China, EU Discuss Untapped Trade Flow Potential

by Ulrika Lomas, Tax-News.com, Brussels

22 December 2010

The EU and China held the second, and final day of their third High Level Economic and Trade Dialogue on December 21, at what was the first meeting between the two parties since the entry into force of the Lisbon Treaty.

The European Commission said prior to the meetings that the meeting would in particular cover macro-economic challenges facing the global economy. Particular areas which were discussed, according to the Commission, included competition policy, trade, investment, innovation and cooperation in customs, and customs taxation.

Emphasizing the importance of the talks, the Commission reported that in 2010, China was the world’s largest exporter and the world’s second largest national economy. The country now accounts for about 11% of world trade in goods. In addition, bilateral trade with the EU has gone from EUR4bn in 1978 to EUR296bn in 2009. The EU continues to be China's primary export market; the EU, in 2009, importing goods worth EUR215bn from China.

Commenting ahead of the two-day meeting, Commission Vice-President in charge of competition policy, Joaquín Almunia, said: "The European Union and China are both global partners that have much to gain from each other. It is our interest to develop economic relations that are mutually beneficial and provide the best opportunities for our respective citizens. The EU and China must both be actors in the solution of global challenges such as current macro-economic imbalances [and] development of trade flows...”

"European businesses have vastly contributed to China’s economy over the last decade," added EU Trade Commissioner Karel De Gucht. "We want to stay in the game and be part of China’s future economic development. A constructive dialogue that looks at both the challenges and the opportunities is the way to make this happen."

The Commission noted that the meeting comes in the context of the global economy gaining a more solid foothold, and at a juncture where both the European Union and China are moving forward with bold plans for the future of their economies.

The Commission said it is important for the EU and china, two of the largest economies in the world, to discuss the economic challenges they face. Both EU and China, the Commission said, can contribute, through their policies and enhanced bilateral cooperation and within the G20, to more solid, sustainable and balanced global growth.

Currently, while European companies are reportedly 'deeply integrated in Asian production chains', the European Commission has reported that investment flows show vast untapped potential. In 2009, European companies invested EUR5.3bn in China, while China invested just EUR0.3bn, this is equal to just 3% and 1% of both sides' total investment outflow, respectively.

Recommended