Dr. Hans Dietmar Schweisgut – 欧盟驻华大使 – Ambassador of the European-Union to China.

2015 marks the 40th Anniversary of EU-China Relations. On the topic of “Opportunities for Closer Cooperation between the European Union and Guangdong”, Dr Hans Dietmar Schweisgut, Ambassador of the European Union to China, shares with Delta Bridges his wisdom.

DB: What is the role of the Delegation of the European Union to China in business activities between EU (European Union) and China?

Dr. Hans Dietmar Schweisgut: The EU-China trade relationship is a massive source of economic growth, job creation and investment for both sides. China is the EU’s second-largest trade partner, and the EU is China’s most important trade partner. Alone in goods, the EU and China exchange more than €1,2 billion every day. In fact, the
openness of the huge market of the EU has been crucial for China’s economic success in the past 30 years, which has been based on an export-led model.

In order for the trade to reach such volumes, you need two elements: good promotion activities which bring individual companies together to reach business deals, and effective rules which ensure that such deals can take place by keeping markets open and predictable. In the EU, our Member States take care of promotion activities—and EU institutions negotiate and manage the rules that make trade possible. The best example is WTO rules, covering goods, services, agriculture, customs…

On the basis of constant contact with EU business, the EU Delegation follows up the respect of those rules, engages which the Chinese authorities to discuss and solve
problems—such as market access barriers, discrimination, or infringements of IP rights. The EU Delegation also participates in the many negotiations of new rules to improve openness and predictability for companies on both sides. Right now we are negotiating further opening in WTO rules, but also in government procurement, environmental goods, and information technology. Bilaterally, we are negotiating a comprehensive investment agreement, which has the ambition to unlock trillions of € in bilateral deals—ensuring that the decades to come bring as much mutual benefit as the last 30 years.

DB: What are the highlights of the past 40 years for the European Union to China?

HS: The most important highlight is the explosion in trade—the engine of China’s growth and of its economic miracle. We basically did not trade at all 40 years ago—and now EU-China trade in goods accounts for over 6% of China’s GDP every year. Trade has generated an enormous amount of resources in China and helped improve the welfare of hundreds of millions of Chinese citizens.

Trade has also provided a solid bilateral foundation for a closer relationship between our peoples and our governments, which we can trace by looking at the history of our institutional developments. The establishment of diplomatic relations in 1975 was the first highlight. This was followed in 1985 by the Trade and Cooperation Agreement.

But our relationship now goes well beyond trade. It has gradually widened to new areas, notably human rights and a political dialogue in the 1990s, in 2003 we upgraded our relationship to a Comprehensive Strategic Partnership, following China’s accession to the WTO in 2001. In 2012 we launched the first High-level People to People Dialogue to promote more people-to-people exchanges. Finally, in 2013 we adopted the EU-China 2020 Strategic Agenda for Cooperation, our roadmap for relations to the end of the decade, with a focus on peace, prosperity, sustainable development and people-to-people exchanges.

In addition, President Xi Jinping’s visit to Brussels in March last year marked the first visit by a Chinese President to the EU institutions, which shows the importance China attaches to our relations. We must work hard in the coming years to keep the momentum going to realize the untapped potential.

DB: Why do you think Guangdong Province plays an important role in building a stronger connection between EU and China? And the Pearl River Delta region in Guangdong Province?

HS: Guangdong Province has much to be proud of. It has been at the heart of China’s economic miracle. The Pearl River Delta region is China’s economic powerhouse, accounting alone for one tenth of China’s overall economic output. And Guangdong Province plays a crucial role in our economic and trade relations. It accounts for almost one-fifth of EU-China bilateral trade and is home to some 3000 European companies. The EU’s openness has been a core factor in this success. To name an example, the openness of the EU market to Huawei is at the heart of the company’s global emergence.

The success of Guangdong has always been based on its ambition. Guangdong now endeavors to move from being the ‘world’s factory’ to a globally-renowned, competitive area for modern services and high-tech industries by 2020: a model in the Asia-Pacific region, and a global ‘high-tech hub’. The EU companies’ high-quality services, hi-tech products, know-how, innovation ability, and investment can make a fundamental contribution to this goal. Guangdong’s investment in the EU can also help the province’s companies acquire the tools they need to go global.

Many of China’s provinces will be competing with each other to enhance the relationship with the EU. The provinces that demonstrate the greatest openness, predictability, respect of foreign investors and of IP rights will also be the most attractive—and also have the best image when exporting to and investing in the EU. Guangdong has important tools to shine in this respect—such as specialized IP courts or the new FTZ. If Guangdong uses these and other tools to the fullest potential, I am sure it will be able to reap the many benefits of an even closer relationship with the EU. Individual Guangdong companies have also a large role to play. For example, cooperation in the digital field in China will only prosper if there is a two-way opening to research and innovation and standard-setting bodies like the ones the EU provides.

DB: What are the fields that EU to China is looking at for further cooperation? (Energy, IT, etc.)

HS: Let me mention five economic issues. A first challenge is to tap into the largely unexploited potential in trade in services and investments. The on-goin