Chinese business vies to ‘prevent further erosion of confidence’ with EU

Zhou Lihong, Chairwoman of the China Chamber of Commerce to the EU (CCCEU) speaking in Brussels on Thursday, 10 September 2020. [CCCEU]

This article is part of our special report EU and China: Charting a new relationship.

Economic and trade ties between the EU and China have suffered a setback over recent months and the business community has a “less favourable view regarding the ease of doing business in the EU,” according to the Chinese Chamber of Commerce to the EU (CCCEU).

Despite this, the Chinese commercial sector remains optimistic about its future on the bloc, and both parties can work closely on charting a stable economic recovery from the coronavirus crisis, said CCCEU Chair Zhou Lihong on Thursday.

The message comes just days ahead of a crunch meeting between a contingent of EU leaders and China’s President Xi, with Commission President Ursula von der Leyen, German Chancellor Angela Merkel and Council President Charles Michel attending as part of the video call on Monday (14 September).

Speaking to reporters in Brussels on Thursday (10 September), Zhou Lihong, spoke of how she hopes the concerns of the Chinese business community will be addressed by President Xi next week.

“Many Chinese companies are concerned about overlapping policies and overregulation,” she told EURACTIV.

“For example, the EU’s antitrust review and foreign investment screening,” Zhou said, are regarded by the Chinese business community as burdens to trade with EU member states. Zhou added that she hopes that such concerns emerge during the talks on Monday.

Speaking on the publication of a report from the Chinese Chamber of Commerce which seeks to encourage investment emanating from the country into the EU, Zhou also sought to send a warning to the bloc that investors from China could start to turn away from Europe should diplomatic ties be tested further.

Relations have recently been strained between the EU and China, owing to Western concerns over the erosion of liberal freedoms in Hong Kong, the alleged detainment of Uighurs in Xinjiang, and aggressive market protectionism in China.

The Chinese say that these are domestic political matters, and should not be the concern of global partners.

“Chinese businesses in Europe face enormous challenges for survival and growth, and some have even come under criticism and blame, much of which is unfounded but yet ruined the mutual trust and stability in economic and trade ties,” Zhou said.

“Chinese companies now have a less favourable view regarding the ease of doing business in the EU,” she added. “European institutions should pay close attention to the decline.”

The CCCEU has put forward eight policy suggestions to Brussels with regards to the future relationship between the two parties.

They include a deal to be concluded on the EU-China Comprehensive Agreement on Investment (CAI) by the end of this year, as well as the establishment of a platform for multilateral cooperation in trade agreements, and the de-politicization of cybersecurity issues.

“We can express the wishes of Chinese companies in the EU in just a few words,” Zhou said. “Openness, fairness, cooperation, and reciprocity.”

Meanwhile, on Thursday, Commissioners Reynders, Gabriel, Breton and Vice-President Vestager took part in a video call with Chinese Vice Premier Liu He, ahead of next week’s high-level meeting.

EURACTIV understands that the Commission pressed China on several areas of concern including the use of advanced artificial intelligence technologies for surveillance, the safety of Chinese products sold online, research, and innovation standards. On reciprocity, the EU wants to see greater market access for its goods and services in the Chinese market.

Moreover, a separate EU report on Chinese investments was published on Thursday and highlighted the lack of publicly available information and data on Chinese investments into the EU.

The review, published by the European Court of Auditors (ECA), called for a substantial increase in transparency on such matters, particularly with regards to investments being channelled from the Far East into Europe as part of China’s Belt and Road Initiative – its landmark development plan involving infrastructure and investments stretching across more than 80 countries in Europe, Asia and Africa.

One particular concern that emerged in the report was the fracturing of EU nations in their approaches to dealing with China.

Reflecting on the report, one Commission official told EURACTIV that it’s vital the EU adopt a unified approach with regards to its dealings with the country, otherwise “adopting a harmonized China strategy would be ever the more difficult to come by.”

[Edited by Benjamin Fox]

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