Investment drive

To further promote bilateral ties and benefit each other, experts feel that China and Europe should explore ways to increase investment.

Establishing an investment treaty between China and Europe to improve market access for investors from both sides should be the top priority, says Francois Godement, a French specialist on China and director of the French think tank Asia Center.

"It is important for Europe to gain better access in China and for Chinese firms to be protected and to know how they can invest in Europe," says Godement. "That's probably where the change will be in the EU-China relations."

The two sides should explore the possibility of having a EU-China Free Trade Agreement (FTA) in place soon, says Rubig, adding that China deserves the market economy status and leaders from both sides should find ways to reach a consensus on this issue soon.

Top: Jim O'Neill, chairman of Goldman Sachs Asset Management in London. Above: Pierre Picquart, China watcher and professor of geopolitics at the University of Paris. Provided to China Daily

Godement says that trade imbalances will be an ongoing problem that needs quick fixes from both sides, adding that concrete and effective measures are more valuable than "simply saying it should reduce".

Defraigne also agrees that investment should be accorded top priority. "Investment is the bridge we need to consolidate the economic partnership, and the cross-region investment really matters to the growing mutual interest," he says.

Experts also feel that European leaders should make the macroeconomic environment more attractive for international investment if they want to create jobs and maintain Europe's competitiveness in the long term.

One of the most pressing issues for China will be on whether the EU will take firm steps to deal with the sovereign debt crisis, and whether the steps would help boost consumer confidence, Ho says.

There are also doubts in China on whether the EU will be able to establish a more unified political system, one that allows effective and coordinated trade negotiations.

Yao says that it is important for European leaders to be more open on China and respect its values and foreign policies if they are keen to attract more investment.

"There are still lots of areas on the trade front that can be improved. Though bilateral trade has increased, there are still some constraints for small and medium-sized European companies in China. We hope the new leadership will take positive steps to reduce these trade barriers," says Daniel Walther, vice-president of the Brussels-based Small and Medium Entrepreneurs (SME) Union.

Green moves

Hubert Fabre, research associate at the European Institute of International Relations, says China's commitment to build an "ecological civilization" should be considered as a positive signal for the future. He feels that the new leadership will face challenges in implementing serious ecological reforms and in conveying China's strategic position in the international community, especially on issues like climate change.

Beijing's standing in Europe will therefore be based largely on the ecological measures implemented by it and as such China will have to take more decisive and responsible actions to reaffirm its ecological position, he says.

In real terms, the new leadership should also ensure that "ecological civilization" is not construed as competition or race, but are efforts to ensure real environment protection in and outside China. Considering that ecological progress is linked to social and economic growth, the new CPC goals will go a long way in improving the relations between China and Europe, he says.

Walther says that the new leadership has made a good beginning by expressing its commitment to harmonize the economy and take positive steps for environmental conservation. "There is something common in both Chinese and Christian philosophy - that people should not be judged by their words but by their actions," he says.

He says that there is nothing wrong in the Chinese stance that its natural resources are essentially for its citizens. What is reassuring is the commitment that China would use the natural resources in an environment-friendly and sustainable manner. "Without China, the global economy cannot thrive. It will also be impossible to preserve the flora and fauna without China's support."

Vantyghem says that the new leadership in China has put its best foot forward by setting lofty goals for innovation and green, sustainable growth. The key targets set by the new development plan represent huge opportunities for European companies, particularly small and medium-sized enterprises, as they match their strengths and practical experiences. This is a clear illustration that European businesses can play an important role in China's development plans.

Rebalancing the growth model is the best way forward for the rapidly maturing Chinese economy, Vantyghem says. The new economic model should be based on smart, sustainable and inclusive growth, led by domestic demand and private enterprises.

"Europe and China should continue to work closely and remove impediments to cross-border trade and investment, tackle global challenges, increase mutual understanding and avoid temptation to return to any protectionist measures," he says.

"The new leadership has the opportunity to rethink its strategy (toward Europe). In 2014, Europe will also see a fresh round of elections. China is on the move, and so is Europe. It is important for both to walk together to achieve common goals," Rubig says.

Liu Jia contributed to this story.

Contact the writers at zhangchunyan@chinadaily.com.cn, fujing@chinadaily.com.cn and lixiang@chinadaily.com.cn

(China Daily 11/23/2012 page1)