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European Commission

José Manuel Durão Barroso

President of the European Commission

Address to the 8th EU-China Business Summit

EU-China Business Summit/Brussels

20 September 2012

Premier Wen

President Van Rompuy,

Dear Chairmen of the Business Associations of Europe and China,

President Thumann,

Chairman Wan,

Distinguished guests,

Ladies and gentlemen,

I am very pleased to meet you again on the occasion of this 8th EU-China Business Summit.

And today's topic: "Cooperation to boost confidence for growth" is indeed very timely.

Boosting confidence is indeed what we need to support growth and jobs at global level and it will not happen without a closer cooperation between China and the European Union.

So let me express my deep appreciation to the Chinese and European business communities for their commitment to strengthen the ties between us.

The expansion of our economic relations over the last thirty years has been truly impressive and our economic interdependence has grown steadily.

Beyond, we have also built a solid partnership based on our growing awareness of the need to tackle common challenges together.

For years to come, I believe we still need to further strengthen this relationship and fully exploit the untapped opportunities and potential for greater mutual investment, trade, cooperation and growth.

Let's look at some key facts and figures.

Our trade has grown from 4 billion euro a year in 1978 to almost 430 billion last year. These flows represent around 10% of world trade. Europe is now China's largest trading partner - with business worth more than €1 billion taking place each day - and China our second largest trade partner and fastest growing export market.

Even in these times of crisis, the European Union remains the world's largest single market by value, with €12.6 trillion, over half a billion people and 23 million Small and Medium Sized Enterprises. And we are fully committed to releasing its full potential to deliver sustainable, smart, inclusive growth.

The European Union is also the world's largest exporter and importer of goods and services, as well as the largest source and one of the largest hosts of foreign direct investment.

And I believe that keeping markets open and resisting protectionist tendencies is a shared objective to boost growth at global level. This is essential for the world economy, its prosperity and stability, and it is ultimately about the difference we can make in our citizens' life.

This is why I would like to pay a tribute to Premier Wen's ambition and objective - as sketched out in the 12th five-year plan of China - building on the impressive and successful growth of China - to rebalance "China's growth model" in the medium term towards an economy more driven by domestic consumption, achieving lower carbon intensity, moving industries up the value-added chain and supporting the development of a modern services sector.

Such a rebalancing will be good for Chinese and European citizens as well, by contributing to the global economic rebalancing in line with the G20 framework for growth and, in fact, we have an extremely cooperative relationship between China and the EU in the G20.

The European Union is itself at a defining moment. We will do whatever it takes to stabilise the euro area and to accelerate growth in the European Union as a whole. It is important not just for us but also for the rest of the world that we succeed; and we are succeeding and we will succeed. Indeed, we are very grateful for the confidence always expressed by China, and particularly by premier Wen, regarding the euro stability and the future of the EU.

We are working on all areas - financial, banking and fiscal union, including some steps for further political union - and we are doing that in a step by step approach but with a commitment to a strong horizon and to a strong future for Europe. Just recently the Commission's proposals for the single supervisory mechanism in the euro area, an essential element of the banking union, were a very important step towards deepening and strengthening our economic and monetary union – we will complete the EMU.

Our ambition is clear: in line with the Europe 2020 strategy, what we want is to restore long term, sustainable growth. This is the goal - to create jobs, not only through fiscal consolidation, but also with deep structural reform, smart targeted investment and more innovation. You, as business leaders, know well that these decisions sometimes are difficult, and you know that sometimes results take time to appear. But I think that no one should have doubts about the determination of the EU and its member states going forward with this agenda.

This means that for Europe - and for China as well - investment and trade, but also innovation and cooperation are indeed key to deliver growth. It is in our mutual interest to lay the groundwork for an ever deeper economic partnership and achieve a better level playing field in our economic relations.

Ladies and gentlemen,

Cooperation builds confidence which allows in turn for deeper cooperation, based on a clear understanding that we all should abide by the same set of rules.

Mutual respect and balanced benefits also enable us to settle our differences in a constructive way, which is certainly an integral part of our partnership.

In such an intense relation, which is growing by the day it is only natural that some problems may arise. However these disputes are a very limited part of our bilateral trade. For instance trade defence instruments cover only around 1% of the EU total imports from China.

