China, Forum, Good for Business, Modern EU

China’s profi have come to Europe: professionals and experts from various parts of China have been exploring Denmark’s business opportunities and possibilities during a recent weekend (18-20 August 2016).

 The so-called “Europe Forum” in Hillerod/Denmark was organised by FCPAE (Federation of Chinese Professional Associations in Europe) and has become the first massive “business-landing operation” in the Nordic region with an apparent view over the whole Baltic Sea Region states.

The Forum’s participants (totally 500 and about 250 Chinese delegates!) 

  during three days has analysed Danish progressive facilities for China’s new overseas infrastructure investment and strategies. It seems that direct business contacts are better for establishing trust and fruitful cooperation…

In a booklet prepared by the Danish Bech-Bruun Law Firm, eight Chinese companies have been listed looking for Danish partners! 

The ultimate task is to hit two aims with one stroke: “easy-to do-business” for both sides and providing ground for much broader activities in future, including specific “cases” like the Arctic and its natural resources.

 FCPAE chairman, Zhiguang Deng underlined that the present forum in Hillerod is devoted to the following issues: investments, “smart city” & innovative design; talent strategy, modern agro-food technologies, and innovative society through education.

China’s investment is a highly needed support for the Central/Eastern Europe as well, as EU structural funds on various projects (incl. environmental and technological trends) streaming into CEE will slowly start to drain.

EU-China economic contacts have been always “in favour” of the latter: thus, EU trade with China has a constant deficit in recent years: presently at over € 83 bln (to compare with the EU’s surplus trade balance with the US at about € 57 bln/yearly and trade deficit with Russia at about € 22, 3 bln). There is something for EU’s politicians to worry about…  

About FCPAE & ACED

The Federation of Chinese Professional Associations in Europe, FCPAE is a non-profit association of 52 Chinese business associations already organised in more than a dozen European states.

FCPAE unites over 20 thousand collective and individual members from a wide range of development sectors.

FCPAE is working through China’s professional organisation established already in numerous European states: for example, Chinese experts working and living in Denmark are having their own association since 2000; it’s called ACED (Association of Chinese Experts in Denmark). Quite remarkable is the ACED’s motto: “to communicate, engage and develop”.

Present FCPAE Europe Forum is the 8th on a yearly basis: previous took place in France, Belgium, Austria, The Haag, Germany and in Denmark (already twice).

Changing external strategy

Since the global financial crisis, China has been intensifying her expansion of overseas investment, with a prominent focus on innovative, growth –intensive and green-infrastructure states. In this way, the whole China’s external strategy gas changed: turning from a global consumer-production place (almost everything was “made in China”) to an innovative hub “borrowing” recent innovations and know-how from around the world.

Hence, China’s primary attention is to the most innovative and knowledge-based-value- added countries! One of such country is Denmark: fortunately for China, there are not so many of them, so it can concentrate on most attractive ones.

Reflections of Europe’s future

European Union 28 member states are presently in a difficult and exciting position: on one side it is facing a new “friendly” trade and investment partnership with the United States (so-called TTIP). On another, it’s Asian penetration with so-called Eurasia framework.

If the former covers just two “blocks”, i.e. US and EU-28 states with less than 1 bln people and about one-third of global trade; the latter involves 65 Central and Western Asia states with about 4.4 bln people, accounting for about 63% of global production and about 29% share in global trade.

Some say that presently the “stakes” are clear: “united we stand”, as Europe is already in the Asian geopolitics, hence the popular abbreviation –Eurasia. 

Others argue that Europe’s has a “challenging” role on both “fronts: in Americas and in Asia: it’s up to European decision-makers to make a choice which side is preferential.   

The challenge is to find the solutions in the new context and being “aggressively pragmatic”: pragmatic because there is a need for open solutions that will solve existing problems (even if that means making changes to procedures and practices that have been around for a long time), aggressive because “competing partners” are taking already unprecedented steps.

“One belt, one road”

On top of the new China strategy is another “geopolitical project”: so-called New Silk Road often cited as “one belt, one road”, OBOR. The project dates back to 2013 and focuses on cooperation among –primarily- countries in Eurasian continent.

Chinese government is backing the OBOR with considerable resources for the New Silk Road from a special Fund of $ 40 bln; besides, China Development Bank intends to invest additional $ 900 bln on more than 900 projects in 60 countries.

OBOR indicates China’s intention to integrate into the world economy through regional cooperation: both in Asia and Europe.

Behind the OBOR project are two main directions: so-called “one belt, one road”, which are popularly known as the New Silk Road Initiatives.

OBOR specifically refers to the New Silk Road Economic Belt, which is going to link China and Europe (through Central & Western Asia) and the 21st century Maritime Silk Road, which will link China with South-East Asian states, Africa and Europe.  

Western vs. Asian directions in the Baltics

Presently, “the Western direction” in the Eastern/Central Europe and the Baltic States’ activities is undoubtedly more preferably. Thus, in the first half of 2016, the number of workers in the UK & Ireland from eight “eastern EU states”: the 3 Baltic States, Czech Republic, Hungary, Poland, Slovakia and Slovenia increased by 44 thousand, compared with the same period last year.

For example, there are totally over 2.2 million EU workers in the UK, so attractive is life and business in the country. Due to this fact, unemployment in the UK has decreased while the number of workers from the mentioned 8 states increased four-times during last 10 years.    

However, even that Western markets are still more attractive –and much closer, e.g. in the Nordic states and the UK, the Asian “direction shall not be forgotten.

Regardless of the fact that unemployment levels are still great in the Baltics (9.5% in Latvia, 8% in Lithuania and 6.5% in Estonia) the governments do not know how to reduce it.

There is an apparent lack of long-term economic strategies with perspectives for job markets. Optimal Baltic-China trade and economic relations can certainly help…

 China has become already a new “player” in global economic competition, though not alone on the way of global competition. From the Asian side, while China competes on easy capital, cheap price, swift implementation and developing country experience, another vital “player”, Japan brands itself with high quality, reliability and sustainability.

These differences and competitions play out not only in Asia but also in other parts of the world, including Europe, the US, Africa and the Middle East, changing the economic and geopolitical landscapes across continents.

EU member states have to find their “own brand” in this new geopolitical landscape; and so have the Baltic States. And it has to be quick: China’s professionals are already in Denmark!