China seeks to enhance Asia-Europe connectivity

China is expected to contribute more to the Asia-Europe Meeting (ASEM) by promoting greater relations between the two regions at an upcoming summit.

Chinese Premier Li Keqiang will unveil new proposals in deepening cooperation between Asia and Europe during his first foreign visit this year.

Li will attend the 11th ASEM summit in Mongolian capital Ulan Bator from July 15 to 16, after an official visit to the country from July 13 to 14.

ASEM has provided an important platform for political dialogue, economic cooperation, and cultural and social exchange between Asia and Europe.

Launched in 1996, the biennial ASEM summit has served as a venue for dialogue between countries in Asia and Europe. ASEM now includes 53 Asian and European members. The 11th ASEM summit to be held in Mongolia marks the 20th anniversary of the group's founding.

Shada Islam, director of policy at the Brussels-based think-tank Friends of Europe, said that ASEM has performed well in terms of bringing together Asia and Europe.

"The revitalization of this important forum is to a large extent a consequence of the fact that China is very much engaged into it," said Shada Islam in a recent interview with Xinhua.

She explained that ASEM is very flexible but needs some fresh energy, and said she believes that discussions on connectivity will provide that kind of new dynamism.

"ASEM members are expecting more from China, the second largest economy in the world. It should show more courage and wisdom and allocate more resources in leading the interconnectivity between Asia and Europe," said Cui Hongjian, director of the Department for European Studies of the China Institute of International Studies.

Cui noted the importance of linking China's Belt and Road Initiative to existing ASEM projects such as the Asia-Europe continental bridge as well as to more new projects to boost their connectivity.

China attended all ASEM summits ever since its birth, and the proposals it made in the past 20 years have borne witness to its contributions to the platform.

The Mongolian summit is highly looked to as it will work out the plan for priorities in the next 10 years.

The ASEM faces the challenge to enhance its relevance in looking for more spots of common interests between Asia and Europe, said Ding Yifan, an economist with the Development Research Center of the Chinese State Council.

Ding suggested more cooperation between Asia and Europe in technology and environmental protection, as well as increased efforts in dealing with possible differences among Asian and European members.

Ding expects the Chinese premier will touch upon such topics during the summit in a bid to bring out more momentum from the ASEM in the next decade.

Meanwhile, Li is also likely to discuss with other Asian and European leaders the Brexit issue, the South China Sea arbitration unilaterally initiated by the Philippines, and other hot topics across the region.

The upcoming visit by Li is expected to seek more convergence between China's Belt and Road Initiative and Mongolia's Steppe Road program.

More cooperation in production capacity, major projects and finance is expected to inject more vitality in China-Mongolia ties.

There's opportunity for Mongolia's Steppe Road program to get aligned with the Belt and Road Initiative, which will greatly benefit the Mongolian economy as well as the construction of a tri-party economic corridor involving China, Mongolia and Russia, said Gao Shumao, the former Chinese ambassador to Mongolia.

On efforts to aligning the Belt and Road Initiative and the Steppe Road program, Gao said there is huge potential for the two sides to cooperate in rail and highway construction, clean energy, tourism, health care and people-to-people exchanges.

Chinese President Xi Jinping's visit to Mongolia in 2014 laid a sound foundation for China-Mongolia relations, and Li is expected to strengthen those ties during his trip, said Gao.

