China-EU practical cooperation has injected strong momentum into the post-pandemic global economy
Release time：2020-04-22
The emergence of the "black swan" of the new crown pneumonia epidemic in 2020 has caused economic globalization to encounter more headwinds, and the simultaneous shrinkage of global trade and investment scale and economic aggregate has aroused concern from all parties. In its Trade and Development Report 2020, the United Nations Conference on Trade and Development (UNCTAD) called for significant pressure on the recovery and resilience of the global economy without radical policies to reinvigorate trade and capital flows.
This call was strongly echoed at the end of 2020. Following the signing of the Regional Comprehensive Economic Partnership (RCEP) on November 15, 2020, the leaders of China and the EU jointly announced on December 30 that the negotiations on the China-EU Investment Agreement would be completed as scheduled, which will undoubtedly inject strong momentum into the post-pandemic global economic development.
This will effectively consolidate the economic, trade and investment cooperation between the world's two largest economies.
In recent years, bilateral trade cooperation between China and the EU has taken precedence over investment cooperation. In 2019, the EU overtook the United States to become China's largest trading partner. However, in the same year, the stock of EU direct investment in China accounted for only 5.6% of China's foreign investment stock, and the stock of Chinese direct investment in the EU accounted for 4.3% of the total stock of foreign investment.
The EU-China Chamber of Commerce believes that the technological advantages of China and the EU are complementary, and there is great potential for investment and cooperation between the two sides. The EU and China each have advantages in emerging areas such as artificial intelligence, 5G and cloud computing, while there is a strong demand for cooperation in the field of industrial technology. According to the Business Confidence Survey 2020 by the Chinese Chamber of Commerce in the EU, 62% of members said they were willing to increase investment in China if China further expanded market access, with nearly half of them ready to reinvest 5% to 10% of their annual income, and nearly a third said that the investment would be even stronger. A breakthrough in the EU-China investment agreement negotiations will help create a transparent, consistent and predictable business environment on both sides.
Looking ahead to the development trend of the world's major economies in 2021, major institutions are generally concerned that insufficient policy support may delay the recovery process of the world's major economies. However, the breakthrough of the EU-China investment agreement has provided more certainty for the uncertain global economy.
From the EU's perspective, the Asia Society study in the United States believes that through this agreement, European companies have gained important business opportunities, especially important market access. In the foreseeable future, Europe will share the dividends of China's opening up in areas such as financial services, electric vehicles, and telecommunications. According to a previous survey by the Chinese Chamber of Commerce in the European Union, although global economic growth has slowed down in recent years, European companies with operations in China have benefited a lot. 39% of members said their revenue in 2019 increased 20% year-over-year; Eleven percent of members said their business in China was growing at an even higher rate. Therefore, the Chinese Chamber of Commerce in the EU believes that the Chinese market contains unlimited potential, and European companies hope to share the development dividends. The conclusion of a follow-up agreement will undoubtedly be conducive to the recovery of the EU economy after the epidemic.
Reuters believes that China has made breakthroughs in RCEP and China-EU investment agreements at the end of 2020, which on the one hand reflects China's determination and confidence in promoting high-level opening up, and on the other hand, it has also laid a good foundation for China to build a new development pattern. BBVA believes that this breakthrough has multiple dividends for China. A more convenient, transparent and open bilateral investment environment will effectively promote bilateral investment and add new impetus to China's medium- and long-term economic development, and more EU companies will invest in the Chinese market and the Chinese government's policy agenda of structural reform will further enhance the international competitiveness of Chinese enterprises.
In particular, it should be emphasized that the spirit of cooperation between China and the EU in promoting the investment agreement is urgently needed for the current post-pandemic global economic recovery.
After the completion of the negotiations, the chairman of the EU-China Chamber of Commerce, Mr. Woodke, expressed the hope that the two sides would maintain the current spirit and posture of promoting the completion of the negotiations and reach relevant agreements as soon as possible, and said that "a strong agreement will be a strong statement that constructive engagement can produce results".
The Chinese Chamber of Commerce in the European Union previously said that some people in the market are encouraging foreign-funded companies to take the initiative to "decouple" from China, but European companies are looking forward to further consolidating their positions and participating in the competition for market share. The conclusion of a strong EU-China investment agreement shows that deepening cooperation remains the best way forward, and it can also refute the international noise of a "zero-sum game".
BBVA said that in the post-pandemic era, the China-EU investment agreement will be a "game-changer", showing that countries in Europe and Asia have abandoned the Cold War mentality and are using economic and trade rules to seek closer relations. Promoting global recovery under the new bilateral and multilateral trade and investment frameworks will require perseverance on the part of all countries. (Wang Chutian)
Source: Economic Daily
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