Former Portuguese Prime Minister Barroso
In 1995, during my tenure as Portuguese Foreign Minister, I personally participated in the negotiation of Macao's return to China. That experience brought me closer to China. Since the 1980s, I have visited China many times and witnessed China's remarkable development and modernization process. From 2004 to 2014, during my tenure as Prime Minister of Portugal and Chairman of the European Commission, I also conducted many dialogues and cooperation on behalf of the EU and China.
We have established a cooperative relationship between the EU and China. China has a long history of diplomatic relations with many European countries. The EU established diplomatic relations with China as early as 1975. Now more than 70 dialogue mechanisms have been formed on the bilateral side. These dialogue mechanisms are derived from my passing in 2013. Strategic planning for cooperation.
In July 2018, we held the 20th China-EU Leaders' Meeting. The top leaders of both sides participated in the summit. The Chinese delegates are the Chinese premier, while the European delegates are the chairman of the European Commission and the chairman of the European Council.
Therefore, a well-structured cooperative relationship has been established between the EU and China. This dialogue mechanism covers many fields, and both sides affirm the strategic significance of the mechanism. This means that we cover the most important issues in our long-term strategic vision.
The economic and trade relations between China and the EU are particularly important. The EU is China's largest trading partner. Generally speaking, such a statement is rare, because when you talk about trading partners, the first thing that comes to mind is a country, such as Japan, Germany, France, the United Kingdom, and so on. However, from a trade perspective, all EU member states are considered as a whole. When the European Parliament negotiates with other countries, it also represents all 28 member states. Therefore, the EU as a whole is China's largest trading partner, and China is second only to the United States and the EU's second largest trading partner.
The daily trade volume of goods has reached 1.5 billion euros, and will soon reach 2 billion. For both parties, what matters is the huge transaction volume and extensive trade cooperation areas, which have become part of the integrated supply chain.
Trade activities are now different in the past. However, some people still look at trade from a conservative perspective, arguing that national trade is simply selling what they produce to other countries. But the times have changed. The current trade is that one country exports some components to another country, and then returns to that country or other countries.
This is the integrated supply chain and the reason why China and the EU are getting closer. The latest official data of the EU that I have mastered shows that the total amount of goods exported by the EU to China last year reached 19.8 billion euros, while the total amount of goods imported from China reached 375 billion euros.
Although China has a trade surplus with the EU in terms of total commodities, from the data of 2016, the EU has a slight trade surplus with China in terms of services. The latest data I have learned shows that the EU's total service exports amount to 38 billion euros, and the total amount of services imported from China reaches 30 billion euros.
As you can see, China-EU relations are rich in economic and trade aspects and are of vital importance to us. At present, the EU is negotiating with China on a comprehensive investment agreement. This agreement has already been exchanged since I was the chairman of the European Commission. It was originally planned to be officially launched in 2014.
At that time, we are already discussing the possibility of signing a free trade agreement with China. Some European countries believe that it is feasible to establish free trade in China, but unfortunately we did not reach a consensus at the time. The reason for this failure is that our economic structure is different and there are many other problems that need to be solved. These are the issues that the EU often talks about when it communicates with Chinese leaders. We believe that instead of discussing how to build a free trade zone and reach a trade agreement, it is better to sign a comprehensive investment agreement in order to create a fair commercial competition platform for both parties and provide new market opportunities.
The original intention of this agreement is to support China's economic reforms. The achievements of China's economic development over the past 40 years are the biggest affirmation of the reform and opening up policy, and the EU is also very supportive of this. Therefore, we believe that the comprehensive investment agreement has created favorable conditions for the two sides to further expand cooperation, relaxed market access, and trade liberalization created a fair business environment.
For the EU, the most important thing is that Chinese companies can invest directly in foreign countries. Take my native Portugal as an example. The most important power generation company in Portugal is controlled by a Chinese company. The most important power distribution company is controlled by a Chinese company. The most important private bank is controlled by a Chinese group company. The most important insurance company is a Chinese group company. Holding, the most important hospital is also controlled by the China Group.
