Cooperation bound to deepen despite differences as China becomes EU’s top trading partner

Anne E. Evans

Xinhua Headlines: Cooperation bound to deepen despite differences as China becomes EU’s top trading partner



— Chinese economic growth, which has remained relatively high by international standards amid the pandemic, has made China an “attractive export market”.

— Even amid the pandemic, the EU has shown great investment confidence in China.

— “To foster an open, fair, just and non-discriminatory regulatory environment, both sides need to move in the same direction, and neither should stop or even backslide,” said Zhang Ming, head of the Chinese Mission to the EU.

by Xinhua writers Zhu Sheng, Li Jizhi

BRUSSELS, Oct. 4 (Xinhua) — In the first seven months of 2020, China surpassed the United States to become the biggest trading partner of the European Union (EU), said Eurostat, the EU’s statistics organization.

While European companies have placed much confidence in the market of China, a country that has been continuously opening up and has become the only major economy projected by the World Bank to achieve positive growth this year, Chinese businesses have voiced their concerns over the overall business environment in the EU affected by the COVID-19 pandemic.

Therefore, officials and business insiders have called for an open-minded and positive attitude to seek solutions to existing problems between the two sides and to deepen bilateral cooperation in the future.

a boat that is sitting on a dock next to a body of water

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Aerial photo taken on Sept. 24, 2020 shows containers at Dalian port in northeast China’s Liaoning Province. (Xinhua/Yao Jianfeng)


The EU’s imports from China increased by 4.9 percent year-on-year in the January-July period, noted Eurostat.

According to the Federal Statistical Office of Germany, the largest economy in the EU, China, Germany’s biggest trading partner since 2016, surpassed the United States for the first time in the second quarter of this year to become Germany’s largest export market, and Germany’s exports to China in July have rebounded almost to last year’s level.

The stable development of German exports to China in July underlines China’s importance for the German economy even facing the COVID-19 pandemic, Katharina Viklenko, China expert at economic development agency Germany Trade and Invest, told Xinhua.

Noting that some one-eighth, or most German imports, came from China in July, Viklenko said the Chinese economy is already on the road to recovery amid the pandemic.

China is on its way to become “export destination country number one” for the German economy as the pandemic is hitting global trade, said a recent study published by the German Economic Institute (IW).

a group of people standing next to a train

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Chinese and German guests attend the welcome ceremony of China-Europe freight train from Wuhan in Duisburg, Germany, April 14, 2020. (The Consulate General of the People’s Republic of China in Dusseldorf/Handout via Xinhua)

Gao Feng, spokesman of China’s Ministry of Commerce, said the rapid development of Sino-German trade has benefited from not only the sound bilateral relations and complementary economic advantages of the two countries, but also China’s continuous opening-up.

While the situation in many of Germany’s export markets is deteriorating, “the Chinese economy is already looking ahead with cautious optimism,” said Galina Kolev, senior economist and head of the Research Group Macroeconomic Analyses and Business Cycles at the IW.

Chinese economic growth, which has remained relatively high by international standards amid the pandemic, has made China an “attractive export market,” Kolev said.

Besides, China has also been one of Spain’s top trading partners during the pandemic, according to Jorge Valera, director of Strategic Accounts and Rail at the Barcelona branch of transport company DSV.

“Without doubt, China was our biggest partner during the coronavirus pandemic. The majority of supplies, if not 100 percent of them, arrived from China,” Valera told Xinhua in an exclusive interview.

a train on a steel track

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A China-Europe freight train carrying medical supplies bound for Madrid of Spain departs from the city of Yiwu, east China’s Zhejiang Province, June 5, 2020. (Photo by Lyu Bin/Xinhua)


In the eyes of Tang Zheng, vice president of the European Working Committee of non-governmental organization CEATEC, the signing of the China-EU agreement on geographical indications and the commitment to speeding up the negotiations of the China-EU investment treaty to achieve the goal of concluding the negotiations within 2020, among others, have shown the joint efforts and achievements of both China and the EU in expanding cooperation in trade, economy and investment.

