This photo taken on April 24, 2024 shows a new energy vehicle (NEV) assembly line of BYD, China's leading NEV manufacturer, at the plant of BYD in Zhengzhou, central China's Henan Province. (Xinhua/Li Jianan)

The European Union should avoid trade frictions with China and it is necessary for both sides to seek consensus on new-energy cooperation, according to industry insiders and analysts citing the multi-billion-dollar market opportunities and the global climate goals.

The automotive cooperation between China and Germany on green transformation and intelligent connectivity is vitally important, said Hildegard Mueller, president of the German Association of the Automotive Industry. She encourages the two parties to continue to be crucial partners in achieving climate goals.

"I believe that the two markets should be closely linked," she said, adding that Chinese companies are welcome in Germany. As for the German side, its carmakers have shown interest not only in exporting but also in producing in China, she added.

For European carmakers, including auto giants BMW, Mercedes-Benz and Volkswagen, China stands out as the largest single market.

In the first quarter, about one-third of BMW's sales revenue came from China. The country also hosts BMW Group's largest R&D center outside Germany.

"The innovations we achieve in China allow us to continuously meet the needs of Chinese customers, thereby driving global innovation," said Oliver Zipse, chairman of the Board of Management of BMW AG.

The expanding foothold of Chinese companies on the European continent underscores the strengthening ties between the two sides. In April, China's Chery Automobile signed a pact with Spain's auto company Ebro-EV Motors to produce cars at its first European factory. According to Reuters, this move is expected to help recover some of the 1,600 direct jobs lost when Japanese automaker Nissan shut down a plant in 2021.

Yan Shaohua, an associate research fellow at the Center for China-Europe Relations of Fudan University, said that China's electric vehicle (EV) makers venturing into European countries have helped boost the development of the local EV industry chain and accelerate the digital and green transitions in these countries.

China and the EU are each other's second-largest trading partners. Official data showed that their average trade value approached nearly 1.5 million U.S. dollars per minute, while two-way investment exceeded 250 billion dollars.

For Europe, China also plays a pivotal role as a major supplier of raw materials such as photovoltaic cells and wind turbines, all critical components for the EU given its ambitious goal of becoming the "world's first climate-neutral continent" by 2050.

About 98 percent of the EU's rare earth is imported from China, and more than 93 percent of its magnesium is also sourced from China, according to European Commission President Ursula von der Leyen. Both materials are indispensable in auto parts manufacturing.

Despite the ups and downs of China-EU relations in recent years, cooperation has remained the prevailing theme of bilateral ties. The industrial sector, supply chains and value chains of the two sides are tightly woven together, rending them inseparable from each other.

While visiting Europe this week, China's Commerce Minister Wang Wentao pointed out that protectionist measures are not viable solutions but a "dangerous dead-end."

"China is willing to engage in discussions with the EU on economic and trade concerns on an equal footing and participate in fair competition on the basis of expanded cooperation," Wang said.

Both the EU and China have the responsibility to reach a consensus through negotiations and strike a balance between cooperation and competition, said Spanish economist Julio Ceballos Rodriguez. He stressed that the two sides are dependent on each other in many key issues and share important economic interests.

Kou Kou, an associate professor of German studies at Beijing Foreign Studies University, cited artificial intelligence, electronic information, aerospace and other emerging industries as areas of great cooperation potential for both sides to tap.

"China and the EU are set to witness closer ties on multiple fronts in the future, a trend that will not be easily changed by a few politicians," Kou said.

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