Therefore, we are very supportive of China's efforts to increase its openness in the economic field. The power company cited in the example is the most important public utility in Portugal. However, the Portuguese government still adheres to the principle of openness and welcomes companies from all over the world to come to Portugal. The companies that bid with China at the time, as well as Brazil and companies from the EU member states of Germany, but the Chinese companies have the highest price and become the company's current controlling shareholder.
So, is it feasible for a Chinese company to be controlled by a European company in China? Let us discuss this issue openly and honestly. At present, this situation is unlikely to happen in China. Although the Chinese government now says they will deepen reforms, the reality is that this form of investment is not yet possible in China, especially in the financial sector. Therefore, the Chinese government authorities and the Chinese people must consider whether China is ready to create a fair market environment for overseas investment. This decision is quite critical. If China is willing to do so, it will send a positive signal to the world to eliminate key barriers to trade between different countries. In addition to industrial policies, intellectual property protection and other factors, the reason people who try to create more tensions for Chinese trade is that China does not create a level playing field for foreign investors.
Open direct investment is in the interest of China. If we believe that each other's economy should be more integrated, then this integration is not only achieved through traditional trade mechanisms, such as tariffs and quotas, but also needs to relax restrictions on direct investment, improve the legal system, and make predictable. Laws and regulations better serve Chinese and foreign investors.
The EU has no intention of guiding others, but we are happy to share our experience. The European Union was established after World War II and became a European Community. Initially our idea was to establish a political alliance so that all European countries would no longer be devastated by the war; but in order to achieve this, economic means must be used to make Europe economically integrated, which is also the integration of Europe. The most basic concept. The founders of the European Union, from Germany and France, have experienced two world wars in the 20th century. The terrible wars between different countries made the founders of the European Union realize that "it is necessary to integrate the economies of all countries", so that the European continent will not reignite the war, so the Western European countries will form the EU. Today, one hundred years after the end of World War I, there has never been a war between the original enemies of Germany and France.
Now, if you go to Europe, you will find that there is no war between EU member states. Many long-standing countries in the EU, like Portugal, are independent sovereign states that have existed for centuries, but we still choose to establish such an integration mechanism, so that we not only have a common market, but also eliminate the country and Trade friction between countries - no quotas, no tariffs. Therefore, despite the small size of the Portuguese company, it can go to Germany without any obstacles. On the other hand, free trade between member states should also be attributed to the customs union and unified measures at the national level, including the unified currency, the euro. The euro has become the common currency of 19 countries, which is the most advanced case of regional integration.
There are other integration cases in the world, such as ASEAN in Asia. But if measured from the level of the state, there has never been a coalition in the world that meets EU standards, whether it is business investment, monetary policy, society, or the allocation of funds to the budget policies of the poorest countries. Achieve integration.
Integration has its own structure, and the world does not have to adopt the same approach. However, the successful experience of European countries in removing obstacles, establishing a fair market environment for investment and promoting trade will certainly benefit future development.
The EU also showed resilience in the face of the storm. I started as chairman of the European Commission in 2004. The European Union, which used to have only 15 member states, has become a large family of 28 member states when I left office in 2014, and the number of members has almost doubled. Some of the newly joined countries belonged to the Union of Soviet Unions of the socialist group, such as the three Baltic countries, Latvia, Lithuania and Estonia; some of them belonged to the Economic Mutual Aid Committee, namely the Warsaw Pact, such as Poland, Hungary, Czechoslovakia (later divided into The Czech Republic and Slovakia); and the former Yugoslavia, such as Slovenia and Croatia.
The EU now has 28 member states. But unfortunately the United Kingdom made a bad decision, it is very likely to leave the European Union in 2019, and we have only 27 members left. However, there are still some countries that want to join the EU.
Leaders should look at the issue from a strategic perspective. Although we have suffered from the worst financial crisis in the 50 years since the establishment of the European Union, our membership has increased from 15 to 28, and more mechanisms have been established for integration. For example, we are building a banking industry alliance. Although it has not yet been completed, it is also an initiative from the European Union to establish a single regulatory mechanism for European banks and financial sectors to provide a unified solution for bank bankruptcies that may occur in the future. Said that this organization was born in response to the financial crisis. Sometimes, the crisis can speed up the EU's integration process, because after the crisis, the leaders of the countries are willing to make some compromises to promote European integration.
