(November 14, 2023, 09:40-09:50, Townhall Europe)
President Wang Hong, President Dominique Turpin,
Mr. Pascal Lamy, Ambassador Jorge Toledo,
Distinguished Guests,
Ladies and Gentlemen,
It’s a real pleasure to be here at the 9th Europe Forum. On behalf of the Chinese Mission to the European Union, I would like to first congratulate CEIBS on organizing this event. As a leading business school co-founded by the Chinese government and the EU, CEIBS has been playing an important role in promoting understanding between the two sides. I also want to thank all the friends coming here today, for your contribution to China-EU friendship and cooperation.
This year marks the 20th anniversary of the establishment of China-EU comprehensive strategic partnership. It would be useful to take stock of our relationship, identify the challenges, and more importantly explore opportunities for more substantial cooperation. The theme of this year’s Forum, “Mutual Trust and Win-Win: Toward Another 20 Years of China-EU Economic Cooperation” could not be more timely and relevant. And of course, your insights on deepening China-EU cooperation are greatly needed.
When China introduced its first EU policy paper two decades ago, it laid down several principles, such as mutual respect, mutual trust, mutual benefit, reciprocity, and consultation on an equal basis. These principles have guided our cooperation with EU over the years, which, as many of you have witnessed, has expanded to an unprecedented scale.
We have established over 70 institutionalized meetings or dialogues. Our cooperation in the areas of economy and people-to-people contact have also dramatically intensified. We have become each other’s second largest trading partners. With each passing hour, an average of nearly 100 million US dollars of goods is being traded between China and EU. This clearly shows that our interests are more aligned, and our relations more connected today. So looking back, we have come a long way.
But we do have challenges. It starts with the perception. 20 years later,China still calls EU a comprehensive strategic partner, but this term is rarely used by EU officials or scholars today. We saw three years ago, the designation of China as a partner, competitor and systemic rival instead. For most Chinese, myself included, understanding this so called holy trinity is a mind-bogging exercise.
The problem with this concept is that it is not only contradictory in itself,but also inconsistent with the facts. Partner? Of course, always. Competitor? Maybe. But since when have we become rivals? All EU member states were fully aware of China’s political system when they established diplomatic relations with the People’s republic in the 1970s. It was not a problem 48 years ago, when we established diplomatic relations. And it was not a problem when we became comprehensive strategic partners 20 years ago. Why has it become a problem today?
Some would argue that China does not share EU values. If this logic goes, then EU would have a lot of rivals. Because from the Middle East to Africa, from Asia to Latin America, there are many countries who obviously do not see eye to eye with Europe in terms of values. We can clearly tell from the divergence of responses to the ongoing Gaza crisis.
Misperception, unfortunately, often leads to erosion of trust, sometimes frictions or even confrontations. We have already seen a worrying trend of emphasizing by some groups on the rivalry part while downplaying the partner part. This has been matched at the Commission level by expanded trade toolbox and measures to de-risk from China.
In recent years, a world-leading Chinese tech company has been gradually driven out of the EU market under the pretext of national security, although not a single case has been found that remotely indicates that the products of that company compromised any country’s national security. An anti-subsidy investigation into electric vehicles from China was launched last month. And there are also reports that anti-subsidy probes into Chinese wind turbines, photovoltaic components and steel and aluminum industries may also be launched. The list goes on.
To many Chinese investors and long-term observers of EU, the scope and speed of the changes in EU is unprecedented. As many of these measures are protectionist in nature and potentially in conflict with WTO rules, perceived departure of EU from a world leader of free trade has sent shock-waves through the Chinese business community.
We are deeply concerned about the EU’s growing assertiveness and unilateral actions as they caused disruptions to our bilateral trade and investment. The current global division of labor is a result of decades of evolution which sustained global economic growth. A politically-motivated de-risking process runs counter to established business norms, and many would argue, is a risky exercise in itself. They may well spill over and affect wider areas in the future. That would be the least welcoming news to an already struggling world economy.
From my private discussions, many European entrepreneurs both in China and at home also feel increasingly uneasy about the politically driven economic agenda which complicate their operations. I think it would be a huge task for my EU colleagues to convince the Chinese and other players that their measures are about protection but not protectionist, as some claimed.
I have read about the rationale behind the recent moves by the EU. What is missing here, however, is the proper recognition of Chinese enterprises’ successful adaption and integration into the globalization process since the reform and opening-up four decades ago. It was a daunting exercise and many of them paid heavy prices. The survivors, however, moved up in the value chain and became very competitive globally thanks to their continued investment in innovation.
On the global innovation index released by WIPO last month, China ranked 11th. Compared with ten years ago, China moved up ten places. Today, China ranks 1st among the 36 upper-middle-income group economies. That explained a lot about the success of the Chinese companies worldwide.
On the list of grievances from the EU business community, you will often find staggering energy cost, rising due indigence burdens and excessive bureaucracy have in Europe. These are also the challenges Chinese companies face in Europe and need to be addressed.
