Brussels: Europe and the Arabs

Executive Vice-President of the European Commission, Valdis Dombrovskis, and Vice-Premier of the State Council, He Lifeng, co-chaired the 10th EU-China High-Level Economic and Trade Dialogue. This dialogue is the main platform for the EU and China to discuss economic and financial issues, as well as trade and investment cooperation.
Specifically, the two sides discussed the macroeconomic situation in the European Union, China and the world. Executive Vice President Dombrovskis particularly emphasized the impact of Russia's unprovoked attack on Ukraine on global economic growth prospects, as well as on food and energy security. The two sides discussed market access and supply chain issues, with Executive Vice President Dombrovskis calling for progress on EU concerns over access to the Chinese market, and rebalancing EU-China economic and trade relations based on transparency, predictability and reciprocity. As well as potential ways to enhance multilateral cooperation.
Regarding trade and investment, the European Union stressed during the World Economic Forum its concerns about the general state of the business environment for EU exporters and investors in China. Dombrovskis particularly raised the issue of European companies' access to the Chinese market, particularly in the areas of agri-food exports, medical devices, cosmetics and baby formula. The European Union and China also committed to resuming discussions on alcohol exports. The two sides confirmed the agreement to exchange information on export controls at the technical level, in order to provide a platform to clarify each other’s procedures.
In particular, the EU welcomed the agreement reached between Commission Vice-President Vera Jourova and Vice-Premier Zhang Guoqing on 18 September 2023 in Beijing, to ensure an easier cross-border flow of non-personal data. In the field of intellectual property rights, the good progress in implementing the Geographical Indications Convention was considered a positive step forward.
The importance of transparent and predictable supply chains, especially for critical raw materials, was also discussed. The two sides agreed to continue discussions on a potential transparency mechanism between the EU and China for raw material supply chains. More broadly, the EU explained its risk mitigation strategy and stressed the importance of refraining from weaponizing supply chains. The European Union does not want to separate from China. The European Union advocates open and fair trade, based on global trade rules, equal opportunities, and fair competition, and rejects protectionism.
The two sides have already taken up a number of sector-specific issues, such as facilitating approvals for cosmetics makers in the EU. EU cosmetics makers have faced increasingly burdensome labeling and licensing agreements, and the EU has welcomed the establishment of a new working group to address these issues. The EU also hopes to continue discussions on improving market access for European medical devices. Removing barriers is a matter of mutual benefit and would directly improve the well-being of Chinese citizens as well, giving them access to the best healthcare technologies. The Chinese authorities have committed to ending the backlog of applications for infant formula licenses, which the European Union welcomes.
During discussions on global economic outlook and macroeconomic policies, the EU encouraged China to undertake market-driven structural reforms to rebalance its economy towards a more sustainable long-term economic growth path. The rebalancing process will not only benefit the Chinese economy by reducing internal imbalances and inequality, but will also be beneficial for the European Union and the global economy as a whole, as it will contribute to more resilient, balanced and sustainable global growth. In this regard, the European Union looks forward to the resumption of macroeconomic, economic and financial dialogues in the coming months.
The two sides agreed to form a new EU-China working group on financial regulation to work on key areas including mutually opening investment opportunities in financial markets for financial institutions; Ensure continued cooperation in the field of sustainable finance and financial technology; and improving the rules around ICT infrastructure for the financial sector, which is vital for our operators to ensure compliance. It will consider the regulation of foreign financial institutions, including the possibility of exchanging financial data across borders.
The two parties also discussed cooperation on common global challenges. Russia's aggressive war on Ukraine has had a severe impact on the global economy, leading to a humanitarian crisis and exacerbating food and energy security challenges. In this context, Executive Vice President Dombrovskis called on China to play a constructive role in ensuring lasting peace and mitigating the economic consequences of the war. He thanked China for its work on nuclear non-proliferation.
Finally, the EU and China discussed possible ways to enhance multilateral cooperation, including participation in debt relief efforts within the G20 framework, and coordination in the World Trade Organization. They also exchanged views on preparations and expectations for the Thirteenth Ministerial Conference of the World Trade Organization in February 2024.
The dialogue came in the wake of the agreement between President von der Leyen and President Xi to restore Activating high-level bilateral dialogues between the European Union and China. This visit was part of an expanded four-day visit of the Executive Vice President to the People's Republic of China, which included several meetings with high-level Chinese officials and European companies on macroeconomic, financial, trade and investment issues. The Dialogue is an important forum to discuss broader geopolitical topics as well as delve deeper into specific topics and concerns. In addition, the Executive Vice President has delivered public speeches at the Bond Summit and at Tsinghua University.
The EU and China are major trading partners: in 2022, bilateral trade in goods increased by 23% year-on-year to a record level of €857 billion. EU exports to China grew by 3.1%, reaching 230 billion euros, while EU imports from China rose by 32%, reaching 626 billion euros. As a result, the EU's bilateral deficit also reached a record high of €396 billion – an increase of 58% from 2021.
In 2022, China was the EU's second-largest goods trading partner, after the United States. It was the EU's third largest export destination after the United States and the United Kingdom, accounting for 9% of total EU exports. At 21% of total imports, China was the largest source of EU imports, exceeding the combined share of the second largest exporter (the United States 12%) and the United Kingdom (7%).