(China Focus Face to Face) The China-EU Investment Agreement is coming. Why is it so important for China to remain “linked” with the world?
China News Service, Beijing, January 25th, title: The China-EU Investment Agreement is coming. Why is it so important for China to remain “linked” with the world?
——Interview with Woodk, President of the European Chamber of Commerce in China
China News Agency reporter Pang Wuji
The 7-year-old China-EU Investment Agreement negotiations were finally completed on December 30, 2020. Also in 2020, an important change occurred quietly-China surpassed the United States for the first time in the first ten months and became the EU’s largest trader. partner.
Why is the China-EU Investment Agreement so important?
What changes will happen to the future cooperation and competition prospects between China and the EU?
Joerg Wuttke, chairman of the European Union Chamber of Commerce in China, accepted an exclusive interview with China News Agency "China Focus Face-to-face" for an authoritative interpretation.
Excerpts from the interview are as follows:
China News Agency reporter: The China-EU investment agreement negotiations will be completed as scheduled by the end of 2020. What do you think of the significance and value of this agreement?
Woodk:
This agreement took 7 years to negotiate. During that time, I thought that the agreement might not be negotiated, but last summer, it regained its vitality, and fortunately, the agreement was reached in December 2020.
I think it has two meanings: First, the completion of the China-EU Investment Agreement negotiations is a symbol, indicating that Europe and China can get things done together, and we can reach an agreement that is beneficial to both parties. This is very good.
Second, it does open up more markets for European companies (entering China), which means that it creates more healthy competition within China, which is also good for the Chinese economy.
At the same time, it also opens up channels for Chinese companies to enter the European market.
For me, the conclusion of this negotiation is really a "win-win" between China and the EU after long and hard work.
Data map: Chinese goods are shipped to Europe via China-Europe Express.
Photo by Lin Qifan
China News Service: Since the outbreak of the epidemic, China's rapid economic recovery has benefited many EU companies. As far as you know, what is the current attitude of European companies towards further increasing investment in China? In the process of investment decision-making, which aspects of the Chinese market are most important to European companies?
Woodk: The
new crown pneumonia pandemic is not a good thing, but it does cause some discussions, such as: should we diversify more funds?
Should we do more in other countries?
The European Union Chamber of Commerce in China has more than 1,700 members, covering 9 cities in China.
Ten years ago, we conducted a survey and asked member companies "Are you considering leaving China?" At that time, 20% of respondents had this idea.
We asked this question again in February 2020, when the epidemic situation in China was relatively severe, (this time) only 10% of the respondents said they considered leaving.
China's economy (every year) contributes 30% of global growth, so it is very important for companies to stay here and participate in this market.
In the next few years, European companies will continue to cultivate the Chinese market, and this will not change.
China's manufacturing industry has always been strong, including automobiles, chemicals, machinery, construction and other industries (walking in the forefront of the world).
However, China is a bit behind in the service industry.
I hope that the China-EU Investment Agreement will open up more markets for investments in industries such as insurance, local transportation, construction, healthcare, and banking.
Joerg Wuttke, chairman of the European Chamber of Commerce in China, accepts an exclusive interview with China News Service on "Focus on China".
Photo by China News Agency reporter Han Haidan
Reporter from China News Service: As the interdependence between China and Europe (economic and trade) deepens, the competitiveness of the two sides has gradually strengthened. Will the future development of EU companies in China require transformation?
Woodk:
The fact that China wants to be more open shows China's desire to introduce competition.
Competition and demand can promote R&D and innovation.
You can't just throw money in the laboratory, hoping that the best-selling product will appear out of thin air, (this innovation process) must be based on someone who wants to buy this product.
This is the role China plays, so (innovation) is a story about demand, and only demand can bring about such changes.
Take German cars as an example. For high-end cars, such as Mercedes-Benz S-series, BMW 7-series or 8-series, most buyers in Germany have an average age of over 50, while the average age of Chinese consumers of these products is 35.
This demand story is driven by equipment and information technology in China.
So this is not only conducive to European companies developing cars for the Chinese market, but also (conducive to) developing products for the global market.
This is why it is so important for China not to decouple from the world and continue to remain open to the rest of the world.
On the 14th, the European Union Chamber of Commerce in China issued a report on "decoupling", explaining the harm of decoupling. For example, it will make the economy turbulent, raise prices, and make the problem more complicated. So we hope to pass on the voice to The Chinese and EU governments, what we really want to see is the "link."
China News Agency reporter: Both are civilizations with a long history and splendid culture. What common values can China and Europe extract? What obstacles do you think the further integration of Chinese and European cultures and civilizations need to overcome, and what prospects can be achieved?
Woodk:
I think the similarity between Europe and China is the love for all aspects of historical heritage. I hope this love has no nationalist meaning, such as the idea of "my heritage is better than yours".
I think this is an aesthetic (common ground) derived from centuries of cultural accumulation.
50% of global luxury goods purchased by China come from Europe. Without China, countries such as France and Italy would not produce these beautiful things.
We (and should) realize that they have very different political and economic systems behind them.
We must admit this, you can live your life, I can live my life, but don't try to interfere with each other.
We see that there are more and more interferences from all sides, such as trying to correct a person's thoughts or behavior. We call this interference the politicization of business.
But we do not want to be politicized. We want to focus on consumers and we want to establish a supply chain. This is the challenge we need to face.
But in general, I think China and Europe have more in common than opposites.
Data map: On January 29, 2019 local time, after a performance at the Fifth China-EU Culture and Arts Festival, Dutch pianist Ralph Van Rath, who served as piano concerto, and Peking Opera Tsing Yi actor Lian Wen Qing hand in hand curtain call.
