations.
"But we can open that can of worms later. Why don't we with you telling me what sort of role you envision for China in the midst of this austerity crisis?"
Spain (MTTezla) - August 8, 2012 04:34 AM (GMT)
Perhaps it was just Garcia-Margallo's imagination, but it seemed as if Yang was slightly... tired. Thinking about it more, Garcia-Margallo concluded that it was simply Freudian suggestion on his part. The Spaniard had, after all, been shuttling back and forth from Brussels and Berlin, from conference to summit to emergency meeting to diplomatic one-on-one for the past year straight, trying to resolve this crisis. One might have thought that the apparent resolution of said crisis would pay off with some vacation time, but it had not. Garcia-Margallo decided that the Socialist platform had at least a few planks that he agreed with about labor disputes.
He smiled at the Chinese minister's description of Berlin. It often took only a short amount of time dealing with the Germans to become deeply frustrated with them, and he felt a certain measure, ironically, of schadenfreude.
"Please accept my assurances that we were in no way offended by your absence at the Summit," he opened. "The circumstances surrounding its opening were misleading, perhaps unintentionally, perhaps by the design of some of the other European governments. I certainly would take no message from the action other than a healthy dose of caution regarding a notoriously politically risky area of the world.
"I regret to hear that your meeting with the Germans was so counterproductive," he lied, continuing. "I believe that the German position has been built out of a certain degree of domestic political pressure, though that certainly doesn't excuse such diplomatic incorrectness. I believe that the future relationship between our two countries, and indeed between China and Europe more broadly, must be developed on the axiom that you have already espoused - avoiding hierarchical structures or attitudes.
"To this end, our policy initiatives revolve around involving the Chinese in the rebuilding and recharging of the global economy. Most of the measures being proposed in the European Prosperity Summit are on the public record, and I would welcome Chinese participation in any of the proposals which have been made there. More specific to our relationship, though, is the need for cooperation. At the moment, the ranks of skilled unemployed Spanish workers is staggering, and unparalleled in modern Spanish history. Obviously, there is no shortage of workers in China, but there may be a shortage of workers with specialized and advance education, especially in construction or capital management. I believe that decreased visa requirements between our countries could allow Chinese companies to find employment for these workers over the next three to five years, while the Spanish economy recovers, that would allow them to contribute invaluable knowledge to the companies for whom they would work.
"In more dramatic action, I believe that a joint Spanish-Chinese commitment to developing infrastructure throughout developing countries could play a similar role in keeping the Spanish unemployed off the street and in increasing Chinese experience with different types of knowledge and previously proprietary technology. Construction projects in Spain are over for the near and medium-term future, but such projects exist in massive quantities, especially in African countries like Nigeria, South Africa, and Rwanda. I believe that preexisting and new Chinese and Spanish efforts in these countries can develop international prestige and influence, while also developing goodwill and future business prospects in the targeted countries.
"Finally, I believe that more Sino-Spanish cooperation is needed in international affairs. Spain has had the luxury of sitting back at the helm of European foreign policy over the last decade, but can afford to do so no longer. There is an increasingly absent US foreign presence, an ever-isolationist London, and a risk-averse and sometimes pigheaded Berlin. Spain has the advantage of sitting on the UNSC for the next two years - I believe that it is time to pursue less destructive international policies such as sanctions on Iran, and replace them with positive, reward-based paths to success. This has led to incredible developments in nations like Myanmar, and has the potential to revolutionize the world. The American approach of sanction first and ask questions later has divided the world, just as the British colonial approach relied on similar economic cutoffs.
"I would note that the Spanish government did not ask you to come here to request funding or a bailout - we have enough on that front, and we believe it to be demeaning to the nature of our relationship to treat you like an ATM. We want to develop a better, more stable, and more prosperous long-term relationship with China both for our nation and as a gateway to the rest of Europe."
China (Schwerpunkt) - August 8, 2012 05:29 AM (GMT)
(Here I am, knocking out bilateral meetings one after another, and then you sneak this reply in when I'm not looking. Bastard.)
Yang was both relieved and upset that Spain wasn't looking for a Chinese handout. If Spain had decided to ask China for money, Yang would have a great deal of leverage. But the decision to avoid doing that -- and expressly condemning that possibility -- made it clear that China wouldn't be able to simply ask for whatever it pleased in return.
"I can agree with you that Europe and China do need broader cooperation on numerous issues of concern. Indeed, there are certain barriers that I would very much like to see dismantled. If nothing else, increased dialogue will help tear down those barriers over time, and that is certainly something to embrace.
