EU-China relations under investigation?

Kai-Uwe Kühn, Director and Chief Economist of DG "Competition" of the European Commission, Agnete Gersing, Director General of the Danish Competition and Consumer Authority, and Ren Zhengfei, CEO of the Huawei Technologies (from left to right) (EC Audiovisual Services).

Kai-Uwe Kühn, Director and Chief Economist of DG “Competition” of the European Commission, Agnete Gersing, Director General of the Danish Competition and Consumer Authority, and Ren Zhengfei, CEO of the Huawei Technologies (from left to right) (EC Audiovisual Services).

Out of the last ten ongoing European Union’s Trade Defence Investigations, pending a decision by the European Commission or the Council of the European Union, six of them have as a target products originating from the Peoples’ Republic of China imported in the EU. Most important of them are the Stainless steel fittings, the Solar panels (Crystalline silicon photovoltaic modules and key components) and Peroxosulphates (persulphates).

Apart from that the European Commission has announced an investigation on alleged state subsidies, against two Chinese telecommunication equipment producers, Huawei and ZTE, for possibly having a competition advantage while operating in the EU (investments and sale of products).

The latest wave of ant-dumbing measures and threats of measures against Chinese products and companies, have prompted the reaction of Beijing. Last week imports into China of the widely used solvents ethylene glycol monobutyl and diethylene glycol monobutyl ethers, produced by a number of European and American firms were penalised with anti-dumping duties ranging from 9.3% to 18.8%. The levies are imposed as from 1 February.

Brussels meeting

According to Brussels sources representatives of the Chinese Ministry of Commerce and their EU counterparts had a meeting in Brussels on Friday, 1 February, to discuss those issues. No official announcements were made afterwards, seemingly because there wasn’t anything close to an agreement to be officially published. The same sources say that of all those cases, plaguing the Chinese-EU trade relations, Huawei and ZTE are the more important.

Of the two companies Huawei is the largest by far. The European Sting has being following this issue for quite some time. Two weeks ago the Sting wrote: “Incidentally, this Chinese mobile telephony equipment and services provider (Huawei) is so deeply implicated in the entire European telecommunications market, cooperating with the largest device providers and network operators to such an extent, that seems impossible for the European Union, to follow the Americans in molesting it. Only recently Clearwire confirmed to the daily newsletter ‘FierceWireless’, that Huawei is one of two firms which are chosen to build its planned TD-LTE network.

A British market analyst went as far as to say that, “UK’s digital future, as well as economic wellbeing are at stake, depending on whether the government deems telecoms giant Huawei Technologies, a cybersecurity threat and blacklists the company, following an investigation”.

The Chinese company is also a linchpin in France’s digital markets. Huawei and France Telecom’s Orange have signed an agreement, to develop jointly smartphones, mobile broadband devices and tablets. The deal covers more projects and aims to merge Orange technology and marketing abilities, with Huawei’s excellent device development and integration qualities”.

Huawei

Huawei has been investing in the European market for a long time now, despite the impediments that Chines firms usually encounter, when they want to build a presence in the EU. Incidentally the European Union Chamber of Commerce in China published recently a study on the problems that Chinese companies encounter, when they want to invest in the European Union. The Chamber is an independent voice of European business in China, seeking greater market access and improved operating conditions for European companies in China. However the study had as its main object the inverse, that is Chines companies wanting to operate in the EU.

It was entitled: “Chinese Outbound Investment in the European Union”. According to the Chamber, “Chinese companies operating in the EU report that they plan to increase their investments and further engage in Mergers & Acquisitions activities to serve the European market and improve competitiveness. Chinese investors view Europe as a safe, stable destination. However, the European operating environment is not regarded as easy to navigate”.

The basic findings of this research work are the following:

•    The biggest obstacles reported relate to obtaining visas and work permits for Chinese employees, dealing with European labour laws, HR costs and cultural differences in management style.

•    78% of respondents report encountering operational difficulties in the EU, mostly related to bureaucracy and high costs.

•    97% of respondents indicate that they will make additional investments in the EU, with the majority planning increases over their current investments.

•    85% of respondents are in Europe with the intent to sell their goods and services in the EU market.

This paper compiled input from over 74 Chinese companies operating in Europe, and was produced in partnership with Roland Berger Strategy Consultants and KPMG, both members of the Chamber.

In view of all that one could have expected that the European authorities would have longed to facilitate the Chinese investments in the EU, mainly for two reasons. First, because all those Chinese projects in the EU tend to concentrate in the technology sector, mainly ICT, where Europe needs urgently to build a stronger world presence. Secondly because the prospect of more direct foreign investments in the EU will obviously help create more jobs the EU needs badly.