Photo by China News Agency reporter De Yongjian
China News Agency reporter: China and Germany have particularly close cooperation in the manufacturing sector. Currently, China is accelerating to make up for shortcomings in the industrial chain and supply chain. What opportunities will this bring to German companies? In what ways can the two parties start cooperation?
Woodk:
China and Germany already have a lot of cooperation. For example, the automobile industry is mainly promoted by a few German companies that are located in Shanghai and Changchun.
(Sino-German cooperation) has developed a very prosperous automobile industry, and it has become the world's largest automobile industry.
From the perspective of ongoing technical cooperation, Germany is a perfect partner for China, while for Germany, China is the world's factory, capable of manufacturing various machines and chemicals.
However, the partnership between the two is changing.
For German companies, China has become a global competitor in many ways. Therefore, the two countries are no longer the kind of relationship of imparting technology, but are looking for a way of coexistence, truly reaching cooperation and facing challenges together.
For example: in response to climate change, we should really come up with solutions.
China News Agency reporter: What is your vision or expectation for the future Chinese market?
Woodk:
If you look at GDP per capita, you will find that, in fact, China's economic growth trajectory is similar to that of Japan and South Korea.
In fact, China is only in its infancy. Since the reform and opening up has only been more than 40 years old, there is still a long way to go.
According to my estimation, China's economic growth will continue to account for 30% of global growth in the next 10 years.
This is equivalent to the total output of OECD (Organization for Economic Cooperation and Development) member countries.
In the field of chemicals that I work in, China accounts for 60% of the world.
As an American saying goes: "If you are not at the table, you will be on the menu."
Therefore, (European companies) must be here (in China) in order to participate.
This is why we really need China to remain open and open so that Europe can participate in China’s development opportunities and become China’s equal partners.
Joerg Wuttke, chairman of the European Chamber of Commerce in China, accepts an exclusive interview with China News Service on "Focus on China".
Photo by China News Agency reporter Han Haidan
Reporter from China News Service: You came to China in 1982. You are an entrepreneur with rich experience in cooperation with China. You are also a witness and witness to the process of China's economic development. How do you evaluate the achievements of China's reform and opening up over the past few decades? What is the most impressive change among them?
Woodk:
In 1982, I was a young student and came to China from Germany through the Soviet Union by train.
The development of China in the past 40 years has made me unimaginable.
I still remember when I was in Shanghai in 1993, I saw the planning of Pudong.
I think the Shanghai government must be crazy. How can this be built?
A few years later, it is clear that it has become a reality.
One thing I have learned in China for so many years is that you must not underestimate China's ability to solve problems quickly.
I remember that when I first came to China, there were (rarely) phone calls.
But now China has undergone a revolutionary change, telephone, financial technology, everything... and then the change of people.
When I first came here, people either wore blue suits or green suits.
Ladies wear short hair when they are married, and braid them when they are unmarried, but Shanghai is now the fashion capital of the world.
I was lucky to sit in the "first row" and watch the story of China's economic revival up close.
I don't know how long I will stay here, but I hope that I have infected my children so they can witness the next stage of the (Chinese economy).
China News Service: How do you think foreign companies do business in China now compared to a decade ago? What do you think of this change and how do you adapt to it?
Woodk: The
main difference is competition.
Chinese companies have really become very mature, it is not so easy for (foreign companies) to make money.
In the past, it was Chinese companies doing downstream and European companies doing upstream, but this is no longer the case, and this change does not only occur in the Chinese market.
China is already a global player, and many outstanding companies have emerged.
I think the most important thing is (to figure out) why they become so good at such a speed.
Frankly speaking, Europe needs to step out of complacency and try to learn from China.
The relationship between Europe and China has changed from a one-way idea provider to a two-way one. It not only learns from China, but also strives to provide solutions, and at the same time brings some ideas and ideas to China.
Data map: Aerial photography of the whole vehicle waiting for export at the Haitong Automobile Terminal in Waigaoqiao Port, Shanghai.
Photo by Yin Liqin
China News Agency reporter: In recent years, China has been working hard to improve the business environment. How do you evaluate China's effectiveness in improving the business environment? In what areas should we continue to improve in the future?
Woodk:
If you search the World Bank database, you can see that China has made a lot of progress in the business environment in the past few years.
However, given the importance of China's economy, there is still much room for improvement in China's business environment.
The European Chamber of Commerce publishes a proposal for EU companies in China every year, offering advice and suggestions for the development of China's economy and business environment from the perspective of European companies. The proposal has 400 pages and 900 proposals.
Because if China wins, we also win.
I think that in the decision-making process, China still has a lot of room for improvement, and transparency should also continue to improve.
Of course, some of these issues have been resolved through the China-EU Investment Agreement, which is not perfect, but at least it is a step forward.
China News Agency reporter: If you give investment advice to European companies investing in China in 2021, what would you say?
Woodk:
I think this year will be a good year.
Because we have come from 2020 (the trough), this year's economic performance is very good, this year China may have 8% growth.
And 2021 is the beginning of a five-year plan, which is usually good.
European companies should pay attention to staying in the Chinese market while also paying attention to market signals, not only to see changes in customer behavior, but also to see what Chinese companies are doing in other parts of the world, so as to gain market trends earlier.
In general, European companies cannot avoid China.
Even if it is very difficult at times, you must stay here, because it at least means that you have the opportunity to participate in this market.
What our chamber of commerce is doing is trying to open the market for those who have not actually participated in it.
(Finish)