“It’s very important that both leaders of China and the European Union (EU) stressed decoupling is not in the cards,” Joerg Wuttke, President of European Chamber of Commerce in China, told GDToday at a recent interview after his meeting with the EU Commission President Ursula von der Leyen in Beijing in early April.
Wuttke shed insight into the de-risking strategy proposed by von der Leyen while highlighting business sectors that he sees enormous potential between the EU and China, especially the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
More communication needed on ‘de-risking’ practices
Decoupling with China is "clearly not viable, desirable or even practical" for Europe, said von der Leyen on April 18 after her visit to China. However, she reaffirmed a focus on reducing the risks of the EU's relations with and dependence on China.
China and the EU are each other's second-largest trading partner as the bilateral trade volume grew 2.4 percent on a yearly basis to 847.3 billion USD in 2022, according to China Council for the Promotion of International Trade (CCPIT).
Wuttke said facing with challenges such as the Russia-Ukraine conflict, Europe is looking to be less dependent on foreign countries and certain products. However, he stressed the de-risking strategy should not lead to overall protectionism when addressing the vulnerabilities.
He took green technologies as an example, saying, “China is leading in solar panels as well as wind turbines, so the EU countries are buying a lot from China. When saying we have an interest in producing our own panels in Europe, it doesn’t mean we have to do our own equipment but have more Chinese companies to invest in Europe.”
Wuttke believes de-risking normally adds more complexities and makes people pay more for products, as a result of which, it requires more consultation between China and the EU. “I hope there is a proper communication between the EU businesses, EU governments and Chinese government, in order to make it as easy, smooth and less complicated as possible,” he said.
A CCPIT report indicates that a favorable business environment is key to attract Chinese companies and investment to the EU. It found that 28.7 percent of surveyed Chinese companies will expand their investments in Europe if the EU relaxes its foreign investment review. About 40.87 percent will increase their investments in Europe if the China-EU Comprehensive Agreement on Investment is signed and implemented.
Cooperative potential expected in auto and green technology sectors
When asked about the latest business potential between the EU and China, especially the GBA, Wuttke considers the opportunities are enormous and highlighted such industries as automobile, green energy and health care.
As for the auto industry, Wuttke explained that China is leading in new energy vehicles, batteries and software while European countries are leading in premium cars. He believes EU companies can learn a lot from China and the two sides can tackle the transition from internal combustion engines to new energy vehicles.
“Chinese consumers are far more demanding than European consumers. They entertain from A to B instead of driving from A to B, which is a type of interconnected communication. Moreover, Chinese consumers are more demanding in that they will seek immediate change if a brand is not good enough, which is good for companies to come up with new ideas,” he elaborated.
In terms of Guangdong, the province with the largest GDP in China, Wuttke highlighted the trend that it is now seeking sustainable and environmentally-friendly growth with the emphasis on the manufacturing. He said the region requires more renewable energy including related offshore wind farms, panels and energy storage, and it needs reliable partners with the latest technologies.
Wuttke who is also Chief Representative of BASF China, introduced that his company, the German chemical giant, launched the smart Verbund project in Guangdong’s Zhanjiang City in 2019 with financing up to 10 billion USD. The project is the first wholly foreign-funded project in China's heavy chemical industry and will initially include plants to produce engineering plastics and TPU serving a range of key industries.
“The chemistry industry is the starting point of a supply chain for better cars, better airplanes, better insulation material and so on. Guangdong needs good partners like Exxon Mobil in Huizhou and BASF in Zhanjiang. There is more space and opportunities not just for big companies but small and medium sized enterprises from Europe,” he said.
Reportor: Jasmine
Video editor: Qin Shaolong
Graphic designer: Lulu
Editors: Wing, Jerry
