China's Reform
Europe embraces China's global vision
By Massimo D’Alema | chinawatch.cn | Updated: 2019-02-14 14:19

Allow me to start with something personal. I paid my first visit to China in 1979, when I was the head of the Federation of Italian Young Communists. The leader of the Italian Communist Party, Enrico Berlinguer, sent me to China with the aim of establishing a deeper relationship with the Communist Party of China led by Deng Xiaoping.

It was a great trip, which gave me the opportunity to discover this unique and great civilization – including the fantastic food. During the tour I was enchanted by the generosity, the curiosity and friendliness of Chinese people.

Since 1979 I have regularly visited Beijing. I can testify that Deng was a man of great vision. The prodigious achievements of China wouldn’t have been possible without the implementation of the concept of “Socialism with Chinese characteristics” inspired by him.

In my long friendship with China, I have been a witness to the outstanding development that the country has gone through in the last 40 years. I still hold the clear memories of the 1970s: when Beijing was filled with bikes; when from the Bund in Shanghai you could see swamps and not Pudong skyscrapers. The leap forward that China has made is simply extraordinary and something to be proud of. I believe that China is going to be, in a few years, the largest economy in the world.

Obviously such growth engenders admiration, as well as fear and hostility.

The international community is threatened by phenomena that undermine the stability of the planet and create feelings of insecurity and fear among people: divergences between the major powers and controversies between states; civil wars and religious conflicts; economic and financial crises; unsustainable development and natural disasters; widespread poverty; inequalities in access to knowledge; terrorism and unmanaged immigration.

The weakness of international organizations, ranging from the UN and the G7 to the G20, disputes between superpowers and the predominance of financial (speculative) powers prevent a fully democratic governance of the world and the achievement of a fairer distribution of well-being and knowledge.

We are going through a difficult stage in international relations. The 2008 economic and financial crisis has left its mark. The mood of optimism and openness that characterized the economic globalization in the 1990s and at the beginning of the 2000s has been replaced by fear and closure. The Trump administration’s choices are particularly worrisome. The return to an aggressive protectionism and the imposition of tariffs are feeding serious tensions and pose a risk to the international economic recovery.

According to Xi Jinping thought, China is determined to participate in, integrate into and ultimately guide economic globalization. President Xi has also presented China’s solutions to adapt to the profound changes in “growth drivers” with a new model of global growth. The goal expressed by Xi is to facilitate and liberalize trade and investment, make globalization more open, inclusive and balanced, and reshape the global value chain.

Xi recently underlined the need for new ways of governing the international community and highlighted the necessity to ensure consultation among equals and wider participation and shared benefits.

In addition he suggested that China’s reform and opening-up are closely linked with international economic development, and China will unwaveringly promote it.

The 19th Congress of the Communist Party of China stressed that “China will keep to the path of peaceful development, hold high the banner of peace, development, cooperation, and mutual benefit, and uphold its fundamental foreign policy goal of preserving world peace and promoting common development. China will work toward a new form of international relations featuring mutual respect, fairness, justice, and win-win cooperation and a community with a shared future for mankind, and work together with the people of all countries to build an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security, and common prosperity”.

The Belt and Road Initiative plays a fundamental role in achieving better cooperation between both states and populations. The initiative was conceived with the aim of developing a new model of strategic cooperation with countries along the route, which will eventually lead to mutual development and prosperity.

Personally, I like the idea of China relating to the outside world through building connections and fostering interdependence; if we are more mutually dependent, we will be more peaceful.

I also hope relations between the US and China will improve despite their differing visions and interests.

Nevertheless, I would like to underline that the Chinese vision of a multilateral world based on the role of the UN and of other global institutions, and on respect for international law is fully embraced by the European Union. This is particularly true and important at a time in which we increasingly observe the emergence of new aggressive forms of nationalism, the re-launch of protectionist measures and the non-compliance with crucial international agreements. Especially worryingly is, in my opinion, President Trump’s declarations that the US will respect neither the Paris agreement on climate change nor the nuclear deal with Iran. The fact that both Europe and China have responded to these statements strenuously confirming their commitment to comply with existing agreements and urging their partners to do the same is very important.

