Experts Call for Talks Between China, EU to Boost Win-win Cooperation as European Firms Suggest Limited Curbs on Outbound Investment

Protectionist moves will harm European economy, companies' competitiveness: experts

By Ma Jingjing

Aug 06, 2024 09:24 PM

A chip manufacture machine Photo: VCG

Global semiconductor industry group SEMI Europe reportedly called on the EU on Monday to limit curbs on European firms' outbound foreign investment, as the EU is considering proposals to screen investment in foreign semiconductor, artificial intelligence (AI) and biotechnology companies, following proposed US rules that would restrict investments in China's high-tech field.

Chinese observers said that EU's protectionist moves over unfounded security concerns will bring uncertainties to China-EU relations and harm European economy as well as the international competitiveness of its companies, amid the risk of losing the huge China market.

There is vast room for cooperation between China and the EU in a variety of fields including new energy and AI, and the general trend of cooperation will not be affected by geopolitics, observers said, noting that talks are needed to address each other's concerns for boosting cooperation in the long run.

In response to the European Economic Security Strategy, SEMI Europe said that "European semiconductor companies must be as free as possible in their investment decisions or otherwise risk losing their agility and relevance," Reuters reported on Monday, citing the group's paper outlining its recommendations.

Representing about 300 Europe-based semiconductor firms and institutions including ASML, the group said that the policies under consideration by the EU appear to be overly broad and if adopted could force companies to disclose sensitive business information, adding that restrictions on cross-border research cooperation would be misplaced, according to the report.

"The EU's protectionist move will add uncertainty to China-EU relations and investments by companies from both sides. Moreover, it will harm the European economy and the competitiveness of European companies, since the EU's investment restrictions targeting China will affect European companies' exports and make them lose the huge China market," Zhang Jian, a vice president of the China Institutes of Contemporary International Relations, told the Global Times on Tuesday.

Zhang said that the EU's politically driven motives sharply deviate from European firms' interests, and as a result, more European companies may step out to oppose the bloc's protectionist moves.

The EU has adopted protectionist measures in recent months targeting China's new-energy and high-tech sectors. Recently, the EU imposed provisional additional import tariffs of up to 37.6 percent on Chinese electric vehicles (EVs), which have drawn strong opposition from European firms.

Oliver Zipse, BMW chief executive, on Thursday said that the EU's tariffs on Chinese-made EVs had hit the bloc's own carmakers, including the Munich-based group, which produces vehicles in China for the European market, the Financial Times reported.

"There is vast room for China and the EU to deepen cooperation, for example, in green technology, AI, biotechnology and environmental protection," Jian Junbo, a deputy director of the Center for China-Europe Relations at Fudan University's Institute of International Studies, told the Global Times on Tuesday.

It's unrealistic for some Western countries to achieve a technology monopoly through geopolitics, and China's high-level opening-up is in line with the trend of history, Jian said.

In June 2023, the European Commission brought up the European Economic Security Strategy, which proposed several measures, including preparing a list of technologies critical to economic security and assessing the risks they face, fully implementing the EU's export control regulations on dual-use items, and reviewing regulations on screening foreign direct investment.

Due to the increasingly fierce China-EU competition, the EU may impose more trade restrictions on products where China has an advantage, acting out of protectionism. However, such measures will hinder the healthy development of bilateral economic and trade relations, disrupt international trade and ultimately harm the prosperity of Europe, Jian said.

To address the increasingly fierce economic competition, the two sides should bind their industrial chains more closely together, explore a larger market through mutual integration, avoid vicious competition and unilateral suppression, and truly achieve the best way to share their interests and prosperity.

They should also facilitate the promotion of the technological development of humankind, according to Jian.

"It is in the interests of both China and the EU to properly handle differences through dialogue and consultation on the basis of mutual respect," Chinese Foreign Ministry spokesperson Lin Jian said at a press conference on July 29, stressing that China-EU trade and economic cooperation is mutually beneficial in nature.

China-EU economic and trade relations have recently developed in a direction that is not very good amid the EU's growing protectionism and abuse of the "national security" concept, but the general trend of cooperation will not change, Zhang said, as Chinese and EU officials have expressed willingness to strengthen cooperation during their high-level exchanges.

He said that talks are needed for the two sides to address each other's concerns to promote win-win relations.