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"Developed countries in northern Europe promote free trade, while less developed members like the newly joined Romania would prefer to protect," said Mei. "However, when it comes to vote, one member gets one vote. It's hard to reach a consensus."
Zhou noted that the EU and Chinese textile disagreements could actually be a reflection of problems between northern Europe and southern Europe.
"China's textile export to the world market doesn't happen or boom overnight, and the international barriers to textile trade will be eliminated sooner or later," said Zhou. "Northern European countries, for instance Sweden, generally oppose to adopt protectionist practices and believe "Made in China" will benefit its people. Southern EU members like France, Italy and Spain, haven't yet adjusted their economies to globalization, and that's why they lobby so hard against Chinese textile exports."
Mei commented that there are countries, such as Poland, which are being influenced more by Washington than Brussels when it comes to matters of international trade.
"Uncle Sam has made many unwise decisions, for example, forcing China to appreciate its currency, and calling off the decision to give most-favored-nation status to China," said Mei. Instead, he suggested Europe not follow suit of the United States and should instead develop independent and fair trading policies with China.
While Europe is a continent boasting advanced technology and services, the EU's new technology is lagging behind that of the United States and Japan and cannot meet the demand of Chinese importers, according to Mei.
"We should import more sophisticated items like those from the electromechanical industry instead of merely Italian macaroni or French cookies," Mei stressed. Compared with the United States, the EU's trading policy to China is relatively open, but it is very conservative in terms of technology transference.
"When the EU moves toward eastern Europe, trade frictions with China tend to grow," said Mei. "But the mainstream of the China-EU trade is relatively good."
| The EU report "Future Opportunities and Challenges in EU-China Trade and Investment Relations 2006-2010" highlights that China offers important opportunities for Europe in the
following sectors:
1. The machinery sector: The drive for lower energy intensity will lead to an increased demand for more energy-efficient machines, power generators and renewable energy-related equipment.
2. The chemical sector: In 2004, China's chemical imports (including pharmaceuticals) were valued at around 44 billion euros and the size of the domestic market reached around $180 billion. If further reforms (e.g. improved IP protection and the corporate law regime) continue to support market growth trends in key customer industries, the chemical industry will grow at a compound annual growth rate of 10.2 percent.
3. The automotive sector: The automotive sector in China will see moderate to strong growth leading to overcapacity and increased local competition. Auto production capacity in 2010 is expected to be more than double domestic demand, with the annual output increasing from approximately 8 million units to 16 units by 2011.
4. The pharmaceutical sector: Continued economic growth and rising living standards will result in the emergence of "diseases of affluence" in Chinese society. Longevity and the ageing population will fuel demand for drug categories that have preventative qualities e.g. OTC pharmaceuticals and nutraceuticals, resulting in expected growth within this sector of approximately 10 percent per annum over the next five years.
5. The ICT equipment sector: European operators should compete on IT design rather than in the manufacture of commodities.
6. Agriculture exports: Export opportunities exist in the agricultural service sector as the EU has substantial experience in organic production, value-added food production and sustainable land management. European operators also have considerable investment opportunities in China's rural economy such as irrigation systems, supply chain management services, eco-tourism and biodiversity protection.
7. Financial services: In the financial sector, there exist significant opportunities despite ongoing market access restrictions. Strong growth in the Chinese economy requires further reform and opening of the banking sector to meet the predictions of a sustained annual growth of 20 percent in the consumer loan business, 50 percent in credit card business and 15 percent in business transactions.
8. The distribution/retail sector: The opportunities presented by China are perhaps the biggest for European retailers. Foreign retailers are sourcing an increasing amount of products from China for their home markets ($60 billion in 2005), and foreign expansion into the Chinese retail market continues, where total sales are predicted to grow at an average rate of 10.1 percent until 2010.
9. The construction sector: An estimated annual growth rate of 7.5 percent during the implementation period of the 11th Five-Year Plan (2006-10) indicates that China will be the world's largest building market for the foreseeable future. While Chinese companies are generally low-cost and relatively efficient, many lack the key management expertise to handle large and sophisticated projects. The European construction industry is well positioned to take advantage of these capability shortcomings and has global experience in adopting cutting-edge technologies in large infrastructure projects. 10. Telecommunications value-added services: This market remains all but closed. As a means to circumvent restrictions in the telecoms and other hi-tech sectors, European operators should seek partnerships with those influential Chinese operators hoping to set up strategic alliances in China for the integration of advanced service applications, high- quality customer relations, and management and marketing skills. |
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