[Illustration by China Daily]
Production capacity cooperation has increasingly shown up as a new “business card” of Premier Li Keqiang.
Premier Li mentioned production capability cooperation on various occasions during his visit to Europe, and sketched a blueprint for multilevel production capability cooperation between China and Europe.
Addressing the opening ceremony of a China-EU business summit in Brussels on June 29, Li said that, in order to overcome the global financial crisis, it was an urgent matter to address the mismatch of the aggregate and structure of supply and demand.
Therefore, advancing domestic structural reform and strengthening international production capability cooperation is the key to break the bottleneck of growth, Li noted.
Currently, it is the right time to push ahead international production capability cooperation as the world sees a sluggish economic recovery, the Chinese premier said.
Through international production capability cooperation, Li said, developing countries can achieve accelerated growth with relatively low costs, China can boost the upgrading of its industrial chains, and developed countries can explore a bigger market.
It is a all-win move, he added.
At the ceremony, Li also emphasized that China and the European Union (EU), as two major influential economies in the world, have the responsibilities and commitments to join hands to advance international production capability cooperation and make contributions to robust, sustainable and balanced growth of the world economy.
Advancing international production capability cooperation follows the grand trend of the changing global industrial chains. A latest study by Britain’s Standard Chartered Bank shows that the restructuring of the global supply chains will reshape the pattern of global trade in the next 10 years.
Moreover, China, which currently stands at a dominant place in global industrial chains, will be a core element to trigger change, according to the study.
“China’s economy has entered into a new stage where it is now in a position to tap into its emerging comparative advantages,” Zhang Jun, director-general of the International Economic Affairs Department of the Ministry of Foreign Affairs, said in an op-ed published in China Daily on June 19.
“After decades of development, China has now grown into one of the world’s major industrial powers and lies in the middle of the global manufacturing chain. A large number of industries in China are advanced in technologies and operate at modest cost, thus enjoying the dual advantages of high quality and moderate cost,” he said.
During his recent visits overseas, Premier Li has been dedicated to advancing international production capability cooperation. From late 2014 to middle 2015, China and several developing economies have scored remarkable achievements in their production capability and equipment manufacturing cooperation, including Kazakhstan, Egypt, Kenya, Indonesia and some Latin American countries.
During Li’s visit to Europe this time, production capability cooperation becomes a highlight of China-Europe cooperation.
During a meeting with Belgian Prime Minister Charles Michel on June 29, Li emphasized cooperation in production capability and equipment manufacturing in third-party markets; when meeting French President Francois Hollande on Tuesday, Li and Hollande held concrete and in-depth discussions on cooperation in third-party markets.
On how China and Europe will embark on international production capability cooperation, Li proposed four breakthrough points during his European trip.
The first is the docking of China-EU investment plans, starting with those investment plans on infrastructure.
In November, European Commission President Jean-Claude Juncker unveiled a 315 billion euro ($352 billion) investment plan, called “the Juncker investment plan,” to finance projects aimed at rejuvenating the EU’s economy.
Juncker recently told Xinhua that the EU seeks to dock “the Juncker investment plan” with China’s “Belt and Road” initiative.
Second, China and the EU can focus on equipment manufacturing to achieve a breakthrough in cooperation with third-party markets.
During Li’s French trip, China and France issued a joint statement on cooperation with third parties and a joint statement on China-France nuclear cooperation.
Third, in order to facilitate financing to businesses, China and the EU should make a breakthrough in financial cooperation.
During Li’s visit to France, China and France agreed to set up a mutual fund to support cooperation with third parties. Meanwhile, the upcoming Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund also will guarantee the financing to China-EU cooperation with third-party markets.
Fourth, there should be freer trade and investment between China and the EU as international production capability cooperation needs resources worldwide.
Compared with a bilateral trade valued at $600 billion, investment between China and EU was merely $20 billion in 2014.
Currently, many Chinese enterprises go to Europe to look for mergers and acquisitions. The Financial Time has urged the two sides to conclude a bilateral investment pact to facilitate Chinese acquisitions in Europe.