EU’s troublemakers find comfort in Chinese arms

Italian Deputy Prime Minister, Luigi Di Maio (centre) visits the Italian stand at China International Import Expo, in Shanghai, last November. [Jorge Valero]

This article is part of our special report A new trade framework for shared prosperity.

Cornered by their EU partners, Italy, Hungary and the UK were welcomed with open arms by Chinese President Xi Jinping during his landmark trade event held in Shanghai this week, where around 3,000 companies from more than 130 countries are taking part in the first China International Import Expo (CIIE).

A dozen heads of state and of international organisations, including the IMF, the WTO and the OECD, attended the event. 

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While most EU member states sent mid-ranking delegations, half a dozen of European governments were represented at the highest level, including Croatia (Prime Minister Andrej Plenkovic), Czech Republic (President Milos Zeman) and Lithuania (President Dalia Grybauskaitė).

Hungary, Italy and the UK were among those who sent their most senior figures.

Orbán’s voice

Hungarian Prime Minister Viktor Orban said the invitation as guest of honour to CIIE came as his words brought “the voice of our region”, Central Europe. He did not mention the EU in his remarks.

In his speech during the opening ceremony on Monday (5 November), Orbán said that the region has become “the growth engine of Europe” representing “the common sense”.

The Hungarian leader took advantage of the spotlight to demonise refugees, categorising them as migrants and therefore without the legal right to seek protection.

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“Even under the pressure of massive illegal migration”, the growth rate of the country will be twice as high that the rest of the continent, he told the audience of business leaders and decision makers.

Less than 2% of asylum seekers were granted protection in Hungary last year.

Orbán also expressed his support for the 16+1 format that brings China together with 16 European countries, as well as the One Belt One Road (OBOR) initiative, China’s major infrastructure project beyond its borders. 

Hungary was the first EU country to sign a cooperation agreement with Beijing to implement OBOR. 

Budapest has also attracted a growing number of Chinese companies in sectors including finance, automotive and chemicals.

The red carpet rolled out for the Hungarian leader in China contrasts with the cold welcome he may find in Helsinki today from his fellow leaders of the European People’s Party.

EPP members are expected to adopt a declaration during its conference condemning Hungary’s breach of EU’s values and the Rule of Law.

Tensions have resurged between Hungary and its EU partners again due to Budapest’s intention to close down its Central European University.

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‘Made in Italy’

Italy also found comfort in Shanghai as the situation continued to worsen this week with its EU partners over its spending plans for the forthcoming year.

Deputy-Prime Minister Luigi Di Maio travelled to Shanghai to continue strengthening ties with Beijing. Rome is pivoting toward China and is aiming to become the first G7 partner to join OBOR. Minister of Agriculture, Gian Marco Centinaio was also part of the delegation. 

A large business representation also travelled with the duo as the Italy-China Business Forum took place on Tuesday (6 November) on the margins of CIIE.

Giovanni Rodia, Communications Director of the Italian Trade Agency, told that the goal was to attract Chinese buyers to other sectors besides food, furniture and fashion products, the pillars of the “Made in Italy” brand.

Rodia added that the huge Chinese market of 1.3 billion consumers would be instrumental in raising exports, currently one third of the GDP, to reach half of the total output.

Di Maio’s charm offensive in Shanghai came as Italy’s eurozone partners pressed Italy on Monday to rewrite its draft budgetary plan by 13 November in order to meet the EU’s fiscal rules. 

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UK’s services

As the EU-UK divorce remains unsolved and the future relationship is still a question mark, London sent its trade tzar to China to find new opportunities for services in the largest economy on the planet.

Only 18% of UK exports to China are services, despite the important role they play in the British economy,

UK Trade Secretary Liam Fox welcomed Xi’s commitment “to relax investment restrictions” in education and healthcare sectors. But he said that further efforts should be made also in amending technology import-export regulations and ensuring that government procurement rules are aligned with WTO standards. 

“The main focus of the national pavilion will be Britain’s capability in innovation,” UK Trade commissioner for China Richard Burn said.

More than 30 UK companies from finance, retail, healthcare, culture and high-end manufacturing were also represented in the CIIE.

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The country also received Chinese investment to expand Hinkley Point C nuclear power station.

Meanwhile, China’s imports from the UK increased almost 20% in 2017, compared with the previous year.

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