Optimism seen on EU-China ties

Fu Cong, the new head of the Chinese Mission to the European Union, says he is confident in being able to act as a bridge that enhances understanding and mutual trust and facilitates practical collaboration between China and the EU.

After Fu, a 57-year-old career diplomat, arrived in Brussels on Dec 10 he wasted no time in getting down to business. This included attending and speaking at the fifth China-EU CEO and Former Senior Officials' Dialogue on Dec 15 and meeting the European Council President Charles Michel the next day to present his credentials. Michel had met President Xi Jinping, Premier Li Keqiang and the National People's Congress Standing Committee Chairman Li Zhanshu in Beijing on Dec 1.

On Dec 20 Fu met Bjoern Seibert, head of cabinet of the European Commission President Ursula von der Leyen, and the following day he visited Gunnar Wiegand, managing director for Asia and the Pacific at the EU External Action Service.

"I was told that it is by advocating diversity, inclusion, dialogue and compromise that the EU has witnessed the steady development of European integration," Fu said in an opinion article published on the Brussels-based news website Euractiv on Dec 19.

"I sincerely hope that these principles can find their expression in my future work."

Fu said his confidence lies in the fact that China is highly committed to peaceful development, there is high-level political support for better China-EU ties, and there are strong underlying forces that will drive China-EU relations in a positive direction.

"The decadeslong relationship shows that China and the EU are partners rather than rivals," he said.

Fu is no stranger to Europe, having served in China's diplomatic missions for many years, including in Vienna and Geneva. Before assuming his current role he was director-general of the Department of Arms Control of the Ministry of Foreign Affairs.

China, which prides itself on its comprehensive strategic partnership established with the EU in 2003, has opposed the EU's revision of March 2019 describing China as a cooperation partner, an economic competitor and a systemic rival.

Michel, a former Belgian prime minister, said after his meeting in Beijing that the 27 leaders of EU member states agree on the critical importance of the EU-China relationship.

After wide-ranging discussions with Chinese leaders, Michel said that "with China, engaging openly on all aspects of our relationship is the only way forward".

China is the EU's top trading partner in goods, worth almost 2 billion euros ($2.13 billion) every day, and China accounts for more than 22 percent of European imports.

"China's growth in recent decades has benefited both China and the EU and has contributed substantially to China's dramatic economic transformation," Michel said.

China's GDP was $17.32 trillion last year, compared with the $17.09 trillion of the 27 EU member states.

Michel's visit to Beijing followed a trip there by Germany's Chancellor Olaf Scholz on Nov 4. Other European leaders such as France's President Emmanuel Macron and the new Italian Prime Minister Giorgia Meloni are all expected to visit China next year. Many of them held talks with President Xi during the G20 Summit in Bali, Indonesia, last month.

Fu said in an interview with the South China Morning Post on Thursday that his four priorities include maintaining and resuming all levels of contacts, promoting practical collaboration, strengthening cooperation and coordination in dealing with global issues and resuming people-to-people exchanges.

Largest trading partner

China replaced the United States as the EU's largest trading partner in goods last year, with two-way trade worth $828 billion, 27.5 percent more than in 2020, but the relationship has been negatively affected by rivalry between the US and China as well as the Russia-Ukraine conflict, which has triggered a debate in the EU about economic dependency.

"China's manufacturing relies as much on the EU as the EU relies on China," Lyu Gang, a research fellow at the Development Research Center of the State Council, told a China-EU forum this month. He based his conclusions on data from 2001 to 2020.

More than 30,000 EU businesses have a presence in China, and Chinese companies have set up 2,700 businesses in the EU, largely a result of Chinese companies going global since more than 10 years ago.

A report published on Sept 30 jointly by the China Chamber of Commerce to the EU and the global consultancy Roland Berger said Chinese businesses in the bloc have enjoyed rapid growth despite problems, but their outlook on the EU's business environment has fallen to a three-year low.

Concerns among Chinese companies include the EU's overall policy, unilateral economic and trade instruments and fast-changing policies in some member states.

The report called on the EU not to selectively decouple from China in targeted high-tech, digital and green sectors.

Similarly, an annual European Business in China Position Paper published in September by the EU Chamber of Commerce in China said China's unparalleled consumer base and manufacturing capacity make the country a core part of business plans, but the paper included 967 recommendations on improving relations.

The report came shortly before the German chemical giant BASF announced it would build a 10-billion-euro plant run entirely on renewable energy in Zhanjiang, Guangdong province, to build an engineering plastic compound for the automotive industry.

German carmakers have invested heavily in China and depend on it for about a third of their sales.

Ding Chun, director of the Center for European Studies at Fudan University in Shanghai, said the economic and trade relationships between the two sides are mutually beneficial and they should talk about their concerns.

The China-EU Comprehensive Agreement on Investment should be pushed forward, he said. China and EU concluded talks on the agreement in December 2020 but the ratification has been frozen by the European Parliament amid sanctions imposed by both sides.

"The agreement aims to solve bilateral investment and trade issues," Ding said. "You can't solve them by freezing the agreement."

The South China Morning Post quoted Fu as saying that reviving the agreement will also be one of his priorities, and the issue was raised when Michel met Xi in Beijing. In meetings with EU officials, Fu said, he had talked about the issue.

Some of the complaints that European business people have regarding Chinese markets related to market restrictions or market access, he said.

"And actually that agreement would resolve many of the concerns that the European business people may have."

He Zhigao, a researcher at the Institute of European Studies at the Chinese Academy of Social Sciences, said bilateral economic and trade ties are resilient, and he cited the fact that the value of bilateral trade rose 6.3 percent to $711.4 billion in the first 10 months of the year.

"As the two largest markets, China and EU's economies are still quite complementary to each other."