The 9th China-EU High-Level Economic and Trade Dialogue (HED) 

co-chaired by China's Vice-Premier Liu He and Executive Vice-President of the European Commission Valdis Dombrovskis.  Source: Xinhua

Editor's Note: Welcome to the CCCEU Weekly Update. In this edition, we examined the nine high-level economic and trade dialogues held over the last 14 years and discovered some intriguing findings. Enjoy reading and have a lovely weekend!   

This week saw the successful conclusion of the long-awaited 9th China-EU High Level Economic and Trade Dialogue (HED), which covered a wide range of topics and produced a number of outcomes and consensus. Since its inception in 2008, the HED has witnessed the continuous deepening of China-EU economic and trade relations, as well as the ongoing changes in areas of cooperation in response to changing times and developments. The following is a summary of the last nine HEDS, listed in reverse chronological order.

9th HED

Date: 19 July 2022

Place: Video conference

Topics: Macroeconomics, industrial chain supply chain, trade and investment, and financial cooperation.

Outcomes: The two sides agreed greater cooperation on global food and energy security; smooth flow of trade routes including China-Europe freight trains; to speed up their agreement on new energy vehicles;  joint work under WTO;  bolster better business environment for both enterprises; to publish second list of GIs; enhance green finance cooperation.

8th HED

Date: 28 July 2020

Place: Video conference

Background: Covid-19; 45th anniversary of China-EU diplomatic ties

Topics: Joint fight against Covid-19; global economic governance, industrial supply chain security, China-EU investment agreement negotiations, WTO reform, expanding market opening, digital economy, connectivity, and financial and tax cooperation. 

7th HED

Time: 25 June 2018

Place: Beijing 

Background: The China-EU Comprehensive Strategic Partnership celebrates its 15th anniversary; the Trump administration raised tariffs.

Topics: Global economic governance,  multilateral trading system, promoting trade and investment liberalisation and facilitation, digital economy, e-commerce, circular economy, white pollution prevention and control, climate change, agriculture, and the financial sector.

6th HED

Time: 18 October 2016

Place: Brussels

Topics: Macroeconomic policy coordination, synergies between the Belt and Road Initiative and the EU's investment plan, connectivity platform, GI and China-EU investment agreement negotiations, digital economy, third-party market cooperation, and intellectual property. 

5th HED

Time: 28 September 2015

Place: Beijing

Background: 40th anniversary of China-EU diplomatic relations; Chinese investment in the EU soared.

Topics: the Belt and Road Initiative, international production capacity cooperation, talks on their investment agreement, joint investment fund, China-EU connectivity platform and 5G.

4th HED

Date: 24 October 2013

Place: Brussels

Background: Ten years after China and the European Commission established a comprehensive strategic partnership, the European Commission was given the mandate to begin negotiations with China on an investment agreement.

Topics: Trade cooperation in high technology; China raised issues such as visas and work permits for Chinese businesses; The two sides agreed to expand cooperation in areas such as urbanisation, innovation, customs, civil aviation, quality inspection, energy conservation, environmental protection and intellectual property rights.

3rd HED

Time: 21 December 2010

Place: Beijing

Background: EU has been China's top trading partner for six consecutive years; the EU's sovereign debt crisis.

Topics: aerospace, competition, high technology, new materials, energy conservation and environmental protection, macroeconomic situation, trade and investment, innovation and customs cooperation.

2ND HED

Date: 7 May 2009

Place: Brussels

Topics: Trade and investment, SME cooperation, sustainable development, customs cooperation, trade and consumer protection, trade and innovation, and transport.

1ST HED

Time: 25 April 2008

Place: Beijing

Background: The EU is China's largest trading partner, and China is the EU's second largest trading partner; the 2008 Beijing Summer Olympics.

Topics: Energy, sustainable development, innovation and technology, consumer protection, product safety, intellectual property rights and trade facilitation.

The nine dialogues contain several intriguing points.

To begin with, the nine editions of China-EU high level talks have always been confronted with intricate changes in the international situation from one crisis to the next, from the global financial crisis and the European sovereign debt crisis in 2008 and 2009 to the tariff war waged by the Trump administration back in 2018, as well as the Covid-19 and the Russia-Ukraine conflict. 

And, in times of crisis, China and Europe, as multilateralist defenders, always seem to find a common path when the global economy and external environment face challenges.

These nine economic and trade dialogues have coincided with a number of key moments in China-EU relations, such as the anniversaries of their diplomatic relations and comprehensive strategic partnership, as well as difficulties, such as the EU's new strategic approach toward China in 2019 and the "freezing" of the 2021 China-EU investment agreement.

Both China and the EU are among the world's top three economies, and their dialogue and cooperation are of incalculable importance beyond the bilateral context and for the stability and development of the global economy in the midst of numerous crises. Or, to borrow the EU's viewpoint on the 9th HED, a stable global economy is the EU and China's "shared responsibility."

Second, nine dialogues have seen the "rise and fall" of trade partnership rankings. For the majority of the 14 years until 2020, the EU was China's top trading partner, until ASEAN made a push to overtake the EU on the occasion of the 10th anniversary of the China-ASEAN Free Trade Agreement, and has remained China's top trading partner ever since.

China has historically surpassed the United States to become the EU's top trading partner in 2020. Despite a number of factors, China-EU trade increased in the first half of this year. The average daily trade volume between China and the EU currently exceeds 2 billion euros, with economic and trade relations acting as "ballast" for bilateral relations.

