EU-China economical and political relations
Ma liang-liang
Student ID: S06131
Research paper Supervisor: Dr. Sekou Conde
Minzhu University of China
2006-2007 Academic Year
Throughout much of the 1980s and 1990s, the EU's focus was on building a single market and a single currency. In the first decade of the 21st century, the emphasis has switched to making the EU a more effective international actor.
This paper is mainly about EU’s relationship with China. Three parts are included, such as: Long—standing partnership between EU and China??/span>Trade and economic relations??/span>Strengthening bilateral co-operation.
1??/span>Long—standing partnership between EU and China
China is the single most important challenge for EU economy policy. EU-China trade has increased dramatically in the past few years, doubling between 2000 and 2005. Europe is China's largest export market; China is Europe's largest source of imports. It is part of the broader partnership with China and the approach set out by the Commission in its Communication on relations with China: "Closer Partners, Growing Responsibilities".
EU-China Trade Statistics (Source: EUROSTAT)
2000
2001
2002
2003
2004
2005
EU25 Merchandise Trade with China
(millions of euros)
Imports
74.369
81.620
89.610
105.389
127.444
158.098
Exports
25.758
30.554
34.869
41.170
48.189
51.796
Balance
-48.611
-51.066
-54.741
-64.219
-79.255
-106.302
(From website: http://ec.europa.eu/external_relations/china/intro/index.htm)
The EU's open market has been a large contributor to China’s export-led growth. The EU has also benefited from the growth of the Chinese market: EU exports to China have more than doubled in the past five years. Competitively priced Chinese products have helped keep inflation and interest rates in Europe lower. European companies have gained from their investments in China. But competition from China has raised serious challenges for Europe in some important manufacturing sectors.
If we strike the right balance, there is ample scope for a continued mutually beneficial trade partnership between Europe and China. Political leaders on both sides should continue to argue for open economic engagement.
Europe should continue to offer open and fair access to China's exports and to adjust to the competitive challenge, while pursuing policies to support those bearing the burden of economic adjustment at home. China itself should pay back by strengthening its commitment to economic openness and market reform. It should strengthen legal protection for foreign companies and the enforcement of this protection and reject anticompetitive trading practices and policies.
2??/span>Trade and economic relations
China's integration into the global trading system has benefited both Europe and China. The EU is China’s largest trading partner, representing more than 19% of China’s external trade. European companies trading with and investing in China have contributed to China’s growth, bringing capital goods, knowledge and technology that have been instrumental to China's development.
An economically strong China is in Europe’s interest. China, especially its rapidly increasing middle class, is a growing market for EU exports. European companies and consumers benefit from competitively priced Chinese inputs and consumer goods. Openness brings benefits to both China and the EU.
Nevertheless, in Europe there is a growing perception that China’s as yet incomplete implementation of WTO obligations and new barriers to market access are preventing a genuinely reciprocal trading relationship. Imports from China have added to pressure to adjust to globalisation in Europe. This trend is likely to continue as China moves up the value chain.
For the relationship to be politically and economically sustainable in the long term, EU needs to develop and consolidate areas of comparative advantage in high-value and high-tech design and production and to help workers retrain. China for its part should strengthen its commitment to open markets and fair competition. Both sides should address concern over the impact of economic growth on natural resources and the environment.
The EU will:
Insist on openness. The EU will continue working with China towards the full implementation of its WTO obligations and. will urge China to move beyond its WTO commitments in further opening its market to create opportunities for EU companies. The EU will accept that it cannot demand openness from China from behind barriers of its own. The EU will urge China to honor its commitment to open accession negotiations on the Government Procurement Agreement in 2008 and work to bring them to a successful conclusion as rapidly as possible.
Level the playing field. Better protection of intellectual property rights in China and ending forced technology transfers are EU priorities, including through implementation by China of WTO obligations and will help create a better investment climate in China. The EU will press China to stop granting prohibited subsidies and reform its banking system, and encourage China to allow market forces to operate in its trade in raw materials.