"To that end, I am certainly willing to facilitate reduced requirements for work visas. While I do not necessarily believe that Spain has a great deal to offer us in the field of construction, China certainly can benefit from Spanish expertise in other fields. IT, for instance; while our domestic development is moving along quite well, Europe remains ahead of us. We would stand to gain from increased cooperation in that particular field. I can even see work visas being offered to Spanish citizens by corporations that simply need a fresh perspective on the development and marketing of new product lines. After all, if you're going to sell things to Europe, it would help to involve Europeans in the marketing process. So, yes, I can certainly see benefit to this proposal. But Beijing is sometimes overly-cautious and will want to 'test drive' this system before we implement it in broad strokes. So, beginning next year, I'll see to it that some 5,000 special work visas are made available for Spanish workers. These work visas will be tailored to corporations operating in Shanghai. If this proves useful, we will allocate up to 50,000 in 2014 and all the the east coast provinces -- Anhui, Fujian, Jiangsu, Jiangxi, Shandong, and Zhejiang -- will also be eligible. And if this proves successful, we will increase the cap on these special work visas to 250,000 and remove the territorial restriction. Note that we will waive the registering fees for these special work visas, which should help minimize the financial costs associated with traditional work visas.
"The joint construction venture I'm slightly less optimistic about," Yang confided. "We finance a great many of these projects through direct government funding or in return for trade concessions. Spanish workers are a good deal more expensive than our workers, and that means costs will certainly go up if we pursue this. While I suspect that Spanish support will drive down costs in countries that are geographically close to you -- countries like, for example, Senegal -- shipping Spanish workers and equipment to a country like Rwanda will be very expensive. We will certainly need Madrid to pay its share of the costs. On the other hand, if you're referring to simply working together on foreign aid to see to it that the money is spent building good roads where they're needed, I fully support that notion.
"As for broader cooperation on international disputes, and looking towards a 'reward-based' system to resolve them, I fully support that. If Spain wants to be more directly involved in some of these issues, and if you prove a good deal less... ideologically bound than the Americans, then I can see no harm whatsoever to involving you. Britain and France sponsored Germany's direct involvement in the dispute over Iran's nuclear program -- I think it's fair if China sponsors Spain's involvement in other disputes. It's not like there is a shortage of crises in Africa or Asia.
"I would also be interested in Iberdrola. It is arguably the world's best wind energy corporation. We are in a position where our rapid growth will force us to either consume massive quantities of fossil fuels or rely upon a diverse network of energy sources. Wind power is a good option for us; it is not a silver bullet, but it will help. We're looking to install somewhere around 1 GWh-worth of wind power in the next few years. We want Iberdrola to be the primary corporation responsible. If we were to establish a system where Iberdrola builds and erects the turbines, and trains a Chinese corporation in their operation, what sort of costs would we be looking at? In general terms, of course; I know you're not exactly one of their representatives."
Spain (MTTezla) - August 8, 2012 06:06 AM (GMT)
[I'm just here to make sure that you can't get to all your threads tonight. :P ]
"I am pleased to hear that you will advocate for the work visas - if there is any way to impress upon your government the need for urgency, it might make the project even more beneficial for both of our countries. I suspect that in three years' time, the Spanish economy will beginning to return to increased employment, and as you say, Spanish workers tend to earn more both in pay and in luxurious labor laws here. I worry that if the program is implemented too slowly, we will miss the point of highest returns, when unemployment is high in Spain, with wages depressed and workers willing to travel far abroad for employment. In any case, I am sure that the program will do us both good.
"In terms of foreign aid, our government would of course be willing to shoulder their portion of the costs. I believe that this is simply an area where working together might provide for some benefits of scale for development work in foreign countries.
"As for international initiatives, sitting government considers itself much more open to reason, especially related to international sanctions. Spain suffered under such sanctions during ham-fisted attempts to remove Franco from power, and we believe that imposing them so rigidly has caused a great deal of problems. I believe that this should be common ground for future collaboration on international crises, which, as you say, come around often."
When he came to the Iberdrola proposition, Garcia-Margallo had to pause. Iberdrola was a behemoth in Spanish politics, and unfortunately hailed from the independent-minded Basque region; its relations with the sitting government were especially tense given Rajoy's conservative slant.
"As to Iberdrola, I am afraid that I may be even less informed than you suspected," he said, resigned. "The company is not particularly fond of sharing information with the national Spanish government outside of formal bidding for contracts, and we have relatively little information on them. However, they are known to be extremely protective of their technology, so I imagine that any training regime about the technology at play might carry a relatively steep premium. That being said, much of what I would say is speculation. Similar deals, from what I understand, have run at roughly $250 million, without the premiums from human capital transfers.
