China trade summit opens up opportunities
strengthen economic cooperation between the two blocs, a move that
will have a significant impact on Europe's food industry.
According to Jean Martin, president of CIAA, exports to China increased by an impressive 24 per cent in 2005 to reach almost €800 million.
Tuesday's summit, which was attended by political and business leaders including premier of the state council of the Peoples Republic of China, Wen Jiabao, and the prime minister of Finland and EU president-in-office, Matti Vanhanen, was targeted at finding innovative ways of deepening these economic ties.
The overriding theme of the event was Boosting Innovations the New Era of the EU-China Economic Co-operation.
"Innovation plays a key role for economic and social development in China and the European Union," said commission vice-president Gunter Verheugen.
"Innovation offers a large potential to the benefit of both regions. This should bear fruits in seeking new promising ways of economic co-operation."
For Europe's food and drink industry, strong export markets are vital in order to achieve a desirable trade balance. The EU food and drink industry now has a trade surplus of €4.5 billion.
However, many foreign businesses in China are struggling to make money because of low margins and cut-throat local competition. And despite the billion-plus population and rocketing standard of living, there is still just a small limited elite class capable of affording what are perceived as western luxuries.
Interestingly, an article in the Financial Times written by Jacques Penhirin, a principal in the Greater China office of management consultancy McKinsey & Company, argued that most foreign companies are neglecting 90 per cent of the market - more than 700m people by targeting just the wealthiest minority.
In addition, while China remains a favourite destination for foreign retailers, for the country has slipped to fifth place as market saturation has made trading more difficult. US consulting firm AT Kearney recently released its annual ranking of retail investment attractiveness among 30 emerging markets, with Vietnam jumping five slots to number three behind leaders India and Russia.
Alongside the incredible potential of China therefore lie a number of challenges. The business summit was designed to iron out some of these. Certainly, both the EU and China business representatives supported the strengthening of EU-China relations and stated that the EU and China should place trade and investment at the core of their relations.
The objective, they said, should be to work towards comprehensive business regulatory frameworks in the EU and China based on transparency, predictability and the effective implementation of rules on trade and investment.
The business summit was organised under the Finnish presidency of the European Union by the Confederation of Finnish Industries EK in co-operation with the Ministry of Commerce of the Peoples Republic of China (MOFCOM), the Ministry for Foreign Affairs of Finland, the China Council for the Promotion of International Trade (CCPIT), the European Commission, UNICE, the European Chamber of Commerce in China (EUCCC) and the EU-China Business Association (EUCBA).
The business summit was preceded by the Ninth EU-China Summit that was held on ninth of September 2006 in Helsinki Finland. The forth EU-China Business Summit will be held in China in 2007.
