China-EU Summit enhances innovation partnership

Chinese Premier Li Keqiang arrived in Brussel yesterday to attend the 17th China-EU Summit. He will also visit the EU headquarters before paying an official visit to France. This is an important event for the EU-China relationship. It will further develop China and the EU’s relationship into a comprehensive strategic partnership by finalizing a series of agreements between the EU and China on trade, investment cooperation, energy and innovation.

READ: 'Belt and Road' initiatives complement EU investment plan

This is the first time that the summit has been held since both new EU Commission President Jean-Claude Juncker and Chinese President Xi Jinping’s administration assumed their respective offices. The EU is now at a crossroads for the revival of the European economy. Most EU member states are shaking off the recession, but the EU economy is still growing slowly and needs new momentum. The EU is also facing a variety of internal and external challenges. The Greek debt crisis is still underway and is in urgent need of a solution, while the overall process of European economic integration has been negatively impacted by the Greek debt crisis and the Ukraine crisis.

Meanwhile, China has entered a new stage of slower economic growth, turning its focus to reforming the country’s economic structure and addressing social and environmental problems. Both EU and Chinese leaders will therefore take this opportunity to exchange views on the most important issues facing the development of both of their economies.

In order to stimulate economic growth, the new EU Commission leadership has devised a new development strategy that defines EU investment priorities. The new strategy focuses on infrastructure, cultivating an energy “Union,” creating a single digital market, and fostering education, innovation, research and development.

Meanwhile, China’s "Belt and Road" initiatives have reached the implementation stage. The Silk Road fund has been created and the Asian Infrastructure Investment Bank initiative has received a positive response from most EU member countries.

The new EU investment plan and China’s Belt and Road initiatives both focus on investment in infrastructure, internet connectivity and smart energy grid construction and will therefore create more opportunities in technology-related investment fields for both China and the EU.

The first priority of the 17th EU Summit is to smoothly advance negotiations on the Bilateral Investment Treaty. The BIT negotiations have achieved some positive result so far, but there are still some differing viewpoints on market access and investment rules and regulations.

China-EU bilateral investment is relatively small compared to the volume of EU-China bilateral trade. The EU is China's largest trading partner, its biggest import and export market and its primary source of technology transfer. According to official Chinese statistics, the bilateral trade volume reached US$615.1 billion in 2014, 9.9 percent higher than the previous year. By the end of 2014, the total volume of foreign direct investment in China by the 28 EU countries was US$96 billion. Meanwhile, China’s FDI in EU countries was US$49 billion.

The second goal of the EU Summit is to address differing attitudes about the new climate change agreement which may be signed in Paris in December at the UN Climate Change Conference. China and the EU are both actively responding to global climate change, and both sides want to promote climate policy dialogue and coordinate different targets for greenhouse emissions reduction, energy efficiency and renewable energy usage. China is looking for new institutional arrangements between developed and developing countries based on the principle of common but differentiated responsibilities. The country is also seeking a system that will allow low-carbon technologies to diffuse from industries in advanced countries to less developed countries and also wants to make new financial arrangements for mitigating global climate change after 2020.

The third target of the summit is to discuss the four concepts put forward by President Xi Jinping in 2014: civilization, reform, growth and development. The long-term target of the EU-China relationship is to realize these four concepts and accept different understandings of them. At the present moment, the best possible way to pursue these four concepts is to explore measures that connect the EU’s new investment plan with China’s Belt and Road initiatives. One of the related topics that may be discussed at the summit is the establishment of an EU-China joint funding platform to carry out joint investment projects in infrastructure, clean energy and corporate cooperation.

Finally, the EU and China will sign a series of agreements on low-carbon energy technology and science and technology innovation. The EU and its member states are investing more money in the development of low-carbon and energy-efficient technologies to both transform the EU economy to a green and low-carbon model and to increase the EU’s energy self-sufficiency.

A secure energy supply is necessary for EU economy growth, but official EU statistics show that the EU imported 53 percent of its energy at a cost of around 400 billion euros, making it the largest energy importer in the world. Six EU member states depend on a single external supplier for all their gas imports and therefore remain extremely vulnerable to supply shocks. China is the big energy-consuming country in the world, and the proportion of fossil fuels in its primary energy production is high. Many industries in China have high carbon emissions, resulting in serious environmental pollution that necessitates the restructuring of China’s energy production and consumption.

For this reason, enhancing energy cooperation is a common interest of the EU and China. In 1997, the EU and China established an energy cooperation dialogue with a focus on technological cooperation in the International Thermonuclear Experimental Reactor program as well as in the fields of hydrogen energy, fuel cells, bio fuels, wind power, clean coal, energy efficiency and renewable energy. China and the EU signed a joint energy security declaration in November 2013 during the sixth China-EU energy dialogue, which was held in China.

At the summit this month, senior leaders from both sides will initiate more measures to deepen cooperation and the shared development of nuclear energy, solar power, energy efficiency technology and smart grids.

During Premier Li’s visit to France, China and France will actively implement a long-term strategy of Sino-French relations, taking concrete steps toward mitigating climate change, developing green energy, and building energy efficiency. This cooperation will involve the adoption of low-carbon technology, carbon dioxide capture and storage technology development and other efficiency technologies by China's power production industry. The French Development Agency will continue to focus on improving energy efficiency in China, and China and France will coordinate under the International Renewable Energy Agency, a multilateral green technology framework.

In 2014, the EU and China decided to establish an innovation partnership. Innovation is a driving force that will make the EU more competitive in the world economy, create new jobs and promote sustainable growth. The innovation partnership between China and the EU encompasses not only traditional economic and trade fields but also includes the innovation of the systems and mechanisms of innovation, redefining cooperation approaches by expanding the idea of innovation into the fields of politics, economics, culture, industry, agriculture, health and social security.

According to a global report on innovation on the top 10 innovative countries in the world, EU annual research expenditure from public and private sources is the second largest after the United States, while its research and development intensity is about 2.1 percent, almost the same as that of China. However, the EU’s research and development investment has resulted in higher competitiveness than China; the EU’s micro, small and medium enterprises in particular have strong innovative abilities and innovative ideas.

To advance the development of the innovation partnership, Premier Li will attend a China-EU innovation forum and present a speech on enhancing the EU-China innovation partnership with concrete measures in the development of science, technology, energy and other fields. China has developed several cooperative innovation projects with Belgium, and high-tech cooperation between the two countries is increasing as a result.

In 2012, Haier Group and the University of Leuven established the first Chinese-funded overseas design laboratory. Meanwhile, Huawei, ZTE and Datang Telecom have been working with Belgium’s world-famous IMEC, also known as the Interuniversity Microelectronics Center. Beijing’s Zhongguancun Science and Technology Park has also opened its second European office in Brussels. In 2013, Wuhan East Lake High Tech Venture Center and the University of Leuven signed an agreement, to build China's first overseas business incubator, which will allow the transfer of scientific and technological achievements to high-tech SMEs in both countries through an innovative service platform. Such successful pilot projects can act as models for future cooperation with other EU member states.

Without a doubt, Premier Li’s visit will make EU-China relations more innovative and friendly, creating a sound foundation for realizing the EU-China 2020 cooperation strategy.

http://www.china.org.cn/opinion/2015-06/29/content_35934375.htm

（Contact Zhang Min：zhangmin@cass.org.cn）