Vice President Charlotte Roule Interviewed by Bloomberg on the Significance of Merkel’s Visit to China Go back »

2019-09-06 | All chapters

European Chamber Vice President Charlotte Roule was interviewed by Bloomberg on 6^th September on the significance of Merkel’s visit to China. VP Roule commented that Merkel’s visit is very important for European business. She expressed hope that the visit can address three issues facing European businesses in China: the Corporate Social Credit System; the EU-China Comprehensive Agreement on Investment (CAI); and the EU-China WTO reform working group.

VP Roule was also questioned on how the US-China trade war has affected European businesses. She said that while the European Chamber agrees with US concerns over China’s lagging reform agenda, the Chamber disagrees with using tariffs as a response. She noted that according to the European Chamber’s Business Confidence Survey 2019, 25 per cent of its members export goods to the US and are being affected by US tariffs. Members also cited the trade war as the fourth biggest challenge to the future of doing business, following the Chinese and global economic slowdowns and rising labour costs. VP Roule noted that the ongoing nature of the trade war and the potential for further escalation is driving considerable uncertainty for the Chamber’s member companies. This makes it imperative that both parties engage in good faith negotiations that produce a lasting solution.

Addressing the possibility of creating a fair business environment in China without the involvement of the WTO, VP Roule said that on one hand, the Corporate Social Credit System—which is based on big data—brings some subjectivity and has the potential to create a more level playing field for businesses. On the other hand, the CAI—which the EU and China pledged at the last EU-China Summit to finalise by the end of 2020—has the potential to be the most momentous economic breakthrough in EU-China relations since they were established more than 40 years ago. However, VP Roule said the CAI must be ambitious and binding in order to bring meaningful market share increase to European businesses in affected sectors.

VP Roule also called for WTO reform to aim to address outstanding issues such as industrial subsidies, forced technology transfers, intellectual property rights, industrial overcapacities, the free flow of investment as well as trade, new sectors of the economy (e.g. e-commerce and the digital arena), and competitive neutrality between SOEs and the private sector.