China-EU economic cooperation increasing amid COVID-19
Editor’s Note:
Is the COVID-19 pandemic a game changer for China-Europe ties? As some observers claim the public health crisis is upsetting relations, economic and trade cooperation between the two – a crucial wind vane of their comprehensive relationship – is quietly increasing. Henry Tillman
(Tillman), founder, director and CEO of UK-based consultancy Grisons Peak shared with Global Times (GT) reporter Li Aixin his numerical evaluations of China-EU collaboration both during and after the pandemic.
GT: How do you evaluate the ChinaEU cooperation amid the novel coronavirus pandemic?
Tillman: While much has been written about Chinese medical assistance with the virus and indeed outbound investment into Europe over the past decade, since 2018 our firm also began focusing on EU investment into China. Beginning in 2018, we have seen substantial investment and pledges by many EU countries.
GT: How do you think China-Europe trade ties will develop in the postpandemic era?
Tillman: China-EU trade has been in the range of 13-14 percent of total Chinese trade since 2013, ranking No.2 behind only the US. This changed in 2019, when the US and the EU reversed places. However, in Q1 2020, ASEAN became China’s largest trading partner, surpassing both the EU and the US. Over the short term, this can in part be explained by the effects of the EU lockdowns and strong performances in growing major Southeast Asian economies. Longer term, China has put into place detailed plans to possibly double trading volumes between 2019 and 2025 with the ASEAN, Africa, Latin America, Russia and MENA regions.
GT: Some observers from the US and Europe recently voiced that in the post-pandemic era, Europe must decide between Washington and Beijing. What is your take on that view?
Tillman: Across the EU, European decision makers in the countries we are involved in realize that there has been substantial movement in the 70-year world order. It is too early to tell where this movement is heading as we are still in the early stages of the virus with some way to go before an effective vaccine is available. At the individual country level, there have already been a few recent US/ EU 2020 vignettes worth highlighting.
On February 7, CNBC reported that US Attorney General William Barr said America and its allies should take controlling stakes in Finland’s Nokia and Sweden’s Ericsson to “blunt” Chinese firm Huawei’s “drive to domination.”
On May 8, Der Spiegel cited a German intelligence report which cast doubts on US allegations that COVID-19 originated in a Chinese laboratory, and says the accusations are an attempt to divert attention from the US’ failure to rein in the disease. The Der Spiegel report followed US Secretary of State Mike Pompeo’s prior 5G threats to European allies warning them not to use Huawei.
GT: What kind of role do you think the BRI could play in the global industrial chain?
Tillman: On May 14, MOFCOM released data showing China’s trade volume with BRI countries from January through April 2020 was up by 0.9 percent, while overall Chinese trade had declined by 4.9 percent during the same period.
The pandemic has clearly emphasized the need for supply chain diversification. With air transportation and ocean freight affected, China-Europe rail freight has shown very strong growth.