EU-China Summit advises on trade conflict

The opening of the EU-China Summit, which began today in Beijing, was overshadowed by discussions about the ongoing trade conflict between China and the US.

European and Chinese leaders expressed concern over the tit-for-tat trade war and faltering negotiations on an investment protection agreement between the two sides – the EU’s call for more market opening in China and the planned reform of the World Trade Organization (WTO).

Pressure from US President Donald Trump, and his disruptive tactics, have brought China and the EU closer together. For the first time since 2015, there will be a joint declaration at the end of the Summit.  In the trade dispute, the EU, like China, rejects Trump’s unilateral action outside the WTO, but does not want to be over-reliant on Beijing because many EU politicians share Trump’s criticism of China’s market barriers and forced technology transfer.

After talks with Chinese Premier Li Keqiang, European Commission President Jean-Claude Juncker, EU Council President Donald Tusk and other members of the EU leadership were also welcomed by President Xi Jinping. Topics discussed include North Korea’s nuclear programme and the future of the Iran deal in light of the US’s withdrawal earlier this year.

The EU hopes the Summit will help accelerate the proposed investment agreement, and help expand agricultural exports. China has already reopened its market for beef from Ireland and France, which had closed in 2001 after the outbreak of BSE in Europe. Agricultural exports accounted for only 8 percent of all EU exports to China in 2017, but this is expected to grow.

The EU has become China’s largest trading partner. Goods worth EUR 1.5 billion are exchanged between the EU and China on a daily basis. Both sides want to set up a joint working group to discuss reforming the WTO. “The WTO may not be perfect, but it remains the only existing organisation with clear rules and a mechanism for resolving disputes,” said Hans-Dietmar Schweisgut, Head of the European delegation in Beijing.

Alistair Michie, Group Business and Government Advisor, speaks at the Third Annual China Global Think Tank Innovation Forum 2018

The Annual China Global Think Tank Innovation Forum gathers experts and leaders of many leading global think tanks and plays a key role in shaping government policy worldwide.

Hampton Group Group Business and Government Advisor Alistair Michie was invited to give the keynote speech at the Third Annual China Global Think Tank Innovation Forum, in his role as Chairman of the International Advisory Board of the Centre for China and Globalisation (CCG). In his speech, Alistair warned of the dangers of an increasing ‘knowledge deficit’ in the West on Asia and especially China.

In past 40 years, China has modernised and industrialised at a speed and scale unprecedented in human history. China is fast approaching the point where it will become the largest global economy, and have almost a quarter of the world’s population. However, there is an increasing ‘knowledge deficit’ between the world and China.

China’s biggest challenge is to communicate with the world. Recent Chinese government policies have aimed to support tackling this ‘knowledge deficit’, but there are very limited practical solutions. Most Chinese officials lack international experience and therefore do not understand the challenge – let alone the ability to deliver solutions.

Furthermore, teaching about Chinese culture, civilisation and history is almost totally absent from school curriculum in high income countries outside of China. This results in little motivation by students to pursue studying China at university. When China is studied at universities outside of China, the focus is on ancient liberal arts history. Yet key areas such as economic, industrial and scientific history of China or contemporary China studies are rarely focused on.

In addition, the speed of change of China makes it a great challenge for curricula and knowledge to keep pace outside of China. The boards of major businesses and organisations have not recruited members with real knowledge to advise on how to minimise risk and optimise success and explain the ‘knowledge deficit’.

Alistair called for research and practical policies that can be presented to governments world-wide to tackle the ‘knowledge deficit’. Without such action, several challenges will appear – such as the ongoing trade tensions between the US and China – founded on ignorance, misunderstanding and miscalculation.