Global EditionASIA 中文雙語Fran?ais
    World
    Home / World / China-Europe

    Why 'de-risking' from China poses high risks for European economies

    Xinhua | Updated: 2023-05-14 07:31
    Share
    Share - WeChat
    People stand in front of the Euro sculpture in Frankfurt, Germany, Aug 22, 2022. [Photo/Xinhua]

    FRANKFURT -- Walking a fine line between preserving its interests and reducing exposures to the so-called "risks," the EU has been touting a "de-risking from China strategy," which is likely to incur high risks and take a toll on its economic growth.

    If certain countries or parties pursue de-sinicization in the name of de-risking, they would actually be breaking away from opportunities, cooperation, stability and development, China's State Councilor and Foreign Minister Qin Gang said during a press conference with his German counterpart after their talks in Berlin on Tuesday.

    Globalization in peril

    As an outward-oriented economy, the EU has benefited greatly from globalization over the past few decades.

    Even after a setback in recent years, foreign trade makes up around 20 percent of the EU's GDP.

    Globalization also contributes to employment in the EU. A report released by the bloc in 2021 revealed that exports supported 38 million jobs in the EU and that one in five jobs depended on exports, illustrating the strong relationship between trade and employment.

    A report published in 2022 by the European Center for International Political Economy think tank noted that there were signs the EU had become more integrated into the global economy in recent years.

    The number of importing firms in the EU grew steadily and reached a new record of over 1.2 million in 2020, said the report.

    The economies of the EU and China have become deeply and increasingly intertwined. Two-way trade between the two sides has been steadily growing despite the challenges posed by the COVID-19 pandemic.

    In a recent statement, Josep Borrell, EU high representative for foreign affairs and security policy, highlighted the substantial economic ties between the EU and China.

    China accounts for 20 percent of the EU's imports and receives 9 percent of the EU's exports. The volume of bilateral trade exceeds 2.3 billion euros ($2.5 billion) per day, he said.

    Europe cannot ignore China's role as a key trading partner and "we cannot just turn our back on China and try to ignore it," Reuters quoted Spain's Economy Minister Nadia Calvino as saying.

    Bucking the trend

    By "de-risking," the EU is mulling over a mechanism of more screening, trade instruments and new defensive tools, which may lead to interference with the market mechanism or even a deviation from market economy rules. It gives rise to concerns that globalization and the market economy could be further undermined.

    While some policymakers in the EU peddle risks from China, European companies and investors are seeing the country in a different light. Bilateral trade has been growing vigorously. For some EU members like Germany and France, economic ties with China are simply too tight to cut.

    In 2022, the volume of trade between Germany and China rose to a record high of 298.6 billion euros ($326.6 billion), up by more than 20 percent year-on-year, making China the most important trading partner of Germany for seven consecutive years, according to the German statistics authority.

    Martin Brudermueller, chief executive officer of the German chemical giant BASF, said it is advantageous to expand involvement in China.

    Speaking of BASF's decision to invest around 10 billion euros ($10.9 billion) in China, Brudermueller said that China is the biggest chemical market and a fast-growing one, and his company sees potential for good profitability there.

    Defying the uproar in political circles, Chinese greenfield investment in Europe has been booming. It increased by 53 percent in 2022, according to a report released by the Rhodium Group and the Mercator Institute for China Studies.

    The increase in greenfield investment was driven mainly by a few large-scale projects, almost exclusively concentrated in the automotive sector as Chinese battery giants, including CATL, Envision AESC and SVOLT, invested in the construction of battery plants in Germany, Hungary, Britain and France.

    At a time when the EU is trying to steer its economy away from fossil fuels to green energy, the expertise of Chinese companies comes in handy.

    Volker Treier, head of foreign trade at the Association of German Chambers of Industry and Commerce, sees no real alternative to China. Neither the planned transition to renewable energies nor the transition away from combustion engines would progress if there was a de-coupling from China, he said.

    Collaboration with China extends beyond the green transition and encompasses the realm of digital transformation, another key element in the EU's recovery plan.