The EU and China must react to these dangers and the starting point for their action should be, in my opinion, their convergent vision on the need to strengthen multilateralism, on the governance of the global economy and the concept of harmonious growth to reduce imbalances and contradictions. Against this backdrop, I would like to draw attention to the relations between China and the EU, mostly in trade and the economies. Some figures illustrate the state of these relations.

As two of the three biggest economies and leading traders in the world, the EU and China have a deep and comprehensive partnership. 

Today, the EU is China’s biggest trading partner, while China is the EU’s second largest trading partner (the EU’s second largest export market and main source of imports) after the US. Trade in goods between the EU and China is worth well over €1.5 billion a day, with EU exports amounting to €198 billion and imports €374 billion in 2017. 

The GDP of the EU and China(€14.72 trillion and €9.75 trillion, respectively, in 2015) rank second and third in the world, behind the United States (€16.64 trillion). They are two of the most externally-integrated economies in the world, with annual international trade in goods and services of €15 trillion and €4.75 trillion in 2015, respectively. Today, China is significantly more open than either Japan or South Korea was at a similar stage of development. The EU’s total trade with partners outside of the EU was €5 trillion in 2015, slightly higher than China’s international trade. Their annual bilateral trade in goods and services stood at €580 billion in 2015, with each being the other’s largest source of imports and second largest export destination.

The EU has a substantial trade deficit in goods with China, though its relative size will reduce after Brexit given the UK’s disproportionate contribution to the deficit. According to EU statistics, the bloc's annual trade deficit increased from €109 billion to €180 billion from 2005 to 2015, falling slightly to €175 billion in 2016; in 2015, China exported €350 billion worth of goods to the EU against €170 billion in imports. Chinese statistics showed a smaller surplus, but one which still increased from $70 billion to $147 billion from 2005 to 2015, falling slightly to $131 billion in 2016.

By contrast, bilateral EU–China trade in services is only about one-eighth of the trade in goods. According to EU statistics, in 2016 the EU exported €38 billion of services to China, while China exported €27 billion to the EU. The importance of services relative to goods trade is very different for the two partners: bilaterally, EU exports to China of services are equivalent to 22 per cent of its goods exports, but that proportion is only 8 per cent for Chinese exports to the EU. Chinese imports of services grew at an average annual rate of more than 25 per cent between 2010 and 2015, and the EU’s trade surplus in services with China has been growing at an average annual rate of 37 per cent since 2010, reaching €11 billion in 2015. So there exists substantial potential for China and the EU to develop services trade, dependent in particular on the extent of China’s market opening to foreign competition.

The background to economic relations between China and Italy is as follows: Italy is the fifth country in Europe in terms of value of trade with China. It is important to emphasize the upward trend, which has been accentuated during the last few years, with the volume of business increasing five-fold since 2000, reaching €50 billion in 2012 and continuing to rise thereafter. Chinese capital is invested in many large Italian companies, including Banca Intesa, Eni Telecom, Terna, Snam and Pirelli. The flow of Chinese tourists coming to Italy is also growing strongly, exceeding 1.5 million visitors in 2016.

However, it is clear that trade between Italy and Europe and China is seriously imbalanced in favor of the latter, especially when it comes to trade in goods. I think that this situation should be tackled by means of greater cooperation and not trade wars. But we all need to agree that rebalancing is required. About a year ago, the President of Italy, Sergio Mattarella, visited China with a delegation of leading businessmen, and important economic agreements were reached. More recently, the minister of economy from the new government also visited China. It is important to build a more complete overview of Italy and its potential.

We all know the Silk Road initially connected Venice and China: there is no need to mention the historical roles played by Marco Polo, Matteo Ricci (Lì Mădòu) and Giuseppe Castiglione (Láng Shìníng) among others.

The Chinese see Italy as a cradle of culture; beauty; lifestyle; fashion; design; food and wine. This is true. But I want to underline the fact that Italy is the second biggest manufacturing country in Europe with a long tradition in different high tech sectors.

