The China-EU Investment Agreement is more like "sending charcoal in snow" to Europe
Mei Xinyu
Comparing the data of major economies since 2016, we can see that whether it is a normal year without the impact of the epidemic or an epidemic year like last year, China's economic growth rate over the years has been significantly higher than that of countries and regions such as the United States, Europe, and Japan.
Given that the Eurozone has fallen into a "double-dip recession", vaccine R&D and production lag behind China and the United States, and traditional competitive industries are also facing insufficient stamina, it is difficult to say whether the European economy will rebound from the bottom in the second quarter as it wishes.
In other words, this mutually beneficial China-EU agreement is more like "icing on the cake" to China, and more like "sending charcoal in snow" to the EU, no matter from the current point of view or from a longer historical period.
"The EU has suspended the promotion of the ratification of the China-EU Investment Agreement."-The European Commission’s Vice Chairman for Trade Don Brovskis made a statement in an interview with AFP reporters a few days ago, which triggered a while in the economic circles of China and Europe and even the global market. Ripples of restlessness.
Since then, the European Union issued a statement stating that the China-EU Investment Agreement is still in the legal review stage and the ratification process has not been involved, reflecting that EU policymakers still have a rational side of the judgment of the China-EU Investment Agreement.
After all, whether it is viewed from the present or from a longer historical period, this mutually beneficial China-EU agreement is more like "icing on the cake" to China, and more like "sending charcoal in snow" to the EU.
Europe is in deep "double-dip recession"
Statistics from the International Monetary Fund’s April World Economic Outlook show that China’s real GDP in 2020 will account for 18.3% of the world’s total, and 19 countries in the Eurozone will account for 12.0%.
Comparing the economic growth rates of major economies such as China, the United States, Europe and Japan since 2016, we can see that whether it is a normal year without the impact of the epidemic or a year of the epidemic like last year, China's economic growth rate over the years has been significantly higher than that of the United States, Europe, and Japan. And other countries and regions.
Among Western countries, Europe’s economic growth rate is generally lower than that of the United States, and its ability to withstand shocks is also lower than that of Japan.
Especially when measured by quarter-on-quarter growth rates, according to the definition of “two consecutive quarters of economic contraction constitutes a technical recession”, under the impact of the epidemic, the United States experienced an economic recession in the first half of last year and began to recover in the second half of the year. The dilemma of "double-dip recession", and after two consecutive quarters of economic contraction in the first half of last year, there was another two consecutive quarters of contraction after just one quarter.
In the context of the major impact of new variants of the new crown pneumonia virus, in view of the fact that European vaccine research and development and production lag behind China and the United States, the organization and mobilization capacity for epidemic prevention and isolation is also not as good as that of the United States, and is not at the same level as China. Whether it will rebound from the bottom in the second quarter is still inconclusive.
The unemployment rate is most closely related to people's livelihood.
This is not only an economic issue, but also a political issue related to social stability, and Europe is precisely concerned about this issue.
Unemployment rate remains high. It was originally a chronic disease that Europe could not solve for a long time. The problem of youth unemployment has become more prominent, so that after the subprime mortgage crisis from 2008 to 2009, the youth unemployment rate in many European Union countries exceeded 50%, and the number continued. year.
The new crown pneumonia epidemic has once again put the European labor market into an "freeze" state.
China's economy grew by 18.3% year-on-year in the first quarter, while the euro zone's GDP continued to shrink, and the unemployment rate index was almost double that of China.
Under this circumstance, between China and Europe, who needs a major economic benefit such as the China-EU Investment Agreement?
The answer is self-evident.
Competitive industries face challenges
We can see more clearly when it comes to industrial sectors such as automobiles, where Europe has a clear competitive advantage in the international market.
China has been the world’s largest auto producer and auto sales market for more than ten consecutive years, and its proportion has been increasing in general. It has shown extremely strong resistance to shocks especially when it encounters major shocks such as the subprime mortgage crisis and the new crown pneumonia epidemic. Therefore, it is particularly valued by the global industry.
According to statistics from the World Organization for Automobile Manufacturers (OICA), global car sales in 2020 will drop by 13.8% to 77.97 million units, which is the same as 2011 and has receded by nearly 10 years.
Among them, sales in the United States were 14.45 million, a year-on-year decrease of 15.2%; sales in the Americas were 20.25 million, a year-on-year decrease of 18.5%; sales in Europe were 16.74 million, a year-on-year decrease of 20.2%; EU 27 countries, European Free Trade Association (EFTA) countries, and the United Kingdom combined The sales volume was 14.08 million vehicles, a decrease of 23.6% year-on-year; the sales volume in China reached 25.31 million vehicles, a year-on-year decrease of only 1.9%, accounting for 32.5% of world sales.
