| Author (Person) | Beatty, Andrew |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.12, No.23, 15.6.06 |
| Publication Date | 15/06/2006 |
| Content Type | News |
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Date: 15/06/06 During the past 25 years of China's double-digit growth, few trading partners have been in the mood to pick a fight with the emerging giant. Europe's political and business elites have tried to smooth over difficulties, fearing future contracts would be jeopardised along with political influence. European diplomats, keen to encourage China's self-styled "peaceful ascendancy", have ushered China gently towards adopting global rules for trade. But as China begins to be competitive across a range of sectors, not just textiles and shoes, her trading partners are feeling the pinch. The EU, along with Japan and the US, has long complained about trade imbalances with China. The country has been criticised for its protectionist investment and import rules, undervaluing its currency and disregarding intellectual property rights, but the criticism has been muted. There are now signs that the EU is ready to moderate concerns about upsetting the authorities in Beijing and defend more robustly its own interests. One spur has been the EU's trade deficit with China rising to EUR 100 billion in 2005. Another is the imminent end of its five-year transition period after joining the World Trade Organization, which will make it more difficult for China to turn a blind eye to the rule book. Now the European Commission is taking the first tentative steps towards trying to level the trade playing-field. A month-long consultation has just ended with European firms, which have been asked to describe their experiences in doing business in China. The result of the consultation will feed into proposals for a new trade agreement, which the Commission hopes to develop by the end of the year to replace the 1985 Trade and Co-operation Agreement. Despite talk of endless opportunities for firms in the world's most populous country, these experiences have often been difficult. Many large European companies, from DaimlerChrysler to Siemens, have complained that investment in China has been followed by 'technology transfer'. Often this is a polite term for what is essentially theft of technology by local firms. Japanese diplomats also complain bitterly that their firms have to surrender advanced technology in return for access to the Chinese market. The fruits of decades of investment and research by the EU and Japan have been replic-ated by their Chinese counterparts in a matter of months. The EU now appears ready to insist that China deals with 'technology transfer' as well as the restrictive rules that forbid EU firms from owning a majority stake in Chinese enterprises. According to observers both inside and outside the EU, the change is as much down to politics as it is economics. In 2003 the Chinese government issued its first EU policy paper. It was a flattering document for the then European Commission president Romano Prodi, French President Jacques Chirac and then German chancellor Gerhard Schr�der. The EU was described as a "major force in the world" and there was much talk of supporting multilateralism. The phrase "multipolarity" featured in the second sentence - a Chinese nod to Chirac's vision of a "multipolar world", free from US hegemony. Chinese leaders Wen Jiabao and Hu Jintao were still viewed as a new generation of leaders who could increase democratic as well as economic freedom. Today the EU's discussion of "strategic partnerships" and "multipolarity" has given way to more pragmatic concerns. One sign of the change, along with the launch of the Commission's consultation, came during a visit to Beijing and Shanghai in May by German Chancellor Angela Merkel. There she pressed Prime Minister Wen Jiabao to take a tougher stance against product piracy. According to Axel Berkofsky, a senior policy analyst at the Brussels-based European Policy Centre, that attitude is also reflected in a new realism among European firms to doing business in China. Many investments are yet to be rewarded with significant returns, booming middle-class or no booming middle-class. Economic realities now look like moderating political optimism: "The trade deficit is not going down," said Berkofsky, "it is going up and up and up." Major analysis feature in which the author takes a look at the European Union's stance towards China as an emerging economic superpower. Author suggests that unlike some years before, EU leaders were now increasingly willing to address sensitive issues and not smooth over difficulties for political reasons. |
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| Source Link | http://www.european-voice.com/ |
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| Countries / Regions | China, Europe |
