China and Europe advance relations with an eye toward addressing emerging global challenges
CORPORATE POWER: Chinese and European leaders attend a business gathering held alongside the China-EU summit in Nanjing, Jiangsu Province, on November 30 (HAN YUQING)
Chinese Premier Wen Jiabao must have been fully confident when he urged China and the European Union (EU) to help shape the world's future at the 12th China-EU summit on November 30.
As strategic partners, China and the EU should not only make joint efforts to cope with the global financial crisis, but also work to render the international political and economic order fairer and more equitable, he said at a joint press conference after the summit he had co-chaired in Nanjing, the capital of China's Jiangsu Province, along with European Commission President José Manuel Barroso and Prime Minister Fredrik Reinfeldt of Sweden, which currently holds the rotating EU presidency.
Indeed, the EU, as the world's biggest economy, and China, its third biggest, each have plenty to offer the other—not to mention the rest of the world. Their recent summit once again underscored the two powers' shared interests in diverse fields ranging from boosting trade to tackling climate change.
Moreover, at a time when the world confronts a series of daunting global challenges, China-EU relations appear poised to take on new dimensions.
Business matters
Chinese and European leaders held "serious, constructive and friendly" discussions on issues including trade and the economy, said Ambassador Serge Abou, head of the EU Delegation to China, at a press conference in Beijing. The leaders agreed that China and the EU must cooperate in order to get out of the financial crisis, he added.
Two-way trade between China and the EU reached $425.5 billion in 2008, up 19.5 percent from the previous year, according to the Chinese Ministry of Commerce (MOFCOM). Of this total, China's exports to the EU amounted to $292.9 billion, while its imports from the EU stood at $132.7 billion.
Jiangsu Province, which is home to many prestigious European-invested companies, took up 18 percent of the China-EU trade last year.
Under the devastating effects of the global financial crisis, meanwhile, bilateral trade decreased 18.7 percent year on year to $292.4 billion from January to October of this year. Despite the decline, the EU remains China's biggest trading partner, with the percentage of China-EU trade to China's total foreign trade volume keeping steadily at about 17 percent.
According to EU statistics, from January to August this year, the EU's total exports dropped 19 percent over the same period last year, but its exports to China only fell 3 percent. This is what MOFCOM believes is an indication of the EU's decreasing trade deficit with China.
China will continue to take active measures with which to increase imports from Europe, thereby addressing the trade imbalance between China and the EU, said Premier Wen at the China-EU summit.
At the same time, he called on the EU to relax its export controls over hi-tech products to China.
A SHOW OF UNITY: Chinese Premier Wen Jiabao (center), European Commission President José Manuel Barroso (right) and Swedish Prime Minister Fredrik Reinfeldt pose at the 12th China-EU summit in Nanjing on November 30 (RAO AIMIN)
China has sent about 10 trade promotion missions to Europe since the financial crisis broke out last year, according to MOFCOM. Most recently, a group of some 300 Chinese entrepreneurs visited Serbia, France, the Netherlands and Ireland from November 21 to December 4. They toured these countries to explore business opportunities in a wide array of sectors such as energy, aviation, automobiles, finance, telecommunications and environmental protection.
The EU is China's most important partner in technological cooperation. By September, China had signed $125.2 billion in technology import contracts with the EU, according to MOFCOM.
Regarding some Western countries' calls that the Chinese currency should appreciate, Wen said it is unfair that these countries pressure the yuan to appreciate while practicing trade protectionism against China. "In fact these measures are restrictions on China's development," he said.
Against the backdrop of the financial crisis, a stable yuan is conducive both to China's economic development and to world economic recovery, he said. China will improve its exchange rate regime to maintain the stability of the yuan at a reasonable level, he said.
In a joint statement released following the China-EU summit, the two sides pledged to promote sustainable economic growth by "fighting all forms of protectionism, keeping open and free trade and strengthening support for developing countries."
