"Sino-Spanish relationships have been splendid over the last 40 years and our country has played a key role in bilateral links between Europe and China”, stated Javier Solana, President of the ESADEgeo-Centre for Global Economy and Geopolitics during his address at the China-Europe Forum on Reform and Globalisation, held in Madrid on the 22nd of November 2018. The Forum was organised by China Daily, in collaboration with the China Institute for Reform and Development, and ESADEgeo.

Furthermore, Solana noted that “China, through its reforms and its opening up to the world, has achieved great things, especially thanks to its incorporation in the planet’s financial system after joining the World Trade Organization (WTO) in 2001”, a step that “allowed China to chalk up double-digit growth”. “This week, there will be a G20 meeting in Argentina, in which trade relations between the United States and China are at stake. In this context, The European Union may play a key role”, added Solana.

The Forum was attended by over 30 experts in world politics and economy. Keynote speakers included José Luis Rodríguez Zapatero, former President of the Spanish Government; Wang Xiaohui, Deputy Head of the Publicity Department of The Central Committee of The People’s Republic of China (PRC) and Deputy Director of the Policy Research Office of The Central Committee; Liu Shijin, Vice-President of the Research Foundation for China’s Development (a State Think-Tank); Lyu Fan, Chinese Ambassador to Spain; Bernard Dewit, President of the Belgium-China Chamber of Commerce.

New alliances between China and Europe

“China sees Spain and The European Union as natural allies and world politics today means multilateralism, co-operation, and global solutions” stressed Rodríguez Zapatero, former President of Spain, in his address. “Protectionism and nationalism lead to xenophobia, division, and regression. Sharing, respecting one another, and humility in pursuing political goals are key to achieving progress and a better future for Mankind” he argued.

The experts at the Forum stated that China had entered a new stage of economic maturity and was transforming its consumer market and thus sought Spain’s help to achieve its goals in these fields. Both countries are seeking new kinds of collaboration in areas such as tourism, cultural activities, and innovation. China is also increasingly interested in Small and Medium-sized Enterprises (SMEs) given that these are the ‘invisible champions’ of the business sector. These companies have long histories and a much smaller volume of production but they are the best in their respective sectors and produce more sophisticated products.

President Xi said that China would continue its ‘open door’ trade policy but noted that a strong shift was taking place in his country from a manufacturing market to a service market. It is precisely the latter that is one of The West’s strengths and, as Javier Solana stressed, “Development of the Service Sector will be a key factor in rebalancing trade between China and the EU”. In this new stage, “Spain can boost the growth of services such as Tourism, Health, Research and Technology, creating new opportunities in common. With President Xi’s visit to Spain this month, we must continue this dialogue in order to advance” said Solana.

Co-operation and globalisation in the G20

The G20 Summit is a challenge for China, given that economic agents are looking for a sign of which way the tariff war between The United States and China will go and whether a truce or a worsening of the trade dispute is on the cards. At the same time, the relationship between China and Europe may set a precedent, opening up a new stage in trade relations with the Asian giant. In this connection, experts stated that “as China strives ever harder to achieve high-quality growth, a collaboration between China and The European Union with strengthen across the board, boosting Europe’s competitiveness”.

There is some worry in Europe about the risks of opening up to the Chinese market. The experts noted that Xi seeks a pacific China that will not upset the present world trading system but rather will continue being one of its mainstays. In this context, China is the world’s biggest exporter and its imports continue to grow (it is already the world’s biggest importer, with its imports amounting to US $1.23 bn a year — something from which European countries could benefit). Furthermore, Spain wields great influence in North Africa and Latin America, and China could explore these markets with Spain’s help.

China continues to intensify and diversify its overseas investments for various reasons, which include financial liberalisation and its Belt and Road Initiative, whose purpose is to link up over sixty countries in Europe, Asia, and The Middle East by creating a land route and parallel sea route. “Spanish companies could take advantage of this initiative through infrastructural investment, in which we are leaders”, said Eugenio Bregolat, former Spanish Ambassador to China.

Sharing also means bolstering international organisations, strengthening the WTO and the role of the G20 as an international trade forum. The need is to foster stabler economic co-operation and to resist the siren-song of neo-protectionism. “Economic sovereignty is a thing of the past and globalisation is irreversible. The March of History cannot be stopped. Protectionist movements are harmful and mistaken. While they cannot turn the clock back, I only hope that they do not slow down the pace of progress”, stressed Rodríguez Zapatero.