Ahead of import fair, EU calls for concrete opening steps from China

Ben Blanchard, John Ruwitch November 1, 2018

BEIJING/SHANGHAI (Reuters) – The European Union on Thursday called for China to take concrete steps to further open its market to foreign firms and provide a level playing field, saying it would not sign up to any political statement at next week’s major import fair in Shanghai.

aaaThe EU’s statement comes on the eve of a trade expo that Beijing hopes to use to signal its willingness to narrow trade deficits and assuage outside concern about its trade practices.

Critics see the China International Import Expo, or CIIE, as an ill-conceived event that is less about business and more about political posturing amid trade tensions between China and the United States.

The EU has many of the same complaints as the United States when it comes to Chinese trade practices and the treatment of foreign firms.

“For us, as one of China’s most important trading partners, success will be measured by the timely, concrete and systemic measures that China implements,” the EU said.

“These measures should go beyond tariff adjustments and aim to address the many long-standing trade and investment concerns. Our expectation is a clear-cut statement by the Chinese government which lays out details and timelines for such measures,” it added.

“As it is a country-specific initiative that focuses on imports into/opening-up the Chinese market, we would not endorse any joint political CIIE statement.”

Underscoring European concerns, a new strategy paper from Germany’s influential BDI industry federation calls on firms to reduce their dependence on the Chinese market, according to a draft seen by Reuters, in a sign of rising concern over Beijing’s state-driven economic model.

Also on Thursday, Germany and France urged Beijing to do more to address concerns about the business environment through “concrete and systematic measures”.

In a rare joint op-ed in the business magazine Caixin, the German and French ambassadors to China said European businesses should have the same opportunities in China as Chinese industries have in Europe.

French Ambassador Jean-Maurice Ripert and German Ambassador Clemens von Goetze said the expo was timely.

“French and German companies are looking forward to China demonstrating that it will not waver and will deepen its opening-up and reform policy in order to create a level playing field for foreign businesses in China,” their article said.

Western governments and businesses have long complained about discriminatory Chinese policies and market access restrictions.

“International businesses operating in China are awaiting a more holistic reform agenda to increase international investment and resolve the existing challenges,” the op-ed said. “We encourage China to address these issues through concrete and systematic measures that go beyond tariff adjustments.”

China should introduce quicker, scientifically-based procedures for agricultural products (SPS), abolish all joint venture requirements, ensure that implementation of cybersecurity legislation does not create barriers to business or discriminatory practices, and better protect intellectual property rights, it said.

But more also needs to be done, giving European companies the same opportunities in China that Chinese firms enjoy in Europe, they added.

“The Shanghai expo comes at just the right time. Forty years after their inception, China should give the reform and opening-up policies fresh impetus and create new political and economic momentum for foreign business,” they wrote.

(This version of the story has been refiled to add dropped word “to” in first paragraph)

Additional reporting by Michael Martina in Beijing; Editing by Kim Coghill & Simon Cameron-Moore

Source: Reuters “Ahead of import fair, EU calls for concrete opening steps from China”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Trump’s Missile Treaty Pullout Will Push EU Closer to China

Trump’s trade and NATO disputes with EU have already made EU quite unhappy and thus made it possible for China to form a united front with EU against the US

Now Reuters says in its report “Trump’s missile treaty pullout could escalate tension with China” on October 23 that Trump threatens to unilaterally withdraw from the Intermediate-Range Nuclear Forces Treaty between the US and Russia in order to deploy intermediate-range missiles against China. It believes that the move will make China unhappy.

As a matter of fact, it will be a stupid move. US diplomatic blunders have pushed Russia and the Philippines and been putting Japan into China’s arms. Will the US push EU into China’s arms as the treaty is concluded for Europe’s defense?

Is the US really seeking isolation?

In fact, even if the US is able to develop and deploy such missiles, where can it deploy them? South Korea? The deployment of THAAD has already caused lots of trouble to it. Japan or the Philippines? They are both seeking good relations with China. Australia? It will make Australia within the range of not only Chinese missiles but even rocket artillery.

