Giant + Giant = Gigantic Opportunity
Today, the idea of both giant economies, China and the European Union, joining hands and fully harnessing the synergies between them both, will definitely not be dismissed as a flight of fancy. To give a brief but expository summary: China and the EU are the two biggest traders in the world; the EU is China’s biggest trading partner whilst China also comes close to becoming the EU’s biggest trading partner, following closely behind the US. Since China’s accession to the WTO in December 2001, which was hailed as an important milestone in China’s integration into the global economy, trade relations between China and the EU have gathered momentum at an incredible pace. They now trade over €1bn every single day.
China’s growing presence on the continent is welcomed by the EU which is a grand connectivity initiative in itself and whose ultimate aim is to promote connectivity both within and beyond its borders; therefore, the EU’s objective in this respect very much complements China’s “going out” strategy.
In January 2016, China officially became a member of the European Bank of Reconstruction and Development (EBRD), of which the EU is the biggest proponent through its generous provision of grants (€179m) that accounted for half of the donor funding to the EBRD in 2015. The People’s Bank of China Governor, Zhou Xiaochuan, highlights that China’s accession to the EBRD will provide a platform to share experiences in economic transition and development with other member states. Furthermore, there are clear overlaps in the EBRD’s efforts to promote economic connectivity in the very regions that are also covered by China’s “One Belt, One Road” initiative, which involves a sophisticated network of high-speed railways, ports, pipelines and highways connecting Asia to Europe.
A Free-Trade Agreement between China and the EU? Not Far-fetched.
Since the 16th EU-China Summit in November 2013, both parties have been engaging in negotiations for a comprehensive EU-China Investment Agreement to provide for the progressive liberalisation of investment. President Xi Jinping officially broached the possibility of an FTA in 2014; it is currently being explored, albeit tentatively and with caveats, by the EU. The EU-China Investment Agreement could potentially lay the foundations for an FTA between China and the EU, which would indeed mark a watershed moment in the global economic order. Together, the EU and China account for a hefty two-thirds of world trade and in GDP terms, more than one-third of world GDP, according to Lawrence Lau, Professor of Economics at the University of Hong Kong.
CW’s Unique Latin Department with Spanish-speaking Expert Advisors
In view of Latin America’s and Spain’s increasing trade with China, we have the Latin Department (Latin American and Spanish business advisory desk) exclusively for Spanish and Portuguese-speaking clients.
We provide industry-leading advisory services, offering flexible, timely, localised services to address the needs of clients from Latin American and Hispanic countries. Progressively, we have been part of the compelling growth of economic and diplomatic relations between China, Latin American countries and Spain to deliver “all-inclusive” services, including a pioneering website in Spanish and Portuguese.
We boast an extensive network with members of the Latin and Spanish community in Hong Kong as well as in mainland China, and we are also an active member of the Spanish Chamber of Commerce in Hong Kong and China.
CW’s Europe Desk in London to Promote China-Europe Connectivity
In light of the flourishing trade relations between China and Europe, and with the aim of facilitating coordination so that we can better serve the needs of European clients looking to establish operations in China as well as Chinese investors wishing to expand into Europe, CW set up a Europe desk in London in 2016.
The DACH region is comprised of Germany (D), Austria (A) and Switzerland (CH) where German is the, or in Switzerland, an official language.
Switzerland is an “Old Friend of the Chinese People”
During a state visit to China in April 2016, President Xi Jinping greeted the Swiss President, Johann Schneider-Amman, warmly whom he called an “old friend of the Chinese people”—a title bestowed rather sparingly on a select group of individuals. This gesture attests to their “innovative strategic partnership”, as Switzerland was the first country in continental Europe to sign a bilateral free-trade agreement with China in July 2013. China has been Switzerland’s biggest trading partner in Asia since 2010 and the third largest globally after the US and the EU.
Germany: Frankfurt is a Darling of Chinese Investors
Germany is China’s biggest trading partner within the EU with bilateral trade close to €163bn in 2015. In particular, Frankfurt—the biggest financial hub in continental Europe—has been basking in the Chinese spotlight for its pioneering role as Europe’s first renminbi payment hub and its part in fostering the emerging financial technology industry, also known as Fintech. According to the Hong Kong Trade Development Council, Frankfurt is the natural destination to which Chinese investors go for outbound direct investment. The federal state of Hesse, in which Frankfurt is located, accounts for 60% of Germany’s total Chinese investment and boasts a vibrant Chinese business scene with around 600 companies, including China Telecom and Huawei Technologies.
CW’s German Desk to Cater For German-speaking Clients
In view of the DACH region’s dynamic trade relationship with China, we set up the German business desk in late 2014. Having our own German advisor and by harnessing our connections to accounting, consulting and law firms in the DACH region, we are confident of providing leading advisory services, offering flexible, timely, localised services to address the specific needs of German-speaking clients who wish to break into the Chinese market as well as the needs of Chinese-speaking clients looking to gain a foothold in Europe.