Therefore, to deepen our cooperation on these sound foundations is the best way to alleviate some potential concerns or correct some misunderstandings that may exist on both sides. The High Level Economic dialogue that we have set up to steer our economic relations is precisely meant to discuss these issues.

This is how we will be able to develop further a mature, mutually beneficial relationship and create the right conditions - with sufficient legal certainty and predictability - to boost confidence for growth.

We can do more and do better in a number of areas. In spite all the progress achieved I believe more can be done. First and foremost, on investment. The current two-way flows are simply too low for a partnership between two of the three world largest economies, the EU and China. There is here a huge untapped potential. To exploit it fully, we need to create the right conditions for future development, encourage and increase investment flows on both sides and create legal certainty for our investors.

This is the reason why, today at our political Summit, we have reconfirmed our resolve to move towards the launch of negotiations for an Investment Treaty, and this was, from my point of view, the most important deliverable of this very successful Summit between China and the EU.

Because from China's perspective, such an agreement will mean consolidating all of its current 25 bilateral investment agreements with European Member States into a single framework. It would also secure for the long term the current Europe's favourable investment climate towards Chinese investments. As we all know, Chinese investments are most welcome in Europe.

But also from a European perspective, it would help to improve investors' access to the Chinese market and provide a level playing field for companies, both in Europe and China, regardless of their ownership structure or origin. Besides investment, we also need to work towards closer cooperation and possibly common guidelines on export credits, building on our Summit discussions and conclusions. This is important to ensure that stakeholders on both sides can compete on similar and transparent terms.

Let me very briefly turn now to some global trade issues. China and the European Union are world leaders in international trade. And we should share the same interest in an open, non-discriminatory trading system both for imports and exports.

We have a common strategic interest that a strong multilateral system, embodied by the WTO, delivers on its agenda. Not just resisting protectionism but also moving forward trade liberalisation in a balanced and mutually beneficial manner.

There are certainly a number of issues where progress is being made, for example in trade facilitation, where Europe and China have a great deal of shared interest.

But other issues are currently on hold. This is notably the case for services liberalisation, an area with great potential.

Finally, I would like to say a few words on innovation. We are all aware that there is no sustainable path to growth and prosperity outside research and innovation.

This is obviously an area where the European Union and China have a mutual interest in exchanging best practices, promoting mutual access to each other's research programmes and also encouraging mobility and exchanges of young researchers.

This is why I warmly welcome the signature, today, of the Joint Declaration on EU-China Innovation Cooperation Dialogue.

The European Union and China will discuss innovation strategies, jointly encourage and support cooperation on research and innovation activities, and fully involve industry, universities and research institutes.

The Innovation Dialogue will therefore contribute to complement mutual strengths and deliver win-win results.

Let me add that a proper Intellectual Property regime is a clear requirement to facilitate innovation and we need to continue to work together as partners on IPR matters, for a mutually beneficial growth-enhancing cooperation.

I would also like to welcome the Joint Statement on Space Technology Cooperation adopted today.

Europe and China have a long history of cooperation in this field and I am very confident that the newly established Space Technology Dialogue will serve as a basis to further cooperation in this strategic area.

Ladies and gentlemen,

There is certainly much we have already worked on and achieved. But the message I would like to convey today is that there is still room to come closer together, in order to better translate our common interests in common actions for common results.

I am very grateful for the very significant progress we have made over the last years. And I would like to warmly thank again Premier Wen for his leadership and his support throughout these last 10 years.

Ladies and gentlemen,

Premier Wen has been and he is a committed partner, a true friend of Europe and we hope and we are sure he will remain so in the future. And I am saying that not only because of courtesy; and I do not mean that just from the political point of view. We have seen over the years that Premier Wen has devoted real attention to Europe's concerns and Europe's interest as well as to building a very important, confidence relationship.

I can remember - if I may - that in one of the last visits I have made to China, Premier Wen very swiftly organised a meeting between many members of his government and himself with many representatives of European companies and engaged in a frank and open dialogue. I can tell you Premier Wen: that was extremely well seen and appreciated by our side and by the business community.

So I really want to pay tribute to you today because this is the last time you are chairing these Summits on the Chinese side. I wish you well for the future and I am sure that the legacy we have built will be very important for the future because, as you have said so many times, we have now established a relationship that is based on a strategic perspective of mutual understanding, mutual respect and friendship, and I am sure that our relations will go along this path in the future.

I thank you Premier Wen, and I thank all of you for your attention.

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