The trade war initiated by the United States is evolving into a global economic warfare; this is the war of two different world blocs, but of the United States against the world. Under this background, Premier Li Keqiang’s trip to Europe has a special significance – how will China and Europe, both under pressures from the U.S. trade war, see the future? How will cooperation be carried out? This is a question that is of concern to the world.
Anbound’s researchers noted that Premier Li Keqiang deliberately expressed his positions on many major issues during his trip to Europe. On July 7, on the eve of his visit to Germany and the fifth round of China-Germany intergovernmental consultations, Li Keqiang published a signed article in the Frankfurter Allgemeine Zeitung stated that he will co-chair the fifth round of China-Germany intergovernmental consultations with Prime Minister Merkel, aiming to plan and coordinate the promotion of all-round cooperation between China and Germany in the next four to five years. Premier Li’s article emphasizes the following points:
First, China will continue to adhere to market-oriented reforms and opening-up to the outside world. China has adhered to opening-up to promote reforms, and using reforms to promote innovation. The market-oriented reforms have made significant progress, which is consistent with the direction of economic globalization and free trade, and China will maintain this path, striving to create a better business environment and make itself the world's most attractive investment climate for a long time. Earlier, when Premier Li Keqiang attended the 8th China and Central and Eastern European Countries Business Forum, he stressed that for a long period of time in the future, three things will not change, and these are the long-term economic fundamentals, the orientation of market-oriented reform, and the determination to expand opening-up. This shows that after President Xi Jinping, Chinese leaders once again demonstrate China's attitude towards market-oriented reform and opening-up to the world.
Second, China attaches importance to Germany's strength as a manufacturing powerhouse and a major exporter, and will promote further cooperation between the two countries. Li Keqiang believes that Germany's strong international competitiveness benefits from an open and inclusive environment and the ability to innovate, as well as from the "Made in Germany" and “craftsman’s spirit”. During the visit, China and Germany are expected to sign cooperation agreements in the areas of automobile manufacturing, finance and insurance. The Chinese opening-up and favorable measures will first be realized in Chinese-German cooperation. Li Keqiang also said that Chinese companies invest abroad are adhering to market rules and the Chinese government does not intervene. It is hoped that the German side will regard Chinese enterprises as equal and trustworthy partners, and create a fair and open environment and a stable institutional framework for their investment in Germany and Europe.
Third, China and Germany should further expand their bilateral opening-up and not worrying about competitions brought through cooperation. In the past five years, China has imported US$ 470 billion of products from Germany. Since the beginning of this year, China has successively launched new measures to expand opening-up, relax market access in the fields of finance and automobiles, and restrictions on foreign-invested shares, as well as significantly reducing import tariffs on some products. Some German companies worry that Chinese companies will become competitors once they learn advanced technology from them. Li Keqiang said that there is still a long way to go for Chinese manufacturing industry moving towards the middle and high-end. The industrial and technological complementariness between the two countries will exist for a long time. With China's industrial transformation and upgrading and consumption structure optimization, the Chinese demand for high value-added products in Germany will not decrease but will only increase. In addition, China strictly protects intellectual property rights and does not allow mandatory transfer of technology.
Fourth, China and Germany must jointly safeguard the international multilateral order based on rules. Facing the complex situation where economic globalization is confronted with countercurrents, protectionism and unilateralism, China and Germany, as the world's major economies, have the responsibility to jointly safeguard free trade and multilateralism and to promote world peace, stability, openness and cooperation. China has always regarded Europe as an important pole of the world, and supports the process of European integration. China would love to see a united, stable and prosperous EU. China is willing to work with Germany to promote the early conclusion of the China-EU Investment Agreement, initiate the China-EU Free Trade Area negotiations as soon as possible, and jointly send a positive signal that China and the EU are committed to trade and investment liberalization and facilitation.
Li Keqiang’s article is a systematic discussion on China-German and China-EU cooperation, which is conducive to establishing a framework for cooperation between China and Europe. China-German cooperation is one of the important pillars of the new "1+3" paradigm in this trade war era proposed by Anbound (another important pillar being China-Japanese cooperation). However, in the past Germany and Japan belonged to different “factions” (ideology and geopolitics) with China, therefore for China promote the formation of the “1+3” paradigm, it should not be limited to trade, investment, technology and specific cooperation projects; more importantly China should take the opportunity to establish a foundation for long-term cooperation. What is the basis of cooperation between China and Germany (Europe) and Japan? We believe that in addition to the specific "businesses" (economic benefits), it is also more important to understand the "values" of the world economy.
Some people may find it impossible for China to establish common values with Europe and Japan, or at least politically and ideologically incorrect. What we want to emphasize is that the values referred here are mainly economic values. The essence of this is the recognitions of economic globalization, free trade, and open market economy, and it is very important to understand this.
The reason for the rift between the United States under the Trump administration with Europe and Japan is the different views of these three “recognitions”. Trump believes that under globalization, the United States has suffered economic losses and is reluctant to play according to the rules of the game in the past. China, Germany and Japan belong to the party that insists on globalization and free trade. Under such context, it is entirely possible for China to establish a common "economic value" based on globalization and free trade with Germany and Japan.
We also want to emphasize that it is extremely important to establish common values in the cooperation with developed Western countries; this is the core point in the history and culture of these countries. China must be "a promoter of new international relations" and "a collaborator that transcends ideological differences". It cannot be based solely on subjective wishes, nor can it completely reconcile with different ideologies. Therefore, the important and realistic practice is to establish in the common economic values. If China can do business with other countries based on common economic values, this would be a long-term cooperation that European countries and Japan can accept. Building and expanding common economic values is in line with establishing common ground while reserving differences in the Chinese tradition.
Final Analysis Conclusion:
In today's world, the situation is ever changing. The establishment and expansion of common economic values between China and Germany, Japan and other countries is an important foundation for the construction of the "1+3" paradigm. It is also a tour de force to promote China's continued market-oriented reforms and opening-up.
