The delegates of the sixth Hamburg Summit charted the prospects of the Sino-European economic relations, with a focus on the need to promote Foreign Direct Investment (FDI) in both directions.
Key to stimulating FDI in both directions will be the EU-China investment agreement, which is currently being negotiated.
The strong links between trade and investment mean that negotiations on an investment treaty will include market access, a key European demand.
The EU wants assurances on the dismantling of non tariff barriers, or what happens “behind the border.” As such, the talks will be difficult, a report from EU-China think tank Friends of Europe said.
The EU side stresses that foreign investment brings know-how, expertise and the competition that will boost the productivity of China’s companies. Investment abroad by Chinese companies, particularly in competitive markets like the EU, also helps them become more efficient and effective.
“The EU-China investment relationship is already strengthening, but there is considerable room for improvement,” outgoing EU Commissioner for Trade Karel De Gucht told the conference. He noted that Europe’s investments in China add up to less than roughly 2 percent of its total investments abroad.
However, over the two days, a number of Chinese participants expressed the view that anti-dumping cases launched by the EU under De Gucht have often looked like protectionism.
They pointed to the cases of both solar panels and mobile phones, and stated that there was strong demand for high quality but low priced imports in Europe.
There was a strong environment theme at the Summit, and clearly many European companies see a role for themselves in developing clean and efficient energy solutions for China.
Europe takes a global lead in advanced manufacturing, new energy and energy saving and environmental protection, in addition to solar energy, wind power and nuclear power.
China and Europe could integrate each other’s strengths in a well organised way, thus realizing sustainable development with mutual benefits and interests. There were also calls for more cooperation on high tech manufacturing, known as Industry 4.0.
With regard to the environment, the European Parliament will be watching closely to ensure that the EU Commission presses ahead with sustainability chapter while negotiating the investment agreement.
Martin Schulz, President of the European Parliament, said that the role of China was central to progress on environmental issues.
“The work taking place through our bilateral cooperation on climate change is also of note. But, more than anything else, it is crucial to have strong cooperation in view of the Climate Summit in Paris late next year. China’s positive engagement is decisive for the Summit’s success,” he said.
“China will be at the top of my foreign policy agenda throughout my mandate as President of the European Parliament,” said Schulz.
Outside of manufactured goods, opening the China market up to European service sector companies is a priority. This includes financial services.
A report from the Mercator Institute for China Studies (MERICS), says that a precondition for a rebalancing towards consumption is a more liberalised financial system. MERICS argues that opening up the finance sector to foreign companies will contribute to a more efficient allocation of capital.
The overall theme for the conference was one of the need for cooperation, and the opportunities that will result from more market openness and increased investment flows.
Li Yizhong from the China Federation of Industrial Economics, said that it was important for China and the EU to commit themselves to greater cooperation, and shift from the trade-dominant structure to one which places more of an equal emphasis upon trade and investment.
“Europe, known for high-end manufacturing and R&D strength, calls for more capital in its economic recovery,” said Li. “Meanwhile, China boasts of a huge foreign reserve and vast market with great potential and its enterprises are stepping up their globalisation process.”
President of the Hamburg Chamber of Commerce, Fritz Horst Melsheimer, stressed the need to promote free trade and avoid protectionism.
“We will not solve these problems if we create additional barriers to trade, we need more trade with China, not less,” said Melsheimer.