This has been a very stimulating visit to China, which has focused on two priorities:
First, delivering the EU perspective on geopolitical developments. This is important to build understanding and set the right tone.
Second, I have engaged closely and constructively with my counterparts to take stock of bilateral relations. We also explored options for EU-China cooperation at global level.
Yesterday Vice Premier He Lifeng and I chaired the 10th EU-China High-level Economic and Trade Dialogue. This was a first opportunity for us to meet face to face to discuss economic, financial, trade and investment cooperation. We met at a time of rising geopolitical tensions and increasing risks for global market fragmentation.
We discussed the challenges affecting the macroeconomic outlook. While the EU economy has shown remarkable resilience, wider economic trends are subject to many risks and uncertainties.
China's economic performance is critical, also for the broader global economy. So I am pleased that we will soon resume our regular exchanges to discuss macroeconomic issues.
We also discussed shared global challenges and I conveyed to the Chinese leadership some key messages that are vital for our relations.
I have been very clear in all my engagements that responding to Russia's aggression against Ukraine is not just an EU priority – it's a decisive factor in virtually all EU priorities at the present time.
We believe Russia's aggression to be unprovoked, unjustified, illegal, and barbaric. The war has caused a humanitarian crisis in Europe. We have given shelter to over 4 million war refugees from Ukraine. We are committed to supporting Ukraine to victory, for as long as it takes. This is a sovereign and independent nation, with clear and established territorial boundaries. Under international law, Ukraine is entitled to pursue whatever alliances it wants.
In this context, it is very difficult for us to understand China's stance. The war is a global disaster, driving up food and energy prices. Russia's sabotage of grain export from Ukraine weakens food security, hurting the developing world.
Food security is also high on China's agenda.
In my meeting with Vice Premier He Lifeng, I asked that we increase cooperation aiming to bring back the Black Sea Grain Initiative, working alongside with Turkiye and the United Nations. The war also weakens the global economy, which negatively impacts on China as an export-oriented economy.
And China's position is affecting the country's image, not only with European consumers, but also businesses.
Over a third of EU companies in this country have indicated that China's position on the war is making it a less attractive investment destination. China's response and its contribution to resolving the war is a way that is important for us to engage.
Let me turn now to our trade and investment relationship. The EU-China trade relationship is one of the biggest in the world, and critical for both sides. Our total trade in goods last year reached €857 billion.
Yet European companies here are raising a number of concerns about the business environment. Addressing those would help China to retain its capacity to attract and retain foreign investment, and meet the objective of sustainable, high quality economic development.
The EU remains China's biggest export destination, and EU companies remain a substantial presence in the Chinese market. However, to continue on a mutually beneficial path, rebalancing is necessary. The current EU's trade deficit with China stands at nearly €400 billion.
We also have real concerns about market access and other challenges. In a recent survey by the EU Chamber of Commerce in China, nearly two-thirds of respondents indicated that doing business has become more difficult. The business environment has become more political and less predictable.
We have requested that our Chinese partners engage with us on these challenges. Specifically, we wish to see greater transparency, predictability and reciprocity.
In this context, we both agreed in our High-Level Economic and Trade Dialogue to continue discussions on a possible EU-China transparency mechanism on supply chains for critical raw materials.
We have a number of areas where more work is needed: the agri-food sector, where we will still need to work towards recognition of so-called EU zoning rules or regionalisation, so as not to hamper wider exports in case of localised animal disease outbreaks.
Further work will be needed to improve public procurement access for European medical devices. This is also for the good of Chinese citizens, who should get access to the best available healthcare technologies.
Another topic was infant formula. EU companies supply 75 percent of China's market, but our companies are hitting hurdles. Following our discussions, we expect to see rapid progress in clearing up the backlog of applications for licenses.
We also hope to lower the administrative burden and far-reaching disclosure requirements on European cosmetic products sold here in China, which we need to address.
So we agreed to set a working group to address these issues.
Let me touch briefly on the legal uncertainty related to data. This is causing real anxiety among European companies here in China, as new legal rules are making it very cumbersome to operate effectively.
So we will build on the agreement reached agreed earlier this month by European Commission Vice President Jourová and Vice-Premier Zhang to provide clarity and facilitate compliance of EU businesses with Chinese data laws.
Finally, I am glad that we managed to have insightful and positive discussions on managed financial services, setting up a new working group on financial regulation.
Allow me to say a word about enhancing our multilateral cooperation.
This includes engagement on debt relief efforts at G20 level and improving coordination in the World Trade Organization. The EU and China cooperate proactively on many WTO files, but we could do more together on overall reform. The EU is convinced this is in China's direct interest, because a reformed, well-functioning WTO can be a cornerstone for the country's growth and development.
To conclude, I am thankful to my Chinese partners for an engagement that has been both candid and useful.
The EU is keen to translate this engagement into mutually advantageous results, without delay.