China-Europe: a curious conversation

Early April in Beijing and the sky is unusually clear and blue, cherry blossoms are in full bloom and the roads are eerily quiet. It’s “tomb sweeping” day and most of my Chinese friends and colleagues are on holiday, commemorating their ancestors.I’m in Beijing for meetings on EU-China relations. I need to get my thoughts together, write up my talking points for the upcoming seminars. But I can’t concentrate. And since all offices and shops are shut, it’s the perfect moment to visit the Great Wall.And so here I am, climbing up the long and winding road that takes me to the bus stop that takes me to the cable car that takes me — finally — to one small but majestic portion of the Great Wall.It’s breath-taking. All the pictures I’ve seen do not prepare me for the magnificent reality. Like everyone else I’ve looked up the impressive facts and figures. The Wall is old, long and high — and every stone, every inch has an interesting story to tell. But seeing is believing, and the Wall, with its majestic vistas and amazing construction, does not disappoint.I like the legends and the history. But I’m more focused on modern-day China and the enormous challenge of economic transformation that President Xi Jinping has embarked on. I’m also watching my fellow tourists who are slowly wheezing up the steep slope with me.We are a motley bunch. Chinese grandmas and grandpas with toddlers in tow, young lovers out on a date, foreign tourists from India, Indonesia and the Philippines and an attractive blonde woman on her own who stops every two minutes or so to take a selfie with the Wall as a backdrop. Who needs friends when you have a smartphone?The return journey to Beijing is complicated as the roads clog up with traffic and our driver struggles to find ingenious back roads to get us to the hotel. We get to see more cherry blossoms on the side roads, small carts full of fruit, strawberries for sale in tiny stalls. It’s like going back in time.Tomorrow Beijing will be back to normal, our driver warns. Beware of pollution and traffic jams, he says. Be prepared.I am. And not just for the congested roads and stinging eyes. I’m all geared up for some interesting discussions with Chinese academics and think tank representatives on relations between China and Europe.I’ve been tracking the ups and down of relations between Europe and China for many years and the EU-China “strategic partnership” continues to fascinate and intrigue me.Unlike the US, Europe doesn’t see China as a rival or competitor. Never having achieved the “super power” status, Europe isn’t too wary of the changed world order and the rise of China — and India, Asean and others.Europe isn’t an Asian power but an Asian partner, EU policymakers insist. There is much that the EU and China can do together on the bilateral level and on the global stage. Europe is a strong supporter of China’s new economic transformation agenda. Its mutual say Chinese officials who insist that Beijing wants a stronger and more integrated Europe.Both sides are cooperating on a range of issues, including China’s plans to build a “One Belt, One Road” connectivity network linking Europe and Asia. There is heady talk of an EU-China partnership on urbanisation, building 5G technology and warmer people-to-people relations.This is heartening — but its only part of the story. In the public discussions in Beijing, Chinese academics make no secret of their anger at Europe’s stance on two key issues: the EU’s reluctance to grant China “market economy status” and Europe’s failure to lift the arms embargo imposed on Beijing after the Tiananmen Square clampdown in 1989.There are accusations that Europe is too easily swayed by American pressure to take a tougher stance against China. And since it is not a “hard” security actor, some Chinese colleagues insist that the EU has no business making statements on rising tensions in the South China Seas.Europeans, for their part, complain about market access restrictions facing European exporters and investors, the slow pace of economic reform in China and worry about the country’s increased assertiveness on the regional stage. There are worries about China’s overcapacity in sectors such as steel which is making life difficult for Europe’s steelmakers.But while the talk sometimes gets tough, it’s clear that Europe and China need each other. Trade between the two sides is worth about 1.5 billion euros a day. An estimated three million jobs in Europe depend on relations with China. Beijing needs Europe’s intellectual expertise, technology and experience.Both sides face the challenge of ensuring growth and jobs, looking after their ageing population while also providing hope and employment for young people. There is talk of synergies between the EU 2020 agenda for growth and jobs and China’s plans for a “new normal” of lower but high-quality, sustainable and inclusive growth.As European and Chinese leaders prepare to meet in Beijing in July for their 18th summit, it is clear that EU-China relations have grown and matured over the years. Brussels and Beijing talk to each other on multiple topics and in multiple fora.There are disagreements and occasional bitterness and sparring. But the conversation is intense, much more so than the EU’s relations with other Asian nations. There is mutual curiosity. And the beginnings of a mutual understanding.In a world marked by inter-state rivalries, power struggles and competition between nations, can anyone really — and realistically — ask for more?

Trade discord should not affect EU-China relations

EVERYONE loves a good trade war or at least a trade skirmish. As a reporter, I’ve written endlessly about quarrels between nations over imports and exports of textiles, footwear, bicycles, steel and other equally mundane products.