China’s sales in one country are equivalent to 1.5 in Europe, 1.8 in "EU 27 + EFTA + UK", 1.8 in the United States, and 1.3 in the Americas.
In 2020, 49 countries around the world produced 77.62 million vehicles, a year-on-year decrease of 15.8%.
Among them, China’s output was 25.23 million vehicles, accounting for 32% of the world’s total, a year-on-year decrease of only 2.0%; the former "automobile kingdom" in the United States produced 8.82 million vehicles, a year-on-year decrease of 19.0%; the entire Americas output was 15.69 million vehicles, a year-on-year decrease 22.1%; European production was 16.92 million vehicles, a year-on-year decrease of 21.6%; EU production was 13.77 million vehicles, a year-on-year decrease of 23.5%.
China’s output is equivalent to 1.5 in Europe, 1.8 in the European Union, 1.6 in the Americas, and 2.9 in the United States.
In the first quarter of this year, China's automobile production and sales continued to maintain a rapid growth momentum, with production and sales volume of 6.352 million and 6.484 million vehicles, respectively, with year-on-year growth rates of 81.7% and 75.6% respectively.
More importantly, the global automobile industry is brewing major technological changes. Before long, new energy vehicles may replace fuel vehicles on a large scale and become the mainstream of global automobile production and consumption.
Once this change becomes a reality, a large part of the fuel vehicle manufacturing technology accumulated by European automakers for hundreds of years will be eliminated.
In this field, China and the United States are currently leading the world. China is the world's number one new energy vehicle production and sales country. In 2019 and 2020, the global market share of new energy passenger vehicles is 51% and 41%.
In the first quarter of this year, China's new energy vehicle production and sales "blowout", with production and sales increasing by 3.2 times and 2.8 times year-on-year respectively, and charging infrastructure continues to lead the world.
Whether it is production or infrastructure, Europe, the United States and Japan will not be able to narrow the gap with China in the foreseeable future. This is the reality that the global new energy vehicle industry must face up to at present and for a considerable period of time in the future.
Recognizing this reality, from traditional models to new energy vehicles, foreign automakers are accelerating their deployment in the Chinese market, while China is open-minded to welcome foreign manufacturers to come, and China’s new energy vehicle supporting industry is also willing to provide for the global new energy vehicle industry. stand by.
So, are European politicians trying to help their auto industry catch up with the trend, or do they want to hold them back?
Call for objective and rational reflection
Looking at a longer time span, we can more clearly see the continued decline in the global share of the European economy and industry:
From the perspective of real GDP in terms of purchasing power parity, at the end of the Cold War in 1990, the 12 European Union countries accounted for 18.5% of global real GDP. At this time, China’s share in the International Monetary Fund’s World Economic Outlook was not enough alone. List items.
Entering the new century, in 2000, the 15 EU countries accounted for 20.0% of the global real GDP, the 12 euro area countries accounted for 16.0%, and China accounted for 11.6% of the global real GDP.
In 2020, the euro zone camp expanded to 19 countries, but its real GDP accounted for 12.0% of the world’s share, and China’s share rose to 18.3%.
As far as the automobile industry is concerned, Europe is the birthplace of automobile products and the modern automobile industry. In 1938, the production of automobiles in major European countries reached hundreds of thousands: 445,000 in the UK, 338,000 in Germany, 227,000 in France, and 211,000 in the former Soviet Union. There are 71,000 vehicles in Italy.
China’s automobile industry began in 1955. It produced 1,000 vehicles that year. The Soviet Union produced 508,000 vehicles, Britain produced 1.238 million vehicles, Federal Germany produced 902,000 vehicles, France produced 725,000 vehicles, Italy produced 270,000 vehicles, and Czechoslovakia. With 23,000 vehicles, the starting point of China's automobile industry is extremely low compared to Europe.
By 1998, global automobile production was 51.9 million units.
Among them, China's production was 1.63 million vehicles, accounting for 3% of the world; the United States' production was 12 million vehicles; Europe's production was 19.19 million vehicles; and the European Union's production was 16.55 million vehicles.
By 2020, China’s auto production is equivalent to 1.5 Europeans and 1.8 Europeans.
Facing the long-term trend of the continuous decline of European economy and industry's status in the global arena, do European political circles need to reflect?
The original pure economic affairs have been over-politicized, so as to damage the long-term sustainable development potential of European economy and industry. Is it one of the most important reasons?
We expect responsible European political elites to observe, think, judge and act, because as the world's largest exporter and one of the largest importers, China's long-term sustainable economic development requires the economic prosperity of trading partners.
We believe that a mutually beneficial and win-win treaty such as the China-EU Investment Agreement can withstand objective scrutiny. We also hope that the EU will draw inferences from one another, based on objective and rational observation and thinking of its own long-term fundamental interests, and create the greatest degree of tolerance for China-EU trade and economic development in the region. A good environment for political interference.