EU, China heading in the right direction
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E-mail China Daily, November 18, 2013
Strong ties
Ford says that it is important for China to forge strong ties with the EU, because it would help offset the growing influence of Washington.
To support his statement he cites British Prime Minister David Cameron who, on the one hand calls for more investment from China, and then urges action against Beijing for industrial subsidies.
Dewit from the Belgian-Chinese chamber anticipates that both sides will have a better understanding of the future social challenges as the economic interdependency deepens.
Pressing his point, he says that China's rapid economic development has led to widespread changes in Western economies.
"There has been a sort of revolution in sectors such as the textile industry. European companies that were unable to withstand the external competition had to shut up shop. The solar panels issue is a good case in point," Dewit says.
"The social tensions caused by the competition have also put more political pressure on European policymakers to retaliate."
Dewit says that Chinese companies also had to face stiff competition from European companies within China, when China joined the World Trade Organization. "There was political pressure on Chinese decision makers too at that time to retaliate," he says.
In spite of these hassles, both investment and trade had grown manifold during the past decade. Even during the recession years from 2009 to 2012, the number of Chinese companies that had invested in Europe more than doubled to 8,000. More than 50 percent of these companies ended up with heavy losses.
At the same time, statistics have also shown that more than 80 percent of the European companies investing in China have seen their profits grow steadily. That also explains the robust growth in European companies investing in China.
Andreas Frahm, the chief sales officer of German medical equipment maker Draeger, admits that China has indeed been a sweet spot for the multinational company during the past decade. "China is already the largest market for Draeger in some product and application fields," Frahm says.
According to Frahm, although there are several attributes for success, it is high retention rate of local talent, their deep commitment and the close linkages within China that have really made the difference.
Frahm admits that during the last few years, demand for the German company's products has surged in China. "There is a continuous and growing demand for affordable products and solutions in the medium and upper basic segment markets of China. We anticipate these sectors to clock even higher growth rates going forward."
Frahm also believes that growing economic interaction between the EU and China are important because it provides a legal framework to the investment activities and a solid platform for future projects.
Dewit says both economies have benefited from the growth in bilateral trade relations during the past few years. "Chinese and EU authorities should take more steps to promote these interactions. Culture is another aspect that will play an important role in the future because both sides need to understand each other better," he says.
Dewit admits that Europe needs to brush up on its knowledge of Chinese language and culture, while European institutions must do more to promote European culture in China.
"Both sides have to do their best to avoid misunderstandings based on ignorance or false perceptions," he says.
Rolf J. Langhammer, former vice-president of the Germany-based Kiel Institute for the World Economy, says the summit is an important milestone for settling bilateral trade policy tensions, such as anti-dumping issues, and for coordinating positions at the upcoming Bali round of global trade negotiations.
According to Langhammer, China still believes that the EU has a long way to go until a full economic recovery. "They (the Chinese) believe that the EU is still an important export destination and a host market for overseas investment."
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