Maybe not everyone knows that we produce the world’s best helicopters and cruise ships. We have a strong aviation and space industry and we produce high-end machinery and the most impressive sport cars. The list could go on.

What I see as fundamental for the future is a greater opening-up of the Chinese market to services where, in contrast with goods, Italy and Europe are at a clear advantage; more effective protection of intellectual property rights and a larger flow of Chinese investments into our country and Europe.

A robust, balanced economic partnership can certainly help to strength dialogue and political cooperation which I view as fundamental and necessary.

I have already mentioned the shared desire of China and the EU to defend and reinforce multilateralism, and to work together for peace and safety worldwide. I would like to provide an example relating to the need for closer cooperation for stability and progress on the African continent. We have recently seen the announcement of the Chinese plan for investments of $60 billion in the continent. Today, China is truly an amazing partner for Africa and, as is natural, Chinese economic presence is being reflected by growing political influence. For Europe, Africa is an essential partner. Europe is the second biggest donor to Africa and at the same time partnership with Africa is absolutely necessary, both for supplies of raw materials and for the management of migratory flows. It could be very important to make Africa the major priority for China-EU cooperation, also because I believe we could start from a vision and interests which are largely convergent, or in any case compatible.

Italy and China can definitely make an important contribution to strengthening China-EU cooperation. In 2020 we will celebrate the 50th anniversary of diplomatic relations between our countries. We must not forget that Italy was one of the first European countries to recognize China, and it did so a year before the historic vote that welcomed the People’s Republic of China to the United Nations General Assembly in 1971. We therefore have a long tradition of political cooperation and there is something more as well, since, as President Xi has reminded us, “China and Italy are two ancient civilizations that have always respected and fascinated each other”. On the same occasion, the Chinese president underlined his personal commitment to reinforcing the strategic partnership between our countries.

Today, as we celebrate the 40th anniversary of China’s reform and opening-up, we should state our conviction and trust that our countries will continue to work and grow together in a spirit of friendship.

The author is former prime minister of Italy and is president of the Fondazione Italianieuropei. This article is selected from a book, The Sleeping Giant Awakes, jointly published by China Daily’s communication-led think tank China Watch and Guangdong People's Publishing House.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.

Allow me to start with something personal. I paid my first visit to China in 1979, when I was the head of the Federation of Italian Young Communists. The leader of the Italian Communist Party, Enrico Berlinguer, sent me to China with the aim of establishing a deeper relationship with the Communist Party of China led by Deng Xiaoping.

It was a great trip, which gave me the opportunity to discover this unique and great civilization – including the fantastic food. During the tour I was enchanted by the generosity, the curiosity and friendliness of Chinese people.

Since 1979 I have regularly visited Beijing. I can testify that Deng was a man of great vision. The prodigious achievements of China wouldn’t have been possible without the implementation of the concept of “Socialism with Chinese characteristics” inspired by him.

In my long friendship with China, I have been a witness to the outstanding development that the country has gone through in the last 40 years. I still hold the clear memories of the 1970s: when Beijing was filled with bikes; when from the Bund in Shanghai you could see swamps and not Pudong skyscrapers. The leap forward that China has made is simply extraordinary and something to be proud of. I believe that China is going to be, in a few years, the largest economy in the world.

Obviously such growth engenders admiration, as well as fear and hostility.

The international community is threatened by phenomena that undermine the stability of the planet and create feelings of insecurity and fear among people: divergences between the major powers and controversies between states; civil wars and religious conflicts; economic and financial crises; unsustainable development and natural disasters; widespread poverty; inequalities in access to knowledge; terrorism and unmanaged immigration.

The weakness of international organizations, ranging from the UN and the G7 to the G20, disputes between superpowers and the predominance of financial (speculative) powers prevent a fully democratic governance of the world and the achievement of a fairer distribution of well-being and knowledge.

We are going through a difficult stage in international relations. The 2008 economic and financial crisis has left its mark. The mood of optimism and openness that characterized the economic globalization in the 1990s and at the beginning of the 2000s has been replaced by fear and closure. The Trump administration’s choices are particularly worrisome. The return to an aggressive protectionism and the imposition of tariffs are feeding serious tensions and pose a risk to the international economic recovery.

