This article is part of our special report EU-China trade in troubled waters.
The Chinese business community’s message to the EU is clear: an open and non-discriminatory business environment is key while bilateral cooperation and dialogues should always prevail.
Xu Haifeng is the Chairman of the China Chamber of Commerce to the EU (CCCEU).
2021 is critical for the development of both China and the European Union (EU). Surviving the test of the pandemic, China’s economy this year has gotten off to a good start, with economic activity showing strong resilience and vitality. As for the EU, the accelerated rollout of Covid-19 vaccines has fuelled the bloc’s economic recovery amid ongoing twin green and digital transitions.
The pandemic is still wreaking havoc, but we can see a glimmer of light at the end of the tunnel: scientists in China, Europe and beyond have been quick to develop jabs while manufacturers across the globe ramp up production. As the Chinese economy continues to bounce back and the 27-country EU emerges from a double-dip recession, we know they are a big win with efforts from all walks of life.
More has been achieved in a much challenging time. For China and the EU, trade volume registered growth, hit a record high, and is maintaining strong momentum. Since the second quarter of last year, China has traded more goods with the EU than any other country or bloc in the world. It is hard to imagine that the two recorded bilateral trade of merely USD 2.4 billion back in 1975, when they set up diplomatic relations, whilst we now see a staggering EUR1.6 billion worth of imports and exports coming and going each day.
There were more: China-Europe freight train services surged by 50% in 2020; the China-EU Geographical Indications Agreement came into force in March this year, and by July 2021, the two sides have mutually recognized and protected 244 geographical indications.
The vast markets of China and the EU offer huge opportunities for enterprises, even during the pandemic. Powered by a pioneering spirit, enterprises from both sides are seeking opportunities during the Covid-19 crisis. Thanks to the resilience of both markets and the global supply chain, many companies have witnessed a turn from loss to profit.
We estimated that Chinese enterprises recorded modest growth in 2020 with a total turnover of EUR 150.3 billion in the 27 EU member states, up 1.4% year-on-year. Last year, Chinese-invested enterprises in the EU employed about 320,000 Chinese and foreign employees, 10,000 more than last year. Nearly 80% of the employees of Chinese enterprises in the EU were citizens of an EU member state, an increase of 7 percent compared to a year ago.
However, they also have been concerned about the ease of doing business in the EU.
According to the overall evaluation by Chinese enterprises, the ease of doing business in the EU in 2021 declined for the second consecutive year with significantly lower scores for the political climate and the business environment in comparison to the past.
The declined sentiment came following a number of events, including the European Parliament’s “freezing” of debates on ratifying CAI, the EU and member states tightened FDI screening, the Commission put on the table a new regulation against foreign subsidies, the international procurement instrument is under debates, and many more.
For Chinese businesses, Europe’s significance as an overseas investment destination has been rising. But, is Europe still welcoming Chinese companies and Chinese investment?
We do hope the answer is yes. To the best of our knowledge, most Chinese enterprises in the EU are marathon runners, eyeing on long-term development in the bloc. This is beneficial to local employment, economic development, and technological innovation in the long run. But to make this kind of commitment sustainable, it is key to have an open, fair and non-discriminatory business environment.
We proposed nearly 70 recommendations to achieve this goal. We hope that for the EU-China relations, cooperation and dialogues would prevail, because that is crucial for stable and lasting Sino-EU economic and trade ties that are supposed to not only do good to enterprises on both sides, but also serve the interests of the EU, China and the rest of the world.