EU-China: a stable global economy is a shared responsibility

Executive Vice President Valdis Dombrovskis and Vice Prime Minister Liu He chaired the 9th EU-China High Level Economic and Trade Dialogue today. Commissioner Mairead McGuinness also took part in the discussions, notably on financial services. HED focused on global economic challenges, supply chain disruptions caused by COVID-19 and the impact of Russia’s invasion of Ukraine, including on food, energy and financial markets . The parties also discussed bilateral trade and investment concerns and intensifying cooperation in financial services. The EU and China have agreed to hold the next HED in 2023.

Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said: “The EU and China are key trading partners. With the importance of our economies comes the responsibility to shape common responses to global economic and trade challenges, such as supply chain disruptions, global food insecurity, debt relief for the most vulnerable and the reform of the World Trade Organization. I underlined that Russia’s war of aggression against Ukraine creates enormous challenges for global security and economy. I also stressed the need for continued engagement to build more balanced and reciprocal trade and investment relations between the EU and China.”

Commissioner for Financial Services, Financial Stability and Capital Markets Union, Mairead McGuinness, said: “EU-China bilateral cooperation in the financial sector is of mutual interest. I want to continue cooperation on financial regulation, including on green finance, which is crucial for both economies to support efforts to achieve our climate goals. I am glad that today we were able to discuss concrete solutions to facilitate the operations of European financial institutions in China.

Main topics and results

The EU and China discussed a number of topics and proposals, including:

Concerns about the global economic outlook. In particular, the EU stressed the importance for the EU and China to work together to help overcome the challenges caused by Russia’s aggression against Ukraine. The EU has taken note of China’s willingness to work together to ensure the stability of world markets and to combat global food insecurity, in particular through the export of fertilizers.

The EU has also put forward proposals to intensify work on debt relief for low-income countries, both bilaterally and in the G20 framework.

The EU and China welcomed the positive outcome of the 12th Ministerial Conference of the World Trade Organization (WTO). In this context, the EU and China have agreed to work together on the reform of the WTO. The EU also underlined the need to tackle global distortions, such as in the area of ​​industrial subsidies and overcapacity.

The EU and China agreed on the need to prevent supply chain disruptions and discussed increased transparency and exchange of information on the sourcing of certain critical raw materials and others products.

Exchanges on financial services were constructive. This included a commitment from China to ensure that its future domestic regulations do not restrict the ability of European leasing companies to provide services throughout its territory. Both sides welcomed the signing of the Memorandum of Understanding between the People’s Bank of China and the European Securities and Markets Authority which guarantees access to the Shanghai Clearing House for European banks. The EU welcomes China’s willingness to assess its carbon reduction assistance tool, with a view to possible participation of EU banks.

The EU raised concerns about the business environment, including the lack of a level playing field and the growing politicization of China’s business environment. This is leading EU companies to reconsider their existing operations and planned investments in the country.

The EU reiterated that economic coercion measures – including against Lithuania – are unacceptable.

Managing the COVID-19 pandemic is a shared priority and both the EU and China have worked hard to protect lives. The EU offered further cooperation and exchanges, and encouraged China to review its “circuit breaker” policy, which hampers air services between the EU and China.

Both parties welcomed the increased cooperation on animal health and the EU suggested continuing discussions with a view to concluding a bilateral agreement on the regionalization of certain animal diseases.

Background

The EU-China Summit on 1 April 2022 decided that the EU-China High Level Economic and Trade Dialogue will take place before the summer break.

The EU and China are major trading partners: in 2021, China was the EU’s third largest merchandise export partner (10.2%) and the EU’s largest merchandise import partner ( 22.4%).

EU imports from China amounted to €363 billion in 2019 and €472 billion in 2021. EU exports to China amounted to €198 billion in 2019 and to 223 billion euros in 2021. This represents approximately 1.3 billion euros per day of imports and 600 million euros. per day of exports, or 1.9 billion euros of daily trade between the EU and China.
Source: European Commission