According to Xi Jinping thought, China is determined to participate in, integrate into and ultimately guide economic globalization. President Xi has also presented China’s solutions to adapt to the profound changes in “growth drivers” with a new model of global growth. The goal expressed by Xi is to facilitate and liberalize trade and investment, make globalization more open, inclusive and balanced, and reshape the global value chain.

Xi recently underlined the need for new ways of governing the international community and highlighted the necessity to ensure consultation among equals and wider participation and shared benefits.

In addition he suggested that China’s reform and opening-up are closely linked with international economic development, and China will unwaveringly promote it.

The 19th Congress of the Communist Party of China stressed that “China will keep to the path of peaceful development, hold high the banner of peace, development, cooperation, and mutual benefit, and uphold its fundamental foreign policy goal of preserving world peace and promoting common development. China will work toward a new form of international relations featuring mutual respect, fairness, justice, and win-win cooperation and a community with a shared future for mankind, and work together with the people of all countries to build an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security, and common prosperity”.

The Belt and Road Initiative plays a fundamental role in achieving better cooperation between both states and populations. The initiative was conceived with the aim of developing a new model of strategic cooperation with countries along the route, which will eventually lead to mutual development and prosperity.

Personally, I like the idea of China relating to the outside world through building connections and fostering interdependence; if we are more mutually dependent, we will be more peaceful.

I also hope relations between the US and China will improve despite their differing visions and interests.

Nevertheless, I would like to underline that the Chinese vision of a multilateral world based on the role of the UN and of other global institutions, and on respect for international law is fully embraced by the European Union. This is particularly true and important at a time in which we increasingly observe the emergence of new aggressive forms of nationalism, the re-launch of protectionist measures and the non-compliance with crucial international agreements. Especially worryingly is, in my opinion, President Trump’s declarations that the US will respect neither the Paris agreement on climate change nor the nuclear deal with Iran. The fact that both Europe and China have responded to these statements strenuously confirming their commitment to comply with existing agreements and urging their partners to do the same is very important.

The EU and China must react to these dangers and the starting point for their action should be, in my opinion, their convergent vision on the need to strengthen multilateralism, on the governance of the global economy and the concept of harmonious growth to reduce imbalances and contradictions. Against this backdrop, I would like to draw attention to the relations between China and the EU, mostly in trade and the economies. Some figures illustrate the state of these relations.

As two of the three biggest economies and leading traders in the world, the EU and China have a deep and comprehensive partnership. 

Today, the EU is China’s biggest trading partner, while China is the EU’s second largest trading partner (the EU’s second largest export market and main source of imports) after the US. Trade in goods between the EU and China is worth well over €1.5 billion a day, with EU exports amounting to €198 billion and imports €374 billion in 2017. 

The GDP of the EU and China(€14.72 trillion and €9.75 trillion, respectively, in 2015) rank second and third in the world, behind the United States (€16.64 trillion). They are two of the most externally-integrated economies in the world, with annual international trade in goods and services of €15 trillion and €4.75 trillion in 2015, respectively. Today, China is significantly more open than either Japan or South Korea was at a similar stage of development. The EU’s total trade with partners outside of the EU was €5 trillion in 2015, slightly higher than China’s international trade. Their annual bilateral trade in goods and services stood at €580 billion in 2015, with each being the other’s largest source of imports and second largest export destination.

The EU has a substantial trade deficit in goods with China, though its relative size will reduce after Brexit given the UK’s disproportionate contribution to the deficit. According to EU statistics, the bloc's annual trade deficit increased from €109 billion to €180 billion from 2005 to 2015, falling slightly to €175 billion in 2016; in 2015, China exported €350 billion worth of goods to the EU against €170 billion in imports. Chinese statistics showed a smaller surplus, but one which still increased from $70 billion to $147 billion from 2005 to 2015, falling slightly to $131 billion in 2016.