"In any case, I would think that there would be the opportunity for a more expansive program - Iberdrola operates more than 7 GWh of wind power outside Spain already, and their international ventures in the field are relatively new. Countries like Germany have installed capacities of around 30 GWh and even amounts that large account for only 10% of their energy consumption, from what I understand. I would think that China's energy needs would be significantly higher."
Garcia-Margallo frowned slightly. He might not be a representative for Iberdrola, but he sure sounded like one.
China (Schwerpunkt) - August 8, 2012 07:45 AM (GMT)
(Mission achieved. Probably.)
"While I understand your desire to move things along more quickly, I am not certain that these numbers can be increased to a significant degree and remain effective. Nor am I particularly optimistic about the employment situation in Spain five years from now; your country has long had a great deal of trouble with unemployment. But I will be willing to increase those figures to 25,000 the first year and 125,000 the second year. And I agree to this change expecting many of those slots to go unfilled. It is quite difficult to convince a man to pack up and move to the other side of the planet for a twelve to twenty four month work contract."
Yang expressed his agreement on the matters of international sanctions and foreign aid. And then he tried not to look completely surprised to hear that Madrid actually tolerated insubordination from one of its flagship companies. What kind of nonsense was their national government playing at? But the insinuation that China somehow wasn't doing enough in terms of renewable energy just irked Yang. And, perhaps, that made his reply a bit more... blunt than it should've been.
"The People's Republic of China," he began in an almost grandiose fashion, "has invested a great deal more than Germany in terms of renewable energy. We are the only country that has plans to increase our nuclear power generation eight fold over a period of as many years and we are most certainly the only country willing to commit to a nuclear energy program with an operating capacity of 400 GW by 2050. And nuclear energy is far from our main concern. In fact, Three Gorges Dam alone -- which became fully operational this year -- will produce twice as much energy as our current nuclear power network.
"Let us look at wind power. Two years ago we had roughly 42 GW of installed capacity. Last year we had close to 62 GW of installed capacity. In fact, our installation of new turbines exceeded our ability to network them into the grid; nearly a quarter of our turbines stood idle because our national power grid is more accurately described as several distinct regional power grids with only limited interconnectivity. 1 GW of new turbines is not at all significant to us. By the time they are operational, we'll probably have close to 100 GW of installed capacity.
"I shall be blunt: I am not offering the contract to Iberdrola because we need them. I am doing this for two reasons. The first reason was to give this vaunted corporation a 'trial run,' so to speak, to see if they'd be worth involving in future contracts -- because, if they were, my government would be more than happy to have them install another 15 GW of turbines by the end of the decade. And, if they weren't, we'd already be operating the turbines and could simply offload that responsibility on a more trusted firm. My second reason was to improve bilateral commercial ties.
"While we're on the subject of alternative energy sources: the Central Committee has tasked the government with investigating thorium-based nuclear power as an alternative to uranium-based nuclear power. The reception has been rather positive; we would face enormous uranium shortfalls in our plan to have 400 GWe by 2050. On the other hand, thorium is abundant and extremely efficient. Our plan is to establish the first concrete, comprehensive thorium-based nuclear energy plan within the next two years. Spain, like us, has a host of aging reactors that are in need of replacement. Perhaps this technology could prove helpful to you.
"I would also like to address one of those 'barriers' between Europe and China that I mentioned earlier. Put bluntly, the arms embargo is a relic, not unlike the American blockade of Cuba, and it needs to be relegated to the dustbin of history. With your country's uninspiring history with similar economic sanctions, I am hoping that we might work together to see it repealed. If that were to happen, Beijing would be very grateful." Yang let the carefully-constructed and thinly-veiled bribe be his closing remark. The decision to mention nuclear power and then this was certainly deliberate.
Spain (MTTezla) - August 8, 2012 07:17 PM (GMT)
Garcia-Margallo mentally threw his hands up at the whole thing, though his actual expression shifted to mild concern. Academically, he supposed, it would be good for Spain if Iberdrola were to gain the Chinese contract, though he had little affection for the Basques. They would probably channel all of the money into bombs to be planted in Madrid later, anyways.
"Of course, I did not mean to imply that China is not doing its part for the environment," he said. "Spain would hardly have standing to criticize any country on such ground. I only meant to ascertain the nature of the investment. I would be more than happy to present such an offer to Iberdrola on your behalf, or to ask them to begin preparing to bid for such a contract."
