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China-EU economic ties resilient despite global trade woes

(Xinhua)    15:11, September 18, 2020

FRANKFURT, Sept. 18 (Xinhua) -- Despite the shrinking global trade market due to the COVID-19 outbreak, trade flows between China and the European Union (EU) remain comparatively steady and resilient, facilitating the combat against the pandemic and economic rebound in both sides.

In a post-pandemic world where international cooperation and the value of multilateralism are more important than ever, China and the EU could see new opportunities emerge in economic cooperation, experts have said.

DYNAMIC TRADE

Xavier Wanderpepen, who is responsible for China-Europe rail freight activities at Forwardis, a subsidiary of France's national railway company SNCF Logistics, was impressed by the surge of freight train operations between China and Europe during the first half of this year.

"In my company, since April 2020, demand for trains has increased sharply. The increase is more than 20 percent compared to 2019," Wanderpepen said.

The rise contrasted with the overall gloomy picture of global trade in the early months of the pandemic, during which the World Trade Organization in June forecast an 18.5-percent drop in global trade in the second quarter.

Wanderpepen noted that rail transport has been playing an indispensable role in delivering medical supplies from China, which are most needed in Europe for containing coronavirus, and at the same time facilitating transport of massive goods made in France to China where demand picks up robustly, boosting exports and imports in both countries.

Late August, the first freight train with goods exclusively "Made in Austria" pulled out of the Vienna South Terminal for Xi'an, China, while the first "Bay Area" carrying industrial products made in the Guangdong-Hong Kong-Macao Greater Bay Area left south China's economic hub Shenzhen for Duisburg in Germany.

With new routes launched one after another, the number of China-Europe freight trains hit a record high of 1,247 in August, up 62 percent year on year, marking the sixth consecutive month with double-digit growth, data from China State Railway Group showed.

According to the General Administration of Customs, China saw its trade with the EU rise 1.4 percent year on year during the first eight months of 2020, contributing to 14 percent of China's overall foreign trade.

For the EU, in the first seven months of this year, China became the bloc's top trading partner, a position previously held by the United States, said Eurostat on Wednesday. EU's imports from China increased by 4.9 percent in the January-July period from a year ago, while its imports from the United States dropped by 11.7 percent.

For Germany, the largest economy in the EU, China also surpassed the United States for the first time in the second quarter to become its largest export market. Moreover, Germany's exports to China in July have rebounded almost to last year's level, according to Germany's Federal Statistical Office.

VIGOROUS CROSS-BORDER BUSINESS

With the newly-injected 2 billion euros (2.37 billion U.S. dollars), Germany's Volkswagen Group, the largest auto manufacturer in Europe, announced in May the decision to expand investment in China to develop its electric vehicle business.

Noting that China is the world's biggest market for e-mobility, Stephan Woellenstein, CEO of Volkswagen Group China, said "by opening up the market, China is giving Volkswagen new business opportunities."

Sharing the common stance with the EU of upholding multilateralism, and resisting unilateralism and protectionism, China sticks to opening-up with concrete actions, providing European enterprises with flourishing opportunities in the post-pandemic era.

"The COVID-19 pandemic did not stop the Chinese government from promoting a new round of high-level opening-up," said Li Jian, senior vice president of Danone Greater China, citing the implementation of the country's foreign investment law, as well as pilot projects in free trade zones and cross-border e-commerce zones.

The French food giant announced in July an investment of 100 million euros (118 million dollars) to strengthen specialized nutrition business in China, including the opening of a research center in Shanghai and the acquisition of local infant milk formula capabilities.

The sheer sizes of both China's economy and the European common market cannot be neglected by entrepreneurs of either side, said Xin Hua, executive deputy director of the Center for European Union Studies at Shanghai International Studies University.

In his view, the already-intertwined bilateral networks of production, trade and investment are based on naturally formed divisions of labor, and have already brought tremendous benefits to businessmen, investors and workers from both sides.

A recent survey by the European Union Chamber of Commerce in China showed that European companies in China reported no significant change in plans to redirect current or planned investments elsewhere.

In the meantime, the Brussels-based China Chamber of Commerce to the EU (CCCEU) saw continuous expansion of its membership, mirroring the steady pace of Chinese enterprises' investing and developing in Europe.

"Europe remains a key destination for Chinese enterprises," said CCCEU Chair Zhou Lihong.

A recent survey jointly conducted by the CCCEU and consulting firm Roland Berger indicated that Chinese companies in the EU are willing to increase investment if the business environment in the bloc gets better.

NEW OPPORTUNITIES

At a virtual meeting on Monday, Chinese and EU leaders affirmed their commitment to speeding up the negotiations of the China-EU Bilateral Investment Treaty to achieve the goal of concluding the negotiations within this year.

They also announced the official signing of the China-EU agreement on geographical indications, and decided to establish a China-EU High Level Environment and Climate Dialogue and a China-EU High Level Digital Cooperation Dialogue, and to forge China-EU green and digital partnerships.

Zhou from the CCCEU said leaders of the EU and China have sent clear messages that the two sides should unswervingly promote a sound and stable development of their comprehensive strategic partnership, and adhere to peaceful coexistence, openness, cooperation, multilateralism, as well as dialogue and consultation.

"Especially in times of global protectionism, which has been exacerbated by the COVID-19 pandemic, we need a positive signal for international trade," Thilo Brodtmann, executive director of German Mechanical Engineering Industry Association, said in a statement commenting on Monday's meeting.

Meanwhile, some European experts have seen "green growth" as a sustainable way out of the coronavirus crisis and hope to expand and deepen cooperation on green solutions with China.

Finn Mortensen, CEO of State of Green, a Copenhagen-based environmental consulting firm, believed 2020 will mark an important milestone in Denmark-China collaborations.

"We have had very strong cooperation over the years, and now in particular in 2020 we will be focusing further on green solutions, the green transition and sustainable issues in general," Mortensen said.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Wen Ying, Liang Jun)

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