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You are here » Home Page » News » EU Trade chief De Gucht travels to China and Singapore to deepen trade ties

EU Trade chief De Gucht travels to China and Singapore to deepen trade ties

2011-09-07 source

The EU’s Trade Commissioner Karel De Gucht will meet China’s Commerce Minister, Chen Deming, in Beijing on 14 July to discuss the trade and investment relations between the EU and China. The talks are expected to focus on how European trade and investment with China can be increased with a view to assisting European companies gain better access to the vast Chinese market. The EU and China will also discuss how to make headway on a number of trade barriers including on raw materials. Other topics include the protection of intellectual property rights and the access to government procurement projects. The discussions are part of the "EU-China Joint Committee", which is convened annually.

"European businesses have vastly contributed to China's economic growth over the last decade", said Karel De Gucht, EU Trade Commissioner. "China and Europe now trade over €1 billion a day which is clearly a situation that benefits both parties. However I am concerned by reports of European companies who feel that China's economic openness is improving too slowly or not at all. We need to discuss this matter in a constructive dialogue."

On 15 July De Gucht will continue to Singapore to meet Singapore's Minister for Trade and Industry, Lim Hng Kiang, as well as the Minister for Foreign Affairs and for Law, K Shanmugam. They are set to welcome the strong growth in EU-Singapore trade in 2010, and review the state of play in on-going negotiations on a bilateral free trade agreement.

Background China

The Joint Committee meets in the context of a rapidly developing trade relationship where China has become the EU's fastest growing export market, and the EU is China's biggest market for their exports. A recent study shows that EU businesses in China are optimistic about the future and their continued profitability in the Chinese market, where European companies are contributing to growth and economic development. At the same time, European consumers are profiting from cheaper goods. Chinese exports are well-integrated into European companies' value-chains and thus contribute to their competitiveness in world markets.

European businesses both in China and Europe-based remain concerned, however, about a number of issues in EU-China trade relations. Some of these issues concern investment restrictions where China keeps large parts of its market inaccessible. Certain sectors are even fully excluded from foreign investment. China-specific standards create barriers to trade and the public procurement market in China is far from open. The infringement of intellectual property rights is a frequent issue for European companies apart from general concerns about the business climate in China and complaints of an unlevel playing field for foreign and foreign-invested firms.

Facts & Figures China

In 2011, China is the world’s largest exporter and the world’s second largest national economy. The country now accounts for about 11% of world trade in goods. Bilateral trade with the EU has gone from €4 billion in 1978 to €395 billion in 2010. That means that the EU and China trades more than €1bn a day. The EU continues to be China's main export market. In 2009 the EU imported goods worth €282 billion from China.

At the same time, China is Europe's fastest growing export market. European companies are deeply integrated in Asian production chains. About half of China's exports are currently produced by foreign invested enterprises, mainly from Asia. As a result, the EU runs a deficit with China on trade in goods which was €169 billion in 2010. Through better market access, European exporters should be well placed to increasingly sell their products on the rapidly expanding Chinese consumer market.

On the services market Europe runs a surplus with China of around €5.0 billion in 2010. Investment flows also show vast untapped potential. European companies invested €4.9 billion in China in 2010. China invested €0.3 billion in the EU in 2010. Yet China accounts for just 2-3% of overall European investments abroad, so there remains much potential.

Facts and figures Singapore

Singapore is one of the 10 members of the Association of Southeast Asian Nations (ASEAN). The ASEAN countries as a group are the EU's third largest trading partner outside Europe, after the United States and China.

Bilateral trade in goods and services between the EU and ASEAN reached around €175 billion in 2010, of which EU-Singapore trade makes up about a third (around € 60 billion). Singapore is thus by far the EU's largest trading partner inside ASEAN.

European businesses in a variety of sectors, from pharmaceuticals via green technologies to finance, use Singapore as a hub to serve the ASEAN region. For many EU exporters Singapore is thus the gateway into a dynamically growing market of some 600 million consumers.
The EU has a positive balance of trade in goods and in services with Singapore. In 2010 trade in goods was worth € 42.6 billion, in services € 18.4 billion. Last year bilateral trade in goods increased by some 22%, with both imports and exports showing strong growth. Both sides are also important investors in each others' economies; the stock of bilateral foreign direct investment is close to € 150 billion.

FTA negotiations with Singapore started in March 2010 and seven rounds of negotiations have been held so far.

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