Support European companies. Major effort must be done to assist companies doing business with China, in particular small and medium sized enterprises while urging them to respect decent work standards. The EU will extend and strengthen the existing information, training and advice on protecting and defending IPR in China. A European Centre in Beijing should be opened. The EU-China Managers Exchange and Training Program should be extended.
Defend the EU's interests: The EU has a clear preference for resolving trade irritants with China through dialogue and negotiation. The existing EU-China trade related dialogues should be strengthened at all levels, their focus should be sharpened on facilitating trade and improving market access and their scope extended. The EU and China also have an interest in joining their efforts in international rule making and global standard setting bodies. The EU will actively pursue global supervisory and regulatory solutions, promoting open markets and regulatory convergence, and build on co-operation with China through EU-China regulatory dialogues. This will also help to ensure compliance of Chinese imports with EU standards for food and non-food products.
But where other efforts have failed, The WTO dispute settlement system will be used to ensure compliance with multilaterally agreed rules and obligations. Trade defence measures will remain an instrument to ensure fair conditions of trade.
Build a stronger relationship. A key objective of the negotiations for a new Partnership and Cooperation Agreement, which will also update the 1985 Trade and Co-operation Agreement, will be better access to the Chinese market for European exporters and investors, going beyond WTO commitments, better protection of intellectual property and mutual recognition of geographical indications. China is already a major beneficiary of the international trading system and should assume a responsibility commensurate with those benefits, making a substantial contribution to reviving and completing the WTO Doha Round. Many of these steps are not only in EU’s interest. They are strongly in China's interest and an integral part of China's progress towards balanced and sustainable growth and development and global leadership and responsibility.
3??/span>Strengthening bilateral co-operation
Bilateral co-operation spans a wide range of issues, including 7 formal Agreements, 22 sectoral dialogues, covering diverse and important issues from aviation and maritime transport to regional and macro-economic policy. Further development of the structured dialogue to exchange experiences and views on competition matters, as well as technical and capacity-building assistance as regards competition enforcement, remains important. Cooperation has been successful and positive. But more must be done to focus co-operation and ensure balance and mutual benefit, in all areas, but particularly on flagship areas such as science and technology co-operation. More should be done to strengthen co-operation on migration issues, people-to-people links, and the structures governing our official relations.
Both sides should:
Ensure quality and increased co-operation in science and technology. Science and technology co-operation is a priority area for the Chinese government. China spends 1.5% of its GDP on a dynamic and growing research and development program. Bilateral cooperation is also strong: China is one of the most important third countries participating in more EU research projects under the 6th Research Framework Program, giving it access to 600 million euros of research, and China is an important partner on key projects such as ITER (International Thermonuclear Experimental Reactor) and Galileo. EU participation in Chinese programs should be increased.
The Joint Declaration from the Science and Technology Forum in May 2005 set the context for taking co-operation forward, based on mutual benefit and reciprocal access and participation. Both sides should:
• consolidate and improve the visibility of co-operation. This will allow both sides to focus and set priorities effectively and to respond to dynamic issues such as emerging pandemics or work on clean energy technologies; make it easier to examine scope for increased reciprocity; and provide a basis for more effective co-ordination with Member States;
• improve joint planning to ensure mutual benefit, and increase flexibility to fund the participation of European researchers in Chinese research programs. Both sides should facilitate researchers’ mobility which in the case of the EU is promoted through specific grants under the Framework Program.
Build an effective migration relationship. Chinese and other migrants enrich the EU culturally and bring with them important skills and expertise. But there is a significant downside if the process is not managed effectively. There has to be an effective legal framework to facilitate people-to-people exchanges. But we need effective mechanisms to deal with those who abuse the system, with a focus on prevention and return. Both sides should work towards the early conclusion of an effective Readmission Agreement.
• The existing consultation mechanism should continue and be extended to cover both legal and illegal migration, and with renewed political commitment to make progress;
• Both [...]
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