European Tour 2023: Meeting with European Institute for Asian Studies (EIAS)

2023-01-11 | All chapters

  • AG introduced the EIAS. He noted that he will meet the new Chinese ambassador to the EU, and that he will convey the need to create a more constructive dialogue with China. He noted that in the last few years it has been very black and white but feels that there has been a change of mindset in the last 2-3 months. He noted the effects of the Ukraine conflict and the US’ aggressive stance towards China, with the EU suffering with inflation and soaring energy prices, and how this is contributing to change in mindset. He noted that the US’ attitude towards EU reflects a kind of rivalry too. He also noted that after the large impact of the EU sanctions against officials in Xinjiang, the commission human rights council that was counter-sanctioned is now being investigated for corruption.
  • CH introduced the main themes from the Chamber’s Position Paper, explaining how the Chinese market is now seen by European business as less reliable, less predictable and less efficient. He also noted that going into 2023, there is a great deal of investor uncertainty towards China.
  • SG noted despite recent difficulties, positive progress has been made with the opening that took place in the financial sector is also positive, however, she also noted that the market remains restricted – and that foreign banks market share is around 1%, European banks just 0.2%. She explained that Chinese decarbonisation process is an area for opportunity, and that China can benefit from EU experience in this area.
  • MS outlined the issue related to IIT for foreigners over the past few years. And how the Chamber’s advocacy resulted in an extension of the current policy. He explained the need for this to be further extended beyond 2024, as the total foreign population in China is dwindling and stands at around 400k, or the entire Turkish population of Berlin.
  • VQ noted that although the last two years was good for the ILS industry, freight rates have now dropped. He noted that China exported around five times more to the EU than the other way in the first six months of last year, showing that China is far more dependent on the EU for exports, demonstrating that China is not yet a big market. He lamented that the market is being increasingly controlled and that restrictions on freight rates are increasingly being dictated. He noted that this shows a disregard for free market principles. He concluded by outlining the lack of reciprocity in international cargo relay, despite the introduction of a pilot programme in Shanghai last year.
  • RD stressed that China’s opening requires a proper exchange of people – not just from universities but at all levels. He explained how restrictions on international education has been one of the factors that contributed to the exodus of foreign nationals from China. He highlighted that this is a significant loss for communities in China.
  • AS noted that while the integration of Chengdu and Chongqing should be opportunity for EU companies and a way of raising overall prosperity, foreign companies are being excluded at a policy level. He said that while the Southwest China Chapter has advocated for opening in this area, and has had some success with some recent government dialogues, there needs to be results with European companies being included in tendering. He concluded by stressing the need for engagement to avoid decoupling.
  • PB said that the CAAC took the decision for full resumption flights on January 8th – flight volumes are currently at around 8% of pre-pandemic levels, whereas over the past three years it was somewhere around 3%. He explained that the aim is to reach around 75% by the end of this year, which is ambitious. He explained that the aerospace industry in China is quite different from many others, with Airbus having around 53% of market share. He noted the need for the EU to be mindful of sanctions, with China fearing the bloc could go a similar route to the US. He noted how market access issues are preventing full development of the aviation industry, for example in low altitude flying. He concluded by saying that China is not yet a competitor in aerospace, but more and more Chinese components are being introduced in the supply chain. He said that while COMAC is being set up to be a major competitor, it is very far behind.
  • AG said that the EIAS has enjoyed a long-term relationship with Chamber going back to when Serge Janssen was president. He also said it would be useful for the Chamber to have a rep office in Brussels. He said the EIAS would be happy to work more closely with the Chamber.
  • CH responded that the Chamber already has representatives in Brussels and Paris and would be happy to introduce them.
  • EF thanked the Chamber and said that the message delivered was very clear. He echoed the need for the Chamber to have stronger representation in Brussels. He also said that while he felt the opening in China’s financial services is positive, he questioned whether this is enough confidence for European banks to go fully into China.
  • The delegation then had a general discussion about the feasibility of the CAI being re-instated, among other challenges to EU-China relations.