INMarchthisyear,theU.S.claimedthatsteelimportshavethreateneditsnationalsecurity,necessitatingtheneedtoplacetariffsonimportsofironandsteelfromitsmajortradepartners.IgnoringWTOdispute-settlementprocedures,theU.S.unilateralactionhasseverelychallengedtherulebasedtradingsystemthatglobaltradehasreliedon.Astwoofthebiggesttradersintheworld,ChinaandtheEUhavesupportedamultilateraltradingsystemandproactivelypromotedeconomicglobalization,tradeandinvestmentliberalizationandfacilitation.Tosafeguardtheircommoninterests,ChinaandtheEUshouldhaveaclearerunderstandingofbilateraleconomicandtraderelations,sotopushforwardtheireconomicandtradecooperation.
GoodTimingforRepositioning
Thisyearmarksthe40thanniversaryofChina鈥檚reformandopening-up.Overthepastfourdecades,Chinahasbeenadheringtothefundamentalnationalpolicyofopening-upandpursuingdevelopmentwithitsdoorwideopen.Intheprocessofintegratingintotheworldeconomy,thecountryitselfhasseensubstantialchangesandmadesignificantcontributionstoglobaleconomicgrowth.ChinesePresidentXiJinpinghasemphasizedthatChina鈥檚doorwillnotbeclosedtotheoutsideworldandthecountrywillonlyopenupevenwider.Overthepast40years,theEUhasbeenaparticipantinChina鈥檚reformandopening-upcampaign,andalsogainedsubstantialbenefitsfromthedrive.
Since2013,theEUhasaskedforwidermarketaccesstoChinaintermsofbothgoodsandservices,aswellasgovernmentprocurement.IthasrequestedChinatoreducemarketaccessrestrictions.AlltheserequirementshavebeenreflectedinChina-EUbilateralinvestmenttreaty(BIT)negotiationswiththefirstroundlaunchedin2014,andEU鈥檚adjustmentofitsstrategyonChina.
China,basedonitspracticalconditions,hasbeenactivelyrespondingtotheEU鈥檚concerns.InApril2018whenattendingtheBoaoForumforAsiaAnnualConference,XiJinpingannouncedaslewofmajormeasurestoboostChina鈥檚opening-up,includingbroadeningmarketaccess,creatingamoreattractiveinvestmentenvironment,strengtheningintellectualpropertyprotection,andtakingtheinitiativetoexpandimports.Thesemeasureshavebeenimplementedstepbystep.Sofar,theChinesegovernmenthastakenaseriesofconcreteactions,suchasremovingforeignequitycapsonbanksandfinancialassetmanagementcompanies,aswellasmanufacturingofnew-energyvehicles,andcuttingimportdutiesonautomobiles,autoparts,andsomeeverydayconsumergoods.OnJune15,theStateCouncilunveiledmoreforeign-investorfriendlymeasurestofurtheropenupandpromotehigh-qualityeconomicdevelopment,withdetailedmeasuresandrelevanttimetablesbeingmade.
TheseactionshaveshownChina鈥檚commitmenttoacceleratingreformandopening-up,opposingtradeprotectionism,andsupportingeconomicglobalization.TheyarealsoofgreatconcerntotheEU.Afterthesemeasureswereimplemented,EuropeanenterprisesareexpectedtohavemorepromisingprospectsintheChinesemarketwhentheyexpandtheirbusinessesorwhentheyexportEuropeansignatureproductssuchasagriculturalproducetoChina.Inthefaceofrisingprotectionism,populism,andunilateralism,China鈥檚effortsinfurtheropeningupmeansbothChinaandtheEUwillseebrandnewopportunitiesforcooperation,andalsoimpliesagoodtimingforthetwosidestorepositiontheireconomicandtradeties.
Thefirstcross-bordere-commercefreighttrainfromHamburg,Germany,arrivesinXi鈥檃n,innorthwestChina鈥檚ShaanxiProvinceonMay21,2018.GrowthamidCompetition
Overthepastthreeyears,China-EUeconomicandtraderelationshavebeencharacterizedbywin-wincooperationonthewhole.Bothsideshaveseenmoreintensifiedandbalancedtradeandinvestmentcooperation.However,somesubtlechangeshaveoccurredastheEUseesChinaasacompetitor,andhasadoptedsometradedefensemeasuresonChina.Theoverallsituationofthebilateraleconomicandtraderelationscanbesummarizedasthefollowingtwoaspects:
FirstisthatChina-EUtradeandinvestmentcooperationhasseencommondevelopment.
