Why EU should shift towards China?

Tariff war, unleashed by Trump administration is opening the eyes of Europe as a whole and EU in particular to move much closer to the Eastern superpower of China. I am not talking about politics. It is geoeconomics compulsions that force EU to be away from USA and to get nearer to China. Let me spill the beans:

Europe from time immemorial was confused with China, the ancient civilization in the easternmost part of the globe. The caravans traversing the Silk Road brought goodies to Europe but not much details about the state lying faraway. Today the globe is a village. Aftershock of Trump Tariff Mania had a sobering effect for Europe in general and EU in particular.

Right now EU is buying a lot from US and less from China. Trade volume is a barometer. EU-US trade is almost approaching the Trillion mark with 2023 figures notching USD 975 Billion. Even though trade surplus in goods favoured EU at USD 157 Billion a considerable deficit was overlaid in services sector resulting in a deficit of USD 109 Billion.

China, on the other hand remains biggest partner for EU in importation of goods while for Exports it slips down to the third. Yet, overall trade deficit in goods sector is colossal at Euro 292 Billion out of the total trade volume of Euro 739 Billion. No headway is seen in terms of services sector as China was intent in sourcing services in technology more from America than from EU countries.

China business strategy does not encourage the type of services that could be exported from EU to them. For example, China concentrates on priority sectors such as roads, railways, township development both in urban & rural areas rather than consumption areas such as luxury goods, vehicles and other paraphernalia where, for example German efficiency excels.

Besides there is asymmetrical relationship in terms of trade and investment flows. As an autocratic state China monitors the type of investments that are much suited for their kind of supervised envelopment than the ones promoting European culture of freedom, leisure & pleasure.

It does not mean that EU cannot work with China at all. It can and it should. A kind of give and take has to be brought in. This is more pertinent InTechnology sector. More partnership deals must be struck between these two giants in quantum computing, cloud computing, AI, space research and many other novel areas. The heart of the matter is trade & investment facilitation must be given priority status and EU should come out with innovative programs of connecting China’s vast areas both in her northern and western parts.

Unmistakably, China got trapped into a geoeconomics banana where bulk of her economic growth is located North-East to South- West shore of the China Sea. Succinctly put, EU is in an excellent position to help China diversify its development programs rural to urban centres throughout the country. Germany has done this in her post-war period. Try this business strategy so that EU is more welcome not only in China but in the entire Asian Continent as trading & investment partner vis-à-vis America!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist