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EU looks to China amid transatlantic trade uncertainties

Xinhua | Updated: 2017-02-13 10:41

As its ties with its largest trade partner the United States are becoming increasingly uncertain, the European Union (EU), relying on international trade to keep its economic recovery on track, is looking to China.

The post-Brexit EU is seemingly in a perpetual crisis, and with US President Donald Trump now in the White House, trade protectionism remains a big worry for many. It can safely be concluded that transatlantic trade deals are currently on the rocks.

Last week, EU Trade Commissioner Cecilia Malmstroem said the bloc is ready to stand with China in the fight against protectionism. "If others around the world want to use trade as a weapon," she said, "I want to use it as a tonic; a vital ingredient for prosperity and progress."

She also commended Chinese President Xi Jinping's speech at the World Economic Forum, where the Chinese leader stood up for globalization and multilateralism.

After the United States, China is the EU's second-largest trading partner and the EU is China's largest.

Amid sluggishness and gloominess of the global economy, EU-China trade has been rising steadily. According to China's General Administration of Customs, in the year of 2016, bilateral trade reached 3,610 billion RMB (524.9 billion US dollars), a 3-percent increase compared to 2015.

A Center for European Policy Studies study estimates that a bilateral free trade agreement with China could add 83 billion euros (88.3 billion dollars), to the EU's gross domestic product (GDP) by 2030 and support more than 2.5 million jobs.

Christian Ewert, director general of the Foreign Trade Association, said, "A bilateral investment treaty, which is already being negotiated, will give EU investors legal certainty and much greater access to the lucrative Chinese market and promote increased Chinese investment in Europe."

Realizing an up and running rail link connecting China to European markets by land is already in place, Charles Tannock, a British member of the European Parliament (MEP), said, "This is a modern fast equivalent to the Old Silk Road."

His optimism about future EU-China trade relations is echoed by British Foreign Secretary Boris Johnson who said, "the UK and China are building economies of the future underpinned by the rule of law that enables the business environment. I am committed to intensifying our trade relationship, including more market access for UK service exports and more Chinese investment in the UK."

Plenty of evidence also proves the thriving trade relations between the EU and China.

For example, the first business incubator being built by China in Europe, in Louvain-la-Neuve, Belgium, aims to help companies in both countries to expand in each other's markets.

This is an 'intelligence valley' where hi-tech companies can set up shop, work side-by-side with industry peers and researchers and develop their technology for the European market. Of the 1,600 jobs expected to be created, about 60 percent will go to Belgians and the rest to Chinese,providing a boost to the local economy.

The China-Belgium Technology Center (CBTC) is set to be ready in 2018.

"As the first Chinese technological showcase of its kind in Europe, the CBTC will tighten the bonds between European companies -- particularly in Belgium -- and Chinese companies," said Pascale Delcomminette, CEO of the Walloon Export and Foreign Investment Agency.

EU-China trade figures are, clearly, already impressive. But many, including Malmstroem, believe they could be even higher.

The prospects for the future EU-China relationship are perhaps best summed up by Fraser Cameron, director of the Brussels-based EU-Asia Centre.

"Both the EU and China need to counter growing protectionist trends in the US and the best way to do this would be a speedy completing on the bilateral investment agreement negotiations," said Cameron.

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