The Essence of China-EU Trade and Economic Relations is Mutual Benefit and Win-Win [Promoted content]

Over the past year, amid heightened global geopolitical tensions, the European Union has viewed its trade and economic cooperation with China as a “risk point”, and the trend is intensifying. As the Minister in charge of trade and economic affairs at the Chinese Mission to the EU, I would like to share my views on the current China-EU trade and economic relations.

Mr. PENG Gang, Minister for Economic and Trade Affairs.

Firstly, China and the EU are each other’s most important trading partners. 2023 saw a surge in head of state diplomacy between China and the EU, together with frequent and pragmatic high-level visits. Under the strategic guidance of leaders from both sides and the joint efforts of enterprises, China and the EU remained each other’s second largest trading partners in goods. Due to the global trade slowdown and other impacts, according to Chinese statistics, China-EU trade in goods in 2023, although declined, still stood at 783 billion USD, representing an average of nearly 1.5 million USD trade exchanges per minute. China’s imports of machinery, pharmaceuticals and alcoholic beverages from the EU grew by 15.7%, 13.7% and 6.1% respectively. China’s imports from the EU have improved the health and living standards of Chinese citizens and boosted China’s economic development. At the same time, China’s exports of new energy products, electronics and other commodities to the EU have accelerated Europe’s green and digital transitions and helped reduce the EU’s inflation level. Trade between China and the EU is mutually beneficial.

Secondly, both Chinese and European enterprises continue to be optimistic about each other’s markets. According to Chinese statistics, the stock of two-way investment between China and the EU exceeded 250 billion USD by the end of 2023. EU investment in China in 2023 was 10.6 billion USD, up by 5.5%, exceeding 10 billion USD for the second consecutive year. In the same period, China’s investment in the EU was 8.2 billion USD, up by 17.4%. Since 2022, BMW, Volkswagen, Stellantis, BASF and many other large European multinationals have increased their investment in the Chinese market, and European SMEs such as digital company Dassault Systèmes and home appliance company Group SEB have entered into a number of cooperation projects with Chinese companies. According to the Business Confidence Survey 2023 released by the European Union Chamber of Commerce in China (EUCCC) , more than 90% of the surveyed European companies plan to make China their investment destination, and 59% of them consider China as one of the top three major investment destinations. A survey of 288 German companies in China conducted by the German Chamber of Commerce in China shows that 55% of these German companies plan to increase their investments in China in the next two years. The 2023 Annual Report of the China Chamber of Commerce to the EU (CCCEU) shows that more than 80% of surveyed Chinese companies plan to enhance their business in Europe.

Thirdly, de-risking will lead to “de-opportunity”. China has always believed that the economies of China and the EU are highly complementary, and that China’s mega-market and the EU Single Market offer huge opportunities for each other’s economic development. At present, de-risking is high on the agenda of the EU’s economic and trade policy towards China. We understand that all parties have their own concerns about the security issue, but what matters is to clearly set boundaries and rationally prevent risks. We oppose the politicization, ideologization and pan-securitization of economic issues by which de-risking becomes “de-opportunity” and “de-cooperation”. Covid-19 only outbreak once in a century, and we should refrain from regarding it as inevitable, nor should the EU view normal trade and economic cooperation as a risk, let alone treating China as a source of risk. Once you look at the world through the filter of risk, the world is full of risk, even in a normal Chinese-made electric car. Despite headwinds facing economic globalization, the world economy has already been intertwined. It is the lack of cooperation that poses the greatest risk, and the lack of development that poses the greatest insecurity.

Finally, competition could promote mutual progress. Some in Europe attributed the achievements of Chinese companies and Made-in-China simply to subsidies or non-market practices，and initiated an anti-subsidy investigation into Chinese electric vehicles. At the same time, the EU and its member states have also granted large amounts of subsidies to local enterprises, but Europe is still struggling with its own competitivenesss, which fully demonstrates that competitiveness could not be earned by subsidies. In fact, the secrets behind Chinese products going global have never been the so-called subsidies, but diligence, innovation and competitive awareness of generations of Chinese entrepreneurs. Joerg Wuttke, former President of the EUCCC , once said that China is akin to a fitness club for European companies, and I think the metaphor is quite vivid. From another perspective, competition is the natural attribute of a market economy. Chinese products and enterprises coming to Europe will bring more healthy competition to Europe, ultimately improving the competitiveness of European enterprises, and promoting the development of science and technology and the well-being of EU citizens.

2024 is the Year of the Dragon in China. The dragon represents power and good fortune in the Chinese culture and is one of the favorite Chinese zodiac signs, while dragon is understood differently in the West. Cultural difference like this one often leads to misunderstanding and mistrust between the East and West. Chinese President Xi Jinping pointed out at the 24th China-EU Leaders’ Summit that China and the EU need to develop a right perception of each other, promote mutual understanding and trust. As China pursues high-quality development and higher-standard opening-up, and the Chinese economy continues to recover and improve, we see the EU as a key partner for economic and trade cooperation, a preferred partner for scientific and technological cooperation, and a trustworthy partner for industrial and supply chain cooperation. We are ready to work with the EU for the follow-up of the deliverables of the 24th China-EU Leaders’ Summit and the 10th China-EU High-Level Economic and Trade Dialogue, promote the deepening of China-EU economic and trade cooperation, and inject more stability and positive energy into the world economy.