#EuropeChina trade and investment: Converting challenges into co-operation

| May 17, 2019

As European perceptions towards China evolve and mature, let us remember the lessons of the past while staying optimistic about the future, writes Huawei Technologies Global Government Affairs Vice President Simon Lacey. 

Last week a panel was convened in Brussels by the newly established Europe-Asia Interlink Initiative to discuss ‘Europe-China Trade and Investment: Converting Challenges into Co-operation’. I had the honor to sit beside such notable luminaires as Mrs. Helena Koenig of the European Commission, Jacques Pelkmans of the Center for European Policy Studies, Pascal Kerneis of the European Services Forum and Duncan Freeman of the College of Europe. Professor Miryong Kim of the VUB organized the event, which featured a lively discussion on a whole range of issues. Here are some takeaways.

Huawei Technologies Global Government Affairs Vice President Simon Lacey

Europe and China each have their own comparative strengths

One thing policymakers and trade negotiators need to constantly bear in mind is the stark reality that countries don’t have friends. just interests. Any effort to put a label on China as a “strategic competitor” or summarize the relationship under any other sound-bite sized formula will inevitably betray the complex set of competing and complimentary interests this relationship involves and is thus better avoided. Yes China exports a lot of manufactured goods to the EU, but the EU likewise exports a vast amount of services and more intangible things to China like management expertise and the sophisticated soft-skills needed to build and manage intercontinental supply chains and distribution networks. Although Europe may feel like it is “losing” some ground in basic manufacturing, this is offset to a very large degree in the impressive gains it has made across a very wide range of other important economic sectors.

The causes of China’s successful transformation are manifold and complex

Too often China and its companies are criticized for having succeeded solely thanks to government support and because somehow they failed to play by the rules. This is unfair to the millions of very hardworking people who over the last 30 years have made unimaginable sacrifices to better their own lives. It also overlooks the fact that China has a large and economically significant private sector (of which Huawei is a prime example) that has risen to successfully compete on export markets around the world. This has benefited both the Chinese economy more generally but also businesses in the rest of the world who were able to leverage the massive economies of scale China offers to generate wealth for their shareholders and value for their customers. Of course Chinese companies benefited enormously from the openness they encountered in foreign markets, which is what made China’s export-driven growth model possible in the first place. So it is only natural that now that China has come so far so fast, that its trading partners are calling for their market openness to be reciprocated by China.

Decoupling from China and reversing decades of global economic integration is in nobody’s interest.

After the destruction that Europe suffered during World War II, visionary leaders and the authors of the European project recognized that the best way to avoid future wars was to bind the largest belligerents together in ever-closer economic cooperation initiatives that started with the European Coal and Steel Community and today have culminated in the European Union and the eurozone. This is an important lesson from the past that we should not forget. Treating China as a threat and decoupling from it economically are precisely the opposite of what the world needs now and here Europe can and must show the way to constructive engagement with China.

Partnering to push the boundaries of the technological frontier

Europe is Huawei’s second home market, not only because it generates the second largest share of its revenues in the EU immediately after China, but because of the important place Europe has for the company’s research and development efforts. This point supports what was said above about economic complementarities between the EU and China. The EU is a hugely important place for the creation, dissemination and commercialization of new ideas. This explains not only why Huawei has chosen to invest such significant resources in the establishment of both its own research centers as well as joint innovation centers with its telco customers, but also why it spends billions funding and supporting basic and applied research in European universities and technical institutes. In this very important way, European and Chinese resources, expertise and talent cooperate to build a better connected world and to push the boundaries of the technological frontier in order to make life better for everyone.

It is my sincere hope that Europe stays true to the ideals it has nurtured and become a global champion of over the course of its own economic integration history.

Simon Lacey is global government affairs vice president at Huawei Technologies and works on issues of trade facilitation and market access from the company’s headquarters in Shenzhen.


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