China, E.U. set store by summit

By Batuk Gathani

BRUSSELS, SEPT. 4. The fourth European Union-China summit opening on Wednesday here has aroused wider expectations on both sides with mounting trade volumes and European investments in China.

Sino-European trade has now crossed $ 100 billions and the E.U. ranks among the largest foreign investors in China after the United States and Japan. E.U. officials here have also attached special importance to the ``strategic partnership'' with China particularly in terms of trade and investments. This goal on the political front with the U.S. still remains elusive for the Chinese, as the U.S. is more concerned about strengthening its relations with China's neighbours. Hence, Beijing is attaching special importance to its relations with the E.U., which is fast emerging as its real ``strategic partner'' in trade, exchange of technology and investments. The Europeans are ``less interfering'' in non-trade issues such as human rights and political developments.

Although Chinese officials make no secret of their suspicion that the Bush administration is preparing to contain China's growing influence in Asia, the Chinese feel that the Europeans may have a more sympathetic view of China's aspirations in Asia and the world at large.

Ever since China launched its economic reform process in the late seventies, major European powers led by Germany and France have consistently serenaded it and important business delegations have travelled to the communist nation.

The E.U. has begun cultivating China with fresh vigour. The E.U. is keen to develop China's services market and European officials will lay fresh emphasis on their resolve to ensure that China conforms to basic terms for entry into the World Trade Organisation. The recent E.U. policy paper on China noted that ``economic reform has changed the structure of China's economy beyond recognition. Collective, private and foreign- funded companies produce and sell well over half of China's industrial goods. While over 80 per cent of China's industrial output was subject to mandatory planning only 10 years ago, the figure is now 10 per cent.''

China's microeconomic performance since the launching of reforms ``can only be described as remarkable. The GDP growth rates reached around nine per cent during the 1980's and 12 to 13 per cent in the last three years with the industrial output and investment growing at over 20 per cent per annum for several years.''

It is noted that China's total trade rose from $ 20 billions in 1979 to $ 237 billions in 1994 and with Hong Kong added could be heading towards the $ 500-billion mark. The E.U.'s investment profile in China is modest and only represents less than half the investment of either U.S. or Japanese companies.

The Europeans are more keen than the Americans, to avoid prickly issues with China, as they aspire to have the bigger slice of China's trade and investment opportunities. Perhaps, with a cynical glee China may watch this unfolding scenario amid realisation that Western powers will play the game on Chinese terms as long as Beijing can dangle the proverbial carrots in front of them.

China's mercantile profile in the E.U. has enlarged at an impressive pace. Today, more E.U. companies are looking towards China to launch their new ventures in Asia. The interest in India appears to be ``cooling off'' after the initial enthusiasm generated by the launch of economic reforms in the early nineties. China's aggressive and behind-the-scenes mercantile diplomacy should not be confused with overt clashes

with the E.U. countries over ``routine matters'' related to issues of human rights.

China has improved its trading profile by adopting pragmatic foreign trade policies with the recent influx of foreign-funded companies that hope to sell their goods and services in the local market as well as boost Chinese exports.

China is also offering novel opportunities for foreign companies to either collaborate with state-owned companies or enter the country in partnership with Hong Kong or Singapore- based Chinese companies. This is a major attraction for large E.U. trading companies. Major Dutch, French and German trading firms are also exploring similar opportunities.

The general view in the European business circles is that the decision-making process in China is more pragmatic and faster. Indian business and industry also need to put in more effort to sell India as a trading and investment base, because in the final analysis, India has more plus points - ranging from the wide use of English to the commonality of legal, banking and mercantile institutions with their European counterparts.

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Section  : International
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