Reuters says in the report that the withdrawal from the treaty will make China unhappy. I don’t think so. I believe China will be happy as the US is helping China to form a united front against the US with EU though China opposes it in the open. China, in fact, is laughing in its sleeves.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-usa-nuclear-china/trumps-missile-treaty-pullout-could-escalate-tension-with-china-idUSKCN1MX0E7

Chinese premier tells European, Asian leaders Beijing will continue reform

October 20, 2018

BEIJING (Reuters) – Chinese Premier Li Keqiang said at a meeting between Asian and European leaders in Brussels that China will continue to open up its economy, push forward reforms and improve its business environment, the official Xinhua News Agency reported on Saturday.

Li said Asian and European countries need to safeguard multilateralism and the rules-based free trade system, Xinhua reported.

China is in the midst of a worsening trade war with the United States, with U.S. President Donald Trump demanding sweeping changes to China’s intellectual property, industrial subsidy and trade policies.

Brussels shares Washington’s concern about China’s trade practices, but differs with the U.S. on how to force Chinese reform.

Li said that China’s economy is healthy but is facing challenges including changes to the external environment.

He said China will continue to move toward a market-oriented exchange rate, will not engage in competitive devaluation, and that the yuan can remain basically stable at a reasonable level.

The Chinese premier said he supports improvements to the rules of the World Trade Organization (WTO), but that changes must be carried out on the basis of the WTO’s existing rules and the interests of developing countries must be respected, Xinhua reported.

Reporting by Elias Glenn and Jenny Su; Editing by Sam Holmes

Source: Reuters “Chinese premier tells European, Asian leaders Beijing will continue reform”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Europe-Asia statement to avoid China subsidies criticism: draft

October 19, 2018

BRUSSELS (Reuters) – A final communique for the Europe-Asia leaders summit will not include language calling for an end to trade and market distorting measures by governments at China’s request, according to the latest draft and EU diplomats.

An earlier draft, seen by Reuters, called for an end to “trade distorting measures through the elimination of unjustifiable market distorting measures by governments,” but that phrase has been removed in the latest text.

China requested the changes at a negotiation of senior EU and Asian officials overnight, two diplomats said.

Reporting by Robin Emmott; editing by Philip Blenkinsop

Source: Reuters “Europe-Asia statement to avoid China subsidies criticism: draft”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

EU-Asia United Front to Counter US Protectionism

SCMP highlights in its report “At Brussels summit, EU embraces China and other Asian powers, in the face of Trump’s protectionism”:

●EU states are being joined at the summit by more than 20 Asian leaders, including Chinese Premier Li Keqiang, as they hammer out a joint defence of free trade
●The meeting comes amid bitter disputes with Washington over Donald Trump’s protectionist policies

It seems quite difficult for the US to strike a trade deal with EU, let alone having some toxic pill against China in the hard deal.

In my opinion, given the good relations between US President Trump and his Chinese counterpart Xi Jinping, the probability of striking a deal between the US and China is bigger, if any.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be viewed at https://www.scmp.com/news/china/diplomacy/article/2169237/brussels-summit-eu-embraces-china-and-other-asian-powers-face

EU’s Europe-Asia Links Policy Supplements China’s Belt and Road

On September 20, I reblogged Reuters’ report on EU Commission’s document on its proposed foreign policy plan to improve transport, energy and digital infrastructure links between Europe and Asia.

That is precisely what China’s Belt and Road initiative aims at. China has repeatedly stressed that the initiative is open to all and it welcomes others to join China’s efforts.

However, as always, Reuters tried to make readers believe that China’s Belt and Road is a failure or a financial trap for political control and others’ participation aims at containing China.

In the report, it first gives a description of the debt problems of a Chinese-funded highway to link Montenegro’s Adriatic coast to landlocked neighbor Serbia, stating that it “has so indebted Montenegro that the International Monetary Fund has told the country it cannot afford to finish the project.”

