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China Europe Business News

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If we are being honest, our first topic might not actually fit the definition of “news” as it is a few days old at time of publishing. Who knows how old when you read it. We are talking about the Chinese and European Union bilateral investment agreement that will expand European companies access to China’s economy.

This has been a work in progress for many years now with a deadline set for agreement at 31st December 2020. So, true to the dramatic precedent set by the Brexit negotiations it was, magically, at the last hour that China, France, and Germany inked the agreement on behalf of the EU.

According to Reuters; under the agreement, China would open up industries to EU companies including manufacturing, construction, advertising, air transport, maritime services, telecom and, to some extent, cloud computing. However this isn’t quite the end of the road as the agreement still needs to be agreed to by all EU countries.

This might not be as cut and dried as it sounds however, as the possibly incoming Biden administration has vowed to work with allies to curb China’s growth. Presumably he counts EU countries as part of these “allies.” Some experts have pointed to the advantages gained by the EU around terms and conditions that the US has long been pushing China to relax.

Might this raise a potential dilemma of conflicting loyalties with the US? In short, if ratified, this agreement would give the EU serious economic and trade advantages over the US which might make Biden’s task an uphill battle. That begs the question; do EU countries want China’s growth curbed? Would they be cutting their own throats? Risk losing everything they have worked towards for the past decade?

However, like Asians, Europeans have long memories and some companies may face a personal dilemma. On one hand, the advantages they have been asking for, on the other, caution over Beijing’s oft heavy handed influence over the economy and businesses here as well as past issues of transparency and trust.

That being said, many European firms, such as Sodexo, Siemens, VW, Philips and the plethora of fashion and cosmetic brands have always had good business in China. We do not see them being too keen to see that limited.

For a deeper analysis, you may enjoy this article, part of Caixins premium membership collection: Five Things to Know About the New China-EU Investment Agreement By Jasper Liu. Head image also courtesy of Caixin.

More efforts needed to boost Sino-German ties on Industry 4.0

At a slightly more granular level, Clas Neumann, senior vice-president of German software and cloud service giant SAP, called for more efforts to find common technical standards for Industry 4.0, so as to further the cooperation between China and Germany on leveraging cutting-edge technologies to upgrade manufacturing.

He is looking for common technology standards between China and Germany to enable faster innovations between the two countries. Neumann cited Germany’s strength in creating industrial standards and China’s high level of digitisation as an example where this can be achieved.

This article was originally reported by Ma Shi and can be read in full at the China Daily

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