The European Chamber Annual Conference 2022
The European Chamber held its annual conference in Beijing on 9th December, under the theme ‘Crossing the River Without Stones’. The event was held in hybrid format – while some were able to attend the conference in person, a surge in COVID cases in Beijing meant many were also forced to participate online. The silver lining of this was that it made the conference available to stakeholders in all regions of both China and Europe.
The opening speech was delivered by Jörg Wuttke, president of the European Chamber. He noted that while the phrase “crossing the river by feeling the stones” is generally associated with Deng Xiaoping, and moving China forwards, it was in fact coined by Chen Yun in reference to slowly opening up the Chinese economy. President Wuttke said there were some major ‘stones’ that could be credited with bringing China to where it is today: real estate, which is now in a very precarious position; fixed asset investment, leaving China now with three times the infrastructure in terms of gross domestic product (GDP) that the United States (US) has; exports, which drove China’s economic rise; demographics, as the country had a lot of young people available to go into the factories, an advantage that is now changing; and urbanisation, where a population equal to New York City moved to cities every year, though urbanisation can only be done once. He said that future ‘stones’ should include high-technology manufacturing and consumption, which need the right conditions to succeed.
President Wuttke also spoke of the Chamber’s annual flagship publications, the Business Confidence Survey and the Position Paper. The BCS imagery referred to back swans, specifically COVID-19 and the Russian war in Ukraine, with a lighthouse representing Chin’as potential to recover and return to growth. The messaging of the Postion Paper 2022/2023 was “idealogy trumps the economy”, indicating the Chamber’s concerns over the Chinese Government’s appreciation of the importance of the privately-owned business sector, which plays an oversized role in innovation and economic development.
The final major topic brought up by President Wuttke was China’s handling of COVID-19. He said while Chinese people had been well-protected from the worst of the initial COVID variants, the government’s emphasis on testing over vaccination had led to a waste of resources and greatly impacted people’s daily lives. President Wuttke highlighted the Chamber’s consistent promotion of vaccination since the pandemic began. He added that while the new measures introduced by the government to ease COVID restrictions were welcome, a coordinated and choreographed opening up is vital.
HE Jorge Toledo, the newly appointed ambassador of the Delegation of the European Union (EU) to China, also addressed the annual conference. He began by praising the Chamber for its visibility, not only in China but also in the global debate and analysis of China-related concerns. The ambassador echoed the Chamber’s emphasis on vaccination, saying that it was not only important to avoid disruptions to business, but also to ensure people’s safety and health.
Ambassador Toledo spoke of the turbulence of 2022, such as that caused by the Russian invasion of Ukraine, which had led directly to global food shortages and the fuel crisis in Europe. He highlighted the endurance of the strong trade links between the EU and China, despite the unbalanced nature of that trade. The ambassador said that while the EU has referred to China as “a partner, a competitor and a systemic rival” since 2019, the recent visit of Charles Michel, president of the European Council, was vital in ensuring dialogue is maintained between the two sides. He added that “’systemic rival’ does not mean ‘enemy’”, but is rather recognition of the differences in the systems adopted in the EU and in China. While the two sides can partner well on combatting climate change, and compete and cooperate on trade, they can also utilise their dialogue channels on issues in which they have opposing views and systems, such as human rights.
A leading official of the Directorate General for Trade, EU Commission, addressed the conference by video link from Brussels, highlighting the regard the European Chamber is held in by European institutions as a reliable voice from the ground in China, and thanked the Chamber for its assistance in preparing for the high-level trade negotiations with the Chinese Government in 2022. The official went on to speak of the tools the EU has introduced to protect its own businesses and market, but also stressed that any decoupling between the EU and China was undesirable and should be avoided.
Two panel discussions also took place during the conference. The first, moderated by Wendy Wu from the South China Morning Post, was themed “Is ideology really trumping the economy?” The panellists shared their views on how the new leadership of the Communist Party of China will shape the country’s social and economic policies going forward. They noted that the more consolidated power of the State Council could lead to more efficient implementation of policies, though it increases the risk of sudden policy changes. The panel also agreed that foreign businesses operating in China were more affected by politically-driven policies in recent years than when China joined the World Trade Organization 20 years ago.
The second panel was themed ‘China Ahead 2023’, which focussed on the outlook for the Chinese economy in the year ahead. The panellists also gave their interpretations of the concepts of ‘common prosperity’ and the ‘unified market’. Questions from the audience for the panellists centred on the sources of consumerism in the Chinese market and the viability of introducing property tax in China.
The conference closed with an address from a former leading official of a Chinese financial institution, who also emphasised the potential for deeper cooperation between the EU and China, in particular in the areas of climate change, bilateral investment and financing the transition to renewable energies.
For further details on the topics addressed in the speeches and discussions that took place during the conference, the Chamber’s BCS 2022 and Position Paper 2022/2023 are available to download from its website, www.europeanchamber.com.cn.