China’s Belt and Road is precisely an initiative to provide funds for infrastructures that the countries cannot afford without Chinese funds.

China is willing to take the risks. It will lose its investment in the highway if Montenegro cannot repay its loan. It has no means to recover the investment if such a remote country is insolvent. Remember, the country has powerful West European countries and Russia around it.

We can safely say that all China’s Belt and Road projects in poor countries are what those countries cannot afford. China wants to make those countries richer through the projects so that they will become growing markets for Chinese goods. China may not recover some of the investment in the projects but if China succeeds in making some of those countries prosperous, China will be much benefited.

EU sees that so that it plans to join China’s efforts in building the infrastructures there. EU will also be benefited if the infrastructures enable EU to expand its market there.

With the prospects of difficulties in US market due to Trump’s protectionism, it is only natural for EU to join China’s efforts for expansion of market elsewhere. EU knows well the infrastructures its has funded will benefit China too. That is not a problem as EU will also be benefited by the infrastructures built by China.

Comment by Chan Kai Yee on Reuters’ report “EU unveils Asia infrastructure plan, denies rivalry with China”, full text of which was reblogged here on September 20.

EU unveils Asia infrastructure plan, denies rivalry with China

Robin Emmott September 19, 2018

BRUSSELS (Reuters) – The European Commission proposed on Wednesday a foreign policy plan to improve transport, energy and digital infrastructure links with Asia but denied seeking to counter China’s ambitions that have raised suspicion in Western capitals.

The plan, which would be backed by additional funds from the EU’s common budget from 2021, private sector loans and development banks, amounts to a strategic response to China’s largesse in much of central Asia and south-eastern Europe, where Beijing has invested billions of dollars.

The 13-page strategy outlined by the EU executive did not specify how much the bloc would spend, but the Commission is relying on a proposed 60 billion euro ($70 billion) fund that would act as an insurance for investors if projects fail.

That fund could raise more than 300 billion euros between 2021 and 2027 by attracting investors into projects by offering a guarantee to cover the costs if a project fails.

Although not all money would be spent in Asia, the Commission’s strategy, once agreed by EU governments, would make spending on infrastructure links with Asia official EU policy.

EU foreign ministers are expected to approve it at a meeting on Oct. 15, three days before an summit between European and Asian leaders in Brussels.

Since 2013, China has launched construction projects across more than 60 countries, known as the Belt and Road Initiative, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

EU foreign policy chief Federica Mogherini said the Commission’s proposal was not linked to any Chinese policies.

The Asian Development Bank estimates Asia requires more than 1.3 trillion euros a year in infrastructure investment, not all of which can be met by China, the Commission said.

“Our proposals, our policies and our calendar are not determined elsewhere,” Mogherini told a news conference when asked if the plan was a challenge to Beijing. “It is not a reaction … to another initiative … be it in Beijing, Washington, Moscow or Timbuktu.”

However, EU officials said they are concerned about what they see is a Chinese investment model which lends to countries for projects they may not need, or be able to afford, making them reliant on Chinese help once under way.

A Chinese-funded highway to link Montenegro’s Adriatic coast to landlocked neighbor Serbia has so indebted Montenegro that the International Monetary Fund has told the country it cannot afford to finish the project.

Jan Weidenfeld, an expert on Europe-China relations at the Mercator Institute for Chinese Studies (MERICS) in Berlin, said the EU plan was “very much a response to Belt and Road.”

“The main message is that when you’re creating large-scale infrastructure projects, you need to abide by certain norms or standards, whether they be environmental or financial. The EU sees a window of opportunity to steer Chinese policies here,” Weidenfeld said.

($1 = 0.8566 euros)

Additional reporting by Noah Barkin in Berlin; Editing by Robin Pomeroy

Source: Reuters “EU unveils Asia infrastructure plan, denies rivalry with China”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.