China looking to strengthen economic ties with EU

Strengthening China-European Union economic co-operation has become crucial for worldwide economic growth, as the United States’ tariff hikes against key trading partners have cast a shadow over the global economy, senior Chinese trade experts have said.

They emphasized that amid growing global trade protectionism, the Chinese and EU’s free trade ethos provide a solid basis for deeper bilateral economic and trade collaboration.

Zhang Yansheng, a researcher at the Chinese Academy of Macroeconomic Research, said the EU economy has advantages in high-end manufacturing, green technology and services trade, while China excels in digital infrastructure and smart manufacturing, and has a vast domestic market.

By creating platforms such as industrial co-operation parks and joint innovation funds, the two sides can create concrete projects, creating a roadmap for them to build a new economic and trade partnership, Zhang said.

“With the transformation and upgrading of China’s manufacturing industry, the competition between China and the EU in economic and trade development has intensified,” Zhang said.

“However, as they both face external challenges like rising protectionism and geopolitical uncertainties, the two economies are expected to forge closer economic ties based on complementary competition, thereby achieving a win-win situation,” Zhang added.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said the potential for collaboration between China and the EU is enhanced by their complementary markets and shared need for resource optimization.

He said he expects more co-operation between the two sides to boost collaboration by enterprises, drive innovation and improve the allocation of market resources.

“By doing such things, China and the EU could generate significant economic and social benefits, boost employment and enhance supply chain security for both,” said Zhou, whose academy is affiliated with China’s Ministry of Commerce (MOC).

China remains the EU’s largest import source and third-largest export destination, according to European statistics. Moreover, China’s outbound direct investment inflows to the EU grew from €6.27 billion ($6.43 billion) in 2020 to €8.06 billion euros in 2023.

Zhang, from the Chinese Academy of Macroeconomic Research, said that co-operation potential between China and the EU spans three key areas: green transformation, digital development and third-party market growth.

The two economies could build a joint carbon-neutral laboratory focusing on clean technology collaboration, recognize each other’s cross-border e-commerce standards, and build dialogue mechanisms for co-operation in frontier areas like data flow and artificial intelligence ethics, he said.

According to Zhou, from the Chinese Academy of International Trade and Economic Cooperation, China and the EU should focus in the short term on reviewing and strengthening existing supply chain co-operation by reducing trade barriers and increasing investment opportunities and the mobility of personnel.

Long-term strategies should aim for more effective market integration through reduced tariffs, increased consultation mechanisms and enhanced collaboration on innovation, he added.

China sees growth in trade in services in 2024

China’s annual trade in services exceeded one trillion US dollars for the first time last year, demonstrating significant potential for further growth, according to the latest data from the Ministry of Commerce (MOC).

And the country’s services import and export value amounted to a record-high of 7.5 trillion yuan (about $1.05 trillion) in 2024, expanding 14.4% year on year, the ministry said. Exports grew 18.2% year on year and imports grew 11.8%, according to the MOC.

Driven by the global trends of digitisation, smart technology advancement and green development, China’s trade in services grew in scale and its international competitiveness was enhanced in 2024, said Li Jun, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the MOC.

He added that “the comprehensive relaxation and optimization of China’s visa-free transit policy has played a role in boosting inbound tourism over the last year”.

The Chinese government released a guideline on promoting the high-quality development of trade in services through high-standard opening-up in August last year.

The document offers robust policy support for the development of China’s services trade, Li said, calling for more efforts to advance opening-up, innovation and international cooperation in the sector.

Bilateral, multilateral and regional collaboration in digital trade and trade in services should be expanded, Li said, suggesting that the role of major exhibition platforms should continue to be leveraged, and that international services trade co-operation parks should be developed.