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High-level dialogues on strategic and foreign policy issues including human rights and trade, economic relations and climate, environment and digital issues, etc. have been under closer attention during the China-EU summit. It demonstrated the EU’s commitment “to be engaged” with China, as the Commission’s press release put it.
President of the European Council, Charles Michel and President of the European Commission, Ursula von der Leyen met recently with China’s President, Xi Jinping and China’s Prime Minister, Li Qiang. It is for the 24th time that the two sides conducted extensive dialogues on various issues of common interest as a follow-up of the period of previous intensive bilateral contacts.
The EU’s opinion on bilateral relations
The EU stressed the importance of a well-functioning, rules-based international order “with the United Nations at its core”.
= President of the European Council, Charles Michel underlined that: a) “the EU-China relationship matters”, b) the EU needs bilateral trade and economic relations “more balanced, reciprocal and mutually beneficial”, and c) the sides “will continue to work for equal opportunities for companies”.
Besides, he noticed, that the EU “will continue to engage with China based on transparency, predictability and reciprocity”.
= President of the European Commission, Ursula von der Leyen acknowledged that the EU-China relationship “is complex and we have a responsibility to make it work”.
She stressed that the sides “agreed that it was in joint interest to have balanced trade relations”, and that EU and China “need to address increasing geopolitical challenges”.
Besides, she noted that the sides “must work to ensure Russia stops its war of aggression against Ukraine”.
Source and reference to Commission’s press release: https://ec.europa.eu/commission/presscorner/detail/en/IP_23_6431/ 7 December 2023.
Economic issues
The EU and China are major economic partners with €2.3 billion in goods trade per day; however, with an EU trade deficit of almost €400 billion, this relationship is critically and structurally imbalanced.
The EU does not intend to decouple or to turn inwards; the EU therefore raised concerns about underlying distortions and the negative effects of manufacturing overcapacity in China’s economy. The EU stressed to China the importance of achieving a more balanced economic relationship with a level playing field and reciprocity. The EU equally underlined the need for progress in addressing the core EU interests and longstanding demands: e.g., transparency in the business environment, predictable supply chains, trade distortions including industrial subsidies, and sector-specific trade barriers.
The EU expected that China would take concrete action to improve market access and the investment environment for EU investors and exporters. The EU recalled that de-risking but not decoupling aims at strengthening resilience by addressing critical dependencies in specific sectors, in full compliance with the World Trade Organisation rules.
The EU and China share an interest in an effective multilateral rules-based trading system, equipped to address key modern challenges.
The EU stressed the two sides’ joint responsibility to ensure a transparent and competitive environment for the digital economy, including a level playing field for artificial intelligence that respects human rights and fundamental freedoms.
The EU underscored the common goal of avoiding fragmentation of standards for information and communication technologies.
Present EU economic satiation
At a recent ECOFIN conference, the Commission vice-president noted that “turning towards 2024, there was scope for some cautious optimism”: i.e. inflation continues to fall, providing some relief to consumers (for November in the euro area, it stood at 2.4 percent, the slowest annual pace since July 2021); continued easing of inflation should help economic growth to rebound modestly in 2024, helped by strong labour markets.
However, despite the EU-wide resilience in the face of consecutive shocks, the EU economy also has longstanding structural challenges: it is more important for those EU states that carry out the reforms and investments set in their national Recovery and Resilience Plans, RRPs. Presently, 13 revised RRPs submitted by Belgium, Bulgaria, Croatia, Cyprus, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Poland and Romania have been just adopted.
The final adoption means that the remaining 30% of Recovery-Resilience Facility grants, RRF and the requested loans by the end of the year are available for national budgets.
The EU’s autumn economic forecast indicated sustained increase in investment despite many economic challenges and this is largely down to the RRF’s influence.
This is yet another reason for the EU states to continue with the steady implementation of their RRPs, as well as for some other states to catch up on delays.
Source: https://ec.europa.eu/commission/presscorner/detail/da/statement_23_6450/ 8 December 2023.
Expressed common interests
EU-China leaders noted already reached recent agreements, including the establishment of working groups on financial regulation, cosmetics, export controls, wines and spirits. The EU is looking forward to rapid activation of the mechanism to ease cross-border data flows.
Leaders also noted the work undertaken since the last Summit on customs and intellectual property rights, food safety and safety of products sold online, as well as on geographical indications. In this regard, the leaders agreed to re-launch the High-Level People-to-People Dialogue in 2024.
The EU-China leaders welcomed continued cooperation on climate change and the environment, as exemplified by recent agreement to work further on emissions trading and circular economy. As major economies, the EU and China must lead global efforts to reduce greenhouse gas emissions, as is discussed during the COP28 summit.
The EU acknowledged recent progress on expansion of renewable energy and China’s intention to tackle methane emissions. The EU underlined the urgent responsibility for all states to step up climate ambition and called on China, to join the Global pledge to triple renewable energy capacity and double the rate of energy efficiency improvements by 2030, as well as the Global Methane Pledge.
The EU-China leaders also discussed debt sustainability, food security, health and pandemic preparedness, biodiversity, water, ocean governance, plastic pollution and deforestation.
The EU underlined the importance of China continuing to refrain from supplying lethal weapons to Russia. The EU equally urged China to prevent any attempts by Russia to circumvent or undermine the impact of sanctions.