Xi Jinping

A prosperous China is good for the European Union

PUBLISHED : Monday, 07 April, 2014, 2:40am
UPDATED : Monday, 07 April, 2014, 2:40am

President Xi Jinping could not have timed his European trip better. With relations between the European Union and Russia fraught over Crimea, the 10-day visit offered Brussels a welcome diversion and perhaps a solution. For China, there was the opportunity to strengthen economic and diplomatic relations. The billions of euros in deals struck and the pledges to improve ties point to the dawning of a new era of co-operation.

Xi and his 200-member business delegation were pampered on each stop as they moved from the Netherlands to France, Germany and Belgium. Tough talk on contentious issues from both sides that previously accompanied such top-level visits were put aside, replaced by warmth, typified by the amicable resolution of a dispute over Chinese solar panels that had threatened to cause a trade war. There was every reason for the changed atmosphere: China and the EU need one another. Substantial economic and political benefits lie ahead if they can work more closely together.

The president's stated mission was, as he said in the Belgian city of Bruges, to "build bridges of friendship and co-operation"; the EU sought understanding and trust. These are straightforward goals, but not easy to attain given the backdrop of Europe's concerns over China's rise, its arms embargo and lecturing on human rights. Each has much to learn about the other's history and culture. Building trade and investment are the best ways to advance.

Annual trade between China and the EU is already US$588.6 billion and it will be substantially boosted by the deals signed during Xi's tour. There will be dramatically greater gains if a free trade agreement being pushed by China with the EU's US$17 trillion economy can be forged; the EU said that it was under consideration. In return, the EU is eager for China, likely to become the world's biggest economy within the decade, to open up investment opportunities. Better economic and diplomatic ties will help Europe move beyond its sovereign debt troubles, but the spectre of lost trade from the EU's rift with Russia over Ukraine gives added impetus.

The cordial nature of Xi's trip was fitting given that it marked 40 years of Sino-EU relations. But there was nothing forced about the speeches or deals; both realise the need for a better relationship. It is in the interests of both that they work together. A prosperous China is good for the EU and the reverse is true for China's growth and development.