In2017,thebilateraltradebetweenChinaandtheEUreachedarecordhighofUS$616.9billion,upby12.7percentyearonyear.China鈥檚exportstotheEUstoodatUS$372.04billionanditsimportsfromtheEUwasUS$244.87billion,ayear-on-yearincreaseof9.7percentand17.7percentrespectively.TheshareofChina鈥檚tradesurpluswiththeEUinthetotalbilateraltradevolumehasshrunkenfromnearly40percentin2008toabout20percentin2017.TheEUhasbeenChina鈥檚largesttradepartnerfor14consecutiveyears,beingthelargestsourceforChina鈥檚importsforsevenconsecutiveyears,andthesecondlargestmarketforChina鈥檚exportsforsixconsecutiveyears.
Bilateralinvestmenthasbecomemorebalancedinthepastdecade.SincetheEuropeandebtcrisisbeganin2009,theEUmembercountrieshaveincreasinglyneededforeigninvestment.Meanwhile,Chineseenterpriseshaveacceleratedtheirpaceingoingglobal;therefore,China鈥檚foreigndirectinvestment(FDI)totheEUhasincreasedrapidlysince2009.Bytheendof2016,China鈥檚accumulatedFDIintheEUhitUS$69.83billion,whiletheEU鈥檚FDIinChinatotaledUS$110.336billion.Theratiowaslessthan1:2,whichismorebalancedconsideringitwasstill1:19.2in2008.
ThesecondaspectisincreasingcompetitionexistsintheChina-EUeconomicandtradecooperation.ThisismainlyduetotheEU鈥檚inadequateunderstandingaboutChina鈥檚fasteconomicdevelopment.TheEUhashighlighted鈥渇airtrade鈥漚nd鈥渙pening-uponanequalfooting鈥漣nlaunchingeconomicandtradecooperationwithChina,yetithasadoptedsometradedefensemeasuresagainstChina,suchassettingupamechanismtoscreenFDI,allyingwiththeU.S.andJapantorampuptradepressureonChinainareasofintellectualpropertyrightsprotectionandovercapacityinthesteelsector.
TheSeventhChina-EUHighLevelEconomicandTradeDialogue,co-chairedbyChineseVicePremierLiuHeandEuropeanCommissionVicePresidentJyrkiKatainen,inBeijingonJune25.
NewOpportunities
Asthelargestdevelopedeconomicbody,iftheEUcangrasptheopportunitiesbroughtaboutbyChina鈥檚ongoingreformandopening-up,itwillbecomethebiggestbeneficiary.Infact,bothsidesshouldtakeadvantageofChina鈥檚furtheropening-upandbuildclosereconomicandtraderelations.ItistimefortheEUtoadjustsomeofitsmeasuresandpracticesattheinstitutionallevelthatjeopardizeChina鈥檚interests.
First,bothsidesshouldenhancecommunicationsandexchangesatalllevelsandinallareas,includingdevelopmentstrategiesandforeigneconomicpolicies,soastoeliminatemisunderstandingsandpromotemutualtrust.EffortsshouldbemadetofigureoutaneffectivewaytohelpEuropeancompaniesbemoreinvolvedinChina鈥檚newroundofopening-up,enablingthemtoreapsubstantialbenefits.
Second,bothsidesshouldcontinuetopromoteinternationalcooperationundertheframeworkoftheBeltandRoadInitiative.ChinaconsiderstheEUanimportantpartnerforcooperationundertheBeltandRoadInitiative,whichalthoughproposedbyChina,providesopportunitiesandbenefitsforthewholeworld.Guidedbytheprincipleofextensiveconsultation,jointcontribution,andsharedbenefits,theinitiativedeniesoutdatedgeopoliticalmaneuveringandaimsatbuildingaplatformforwidercooperation.
Third,bothsidesshouldworkhardtoimproverelevantmechanismsandsystemstoboostbilateraleconomiccooperationforawin-winresult.BothsidesshouldaccelerateBITnegotiationsandlaunchajointfeasibilitystudyforaChina-EUfreetradeareaasearlyaspossible,asitsestablishmentwillsurelybringmutualbenefitsandwin-winresultsbasedontheresearchconductedbytheCenterforEuropeanPolicyStudiesandresearchcentersaffiliatedtotheMinistryofCommerceofChina.
Fourth,bothsidesshouldworktogethertoenhancecoordinationofinternationaleconomicpolicies,safeguardingarule-basedmultilateraltradingsystemandjointlyopposeunilateralismandtradeprotectionism,soastoimprovetradeliberalizationandfacilitation.ThedevelopmentofChinaandtheEUcan鈥檛beachievedwithoutafreeandopenmultilateraltradingsystem.Confrontingtherisingwaveofunilateralismandtradeprotectionism,cooperationisneeded.YAOLINGisdeputydirectoroftheDepartmentofEuropeanStudiesattheChineseAcademyofInternationalTradeandEconomicCooperation,anaffiliateoftheMinistryofCommerce.