Third, with the new industrial landscape and major China-EU policies, the areas of China-EU economic and trade cooperation have been continuously updated and developed. For instance, the two sides forged synergies between the BRI and Juncker's Plan; they continued to work in areas such as customs, energy, environment, connectivity, intellectual property, finance and taxation, government procurement, green growth, and supply chains.

Over the last 14 years, the nine dialogues have also seen the completion and implementation of major agreements, such as the GI agreement. The two sides also reached important agreements on macroeconomics, multilateralism, and financial cooperation during the most recent HED. The dialogue mechanism has evolved into a high-level platform for more robust Sino-European economic and trade cooperation.

Fourth, what is important for Chinese and European businesses is that HED has become an important vehicle for improving the business environment. For example, the Chinese side mentioned in 2013 the need to resolve practical issues such as visas and work permits for Chinese firms investing in Europe and this year, Beijing raised concerns on the International Procurement Instrument, the Foreign Subsidies Regulation, and the Carbon Border Adjustment Mechanism.

Beijing, on the other hand, has stated that it is willing to consider the requests of European companies, such as the inclusion of major EU financial institutions in the scope of support for the carbon emission reduction support instrument, the single application by EU insurance companies to open more than one branch, and the approval of cross-provincial operation of financial leasing companies in China.

This indicates that the "pain points" experienced by businesses are anticipated to be addressed at this high-level dialogue mechanism, which is a crucial avenue for both parties to have a better business environment.

EU starts accession negotiations with Albania, North Macedonia

According to Chinadaily, Brussels on Tuesday opened accession talks with western Balkan countries Albania and North Macedonia after two years of stalemate.

North Macedonia has been a candidate member of the EU for almost 18 years, and Albania for eight years.

Both countries have been awaiting their first intergovernmental conference with the EU since March 2020, as Bulgaria blocked the process.

Eurostat: Eurozone annual inflation rate hit 8.6% in June 

The euro area annual inflation rate was 8.6% in June 2022, up from 8.1% in May. A year earlier, the rate was 1.9%. European Union annual inflation was 9.6% in June 2022, up from 8.8% in May. A year earlier, the rate was 2.2%. These figures are published by Eurostat, the statistical office of the European Union.

ECB goes big with 50 basis-point hike, ending negative rates era

According to Reuters, the ECB raised its benchmark deposit rate by 50 basis points to zero percent, breaking its own guidance for a 25 basis point move as it joined global peers in jacking up borrowing costs. It was the ECB's first rate increase in 11 years.

EU Council approved the 7th package of sanctions against Russia

The Council of the EU approved the seventh package of sanctions against Russia. This was announced by the head of the European Commission, Ursula von der Leyen.

This package included a partial ban on the import of Russian gold and the freezing of Sberbankʼs assets.

The sanctions will enter into force after publication in the Official Journal of the EU.

EU Proposes Member States Reduce Natural Gas Use by 15%

According to Le Monde, the European Union on Wednesday proposed that member states cut their gas use by 15% over the coming months to ensure that a Russian cut-off of natural gas supplies to the bloc will not fundamentally disrupt industry next winter.

While the initial cuts would be voluntary, the European Commission also asked for the power to impose mandatory reductions across the bloc in the event of an EU-wide alert – "when there is a substantial risk of a severe gas shortage or an exceptionally high demand for gas occurs, which results in a significant deterioration of the gas supply situation."

Beijing opposes EP vice president's visit to Taiwan

Chinese Foreign Ministry spokesman Zhao Lijian told a regular press briefing that China "firmly opposes all forms of official interactions between the EU side and the Taiwan region."

He made the remarks when asked to respond to a question about European Parliament Vice President Nicola Beer's visit to Taiwan this week.

Zhao said: "Over the past two years, the European Parliament has promulgated multiple Taiwan-related resolutions to support and embolden 'Taiwan independence' forces. Such moves have gravely violated the one-China principle and poisoned the atmosphere of China-Europe relations. China firmly opposes all forms of official interactions between the EU side and the Taiwan region. We urge the EU side to earnestly abide by the one-China principle, speak and act with prudence on issues related to Taiwan, and prevent any serious disruption in China-Europe relations."

What are experts talking about?

ECB Opens Interest Rate Hike by Sun Yanhong, published by the Institute of European Studies of Chinese Academy of Social Sciences. On July 21, the European Central Bank announced a 50 basis-point hike, effective as of the 27th of this month. After years of ultra-loose monetary policy, this is the first time in 11 years that the ECB has raised interest rates and is 25 basis points higher than expected. The article points out that recently, the euro exchange rate against the dollar once fell below parity, the European economy downward pressure increased, monetary policy adjustment and economic prospects are of great concern.

The green transition is a strategic transition by Dr Werner Hoyer, published by Friends of Europe. The article mentions that European governments are busy securing gas supplies to avoid catastrophic economic and social consequences before next winter. However, the medium and longer-term solutions lie elsewhere, away from fossil fuels. The article highlights that reducing Europe's consumption of carbon-emitting fossil fuels and accelerating the decarbonisation of European economies by investing in innovative, green and digital technologies will strengthen Europe's energy security and strategic autonomy.

Please note: the English version of this issue is slightly different from our Chinese one. The views and opinions expressed in this article do not necessarily reflect the official position of the CCCEU.