China-Europe Relations Undergo Comprehensive Upgrade
China and EU have so far established 60 or more dialogue mechanisms, and their cooperation covers 80 fields. Economy and trade constitute the mainstay of their bilateral ties. The economic bond is hence strong, yet frictions erupt from time to time. Two-way investments are growing at a rapid pace, but represent just a drop in the ocean of each party’s total outbound investment. This, however, implies an opportunity for significant improvement. What’s more, current disparities in ideology, values and cultures mean that there is still considerable scope for potentially deeper cooperation in the realms of politics, people-to-people exchanges and global governance.
Direction and Focus of China-EU Cooperation
In accordance with the status quo and characteristics of the China-EU relationship, the direction and focus of their cooperation should be that of carrying forward economic and trade exchanges, deepening cultural and social cooperation, and enhancing cooperation in high and new technology, currency and finance, and global governance.
First, they must carry forward economic and trade cooperation, promote investment agreement negotiations, and explore the possibility of building a free trade zone. In tandem with closer commercial intercourse between China and the EU, annual bilateral trade has approached €500 billion. But there is still huge potential for China-EU trade cooperation.
Based on China’s layout plan, in the next five years China will import commodities worth US $10 trillion and invest US $500 billion abroad. More than 400 million Chinese people will also travel overseas. From the EU standpoint, China’s huge market will help resolve the European debt crisis and achieve economic recovery. From another perspective, the EU leads the world in high technology and innovation capability. It is hence China’s largest source of technical expertise. China-EU science and technology cooperation will help China achieve economic transition and the upgrading of its production structure. Strengthening bilateral trade, therefore, is a truly win-win move.
Trade friction is bound to arise in the course of expanding trade and economic cooperation. It is important for both sides to explore a mechanism to handle trade disputes via dialogues and consultations, so avoiding a lose-lose situation resulting from abuse of trade remedy measures. Meanwhile, both sides should explore the possibility of building a China-EU free trade zone. Since China and the EU have numerous common interests in such aspects as infrastructure, industrial upgrading, technological innovation, green development, and in particular urban-rural integration, there is huge scope for direct investment. Launching bilateral investment agreement negotiations is beneficial to Chinese enterprises going global, and also a main way for the EU to attract more investment from China.
Second, China and the EU must deepen cultural exchanges and build mutual understanding and trust. Misunderstandings between China and Europe are rooted in enormous differences in values and ideology. But any two people can become true friends as long as they understand one another. Cultural and social exchanges can help the China-EU relationship evolve from that of strangers to close friends.
Third, they must strengthen cooperation in the field of science and technology, and promote China’s industrial upgrading to infuse new energy into European economic growth. The growth potential of China and Europe in the trading of advanced technology has yet to come into full play. This is largely due to the EU imposition of bans on high-tech exports to China. The EU’s easing of export bans on new energy, new material and the environment-friendly technologies China sorely needs for its development, and the combining of European technological innovation with China’s active market would facilitate upgrading of the industrial structure, and the transition of China’s economic development model. It may also inject new vitality into the European economy in the post-crisis era.
