Greetings: Enjoying the Lantern Festival's splendid scenery with the gentle moonlight, CCCEU wishes everyone a sweet Lantern Festival and continuous joy! This week, Chinese Foreign Minister Wang Yi made his inaugural New Year visit to Europe, emphasizing the importance of France playing a "constructive role" in strengthening Sino-European relations. Despite facing challenges from EU protectionist policies, German businesses indicated their continued investment in the Chinese market. Enjoy your reading!

Focus

During the New Year in the Year of the Loong, another important foreign visit by Wang Yi, member of the Political Bureau of the CPC Central Committee and Minister of Foreign Affairs, is in Europe. After attending the Munich Security Council in Germany and visiting Spain, Wang Yi co-chaired the China-France strategic dialogue with the French side in Paris and had a separate meeting with French President Macron on the sidelines of the strategic talks.

During this meeting, Macron said France adhered to "strategic autonomy" and was willing to strengthen coordination with China to safeguard peace and stability in the face of global challenges. In fact, Macron has championed strategic autonomy for the EU – the idea that the bloc should become more powerful on the world stage and operate independently in a wide range of areas, from military operations to industrial policy. He has urged the bloc not to become a "vassal" of the US or get caught up in escalating tensions between Beijing and Washington.

Foreign Minister Wang Yi emphasized the development and importance of China-France relations and put forward "two hopes."

The first is to hope that France will create a fair and just business environment for Chinese firms in France, providing positive, stable and long-term expectations, While China will continue to open its market to France. Previously, the European Union conducted an anti-subsidy investigation into Chinese electric car companies, Foreign Minister Wang Yi put forward China's hope to the French President, indicating that China attaches importance to the incident and does not want this incident to become an obstacle to the upward development of China-France relations, as suggested by observers.

The second is to hope that France will continue to play a "constructive role" in the healthy and stable development of China-EU relations and to help act as a "stabilizing force" in the world. In the context that the United States is engaged in camp-based confrontation and attempts to use the EU to target China, France's independence has far-reaching implications for the development of China-EU relations.

As Foreign Minister Wang said, we hope that China-France relations will "uphold the original intention, maintain determination, deepen cooperation, and open up a future."

In fact, before arriving in France, Foreign Minister Wang Yi attended the annual Munich Security Conference in Germany, where the Russia-Ukraine conflict was the main topic.

The Elysee Palace said Macron and Wang discussed the conflict during their meeting and that they shared the same goal of "contributing to peace", according to broadcaster France 24. According to Macron's office, the French leader told Wang that he hoped China would "pressure Russia to return to the negotiating table".

During the Munich Security Conference, Wang said Beijing's relations with Russia did not target any third party. Later in a separate meeting with his Ukrainian counterpart Dmytro Kuleba, Wang reaffirmed that China would not supply weapons to either side of the conflict.

In Munich, Wang pitched China as a "stabiliser" – not just in conflicts but also on global economic growth, as trade disputes continue to loom over ties between Beijing and Brussels.

"I feel that Europe's rational perception of China is increasing, believing that China's development is in line with the logic of history and that Europe should not be afraid of it, let alone reject it," Wang said in an interview transcript his ministry released late on Wednesday (21 February).

Wang, who recently visited and met with a host of leaders from Germany, Spain and France, told Europe that in the bloc's move to de-risk and cut dependence, it should not eliminate cooperation or reduce mutual trust.

"Interdependence based on mutual trust is conducive to the complementary advantages of all parties and is conducive to accelerating common development," he said in the interview with Chinese media.

The bloc has reiterated it does not mean to decouple from China.

Wang said the European side is positive about strengthening China-European Union exchanges at all levels, and is "very enthusiastic" about deepening practical cooperation.

He said Europe hopes for more concrete outcomes from cooperation in economy and trade, energy, green, digital, education and people exchange.

"China will continue to make efforts in relaxing market access, benchmarking international trade rules, and clearing up barriers for foreigners to come to China," Wang said.

News

Farmers across Europe continue to protest, rejecting EU agricultural policies and the influx of Ukrainian agricultural products

According to an AFP report from Kyiv on February 22, Polish farmers have joined with farmers from Central and Eastern European countries and the Baltic states in protest activities, resolutely resisting the "European Green Deal" and the influx of Ukrainian agricultural products. This follows another large-scale demonstration after a nationwide protest in Poland on February 20.

Ukrainian President Volodymyr Zelensky stated on the 22nd that he told Charles Michel, President of the European Council, that it was "unacceptable" for Polish farmers to blockade the border between Poland and this war-torn country.

Zelensky said in his evening address: "Firstly, the situation at the border with Poland is absolutely unacceptable. I have informed (Michel) of Ukraine's initiative, which is for representatives of Ukraine, Poland, and the European Commission to immediately meet at the border."

German companies embrace Chinese market amid EU protectionism concerns

BERLIN, Feb. 23 (Xinhua) -- Mercedes-Benz CEO Ola Kaellenius warned the European Union on Thursday against any move to increase protectionism against China as it would be destructive for an economic region like Europe, according to a Reuters report.

Kaellenius' voice resonates with many German companies. According to a survey released in late January by the German Chamber of Commerce in China, 78 percent of German companies expect consistent growth of their industry in China for the next five years.