The battles are over tariffs (too high or too low), market access, quotas, subsidies, non-tariff barriers and other obstacles and restrictions. And they usually involve the European Union — after all I am based in Brussels and the EU is the world’s largest trader — and a motley group of nations including the United States, Japan, China, India, Pakistan and so on.

With global trade in goods running at around 18 trillion or so dollars a year, it is hardly surprising that nations sometimes rub each other the wrong way. Trade is important because it creates jobs, growth and development.

But confrontations over steel, textile and other products have a nasty way of infecting not just the conversation on trade between states but also their overall “beyond trade” relationship.

This is what may happen in the ongoing debate in the EU over granting market economy status (MES) to China.

The story goes back to 2001 when China joined the World Trade Organisation (WTO) and promised to liberalise trade and undertake a swathe of economic reforms. The deal was that China’s partners would continue to treat it as a “non-market economy” until December 2016 after which according to Beijing’s interpretation it would get full MES.

So what’s so important? If China is granted MES, the EU (and other WTO members) will find it more difficult to slap anti-dumping fines or duties on Chinese products believed to be sold in Europe at unfairly low prices.

China believes it should be granted MES automatically under WTO rules. The EU is split on the issue. And the discussion is further complicated by the global oversupply of steel and the recent increase in Chinese steel exports to Europe.

The European Commission is under pressure from many of its member states to step up action to relieve an ailing steel industry suffering from tumbling prices and cheap imports from China and Russia.

The EU is the second largest producer of steel in the world after China, producing over 177 million tonnes a year and accounting for 11 per cent of global output. But 85,000 jobs in the steel sector have been lost since 2008 representing over 20 per cent of the workforce. The EU also has some of the world’s highest energy costs and green taxes.

Disgruntled steel workers have poured on to the streets of Brussels demanding that the EU stop any moves to grant MES to China because it would worsen their fate. Alarmist studies warn that between 1.7 million and 3.5 million jobs would be lost if China gets MES. Washington is also adamant that Brussels should not meet China’s demands for MES access.

While Brussels deliberates over the matter, Beijing insists that the EU must not renege on its WTO obligation. Tempers are beginning to fray, raising concerns that the carefully-crafted overall EU-China relationship is being impacted.

That would be a pity. Total trade between China and the EU comes to almost one billion euros a day. Anti-dumping actions and the granting of MES only account for a small percentage of such trade. And in any case, granting MES to China would not prevent the EU from pursuing anti-dumping cases against China.

But trade quarrels have a way of becoming politicised and spiralling out of control. Which is exactly why both the EU and China need to think carefully about keeping their relations on track while resolving the MES issue.

It’s no secret that China has an over capacity in the steel sector of 400 million tonnes. Much of the surplus is exported to Europe, with 53 per cent increase of steel imports from China last year.

This has led EU Trade Minister Cecilia Malmstrom to warn that “whatever happens to the market economy status, China needs to behave responsibly and to make sure that its overproduction of steel isn’t dumped into the global market”.

According to some reports, the EU may give MES to China on the condition that Beijing reduces the amount of steel it exports to Europe. Other options could include the negotiation of a “package deal” under which China would agree to restrict its exports of steel and speed up negotiations on a bilateral investment treaty in exchange for an EU decision to grant MES and to undertake an exploratory study on an EU-China free trade agreement, a long-standing Chinese demand.

China has already made some conciliatory moves. In a letter sent to the EU, China’s Trade Minister Gao Hucheng has said Beijing is committed to decrease the steel output “by between 100 and 150 million tonnes”.

But the conversation continues. A decision on MES will likely be made by the EU towards the end of 2016. In addition to the European Commission, the European Parliament and national governments also need to give their approval.

It’s going to be complicated. Both sides need to tackle the issue carefully and cautiously. The focus must be on compromise and cool-headed deliberation.

It would be unfortunate if the carefully-crafted and multifaceted EU-China relationship were to suffer because of discord over trade.