By contrast, bilateral EU–China trade in services is only about one-eighth of the trade in goods. According to EU statistics, in 2016 the EU exported €38 billion of services to China, while China exported €27 billion to the EU. The importance of services relative to goods trade is very different for the two partners: bilaterally, EU exports to China of services are equivalent to 22 per cent of its goods exports, but that proportion is only 8 per cent for Chinese exports to the EU. Chinese imports of services grew at an average annual rate of more than 25 per cent between 2010 and 2015, and the EU’s trade surplus in services with China has been growing at an average annual rate of 37 per cent since 2010, reaching €11 billion in 2015. So there exists substantial potential for China and the EU to develop services trade, dependent in particular on the extent of China’s market opening to foreign competition.

The background to economic relations between China and Italy is as follows: Italy is the fifth country in Europe in terms of value of trade with China. It is important to emphasize the upward trend, which has been accentuated during the last few years, with the volume of business increasing five-fold since 2000, reaching €50 billion in 2012 and continuing to rise thereafter. Chinese capital is invested in many large Italian companies, including Banca Intesa, Eni Telecom, Terna, Snam and Pirelli. The flow of Chinese tourists coming to Italy is also growing strongly, exceeding 1.5 million visitors in 2016.

However, it is clear that trade between Italy and Europe and China is seriously imbalanced in favor of the latter, especially when it comes to trade in goods. I think that this situation should be tackled by means of greater cooperation and not trade wars. But we all need to agree that rebalancing is required. About a year ago, the President of Italy, Sergio Mattarella, visited China with a delegation of leading businessmen, and important economic agreements were reached. More recently, the minister of economy from the new government also visited China. It is important to build a more complete overview of Italy and its potential.

We all know the Silk Road initially connected Venice and China: there is no need to mention the historical roles played by Marco Polo, Matteo Ricci (Lì Mădòu) and Giuseppe Castiglione (Láng Shìníng) among others.

The Chinese see Italy as a cradle of culture; beauty; lifestyle; fashion; design; food and wine. This is true. But I want to underline the fact that Italy is the second biggest manufacturing country in Europe with a long tradition in different high tech sectors.

Maybe not everyone knows that we produce the world’s best helicopters and cruise ships. We have a strong aviation and space industry and we produce high-end machinery and the most impressive sport cars. The list could go on.

What I see as fundamental for the future is a greater opening-up of the Chinese market to services where, in contrast with goods, Italy and Europe are at a clear advantage; more effective protection of intellectual property rights and a larger flow of Chinese investments into our country and Europe.

A robust, balanced economic partnership can certainly help to strength dialogue and political cooperation which I view as fundamental and necessary.

I have already mentioned the shared desire of China and the EU to defend and reinforce multilateralism, and to work together for peace and safety worldwide. I would like to provide an example relating to the need for closer cooperation for stability and progress on the African continent. We have recently seen the announcement of the Chinese plan for investments of $60 billion in the continent. Today, China is truly an amazing partner for Africa and, as is natural, Chinese economic presence is being reflected by growing political influence. For Europe, Africa is an essential partner. Europe is the second biggest donor to Africa and at the same time partnership with Africa is absolutely necessary, both for supplies of raw materials and for the management of migratory flows. It could be very important to make Africa the major priority for China-EU cooperation, also because I believe we could start from a vision and interests which are largely convergent, or in any case compatible.

Italy and China can definitely make an important contribution to strengthening China-EU cooperation. In 2020 we will celebrate the 50th anniversary of diplomatic relations between our countries. We must not forget that Italy was one of the first European countries to recognize China, and it did so a year before the historic vote that welcomed the People’s Republic of China to the United Nations General Assembly in 1971. We therefore have a long tradition of political cooperation and there is something more as well, since, as President Xi has reminded us, “China and Italy are two ancient civilizations that have always respected and fascinated each other”. On the same occasion, the Chinese president underlined his personal commitment to reinforcing the strategic partnership between our countries.

Today, as we celebrate the 40th anniversary of China’s reform and opening-up, we should state our conviction and trust that our countries will continue to work and grow together in a spirit of friendship.

The author is former prime minister of Italy and is president of the Fondazione Italianieuropei. This article is selected from a book, The Sleeping Giant Awakes, jointly published by China Daily’s communication-led think tank China Watch and Guangdong People's Publishing House.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.