Some 48 percent of the respondents anticipate a yearly expansion of 5 percent to 20 percent of their industry in China. Larger companies show greater optimism, with 90 percent of them seeing potential for their industry's growth, according to the survey.

German companies' direct investment in China accounted for 10 percent of Germany's total foreign investment in 2023, marking a significant increase. Their cumulative investment in China over the past three years matched the total investment in the six years from 2015 to 2020, according to the study

As interest expenditures surge, the ECB discloses its first annual deficit in twenty years

The European Central Bank (ECB) announced on Thursday its first annual loss since 2004, following significant outlays due to rising interest rates, primarily focused on interest expenses on liabilities. The central bank reported a loss of 1.3 billion euros (approximately 1.4 billion U.S. dollars). The losses could have been greater if the bank had not released 6.6 billion euros in funds (nearly all of its accumulated financial risk provisions over the years). However, the ECB emphasized in the report that this outcome will not affect its ability to implement monetary policy.

The report showed that the ECB's interest expenses on major liabilities increased significantly, while interest income on assets did not keep pace, as many assets are fixed-rate or have longer maturities. The ECB stated that further losses are expected in the coming years before a return to sustained profitability, but this will not affect "its ability to implement effective monetary policy."

Between July 2022 and September 2023, the ECB raised the benchmark deposit rate from negative territory to a record 4% in response to the surge in European inflation following the Covid-19 pandemic and the unprecedented energy inflation caused by the loss of cheap Russian energy supplies after the Russia-Ukraine conflict.

Norwegian PM says to deepen cooperation with China

KIRKENES, Norway, Feb. 22 (Xinhua) -- Norwegian Prime Minister Jonas Gahr Store on Wednesday voiced his administration's keen interest in expanding cooperation with China in various areas such as energy and climate change.

"We want to have a broad set of cooperation with China. We have a number of areas where we bilaterally can enhance cooperation," Store said in an interview with Xinhua on the sidelines of the Kirkenes Conference, a significant yearly fixture in Northern Norway.

Highlighting China's global influence, he said that with its role in the world economy, China is a country Norway must work with in order to deal with energy issues, climate change issues and also big issues concerning peace and security.

Located within the Arctic Circle, Kirkenes serves as the central hub of the Sor-Varanger municipality in Finnmark county, Northern Norway. First held in 2008, the Kirkenes Conference endeavors to shed light on various developmental facets within Northern Norway and its adjacent regions, touching upon political, business and social progress.

EU's new Anti-Money Laundering Authority to be based in Frankfurt

BRUSSELS, Feb 22 (Reuters, etc.) - Following a competition with eight other cities such as Paris, Rome, and Madrid, the European Union's new Anti-Money Laundering Authority (AMLA) will be based in Frankfurt, Germany. This new agency is proposed to start operating in mid-2025 and will have over 400 staff members.

The European Council stated in a declaration on the same day that the new institution will become the core of EU reforms in the anti-money laundering sector, with powers to supervise and implement sanctions. Mairead McGuinness, the European Commissioner in charge of financial affairs, said that the EU will reduce risks in related fields through this new agency.

Previously lacking any pan-EU authority to control dirty money, Brussels relied on national regulators to enforce its rules, but member states did not always cooperate fully.

China must see need to reform WTO rules, says EU trade chief

BRUSSELS, Feb 19 (Reuters) - China needs to play a constructive role in talks at the World Trade Organization to reform global trade rules on industrial subsidies or risk rivals setting their own policies at China's expense, the European Union's trade chief said on Monday.

Ministers from the WTO's 164 members will gather in Abu Dhabi for a biennial conference on Feb 26-29, aiming to agree on reforms of the global trade body itself, on trade in e-commerce and on subsidies for fishing and agriculture.

European Trade Commissioner Valdis Dombrovskis said the EU was keen to drive debate on trade and industrial policy, which includes allowing the least developed countries to industrialise while limiting the distortive effect of subsidies elsewhere.

What are the experts talking about?

Many European countries "added fuel to the fire" and signed security agreements with Ukraine

Source: Institute of European Studies, Chinese Academy of Social Sciences

Author: Zhao Jizhou

On the occasion of the second anniversary of the Ukrainian crisis, Britain, France and other countries have successively signed similar agreements with Ukraine. This move may cause the Ukrainian crisis to be delayed and escalated again. This is not only unhelpful in reversing the situation on the battlefield, but also poses a new test to the United States and the West's ability to assist Ukraine in the future. If the Ukraine crisis falls into a vicious cycle of "adding fuel to the fire and making the fire worse" in the future, Western countries will inevitably face the end of "harming others and themselves".

The European Union-Russia energy divorce: state of play

Source: Bruegel

Author: Ben McWilliams; Giovanni Sgaravatti; Simone Tagliapietra; Georg Zachmann

Two years on from Russia's invasion of Ukraine, trade in energy products between Russia and the European Union has largely disappeared. The EU has adapted remarkably well to a decoupling that many would have considered impossible. Russia has redirected oil exports to Asia, but has not been able to replace Europe for its natural gas exports. We provide an overview of what has changed since February 2022 and then give more details about EU-Russia trade in oil, natural gas, coal, uranium and electricity.

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.