The EU-China Business Association (EUCBA) and the China Chamber of Commerce to the EU (CCCEU) organized an exclusive webinar with His Excellency Mr Zhang Ming, Ambassador of the People’s Republic of China to the EU and Head of the Chinese Mission to the EU on 10 December 2020.

Ms. Gwenn Sonck, Executive Director of the EU-China Business Association and the Flanders-China Chamber of Commerce welcomed the speakers and the participants to the exclusive year-end dialogue between H.E. Zhang Ming, Ambassador of the People’s Republic of China to the EU, and business leaders. This is the largest webinar of the year with around 350 participants. 

Mr. Jochum Haakma, Chairman of the EU-China Business Association, explained that originally an exclusive lunch with Ambassador Zhang and business leaders was planned, but due to Covid-19 this was changed to an online dialogue which brings the opportunity to have a larger audience. It is also the first webinar organized together with the Chinese Chamber of Commerce to the European Union. Covid-19 has changed our world. The speed and efficiency with which China has tackled Covid-19 is really impressive. China has almost no new infections anymore and if there are some infections immediately strict action is taken with quarantine, efficient contact tracing and mass testing. We can learn a lot from this approach in Europe. The EU and China need to work together for example in the development of a vaccine to combat Covid-19. At present, the biggest challenge for companies doing business with China is the fact that they cannot go to China due to the high number of Covid-19 infections in the EU. During these difficult times the EU-China Business Association acts as an important bridge to promote the economic and trade relations between China and the EU. For the full year of 2019, the value of completed European foreign direct investment in China reached USD12 billion, up from USD8 billion in 2018. The top industries were automotive, agriculture, food, consumer products and services. The total 2020 EU FDI in China is projected to reach USD7 billion, which is a decline from 2019 but not far from the yearly average of the last five years of USD8 billion. The completed Chinese FDI in Europe was USD13 billion, down from USD21 billion in 2018. The top industries were consumer products, services and automotive. For 2020 a lower figure is expected due to Covid-19. There is still enormous untapped potential in the Chinese market. More business opportunities will also arise when the EU-China investment agreement will be signed. The EU and China are having the 35th round of negotiations. This offers an opportunity to increase trade and investment. The negotiations are also going online, which is a pity because it was a good experience to come together physically and see each other’s body language that adds to the discussion and the spirit of the negotiations. The agreement will offer new and better market access to investors in Europe and in China. The aim is to sign this agreement in 2020, but time is running out. 

The EU-China Business Association is a bilateral Chinese business association in Europe aiming at promoting the economic and trade relations between the EU and China. There are more than 19 member associations representing more than 20,000 Chinese and European companies. In non-Covid times the Association is receiving high-level Chinese delegations often together with the Chinese Mission in Brussels and introduces them to the member companies. The EUCBA is also organizing high-level meetings between European and Chinese authorities. It works closely together with the Chinese Mission. Mr. Haakma thanked Ambassador Zhang for the excellent cooperation and the sharing of information. The EUCBA also works closely with the European institutions including the European Commission.

Mrs. Zhou Lihong, Chairwoman of the Chinese Chamber of Commerce to the EU, said that the year 2020 has been a particular one for everybody. Some may describe this as demanding, bumpy or even disastrous. Others on the contrary may highlight that during the darkest moments we joined forces against a common enemy instead of dividing us. Our struggle pushed us forwards to mutual support and cooperation to find long-lasting solutions. This year we experienced that cooperation is vital to overcome common crises and turn challenges into opportunities. This encouraging attitude reunites us. The Chinese Chamber acts as a bridge builder in the Sino-EU relationship and helps Chinese enterprises in Europe to increase China-EU interaction. We must cherish the momentum and look forward to fruitful deliverables in the coming year.  

H.E. Ambassador Zhang Ming gave the keynote speech on China-EU economic and trade relations. This year is a special one for all. The outbreak and global spread of Covid-19 have taken a heavy toll on global industrial and supply chains. The world economy is in the most severe recession since the 1930s. It is a challenge for all to get the economy back on track. On the bright side, China-EU economic and trade relations demonstrate resilience during the crisis. From January to November, bilateral trade approached USD620 billion, up 4.7% year-on-year. China’s exports to the EU and EU exports to China are both on the rise. China is now the EU’s largest trading partner. The EU Chamber of Commerce in China Chairman Joerg Wüttke recently said that, with the resumption of China’s economic activities, many EU companies in China have seen double-digit growth, and with the help of the China market some companies have made profits in the region. The resilience of China-EU economic and trade relations, first and foremost, comes from the win-win nature of China-EU cooperation. This year, the China-Germany EU video summit, the 22^nd China-EU Summit, and other high-level events were held. The High-level Dialogue on Environment and Climate Change was launched, as well as the Digital Dialogue. The China-EU Comprehensive Strategic Partnership has gained new political momentum. The Geographical Indications Agreement was formally signed. Xixia mushrooms, Yingde black tea, Bavarian beer, parma ham and other iconic agri-food produce will be better protected and promoted in each other’s market. China-EU trade will be brought to a higher level. The negotiations on the China-EU Investment Agreement, closely watched by many, has made major progress. 

