1. The European Union's competitiveness report released by Mario Draghi, a former European Central Bank chief.
2. The report, in a way, is an acknowledgement of China's phenomenal transformation over the past decade toward a more sustainable and innovation-driven economy. The sheer fact that China is mentioned many times in the report and that the EU now sees a huge gap not just with the United States but also with China is telling, especially because many Europeans still see China as a country providing cheap labor — although that is no longer true, according to the Draghi report.
3. A decade ago, when China announced its strategic shift, from investment-driven quantitative economic growth to innovation-led high-quality development, not many people took it seriously. Today, China has become a global leader in research and development, renewable energy including solar and wind energy, and electric vehicles (EVs).
4. China is catching up fast with the industrialized world, partly by learning from the EU and other developed economies, but more importantly through massive investments in R&D. Who would have thought just a decade ago that China's robot density would rank fifth in the world, trailing South Korea, Singapore, Germany and Japan but ahead of the US and the average EU member state?
5. China is now competing with the EU and other industrialized economies in a number of fields, a fact that the EU should applaud, just as it should celebrate the progress of other emerging and developing economies.
6. The EU should not follow the US in adhering to McCarthyism to portray China's economic and technological rise as a threat. Instead, it should realize that a rising China means huge opportunities for the EU and the rest of the world.
7. The EU's description of China as a cooperation partner, economic competitor and systemic rival since 2019 has caused confusion and impacted Sino-EU relations, rendering their comprehensive strategic partnership, which they inked in 2003, somewhat ineffective.
8. In this regard, it is important to note that the Draghi report says the EU's "over-regulation" is a major obstacle to overall growth, including the growth of unicorns, or start-ups valued at $1 billion and above.
9. Similarly, the EU's excessive screening over the past few years, which has targeted Chinese investment, has greatly dampened the enthusiasm of Chinese investors to engage with Europe. This is sad, because Chinese investors could contribute to the massive 800 billion euros ($880.67 billion) annual investment target set by Draghi to boost the EU's economic growth.
10. Moreover, China and the EU concluded the negotiations on the Comprehensive Agreement on Investment in December 2020 after seven years, which was hailed by EU trade officials as "the most ambitious agreement that China has ever concluded". Yet the European Parliament's refusal to ratify the CAI has wasted many opportunities for EU businesses to cash in on the vast China market.
11. The EU's "de-risking" strategy, often under US pressure, is also thwarting the bloc's growth.
12. The European Commission's proposed punitive tariffs on Chinese-made EVs risk triggering a trade war between the two large economies, which would hurt the global economy. No wonder Spanish Prime Minister Pedro Sanchez told reporters in China on Wednesday that the EU should reconsider its plan to impose tariffs on Chinese-made EVs, reiterating that "we don't need a trade war".
13. The EU has often touted its landmark "Green Deal" as a great move toward mitigating the effects of climate change, but the program has been losing momentum of late, especially in terms of implementation.
14. Better collaboration with China on the green development front, for which EVs and solar and wind energy are indispensable, will not only help the EU achieve its 2050 climate neutrality target, but also set an apt example of global cooperation in the green economy to fight climate change.
15. There is no doubt deepening win-win cooperation with China will make EU more competitive. And that is precisely what seems to be missing from the Draghi report.
DEEPENING SINO-EU COOPERATION SERVES GLOBAL INTERESTS
1. China and the EU, despite their differences, have great potential to expand cooperation, which has benefited both sides. Apart from trade, investment and people-to-people exchanges, such cooperation also includes working together to overcome global challenges such as climate change, global economic slowdown and nuclear proliferation.
2. China's recent decision to provide visa-free travel for citizens of five EU member states — France, Germany, Italy, the Netherlands and Spain — is a major step aimed at encouraging people to people exchanges. The EU should reciprocate this gesture with measures to facilitate the visa applications of Chinese tourists and business people, which have so far been a source of complaint.
3. As someone who witnessed in 2016 the launch of China-US reciprocal 10-year visa agreement, I feel it would be great if China and the Schengen countries came to a similar understanding. Perhaps top EU leaders such as European Council President Charles Michel and European Commission President Ursula von der Leyen should spend some time traveling in China besides participating in the summit in order to see and understand the real and diverse China.
4. Such an experience may make them realize that the differences between the two sides should not prevent them from deepening cooperation in different fields. For example, the EU should view China's position document on the Russia-Ukraine conflict without any bias and realize the importance of its call for a cease-fire in the Israeli-Palestinian conflict instead of nitpicking. It should realize that the two conflicts, if allowed to escalate, would deal a huge blow to the EU by, for instance, triggering an influx of refugees in Europe, which is already a top concern for the bloc.
5. The EU has asserted that it does not seek to decouple from China. Yet the sheer rhetoric of "de-risking" is souring China-EU ties. Mercedes-Benz CEO Ola Kallenius put it rightly — "for us, de-risking doesn't mean reducing our presence in China but increasing it". Similarly, many German companies, from Volkswagen to Bosch to BASF, continue to increase their investments in China.
One of the reasons for the EU's trade deficit with China is that many EU companies' units manufacture products in China and export them to the EU.
6. The EU could change that by welcoming more Chinese investors and lifting the growing screening measures that discriminate against Chinese investors and withdrawing the export control imposed on companies such as the Dutch firm ASML, the world's largest semiconductor equipment manufacturer.
7. The EU could also reduce the deficit by ratifying the Comprehensive Agreement on Investment, an agreement that took seven years to finalize and will remove the barriers for both EU and Chinese investors.
8. EU leaders should realize that Chinese companies, contrary to Western perception, have become strong competitors of global enterprises. For example, Chinese electric vehicle and solar panel companies are global leaders thanks to the country's early transition toward clean energy. In fact, the EU should applaud China's achievements in green transition because it could contribute a lot to the EU's ambitious Green Deal.
9. Trying to build barriers to undermine China's green transition by launching anti-subsidy investigations and even threatening punitive tariffs will undermine the global fight against climate change. So the EU should change its mindset, and accept that China, the world's largest developing country, can take the lead in some advanced industries, especially those critical to the global fight against climate change and green transition.
Source:
https://www.chinadaily.com.cn/a/202312/07/WS65713e3ba31090682a5f1f6d.html
https://www.chinadaily.com.cn/a/202409/13/WS66e378c7a3103711928a7bc1.html
