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An article by H.E. Ambassador Wu Hailong on EU-China Observer
China-EU Business Relations: Working Together to Create a Win-Win Situation
2013/01/10

In 2012, China and the European Union have continued to keep each other as their most important trading partners as evidenced by the strong interdependence and complementarity. The EU remains China's largest trading partner, the largest source of technology transfer, and the fourth largest source of foreign investment. China has become the EU's second largest trading partner and the export market, the largest source of import, and among the fastest growing export markets. According to Chinese statistics, from January to November this year, bilateral trade in goods registered 495.7 billion dollars. In the first ten months, real investment from the EU to China reached 5.2 billion dollars, and nearly 6.9 billion dollar worth of deals have been made to transfer technology from Europe to China.

However, our current economic cooperation and trade are not problem free, and the European sovereign debt crisis has resulted in the decline of bilateral trade and investment between China and Europe. According to the Chinese statistics, from January to November, bilateral trade in goods have dropped by 4.1% year-on-year, and Chinese export to Europe has fallen by 7%. In the first ten months, EU investment in China has also decreased by 5%. According to the EU statistics, in the first eight months of this year, EU import from China has recorded zero growth. What is even worse is that since the beginning of the year, China has been increasingly challenged by the deteriorating export environment to the EU. We are particularly concerned that with the increasing number and size of trade frictions, protectionist sentiments are clearly on the rise. In this period, the EU has launched seven trade remedy measures against the Chinese companies. The antidumping and countervailing investigation against Chinese solar panels amounts to over 20 billion dollars, accounting for 7.4% of total Chinese export to Europe.

Despite the challenges, both sides have continued to demonstrate strong desire to grow our cooperation. During the 15th China-EU Summit in September, leaders from both sides have reached broad agreement to recommit ourselves to intensifying cooperation in economy, finance, energy, environment, and urbanization, injecting new vigor into the China-EU cooperation across industries. Both sides have maintained sound cooperation on the protection of intellectual property rights with fruitful results achieved in the Intellectual Property Rights Dialogue and commitment made to carry out the IPR Phase III Project. Both sides have expressed the strong desire for the early launch of the negotiation for an investment agreement to facilitate two-way investment. Plan has also been made to leverage the the High-Tech Trade Working Group to promote China-EU trade balance through growing high-tech trade and increasing relevant EU exports to China.

During the recently concluded 18th Congress of the Communist Party of China (CPC), members of the congress have adopted an inspiring development blueprint for the country. China will continue to grow its domestic market, optimize industrial mix, and promote new industries of strategic significance, advanced manufacturing business, and the service industry. Efforts will also be made to accelerate the upgrade and adjustment of traditional industries. During the 12th Five Year Plan, China aims to maintain an annual economic growth rate of 7%, which will help increase market size and result in enormous consumption. It is estimated that the overall retail sales of social consumption products will increase at 15% per year, and the total import of China is expected to exceed 10 trillion dollars. As the European brands have successfully established their names among the Chinese consumers, Chinese manufacturing companies have also been successful in bringing the high-quality and low-priced products to European customers. I strongly believe that Europe will continue to keep its edge in the advanced technologies, innovation capacity, and management expertise in growing its business cooperation with China.

For China and Europe, we should view the current situation of the world economy and the European sovereign debt crisis as a rare historical opportunity for cooperation. Instead of wasting our time and energy to intentionally play up the differences and disputes, we should make the best of the opportunity to grow our economic cooperation and trade. It is imperative that we oppose all forms of protectionism, expand mutual market access, and resolve trade disputes through smooth consultation process. The EU's recent antidumping and countervailing investigation against Chinese solar panel products has not only triggered strong reaction within China, but also caught the attention of the international community and caused concern among the business community in Europe.

We believe that such developments pose great harm to the overall interests of the relevant industries and businesses in both China and Europe. Such an action by the EU will also inevitably undermine the image of the Union and shake the confidence among the Chinese companies to do business in Europe as it casts doubt on EU's capacity to properly handle trade frictions. For China, we always believe that complementarity outweigh rivalry in China-EU business ties, and such complementarity has only been reinforced by the international financial crisis and constitutes a stable and durable basis to our cooperation. In the time ahead, China and the EU must uphold the spirit cooperation to tide over the difficulties and commit ourselves to creating more opportunities for our businesses to cooperate and to grow. I am full of confidence that by working together, we will be able boost market confidence, reinvigorate our economy, and set for the rest of the world a great example of strategic and mutually beneficial partnership.

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