The resilience of China-EU economic and trade relations also comes from China’s continued commitment to reform and opening-up. This year, China’s Foreign Investment Law entered into force. The number of items on the FDI negative list has been reduced to 33. China’s doors opened still wider in sectors that interest the EU, such as finance, infrastructure, environmental protection and automobiles. The latest World Bank report elevated China’s global ranking to 31^st in ease of doing business and recognized China’s strong commitment and effective delivery of the reform agenda, active participation of the private sector and easy access to digital technologies. The resilience of China-EU economic and trade relations is anchored in China’s commitment to multilateralism and free trade. Last month, RCEP was concluded. The world’s largest FTA is taking shape, covering 30% of the global population and 29% of global GDP. China will also favorably consider joining the CPTPP. A prosperous and open Asia-Pacific will open up new horizons with greater opportunities for China-EU economic and trade cooperation. 

China and the EU, having withstood the test of Covid-19, are embracing new opportunities in economic and trade cooperation. The EU has rolled out a historic recovery plan, featuring green and digital transitions at a fast pace. China has made extraordinary efforts to contain the virus and restore the economy. This year, China is expected to achieve positive growth, which will bring hope and driving forces for global recovery. China recently adopted the proposals for the 14^th Five Year Plan and the long-range objectives through 2035. China will step up efforts to forge a new development paradigm with the domestic circulation as the mainstay, and the domestic and international circulations reinforcing each other. It must be emphasized that China is promoting dual circulations, not a single domestic circulation, still less a circulation behind closed doors. Despite the drastic changes in the world, China’s fundamental policy of opening up remains unchanged. In the coming decade, China is expected to contribute about 30% of global growth. China’s imports are estimated to top USD22 trillion. By 2035, China is expected to double its per capita income or total GDP. China is not only a world factory, but also the largest market in the world. 

Business leaders have a strong business acumen and will find plenty of opportunities in such a huge growing market. To translate opportunities into concrete results, market players need to act pro-actively and creatively. It is up to governments to ensure a fair, just and non-discriminatory market environment. China and the EU are each other’s opportunity and partner. What matters most is for the two sides to deliver on the commitment to mutual benefit, openness, cooperation, multilateralism and free trade, and not to turn business issues into politics. This should be the spirit that guides our frank and fruitful discussions. Ambassador Zhang said that he would be more than happy to listen to the opinions and suggestions, and address the concerns and questions of business leaders. He also hopes that the EU partners could give heed to business voices from both sides.

There is a widely shared concern among Chinese companies operating in the EU that in recent years – especially during the Covid-19 pandemic – the EU business environment has become less friendly, adding uncertainties to their business. They jokingly describe the EU’s anti-trust review, FDI screening and foreign subsidies review as “three huge mountains” weighing heavily on their chests. Some high-tech companies complain that their access is restricted to 5G cooperation projects, as non-technical factors could be arbitrarily used in security assessment, and that their products could be labelled unsafe without any evidence. Such moves are obviously against the principles that the EU has long held, nor do they contribute to the EU’s economic recovery and long-term development. In the first three quarters of this year, Chinese investment to the EU dropped by 26.1% from the previous year, which could not be more telling. Hopefully, our EU partners could take such concerns more seriously. 

Next, Ambassador Zhang addressed a few words in Chinese to the Chinese businessmen and women. He continued in English, quoting Chinese President Xi Jinping at the G20 Summit, saying that when Covid-19 is over, our world will rise from the pandemic and emerge even stronger. There is good reason to be optimistic about the prospects of China-EU economic and trade cooperation and making joint efforts to deliver the future we all want. Finally the Ambassador wished the participants a Merry Christmas, and a safe, healthy and happy New Year. 

The transcript of the Q&A session will be published in next week’s China Business Weekly.