China-EU relationship Photo: VCG

While wrapping up a "productive" high-level trade dialogue, China and the EU, two of the world's largest economic powers, have made a noticeable step forward in their pragmatic ties, including announcing concrete working mechanisms in different sectors to enhance communications, which has sent a positive signal of cementing relations amid rising geopolitical tensions and a sluggish world economy.

Based on the productive outcome, in particular fresh working mechanisms that could act as "reservoirs of trust" when both sides deal with specific issues, it is hoped the EU can move in the same direction with China to jointly tap into their broad cooperation space in the future via seeking its own policy independence instead of being tied to the US wagon of unilateralism, experts said.

The EU is urged to abandon its bias against China based on ideology, they said, as it tends to treat China and Chinese businesses as a potential "threat" or "risk" amid a so-called "de-risking" campaign, which is widely believed will see decoupling from China in certain areas, even though the bloc repeatedly denies that is its aim.

Noticeable progress

China and EU concluded productive talks during the 10th High-level Economic and Trade Dialogue through candid and pragmatic discussions addressing investment, trade, industrial and supply chain issues as well as financial cooperation, with the two sides reaching multiple consensuses, China's Ministry of Commerce (MOFCOM) said in a statement on Tuesday.

The dialogue, which came amid a profoundly changing world and a sluggish global economy, has "special meanings," the ministry said, noting it will inject more confidence into the development of the world economy.  

The dialogue was chaired by Chinese Vice Premier He Lifeng and Valdis Dombrovskis, executive vice president of the European Commission, in Beijing on Monday.

Both sides are committed to maintaining two-way openness and providing a fair and non-discriminatory business environment for each other's companies. 

The importance of transparent and predictable supply chains was discussed, in particular for critical raw materials. Both sides agreed to continue discussions on reaching a China-EU transparency mechanism of supply chains for raw materials.

The two sides agreed to establish a dialogue mechanism in the field of export control and conduct communication on export control policies and practices.

Concerning the EU's recently launched probes, including a review on foreign subsidies, a carbon border adjustment mechanism and other trade policies, China expressed the hope that the EU will use trade remedy measures prudently while encouraging deeper cooperation in the new energy industry, represented by electric vehicles (EVs). 

Earlier this month, the EU announced the launch of an anti-subsidy investigation into Chinese-made EVs in order to protect Europe's own nascent EV industry.

In the financial sector, China and the EU took a pragmatic step forward by setting up a new China-EU Working Group on Financial Regulation to work on key areas, including mutually opening up investment opportunities in financial markets for financial institutions, ensuring continued cooperation in sustainable finance and fin-tech, and improving rules on information infrastructure for the financial sector. It will look at regulation for foreign financial institutions, including on the possibility of cross-border financial data sharing.

China is willing to seriously study and consider including more EU banks with legal entities in China within the scope of carbon emission reduction support tools, the MOFCOM statement said.

Following the dialogue, Dombrovskis said at a press conference on Tuesday morning that "we have made some progress across a range of issues from market access to government cooperation in the financial sector," in response to the Global Times' question for comments on the meeting.

Specifically, cooperation in the financial sector, including areas such as green economy and fin-tech were discussed, Dombrovskis said.

Dombrovskis said that both sides agreed to discuss questions related to data flows in financial services in which there are new concerns that need to be discussed.

Sun Yanhong, a research fellow at the Chinese Academy of Social Science's Institute of European Studies, told the Global Times on Tuesday that the dialogue, involving almost all key issues concerning both China and the EU, played a significant role in strengthening mutual trust, which needs "refilling" at this critical moment. The new working mechanism together with previous ones could act as "reservoirs of trust" when both sides deal with special issues that are tricky and complex in the future, according to Sun.

Taking the transparency mechanism of supply chains for raw materials as an example, Sun said the mechanism could largely solve the EU's rising anxiety over raw materials, as it provides room for timely communications between the two sides, which, in a way, guarantees their sourcing.

Last year, European Commission President Ursula von der Leyen proposed new legislation to reduce the EU's dependence on the supply of critical minerals including rare earths and lithium from China, a move that analysts said will increase the cost of achieving Europe's green targets and exacerbate its current economic woes amid the deepening energy crunch. ""

In June, the EU launched the European Economic Security Strategy, essentially a step toward "de-risking," and claimed that Chinese 5G suppliers Huawei and ZTE pose "materially higher risks than other 5G suppliers." Under such rhetoric, some EU countries are reportedly taking steps to exclude Huawei and ZTE, with the latest being Germany.

In the process of economic and trade exchanges with China, Europe should avoid politicizing industry chain issues, Cui Hongjian, a professor with the Academy of Regional and Global Governance with Beijing Foreign Studies University, told the Global Times.

The EU's aim of systemic cutting so-called "dependencies" on China is largely due to geopolitical and ideological biases, which the bloc needs to abandon, Cui said.

Faced with challenges posed by rising US protectionism that is weighing on the world's economic recovery, China and the EU should forge stronger ties and deepen cooperation on the basis of win-win instead of setting up hurdles against each other, he added.