Minister of Commerce Gao Hucheng arrived in the lobby of the European Commission’s headquarters at 9 o’clock on Saturday morning. He was led to the office of outgoing Trade Commissioner Karel De Gucht, who has been a thorn in the side of Chinese businesses because of his protectionist attitude ever since he took over the job in 2010.
De Gucht, 60, will be replaced in a few days by Swedish politician Cecilia Malmstrom, 46, when a newly constituted commission gets underway.
In the afternoon, the Chinese side announced a long-awaited agreement in principle: Brussels will not launch an investigation into subsidies of China’s telecommunication imports into the European market. The EU side still needs to go through internal procedures for formal approval. The threat was mainly targeted at Chinese telecommunications equipment makers Huawei Technologies Co and ZTE Corp.
While the big picture of relations has been a positive one, the Europeans have annoyed Beijing from time to time – for example, by allowing the Dalai Lama to visit, by attacking China on human rights and by imposing high trade barriers.
Despite such irritants, Beijing has sent constructive signals. In the first half of this year, President Xi Jinping paid the first-ever visit of a Chinese president to the European Union’s headquarters. And last week, at the summit of Asian and European leaders in Milan, Italy, Premier Li Keqiang hosted a special dinner for Barroso and European Council President Herman Van Rompuy, thanking them for their contributions to positive relations. At the dinner, the leaders were thought to have touched on the telecommunication trade dispute, which involves about 1 billion euros ($1.26 billion) annually.
The path to Saturday’s solution was similar to a pattern set earlier, in mid-2013, after both sides worked through an anti-dumping and anti-subsidy investigation involving China’s multi-billion-dollar solar panel exports to the EU. Brussels began that investigation in 2012.
Beijing was unhappy that there had been no high-level invitation to visit Brussels a year after the launch of the investigation.
In May last year, Li made his first trip to Germany after taking office and won the support of the German government, which vetoed Brussels’ decision, following dozens of EU member states.
Li made a last-minute call on Barroso the following month, as Brussels was about to vote on whether to end the solar panel dispute through amicable consultation.
Li’s decisive role was crucial in preventing the escalation of a trade war. If Beijing had opted to deal with such disputes in an eye-for-eye, tooth-for-tooth manner, both sides would have been losers, with the EU taking the brunt. It has already suffered two economic recessions, and its jobless rate has been in double digits for a few years now.
Of course, with the trade volume between China and Europe expanding, and with investment pouring into Europe, China’s government, its businesses and its media must work to make the most of the rising economic tide.
So far, there is no unified Chinese business council in Brussels to represent and lobby for Chinese investors in Europe. By contrast, a major US business organization reportedly has 300 staff members focusing on Brussels’ policymaking.
A lack of communication and influence can easily lead to misunderstandings. Bureaucrats in Brussels usually follow Washington’s lead when making policies that affect China.
Trade commission leaders need to make more field trips to member states to learn how Chinese businesses matter.
Take China’s solar panel exports for example. The industry, which involves about 400,000 workers in China, has offered competitive products to thousands of European upstream companies and helped Europe achieve its status as a green energy leader.
In telecom, Huawei and ZTE are deeply integrated with European partners. And, incidentally, Huawei is a steady job creator in Europe, where young people, in particular, have faced huge employment challenges.
If De Gucht had kept the big picture in mind, he would not have made confrontational moves against China and its businesses.
Overall, the EU recognizes China as strong strategic partner. This is the starting point for dispute control. Amicability helps both sides win. With confrontation, everyone loses.
The author is China Daily chief correspondent in Brussels. firstname.lastname@example.org