There is no doubt that the EU-Chinese economic relations are not only multifaceted, but play a vital growth role in both economic entities. Apart the huge bilateral commerce between the two sides, that sets every year a new world record, the two entities have supported for a long time large direct investment flows, going both ways to the tune of tens of billions.

Obviously in such a dynamic environment like the EU-China economic universe, there might be some points of friction. However existing mutual grievances do not account for more than 2% of the total economic relations. Consequently the two sides appear determined not to disturb those huge wealth building exchanges. Unfortunately some major English language media try to inflate the EU-China differences and make them look like threats to the entire Euro-Chinese economic construction.

It is more than evident the two sides will definitely continue to “play the game”, with rules they have both accepted and will not jeopardise such a crucial edifice.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Mozambique pledging conference hopes to soften devastating blow of back-to-back cyclones

This billion-dollar campaign wants to protect 30% of the planet by 2030

ILO welcomes new UNDP report that places decent work at the heart of sustainable development

UN rights chief calls for release of hundreds abducted and abused in South Sudan

The future of manufacturing is smart, secure and stable

European Globalisation Adjustment Fund, who gets it and who pays the bill?

4 innovative renewable energy projects powering Europe’s green future

The Europeans with a job diminish dangerously

Civil protection: Parliament strengthens EU disaster response capability

Drinking water: new plans to improve tap water quality and cut plastic litter

Global health challenges require global medical students

Brexit negotiations: back to square one, tougher words, no good faith

After this year’s Climate Action Summit, what happens next?

Parlamentarians to “break up” with reality in the Google antitrust case

3 ways governments and carmakers can keep up with the future of transport

10 things Europe does better than the rest of the world

“If they think they can slave an entire nation, then they will just have the opposite results!”, Alexis Tsipras cries out from the Greek parliament

How can we measure real progress on the Sustainable Development Goals?

Cambodia: Giving back to UN peacekeeping

UN chief condemns terror attack in Kismayo, Somalia

How public private partnerships must evolve to create social impact

Summer 2018 Interim Economic Forecast: Resilient Growth amid increased uncertainty

5 amazing people fighting to save the oceans

Chinese economy to raise speed and help the world grow

Somalia: UN congratulates Puntland region’s newly-elected President

We are close yet so far…

EU Youth Goals – we are shapers not listeners

The Commission unsuccessfully pretends to want curbing of tax evasion

FROM THE FIELD: Stopping aquatic hitchhikers to safeguard environments at sea

New roadmap toward healthier and cleaner oceans adopted by UN Environment and European Commission

5 facts to know about Africa’s powerhouse – Nigeria

Global Citizen-Volunteer Internships

European Defence Fund on track with €525 million for Eurodrone and other joint research and industrial projects

The relation of deforestation and respiratory diseases

Here’s how data can shine a light on financial crime

Why South Africa is on a path of economic renewal

Eurozone has practically entered a deflation trap

EU budget 2019 approved: focus on the young, innovation and migration

Yemen war: The battle rages on, children suffer most

Despite progress towards peace, Afghanistan facing ‘daunting challenges’ ahead of presidential vote

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

G7 summit: Trump Vs. G6 leaders on trade and climate change

Who will secure Lithuania?

Act now to end violence, Zeid urges Nicaraguan authorities

China is the first non-EU country to invest in Europe’s €315 billion Plan

Intel @ European Business Summit 2014: Better decisions now, the new business dashboard 

New forms of work: deal on measures boosting workers’ rights

Maros Sefcovic Canete European Commission Energy

Better late than never? Commission runs now to fight energy dependency on Russia with the sustainable energy security package

Warmongers ready to chew what is left of social protection spending

How can consumers be effectively protected from insurance sellers?

China and UK relations post Brexit as EU addresses Chinese takeovers

Manipulating privacy and reaping the benefits of technology

South Sudan ‘revitalized’ peace deal must be inclusive, Security Council hears

Conditions deteriorating alarmingly in Yemen, warns senior UN official

Malta: MEPs conclude fact-finding visit to assess Caruana Galizia murder inquiry

Investing in rural women and girls, ‘essential’ for everyone’s future: UN chief

At last Britain considers a super-soft Brexit

Long live Eurozone’s bank supervisor down with the EU budget supremo

Human health – litmus paper for the climate change?

MWC19 Wrap Up, in association with The European Sting, GSMA’s Brussels Media Partner for the 6th Consecutive Year

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s