As a diplomat dealing with multilateral issues all through my career, I am a true believer in multilateralism and a strong supporter of deepened China-EU cooperation. My job is not only to identify the difficulties and challenges, but also to seek solutions together with our EU partners.
As President Xi Jinping pointed out, China and the EU are two major forces, markets and civilizations. This relationship not only concerns the interests of both side. It also has huge global significance.
The world is entering a period of turbulence and transformation. Regional conflicts keep cropping up. Global economic recovery is weak. Looking into 2024, it would be safe to say that the global environment still looks uncertain. In this context, China and the EU must be prepared and think about tomorrow. We should think hard about what we can do to bring to the world more stability and certainty.
I have a few proposals.
First, we should strengthen communication and dialogue to increase mutual trust. I am pleased to report that since my arrival in Brussels last December, I have been witnessing a good momentum of high-level exchanges. President Xi Jinping and Premier Li Qiang met with President Michel and President von der Leyen, as well as other European leaders on multiple occasions. These top-level interactions provided strategic guidance for the development of China-EU relations.
In the past few months, seven EU Commissioners visited China, four of them Vice Presidents. The high-level dialogues on environment and climate, digital, economy and trade, and strategic issues during their visits produced wide-ranging agreement and laid a good foundation for the upcoming 24th China-EU Summit. Let’s hope that something very productive will come out of the Summit.
Building trust is a two-way street. It is our belief that we need to respect each other in terms of development path and social system, and understand each other correctly. Strong partnership is vital to rebuilding mutual trust and improving the political atmosphere. This partnership is not targeted at any third party, nor should it be dependent on or dictated by any third party.
Second, we should take more concerted actions to mange our differences. I always believe that our consensus far outweighs our differences, but we should never shy away from our differences or problems that may arise from our cooperation. The key is to have a positive and proactive attitude and jointly find the right solution.
I give you an example. We have heard so much talk about the trade imbalance between us. EU friends would complain about so- called unfair trade practices while my colleagues back home would highlight the restrictions on high-tech products. China has never deliberately pursued trade surplus with EU. Instead of pointing fingers, would it not be more useful to set up a joint working group to have a stocktaking of the facts, figures and practices and produce recommendations?
I think we all agree that the global economic outlook doesn’t look very pretty at this stage. It is all the more necessary for economies around the world to work together to maintain an open environment for global cooperation. Lack of cooperation will only bring bigger risks. Decoupling in whatever name and protectionism should be rejected. The rules-based and WTO-centered multilateral trading system must be safeguarded. The security and stability of global industrial and supply chains must be guaranteed.
Third, we need to be more innovative in expanding areas for cooperation. As strong advocates of multilateralism and UN-centered international system, there is huge potential for us to coordinate more closely on international efforts in addressing global challenges and improving global governance.
This includes climate change, biodiversity, energy and food security, public health and proliferation of weapons of mass destruction.
Take the green issue for example. China and EU have established a high-level dialogue. We showed great leadership in the Paris Agreement and the Kunming Montreal Global Biodiversity Framework. In the lead-up to the next COP meeting, I think we should go beyond the rhetoric and come up with more concrete suggestions of what could be done together in pursuing green transition and sustainable development. And more importantly, what can we do together to help people in the Global South to adapt to the fast-deteriorating climate change.
It is therefore our responsibility to complement the high-quality public goods that we have offered, as well as the cooperation platforms we have built. If we can leverage our strengths and do it together, we will deliver prosperity for more people around the world.
So these are my three key words to lift our relationship, Communication, Action and Innovation, or CAI for short.
Ladies and Gentlemen,
Dear Friends,
Please allow me to say a few words about China’s economy. Since this year, the Chinese economy has achieved a strong recovery and continued to turn for the better. It grew by 5.2 percent year-on-year in the first three quarters, and with better quality and efficiency. IMF and several other international financial institutions have recently raised China’s growth forecast.
China is also taking concrete steps to improve the business environment. Let me give some examples. Recently, the Chinese government adopted 24 policy measures to attract foreign investment. It also eased regulations on cross-border data transfers. During the 3rd Belt and Road Forum for International Cooperation held in Beijing last month, President Xi Jinping announced that China will remove all restrictions on foreign investment access in the manufacturing sector. When I met the President of EU Chamber of Commerce in China, Jens Eskelund, last month, he said members of the EU Chamber of Commerce in China welcomed the roll-out of the recent policies by the Chinese government.
China will further advance high-standard opening up in cross-border service trade and investment. The 6th China International Import Expo, which was concluded last week, saw the participation of several hundred European companies. Your friends from across the Atlantic sent the strongest-ever delegation to this Expo. This is a vote of confidence in China’s development.
Before conclusion, let me share a piece of news. This afternoon, the China Chamber of Commerce to the EU will publish its annual report on the development of Chinese businesses in the EU. We welcome the report as it provides policy recommendations and identifies areas where China-EU cooperation can be deepened.
With all these in mind, I’m confident that the future is bright. And China-EU economic cooperation will embrace new opportunities and make new progress in the next 20 years.
I wish the 9th Europe Forum a full success.
Thank you!