"There is a strong unity of opinion between China and Europe that we need to fight protectionism and we need to keep the trading system working and open," said Mikael Lindstrom, the Swedish Ambassador to Beijing.
A stronger yuan may not help reduce the EU's trade deficit with China, because products of European-invested companies in China account for a large proportion of Chinese exports to Europe, said Zhang Yansheng, Director of the Institute of Foreign Economics at the Academy of Macroeconomic Research under China's National Development and Reform Commission.
Moreover, he added, the yuan's real exchange rate has actually been on the rise due to soaring labor, energy and environmental protection costs in China.
New dimensions
Held only one week before the opening of the Copenhagen climate change conference, the China-EU summit put the spotlight on environmental issues, said Feng Zhongping, Director of the Institute of European Studies at the China Institutes of Contemporary International Relations.
The EU has taken the lead worldwide in addressing climate change and developing a low-carbon economy, he said. In his view, the potential for cooperation between China and the EU on environmental protection and new energy is huge.
At the China-EU summit, for instance, the EU pledged up to 57 million euros ($86 million) to a project aimed at helping China develop power generation technology with minimum carbon dioxide emissions.
China and the EU will work together with other parties for a "comprehensive, fair and ambitious outcome" at the Copenhagen climate change conference in line with the principle of "common but differentiated responsibilities" adopted by the UN Framework Convention on Climate Change, said their joint statement.
In fact, the Chinese Government announced that it would cut its carbon dioxide emissions per unit of gross domestic product by 40-45 percent by 2020 compared with 2005 levels shortly before the China-EU summit. In Feng's view, the move helped create a congenial atmosphere for climate change discussions at the summit.
China hopes the EU will set up an example for developed countries by drastically reducing greenhouse gas emissions while meeting developing countries' needs for funding and technology transfers, Premier Wen said. The Chinese premier is scheduled to attend the UN climate change conference in Copenhagen, Denmark, in December.
The China-EU summit also drew attention to the growing importance of the China-EU partnership following U.S. President Barack Obama's high-profile visit to China, Feng said. At the opening ceremony of the summit, Premier Wen noted that changes in the international situation demanded China-EU ties be more "strategic, comprehensive and stable."
They should expand consensus on major issues concerning the development of the world community, and deepen cooperation in political, economic and cultural fields, he said.
Chinese President Hu Jintao paid visits to Slovakia and Croatia in June and Italy in July. Premier Wen visited Switzerland, Germany, Spain, Britain and the EU headquarters in Brussels in late January and early February. He also attended the 11th China-EU summit in Prague, the Czech Republic, in May.
Also, Vice President Xi Jinping toured Belgium, Germany, Bulgaria, Hungary and Romania in October. These high-level visits, coupled with the Europalia China art festival in Brussels and China's participation in the Frankfurt Book Fair as this year's guest of honor, have cemented official and people-to-people bonds between China and Europe.
In their joint statement issued in Nanjing, both sides stressed that China-EU relations have increasingly transcended the bilateral framework to include international implications.
With the Lisbon Treaty coming into effect on December 1, China needs to work together with the EU on strategic and global issues such as economic recovery and climate change more closely than ever, Feng said.
The Lisbon Treaty features new rules designed to make the EU more efficient in decision-making and more responsive to global challenges. For example, it has introduced a permanent president of the European Council and a quasi-foreign minister for Europe.
Under the Lisbon Treaty, the EU will be able to adopt a more coordinated policy toward China, said Yang Jiemian, President of the Shanghai Institutes for International Studies, at the Forum on China-EU Strategic Partnership in Beijing ahead of the Nanjing summit. This allows China to work more effectively and directly with the EU to handle bilateral relations, deal with crises and discuss strategic issues, he said.
Moreover, as European countries embrace a common policy toward China with the coordination of the EU, it will be less likely for any individual EU member to try to affect China-EU relations, Yang said.