China’s then chairman, then US President Barack Obama and other leaders attended the G20 summit. Many of them believe that the euro zone will collapse, and the troubled Greece will inevitably leave the euro zone, which is known as the "Greek Brexit."
However, the situation we are worried about has not happened. Instead, we created a new tool, the European Stability Mechanism, to deal with this crisis. This new mechanism is equivalent to the European Monetary Fund and is still being improved. These new mechanisms have allowed Greece to stay in the euro zone and make the euro the second largest currency in the world. By this we also show the resilience of the EU and the Euro.
During the financial crisis, China still gave EU and euro support in the face of the market's low selling of the euro.
At that time, I had a very candid dialogue with the Chinese leaders. They expressed their support for the euro because China understands that the existence of the euro is strategic and always an important currency. This is also the significance of China's indication of the existence of the EU to the world.
Now that China-EU relations are intimate, are there any problems? Of course, and sometimes there are many problems, including trade issues. However, many people in the EU, including me, believe that when dealing with problems, we should treat this issue independently, instead of raising it to other areas where conflict may arise. Such a treatment is very important.
In the international community, if we always react too much to a problem, then communication will only create more problems. The country is like a human being, has feelings, can feel pride and frustration, and does not want to lose national pride. However, the development of international policies with arrogant emotions is not beneficial. Because any form of arrogance is stupid. Therefore, we should avoid all forms of arrogance and avoid all forms of resentment. Although we will have differences when we encounter difficulties, we should try to avoid this problem affecting other aspects and let the overall relationship be positive. This is why I am proud of the results I have achieved over the years.
Do we still have room for improvement now? Of course, from my point of view, some areas need further integration. We should bear in mind our strategic goal, which is the good diplomatic relations between China and the EU.
For the EU, China's growth is an opportunity for global growth and prosperity.
We sincerely admire China’s achievements, that is, to lift hundreds of millions of people out of poverty. Whether it is public or private, we have repeatedly expressed our admiration to the Chinese leaders, and Chinese leaders have repeatedly expressed our gratitude to us.
I think that the economy has developed well in the past two years. Last year's economic development was particularly outstanding. The pillar industries in various economies collectively exerted their strength, which made the economy flourish. Especially in the United States, although this staggering economic growth momentum has occurred, in part because of the intensive efforts of the US authorities to implement taxes and economic injections. But in comparison, we can see that the US economic growth momentum is significantly better than that of Europe. Even if European countries have no economic recession, the growth rate is relatively flat. For these mature economies in Europe, as long as growth is a good thing, some of our member states have also achieved growth that exceeded previous expectations.
China is still the driving force for global growth, and the rate of economic growth is amazing. However, China's economic growth has slowed down; at the same time, the Japanese economy and most emerging economies have also been growing.
Recently, some haze has shrouded in these emerging economies. We believe that if trade frictions continue, the United States will not be able to maintain this rapid growth momentum, and China's economic growth may also slow down. Therefore, 2019 will be an important test for China's economic recovery. Chinese economic experts will certainly have their own views, but I still want to share my views.
The important issue that China must solve is how to continue to grow while avoiding more debt.
Experts from Europe and myself analyze China's economy. The key to China's growth rate is structural reform, and the success of structural reform depends on whether the Chinese government can promote market reform. If the Chinese government can do this, then the Chinese economy can achieve long-term prosperity.
Chinese President Xi Jinping also believes that China should continue to reform. Only reform can further release social productivity, which can offset some of the negative effects of trade and international investment. Therefore, the goal for next year will be to avoid greater market volatility and economic volatility, although this may not be avoided.
This is another reason why the EU and China should continue to work together in a spirit of openness, frankness and friendship. Both sides should bear in mind the overall objectives of the strategic relationship and strengthen collaboration; not only must consider the interests of their citizens, but also the interests of the other’s nationals and the interests of the world – because the European Union and China are not only an important part of the global population, but also An important part of the global economy.
This will not only benefit the EU and other Chinese partners, but also the global economy, and enable everyone to achieve a higher degree of integration in order to achieve their goals.