    Chinese enterprises are making notable contributions to Europe by bringing innovation, scalability and advanced technology, providing more opportunities for mutually beneficial cooperation.

    In digital technological development and innovation, it is important for China and the EU to remain engaged and maintain long-term cooperation, said Lin Goethals, director at the European Institute for Asian Studies.

    The detriment will not be limited to the economic circle. "Scientific decoupling of China will come at a cost," said Ingrid d'Hooghe, coordinator at the Clingendael China Center, a think-tank based in the Netherlands.

    China is a scientific powerhouse and a leading player in many fields, such as biotechnology, 5G and 6G, nanomaterials and electric batteries. According to the Australian Strategic Policy Institute, China is a leader in 37 out of 44 key technologies.

    Real risks

    When talking about "de-risking," people need to identify them and figure out where they come from, Qin said when asked about the EU's "de-risking" strategy.

    Qin's opinion was echoed by Croatian political analyst Mirko Mavric, who told Xinhua that "the risk for Europe is to become an extended arm of the U.S. interests." This has always been fatal for Europe, as the Americans think first of all about themselves and their interests, he added.

    "Through the European Union, Europe needs to rethink its own policy, political and economic, regardless of the American interests," Mavric said.

    As the EU ratchets up the "de-risking" issue, its economy is faltering with a weak and fragile recovery, while the European Central Bank has been hiking interest rates in tandem with its US counterpart.

    When the US Silicon Valley Bank collapsed in March because it failed to hedge its interest rate risks, what seemed like an individual case quickly evolved into a crisis for other US banks, especially regional ones.

    As banks in the United States were scrambling to stay aloof, banks across the Atlantic felt the heat with Swiss lender Credit Suisse being taken over by UBS on March 19, a sign that the crisis in the United States was spilling over to the EU.

    Some countries have been exporting their own inflation and financial crisis, and creating severe spillover effects. "These are real risks that should be paid attention to," noted Qin.

    A recent prime example is the US Inflation Reduction Act that "erodes the multilateral system of cooperation by violating international trade rules," the Brussels-based economic think tank Bruegel wrote in a commentary.

    Shozo Maeda, secretary general of the Japan Business Council in Europe, said that EU-China relations are of great importance, not only for both regions and countries but also for the global economy, including for Japan.

    Mavric pointed out that China is a reliable partner for Europe and "it should remain so, because it is primarily in the interest of Europe itself."

    Most Viewed in 24 Hours
    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    中文字幕无码精品三级在线电影| 日韩人妻无码精品一专区| 亚洲高清无码专区视频| 久久久久亚洲AV无码专区网站| 精品无码久久久久国产| 99无码熟妇丰满人妻啪啪| 无码任你躁久久久久久| 日韩乱码人妻无码中文字幕 | 色欲狠狠躁天天躁无码中文字幕| 无码一区二区三区| 2019亚洲午夜无码天堂| 亚洲AV永久无码精品网站在线观看| 精品国精品无码自拍自在线| 人妻无码一区二区不卡无码av| 色婷婷久久综合中文久久一本| 天堂Aⅴ无码一区二区三区| 成人无码AV一区二区| 中文字幕第3页| 无码少妇一区二区| 亚洲精品无码久久久久去q| 中文字幕无码高清晰 | 亚洲欧美日韩另类中文字幕组 | 亚洲AV综合色区无码一区| 最近中文国语字幕在线播放视频 | 亚洲AV无码之日韩精品| 国产成人无码免费网站| 国产a级理论片无码老男人| 国产做无码视频在线观看浪潮| 无码人妻丰满熟妇区五十路百度| 在线播放无码后入内射少妇| 国产色无码精品视频免费| 无码精品人妻一区二区三区AV| 无码AV波多野结衣久久| 亚洲中文字幕丝袜制服一区| 中文字幕无码第1页| 久久午夜夜伦鲁鲁片免费无码影视| 天堂а√中文在线| 精品无码AV一区二区三区不卡| 无码中文人妻在线一区二区三区 | 亚洲欧美成人久久综合中文网 | 亚洲中文字幕久久精品无码APP |