Garcia-Margallo though through how to most diplomatically handle the next Chinese proposal. The Spanish government, already on shaky ground politically, certainly could not risk expanding its hugely unpopular nuclear program. Indeed, the program was already slated to be phased out, with proposed expansions cancelled and plants being shut down regularly, though never fast enough for the anti-nuclear movement. Accepting the Chinese offer of building more reactors would be political suicide for the Rajoy government.
"The prospect of such thorium reactors would be interesting, but sadly there is little that is less popular among our people currently than nuclear energy. Indeed, our people are perhaps the most averse to the power source in the EU, which is saying something indeed.
"That being said, Spain does agree that the step of dropping EU arms sanctions on China could be a positive one, provided our relationship continues to develop regularly and positively. Indeed, there are already many opportunities from which to build such a relationship - for example, a Chinese commitment to the joint debt-guarantee plan proposed in the European Prosperity Summit would undoubtedly spark further interest from the rest of the world. Such a venture would be highly beneficial for the Chinese government, seeing as they hold so much of the West's debt already - stabilizing said debt and functionally eliminating the risk of it being defaulted on would allow the debt to become a much better hedge politically and leverage economically.
"With positive examples of a developing relationship like this, Spain would be of course advocate for the end of sanctions against China in forums like UNSC or European Council."
China (Schwerpunkt) - August 9, 2012 01:36 AM (GMT)
Yang almost laughed aloud. First the Spaniard had told him that relations between China and Europe would not be determined by money; and then he said that to get Spain's backing on this issue he would have to throw money at Europe.
"My concern with that approach is that we will essentially be offering Europe economic benefits if Brussels decides to rescind the embargo. That is not at all the type of policy that China wants to reward -- and Europe most certainly does not its sanctions to be met with universal derision because of the perception that they can simply be bought off at some point down the line. That being said, I can justify this to the Central Committee.
"Once the aforementioned demonstration of broader strategic cooperation is made public, what sort of timetable will your end involve? It is my desire to see this repealed sooner rather than later."
Spain (MTTezla) - August 9, 2012 02:59 PM (GMT)
"In this case, I think that the goal of the sanctions is the same as China buying into the debt crisis," said Garcia-Margallo. "Nominally, they may be about human rights issues, but if that were the true standard than Russia would not currently be celebrating its accession to the WTO, it would be suffering under equally stringent EU sanctions. No, the sanctions were put in place with intent to try to encourage China to become more of a responsible player in international affairs - supporting actions like global fiscal solidarity is what the sanctions want."
He paused and grinned.
"And even if not, that sounds good enough in a press release that I'm not too worried about PR harms. In any case, Spain will begin diplomatic action on the front in bilateral meetings immediately after the close of the Summit, and will likely bring the issue to larger European organizations immediately after gathering supporting in said bilateral issues. Naturally, I can't make the decisions on behalf of all of Europe, but I'm sure that you've put similar overtures out to other voting members if this is now priority for your government."
China (Schwerpunkt) - August 9, 2012 04:41 PM (GMT)
"We've had France's support for some years," Yang explained. "Now we'll soon have Spain's. I plan on visiting Sweden and Britain to further cement this diplomatic effort. It is my hope that China's commitment to the European debt plan will win us a great many affirmative votes from the smaller states, particularly if Spain argues on our behalf. So you can certainly expect additional diplomatic initiatives from our end. After all, it would be rather pointless to spend all this time and energy to net only Spain's approval, does it not? As you said yourself, Madrid cannot unilaterally dictate EU policy.
"This essentially concludes my list of desired topics to discuss. Is there anything else that you would like to add?"
Spain (MTTezla) - August 9, 2012 05:07 PM (GMT)
|QUOTE (China (Schwerpunkt) @ 09 Aug 2012 11.41.39)|
| "We've had France's support for some years," Yang explained. "Now we'll soon have Spain's. I plan on visiting Sweden and Britain to further cement this diplomatic effort. It is my hope that China's commitment to the European debt plan will win us a great many affirmative votes from the smaller states, particularly if Spain argues on our behalf. So you can certainly expect additional diplomatic initiatives from our end. After all, it would be rather pointless to spend all this time and energy to net only Spain's approval, does it not? As you said yourself, Madrid cannot unilaterally dictate EU policy.|
"This essentially concludes my list of desired topics to discuss. Is there anything else that you would like to add?"
"I don't doubt that your support will achieve exactly such an effect," said Garcia-Margallo. "I also have nothing else to discuss - this has certainly been a pleasant meeting, and I look forward to the implementation of what we have discussed today."