Abstract In the bilateral relationship between China and the EU, trade is at the core. The bilateral trade volume between China and Europe reached 546 billion U.S. dollars. On this basis, the world’s two largest economies have formed a broader strategic partnership, and the growing business ties have brought enormous...
In the bilateral relationship between China and the EU, trade is at the core. The bilateral trade volume between China and Europe reached 546 billion U.S. dollars. On this basis, the world’s two largest economies have formed a broader strategic partnership, and the growing business ties have brought enormous benefits to both parties. However, in the past year or so, Sino-European trade has been declining. In 2012, trade volume shrank by 3.7%, and in the first quarter of this year, it fell by 1.9%. This situation is very worrying. The main reason for the decrease in trade volume is the sluggish economy in Europe, resulting in weak demand and declining competitiveness. But EU protectionist measures against China have also had a detrimental effect on trade.
This month, the European Commission informed member states of a proposal to impose a temporary anti-dumping duty on photovoltaic products imported from China (the core components of solar panels), with an average tax rate of 47%. A week later, on May 15, the European Commission said it was preparing to conduct anti-dumping and countervailing investigations on mobile communication equipment imported from China.
In addition, the European Commission also rejected the idea that Chinese exporters should enjoy market economy treatment. In the collection of allegations of dumping allegations, the European Commission has chosen to compare the price of Chinese companies selling PV products in Europe with their sales prices in India, while the price in India is significantly higher than the price in the Chinese domestic market. .
The Commission’s approach undermines its image as a free trade advocate and stimulates the rise of protectionism, contrary to the commitment of the G20 leaders to adopt protectionist measures.
The EU’s repeated attempts to provoke trade frictions with China are shocking and confusing. Europe has not yet emerged from the debt crisis, and many regions are still in deep recession. In this case, any EU protectionist measures against China will only be counterproductive, because doing so will not help solve the dilemma faced by European industry, nor will it curb the decline in the competitiveness of European products.
In fact, the EU may eventually only hurt itself because these measures may cause its economy to lose its vitality and weaken the confidence of Chinese companies in their business relations in Europe.
Pascal Lamy, Director-General of the World Trade Organization (WTO), recently pointed out that among the country's exports, the portion made of imported materials accounts for about 40%. Therefore, protectionist measures are not protective. A large part of the import and export commodities between China and the EU are in the same value chain. Limiting China's exports to Europe will hurt the interests of European consumers and related industries.
In fact, many entrepreneurs and experts in Europe have publicly opposed the EU's practice of provoking trade frictions. Recently, more than 1,500 companies engaged in the import and assembly of photovoltaic products sent a letter to EU Trade Commissioner Karel De Gucht, who opposed the protection of a small number of manufacturers at the expense of most manufacturers. Some studies in Europe warn that restricting Chinese PV products will cause tens of thousands of people to lose their jobs and may trigger a trade war.
Recently, a number of senior officials from EU member states expressed their support for the political settlement of disputes over photovoltaic products. They believe that by supporting the expansion of the industry, providing consumers with more competitive products, and promoting market demand for photovoltaic products, the EU may be able to find long-term solutions to some of its economic problems. I think their proposal is sensible and reasonable.
The EU economy is still in a downturn, facing considerable downside pressure and many uncertainties. Creating an open trading environment and unleashing positive signals will be much more beneficial for enhancing confidence in cooperation and promoting the EU's economic recovery.
As an important partner, China and the EU share a common responsibility in promoting bilateral trade development. China does not want to see any damage to bilateral trade relations. It also hopes that the EU can take a wise stance and fulfill its commitment to resolve disputes through dialogue and consultation, which will ultimately benefit both sides.
Compiled from Financial Times
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