Work for the New Chapter in Post-Crisis China-EU Business Cooperation

Mr. Stavros Lambrinidis, Ladies and Gentlemen, Dear Friends,

First of all, I wish to thank the EU parliament for the support you've given to this Euro-China Economic Forum. It gives me great pleasure to address this event.

In my view, business ties have always supported and facilitated the growth of China-EU relations. Our contacts and exchanges literally began along the Silk Road that linked us together some 2,000 years ago. Around 700 years ago, Marco Polo traveled across China, searching his fortune in business, but it was his travelogue that made Europe understand China better. 57 years ago, a group of British businessmen started trading with the New China despite all difficulties and barriers. They were later recognized as the "icebreakers" in the contemporary China-Europe relations.

Economic and trade relations between China and Europe have evolved steadily over the last 35 years since the establishment of our diplomatic relations. Such ever-strengthening business ties have become an integral part as well as a power engine of our comprehensive strategic partnership. The yearly bilateral trade volume has increased more than 150 folds from 2.4 billion US Dollars in 1975 to last year's 360 billion. That means, now every two days, our trade volume exceeds that of the whole year in 1975. In terms of mutual investment, the EU has in total invested nearly 70 billion US Dollars through over 20,000 business establishments in China. The Chinese companies on the other hand, are becoming more interested and active in making investment in Europe. Today, China and the EU share one of the world’s most important business ties: the EU is China's largest trading partner, export market, and source of technology transfer; China is the EU's second largest trading partner, largest import market, and the third largest and the fastest growing export market.

Through three and a half decades of development and integration of our economic cooperation and trade, the difference brought to our two peoples and business communities could be felt everywhere everyday.

Jobs were created. According to the Chinese statistics, in the EU, imports from China help create over 2 million jobs. As Chinese companies began to make investment in the EU, we also offered local people high number of employment opportunities. In China, tens of millions of people work in foreign-invested companies, a considerable part of which are from the EU.

Business boomed. For example, we employed the EU's GSM standard back in the 1990s when we developed our second generation mobile telecommunication network. This has in a sense helped promote the GSM as a world's major industrial standard. On the other side, many Chinese SMEs registered leapfrog growth by exploring the EU's vast market since China joined the WTO.

Consumption soared. Today, no European families survive without "Made in China" commodities, and the Chinese products save each of them around 300 Euros a year and help the EU hold down inflation. Airbus and Nokia have become essential brands that Chinese consumers cannot part with, and an increasing number of Chinese people are enjoying the luxury of Mercedes and BMW cars, Hugo Boss dresses, and Gucci bags.

It's worth mentioning that our economic and trade relations maintained a good shape last year despite of the grave financial crisis. According to the Chinese statistics, our bilateral trade volume only declined by 14.5% when the global index plunged 23%; EU investment in China was down by 8.8%, far lower than the 39% drastic fall in global transnational investment. European statistics show that the EU’s total export shrank by 16% last year. As a sharp contrast, the EU export to China grew by 4%, making us the only country among the EU’s top ten largest export markets to have a positive increase out of the global recession. Belgium’s export to China grew by 26%, and the EU trade deficit against China fell by over 20%

What I want to stress is that these results are attributable to the concerted efforts of both China and the EU, and are by no means easy to accomplish. During the financial crisis, we both adhered to stronger consultation and coordination, maintained open markets, and worked utmost to create new opportunities for trade and investment. The Chinese government has in total sent ten "Trade and Investment Facilitation Delegations" to promote import from the EU. Within China, we further reformed our approval system of foreign investment to make it easier for the EU enterprises to start business in China. In order to foster a favorable macro-environment for our business cooperation, we both have made fiscal and monetary policies to address the crisis. In particular, when implementing our 4 trillion RMB Yuan package plan, we took forceful measures to strengthen international cooperation and upscale opening up, which ensured the EU enterprises equal participation in our recovery process.

Ladies and Gentlemen,

April is a season when everything turns green. As the world economy walks out the bitter winter days of the crisis, we have every reason to be confident that the spring of China-EU business cooperation won't be far away.

First and foremost, our sound and stable political relationship ensures the growth of our bilateral economic and trade ties. We both agree to further strengthen our comprehensive strategic partnership, because it serves both the interest of our respective development and the interest of the international community at large. In the globalized world today, the destiny of China and the EU are bound together. A good and stable relationship between us will help ensure healthy and steady growth of out bilateral business cooperation.

Second, our economic complementarities will further promote mutually beneficial cooperation in more areas. The EU has advanced technologies, abundant financial resources, and world's leading low-carbon technologies, whereas for China, the competitive edge rests in low cost production and labor intensive industries and huge domestic market potential. These complementarities constituted a strong basis for the rapid growth of our business cooperation in the past. In the future, they will continue to drive us forward.

Third, the development of China will provide new opportunities for our business cooperation. Domestic demand in China will further unfold as our economy steadily grows. We are determined to change our economic growth pattern and pursue sustainable development, which will expand our market for high and new technologies, energy conservation, and environmental industries. As the Chinese enterprises attain new growth, they will have stronger interest in Europe, and bring more vitality into our investment cooperation.

In the future, China will further open up. The EU enterprises will get more opportunities from China's development, and we will achieve new progress in forging stronger and more extensive business ties. We are deliberating new trade policies to encourage more import to China. We will improve trade facilitation conditions and import more technology equipment and high-end consumer goods from the EU. We will open more areas for investment, intensify IPR protection, and encourage foreign investment in high-end manufacturing, hi-tech industry, modern service sector, new energy, energy conservation and environment protection. We will work hard to provide a sound and fair environment for foreign companies. We will also encourage Chinese companies to make investment here in the EU.

Having said all these positive developments, the business ties between us are not immune of problems. My understanding is that it is impossible to keep away any frictions in any given bilateral relationship, just as the way it is for a family. It is only natural that greater interdependence and larger shared interests will invariably lead to more problems and frictions. What's important is to understand how we should approach and address these problems. In fact, they could never be grave enough to disturb the main trend of our cooperation should we act with a sober mind and objective attitude. For China, we are committed to resolving disputes or conflicts through cooperation and dialogue. We are willing to listen to the EU enterprises and learn your difficulties, so that we can do what it takes on our part to resolve them. We are also open to all the advices that will further promote our business cooperation.

In return, we sincerely expect that the EU side will be equally positive and practical and will take concrete and effective measures to work together with us for a more favorable environment to expand and deepen win-win cooperation between our two business communities. We hope that the EU will recognize China's full market economy status as early as possible and exercise restraint in using trade remedies like anti-dumping measures. We hope that concrete steps will be taken to address the difficulties Chinese business people have in getting their visas and residence and work permit in the EU. It is also our hope that one day all the policy, institutional and technical obstacles in our business cooperation will be removed.

Dear Friends,

This is for everyone a time of major development, adjustment and reform. The international environment is undergoing profound and complex changes, and there remain many uncertainties and destabilizing factors in the world economy. As two major economic powers, China and Europe shoulder important responsibility to jointly promote early global economic recovery and growth, world development, and prosperity. We should view our business cooperation and its prospect from a strategic and overarching perspective. We need to maintain open markets, make full use of our advantages, pursue trade liberalization and facilitation, oppose trade protectionism in all forms, and work for the balanced and orderly growth of the world economy. I have no doubt that with our vision, courage, sincerity, and actions, China-EU business cooperation will continue its growth, and our entrepreneurs will harvest greater returns in the future!

Thank you!