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Optimism seen on EU-China ties

By CHEN WEIHUA | China Daily | Updated: 2022-12-26 07:15
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Largest trading partner

China replaced the United States as the EU's largest trading partner in goods last year, with two-way trade worth $828 billion, 27.5 percent more than in 2020, but the relationship has been negatively affected by rivalry between the US and China as well as the Russia-Ukraine conflict, which has triggered a debate in the EU about economic dependency.

"China's manufacturing relies as much on the EU as the EU relies on China," Lyu Gang, a research fellow at the Development Research Center of the State Council, told a China-EU forum this month. He based his conclusions on data from 2001 to 2020.

More than 30,000 EU businesses have a presence in China, and Chinese companies have set up 2,700 businesses in the EU, largely a result of Chinese companies going global since more than 10 years ago.

A report published on Sept 30 jointly by the China Chamber of Commerce to the EU and the global consultancy Roland Berger said Chinese businesses in the bloc have enjoyed rapid growth despite problems, but their outlook on the EU's business environment has fallen to a three-year low.

Concerns among Chinese companies include the EU's overall policy, unilateral economic and trade instruments and fast-changing policies in some member states.

The report called on the EU not to selectively decouple from China in targeted high-tech, digital and green sectors.

Similarly, an annual European Business in China Position Paper published in September by the EU Chamber of Commerce in China said China's unparalleled consumer base and manufacturing capacity make the country a core part of business plans, but the paper included 967 recommendations on improving relations.

The report came shortly before the German chemical giant BASF announced it would build a 10-billion-euro plant run entirely on renewable energy in Zhanjiang, Guangdong province, to build an engineering plastic compound for the automotive industry.

German carmakers have invested heavily in China and depend on it for about a third of their sales.

Ding Chun, director of the Center for European Studies at Fudan University in Shanghai, said the economic and trade relationships between the two sides are mutually beneficial and they should talk about their concerns.

The China-EU Comprehensive Agreement on Investment should be pushed forward, he said. China and EU concluded talks on the agreement in December 2020 but the ratification has been frozen by the European Parliament amid sanctions imposed by both sides.

"The agreement aims to solve bilateral investment and trade issues," Ding said. "You can't solve them by freezing the agreement."

The South China Morning Post quoted Fu as saying that reviving the agreement will also be one of his priorities, and the issue was raised when Michel met Xi in Beijing. In meetings with EU officials, Fu said, he had talked about the issue.

Some of the complaints that European business people have regarding Chinese markets related to market restrictions or market access, he said.

"And actually that agreement would resolve many of the concerns that the European business people may have."

He Zhigao, a researcher at the Institute of European Studies at the Chinese Academy of Social Sciences, said bilateral economic and trade ties are resilient, and he cited the fact that the value of bilateral trade rose 6.3 percent to $711.4 billion in the first 10 months of the year.

"As the two largest markets, China and EU's economies are still quite complementary to each other."

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