On 10 November 2021, Ambassador Zhang Ming, Head of the Chinese Mission to the EU, sat down with Sam Fleming, Brussels Bureau Chief of the Financial Times (FT), and Andy Bounds, FT's EU correspondent, for an exclusive interview. Answering a question on the EU’s trade toolbox, Ambassador Zhang Ming made the following remarks.
The European Union has been building up its trade toolbox for some time. It is the right of the EU to develop trade and economic policies. But I noticed that recently there were some comments expressing their concerns. The first concern is that trade and economic issues have been politicized. Such moves deviate from the original goals of trade and economic policies and are also distortions of market principles. Some people may call it an overload of trade. The second is that there has been an increasing amount of tailor-made tools targeting other countries and their enterprises. These tools are discriminatory and are also violations of the market principle of fairness and justice. The third is the abuse of the EU’s single market. We notice that the EU has been helping its enterprises gain the upper hand in global competition by simply asking other countries for reciprocal treatment. The fourth is that the EU has been launching more inward-looking, unilateral measures and creating new trade barriers. Such actions are not in line with the spirit and principle of WTO.
Many of these concerns come from foreign enterprises operating in Europe, including the Chinese ones. They believe that such policy measures create greater uncertainties, difficulties and burdens for their operation in the European market and cannot help with the stability of global supply and industrial chains as well as economic recovery at large. It’s not just foreign enterprises operating in Europe who expressed such concerns. I’ve communicated with business representatives from the European side who also expressed similar worries.
The countervailing tool is part of such concerns and I’ve noticed relevant legislation developments. Concerning this legislation, I heard concerns and complaints from Chinese, European enterprises and enterprises from other countries. I noticed that certain parts of the legislative proposals have been adjusted. We hope the European side can observe the basic principles of WTO, refrain from being influenced by protectionism and do not create new trade barriers using subsidies as a disguise. The EU is an important global player. So it’s important for the EU to continue to make the right choice and facilitate and liberalize trade and investment.
The due diligence legislation is also a much-heated topic this year. Maybe I can say it is the most heated topic. I communicated with representatives from the business and academic circles concerning this issue. Such communications leave me the impression that they are all quite concerned about the prospects of this legislation. They worry in particular that this legislation might influence the normal operation of enterprises, undermine the EU’s capacity to draw foreign investment and hurt the competitiveness of local enterprises.
CCCEU (China Chamber of Commerce to the European Union) releases a report every year. In this year’s report, 32% of Chinese enterprises operating in the EU believe that the due diligence legislation might create new market access barriers. I think the business communities from all sides share such concerns on this legislation. They worry that the legislation might create unnecessary influence and blows to the global supply and industrial chains which are highly fragile because of the pandemic. We hope the European side can take into full consideration the appeals and requests of the business communities and may prudently deal with this legislation.
On a follow-up question whether these instruments of the EU will deter Chinese investment, Ambassador Zhang said, I think based on the current situation, the influences of such toolbox are not confined to the market access of Chinese enterprises or Chinese investment. The EU is a global power. So the moves taken by the EU will also have global consequences and might create further stress to the global supply and industrial chains. And based on local public opinions and policies issued by the European side, the Chinese enterprises have more reasons to worry about such moves.