Li gets to lay out China's vision

Generally, the first overseas trip by leaders of any major country tends to attract great attention from the international media. Premier Li Keqiang's first foreign trip to India, Pakistan, Switzerland and Germany is no different.

Li's trip to Europe is important for the following five reasons:

First, through Li's visit, Europeans will have a good chance to learn more about China's new leadership. China's leadership transition was completed in March and many people in Europe are eager to know whether China will change any of its policies, including its relations with Europe. Li can take advantage of his European tour to explain the Chinese government's agendas. He can tell his European counterparts and the general public his thoughts on important topics ranging from corruption, the "Chinese dream" and foreign policy to the sustainability of the Chinese economy. A deeper mutual understanding is important for strengthening China-EU relations.

Second, Li's visit to Europe comes at a time when the EU is on the verge of a trade war with China over solar panel imports, which is worth 21 billion euros a year. On Sept 6, 2012, the EU launched an anti-dumping investigation into imports of solar panels and their key components (solar cells and solar wafers) that originate in China. According to an EU official document, EU ProSun, an industry association, claimed in its complaint lodged on July 25, 2012, that solar panels and their key components imported from China enter the European market at prices below market value. The EU is reportedly proposing a tough 47 percent anti-dumping tariff to limit the imports.

China has urged the EU to "seriously consider China's suggestions to settle the dispute through dialogue" and to work together to "find a solution acceptable to both sides". "If the EU stubbornly insists on handicapping the product, seriously damaging the interests of Chinese companies, the Chinese government will not idly stand by," said a senior official with the Chinese Ministry of Commerce.

A trade war between China and the EU will result in a lose-lose outcome. Li has a golden opportunity to express China's position to the European business community. Several German manufacturers of solar products are reportedly very active in pushing the EU to go through with the tariff. But they fail to understand that the relatively low prices for China's solar products are related to advancements in technology and declining prices of raw materials for these products. Neither do they know that a tariff against China will be harmful to European solar panel installation companies, which have benefited from the cheap supply.

Third, this year marks the 10th anniversary of the establishment of the comprehensive partnership between China and the EU as well as the publication of China's first policy paper on the EU. According to the policy paper, China has always considered the EU an important partner. There is no fundamental conflict of interest between China and the EU and neither side poses a threat to the other. As a matter of fact, China-EU relations can serve as a model of South-North cooperation in today's globalized world.

Indeed, given their differences in historical backgrounds, cultures, political systems and economic development levels, it is natural that China and the EU have different views or even disagree. Nevertheless, the past decade has proven that China-EU relations cannot and will not be affected if the two sides address their disagreements in a spirit of equality and mutual respect.

Fourth, Li will attend the signing of a free trade agreement between China and Switzerland. Switzerland is highly integrated in the international economy, capitalizing on an open trade regime for industrial products but with a protected agricultural sector. Tariffs on Swiss manufacturers are generally low, and in principle there are no quantitative restrictions, anti-dumping, countervailing or safeguard actions. But in a number of Swiss sectors, entrance into the market has long suffered from informal barriers. The FTA is expected to facilitate economic relations between China and Switzerland.

So far, China has signed FTAs with the Association of Southeast Asian Nations, Pakistan, Chile, New Zealand, Singapore, Peru, Costa Rica and Iceland. The significance of China's FTA with Switzerland lies in the fact that China has increasingly recognized the necessity of pursuing bilateral free trade arrangements and at the same time wishes to see a successful and rapid conclusion to the Doha Round of talks.

Finally, Li's visit will further promote bilateral relations between China and Germany. Former premier Wen Jiabao had good relations with German Chancellor Angela Merkel. This personal relationship has consolidated the political foundations of China-Germany ties. Therefore, Li's trip to Germany will likely maintain this special relationship's momentum.

Some Europeans are reportedly jealous about the good relations between China and Germany. Some are even concerned that Berlin could replace Brussels in dealing with EU relations with China.

This sentiment, if true, is far fetched. As a matter of fact, any bilateral relations are special in formality and nature. But it does not mean that relations between China and Germany have been proceeding to the detriment to other EU members. As a matter of fact, improved ties between China and Germany are constructive and productive for the relations between China and the EU. Li's trip to Germany serves this purpose.

The author is professor and deputy director of the Institute of European Studies at the Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily.

(China Daily 05/24/2013 page7)