Indeed, even amid the pandemic, the EU has shown great investment confidence in China. On Sept. 28, Volkswagen Group China (VGC), a subsidiary of German automotive manufacturer Volkswagen Group, announced its plan to invest some 15 billion euros (17.5 billion U.S. dollars) together with its joint ventures in e-mobility in China from 2020-2024.

VGC said in a statement that the investment comes on top of the 33 billion euros (38.7 billion dollars) already announced by Volkswagen Group for development in global e-mobility in the same period.

Besides, Stephan Woellenstein, CEO of VGC, said the company very much appreciates China’s recent announcement of a climate target for carbon neutrality before 2060, “which is what we aim to achieve with our goTOzero strategy.”

“Volkswagen is committed to being an active partner in the nation’s drive towards electrification and carbon neutrality,” Woellenstein said.

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An employee works at an assembly workshop of FAW-Volkswagen Automobile Co., Ltd. in Changchun, capital of northeast China’s Jilin Province, Sept. 1, 2020. (Xinhua/Zhang Nan)

The opening of a new battery center affiliated to German cars company the BMW Group in Shenyang, a northeast city of China’s Liaoning Province, in mid-September is another testament to the EU’s confidence in the Chinese market.

The center is the first in the company’s production network to manufacture fifth-generation high-voltage batteries.

“We stand firm on BMW’s long-term strategy in China, and are committed to our large-scale investments and will continue introducing new products and technologies into BMW’s largest single market, especially on e-mobility and digitalization,” the company’s spokesman told Xinhua in a recent interview, expressing full confidence in mid- and long-term business prospects of China.

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Photo taken on April 1, 2020 shows the construction commencement ceremony of the new Tiexi Plant of BMW Brilliance Automotive (BBA) in Shenyang, northeast China’s Liaoning Province. (Xinhua/Pan Yulong)


While European companies are enthusiastic about investing in China, Chinese companies, although ready to add their investment in the EU, are having growing concerns over the ease of doing business in the bloc.

According to a survey co-conducted by the China Chamber of Commerce to the European Union (CCCEU) and its global partner Roland Berger, close to 60 percent of all the Chinese companies interviewed cited “a slight decline” in the overall business environment in the EU, and 10 percent cited “a significant decline.”

The survey added that 60 percent of the interviewees consider investing more and nearly 20 percent intend to increase their investment “significantly” if the ease of doing business in the EU improves.

“It is our sincere hope that the EU would work closely with China to conclude negotiations on the EU-China Comprehensive Agreement on Investment by the end of this year,” it said.

The Brussels-based CCCEU, which represents some 1,000 Chinese companies, expressed concerns once again on Sept. 24 that the EU document on foreign subsidies issued on June 17 could pose legal barriers to Chinese companies operating in the bloc.

China and the EU should unswervingly promote the sound and stable development of their comprehensive strategic partnership, adhere to peaceful coexistence, openness and cooperation, uphold multilateralism, and maintain dialogue and consultation, said CCCEU Chairwoman Zhou Lihong.

Addressing a meeting of the foreign affairs committee of the European Parliament in late September, Head of the Chinese Mission to the EU Zhang Ming called on EU lawmakers to “take the concerns of Chinese businesses seriously, and get them properly addressed.”

Highlighting that China’s ranking in the World Bank report on ease of doing business has risen from 78th to 31st in past three years, even higher than some EU member states, Zhang said China and the EU “have made significant progress on the level-playing field issues and are stepping up efforts to find a potential landing zone on market access and sustainable development.”

“To foster an open, fair, just and non-discriminatory regulatory environment, both sides need to move in the same direction, and neither should stop or even backslide,” he added.

Tang from CEATEC also believed that the two sides should “highlight cooperation, and do everything possible to broaden and deepen these points of consensus, shared values and common interests.”

(Xinhua reporters Feng Junwei in Madrid and Pan Geping in Brussels also contributed to the story.)

(Video reporters: Zhao Yuchao, Li Jizhi; Video editor: Wang Han)

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