Source: Shanghai Securities News

On June 26-27, 2017, I headed a delegation to Brussels to attend the 7th China-Europe Forum that was jointly held by the Chinese Mission to the EU, the China Institute for Reform and Development (CIRD), the Friends of Europe and the China Public Diplomacy Association. This forum mainly discussed China-Europe cooperation in the framework of the “Belt and Road”. Generally speaking, the enterprises and the academic communities of such countries as Poland, Greece, Spain, and Portugal display a positive attitude to China-Europe cooperation.

Based on this exchange, I proposed 5 suggestions regarding China-Europe cooperation in the framework of the “Belt and Road”.

1. Promote converging of the "Belt and Road" based China-Europe cooperation and Asia-Europe cooperation

The “Belt and Road”-based Asia-Europe cooperation will expand the space of China-Europe economic and trade cooperation, which will facilitate the Asia-Europe Economic Integration process. Moreover, it is helpful for dispelling some concerns of the EU officials, and for expediting Europe’s integration process. To push forward converging of the “Belt and Road” based China-Europe Cooperation and Asia-Europe cooperation is a practical choice.

Firstly, Asia-Europe integration will create a huge market. According to data from the World Bank, in 2016, the total GDP of Asian countries and European countries accounted for about 55.2% of the world's total GDP (Asia accounts for 33.84%, and Europe accounts for 21.37%). Nearly 3/4 of the countries along the "Belt and Road" are newly emerging economies and developing countries. They constitute a huge market, and have a huge potential for development.

Secondly, the Asia-Europe integration brings some pressure on the EU. Inside the EU, the member countries are faced with the issue of inconsistent rate of development, namely, not all EU countries will participate in all stages of the Europe integration process at the same time. Now, Central and East European countries generally lack investment and projects, so, their enthusiasm for participating in the “Belt and Road” is very high. We should make the most of the forces of various parties in Europe, so as to form a resultant force for building of the “Belt and Road”.

Thirdly, China and Europe should play an important role in the Asia-Europe integration. For example, the focus of China and the EU's joint development of the third party market, is in Asia and Europe, and the potential also lies in Asia and Europe. To jointly develop the third party market will allow the EU to access the huge market that includes China, which constitutes an important impetus for the EU to actively participate in the building of the "Belt and Road".

2. Promote building of multilateral cooperation mechanisms for building of the "Belt and Road"

Now, the construction of the Belt and Road has displayed a clear development trend of multilateral cooperation, and next, the focus should be placed on building of multilateral cooperation mechanisms. This not only can help form a resultant force of various parties involved in the “Belt and Road”, but also can produce an important impetus for regional integration.

Firstly, guide the development according to the trend, and accelerate building of multilateral cooperation mechanisms. With accelerated pushing forward of the construction of the "Belt and Road", the impact on regional cooperation and regional integration will increase substantially. To adapt to this trend, we should make building of multilateral cooperation mechanisms a focus in pushing forward the construction of the “Belt and Road”.

Secondly, strive to achieve breakthroughs in multilateral cooperation. For instance, we should expedite the process of the free trade network of Shanghai Cooperation Organization, accelerate pushing forward building of the updated version of China-ASEAN Free Trade Area, and build pilot demonstration areas of multilateral cooperation.

Thirdly, give play to the role of Asia Infrastructure Investment Bank's in promoting multilateral cooperation. The Asia Infrastructure Investment Bank's role in multilateral cooperation has been widely recognized by the member states of the EU. Therefore, the role of the Asian Infrastructure Investment Bank’s in promoting multilateral cooperation must be well developed in order to advance the “Belt and Road”.

3. Accelerate the building of a working platform and a joint governing mechanism for the “Belt and Road”

The main trend of the "Belt and Road" multilateral cooperation raises practical requirements for the "Belt and Road" working platform and joint governance. On this forum, the EU party, especially enterprises from the EU say, they want to participate in building of the “Belt and Road”, but they do not know what agencies and persons of China they should contact.

Firstly, establish national working bodies for the "Belt and Road". It is suggested that special national working bodies for the “Belt and Road” be organized as soon as possible, so as to generally coordinate relevant internal and external businesses related with the “Belt and Road”.

Secondly, establish relevant special bodies in Chinese embassies and consulates in foreign countries. The Chinese embassies and consulates in countries along the “Belt and Road” shall take the lead in establishing "windows", so as to assume such specific functions as connection, communication, and exchange, for participation of enterprises and relevant bodies in the countries in building the “Belt and Road”, as soon as possible.

Thirdly, establish a joint governance mechanism as soon as possible. Considering the trend of multilateral cooperation in building the “Belt and Road”, relevant parties should discuss and establish joint governing mechanisms and governance platforms in such areas as trade, investment, and security as soon as possible, and provide institutional guarantee for promoting the building of the “Belt and Road”.

4. Accelerate negotiation for the China-Europe Investment Agreement

An important choice for deepening the “Belt and Road”-based China-Europe cooperation is the China-Europe Free Trade Area. But, the EU is suspicious about the idea of a free trade area, and have taken a delay approach. Although we do not rule out the possibility that breakthroughs may be made in the negotiation for the China-Europe Free Trade Agreement under certain situations, it is very difficult to achieve breakthroughs in the short term. In such a situation, to reach the China-Europe Investment Agreement as soon as possible is the most urgent business in the “Belt and Road” China-Europe Cooperation.

Firstly, it meets the EU's expectation. In their speeches on this forum, the EU's trade officials specially stress that, the EU want to firstly negotiate on investment agreement, then service trade agreement, and finally free trade agreement. The EU's plan for the period before 2020 is very clear, i.e. to reach a comprehensive bilateral investment agreement, which is a precondition for negotiating for the free trade agreement with China.

Secondly, it mainly depends on the political will of the high level officials of the EU. Some EU experts point out that, if China and Europe lay the focus of their work on negotiation for the investment agreement, it is relatively easy to achieve reciprocity and mutual benefit.

Thirdly, expedite preparation for negotiation for the free trade agreement. Now, the EU is faced with many problems, and we do not rule out the possibility that under certain conditions, the EU may be willing to negotiate on the free trade agreement. Meanwhile, we should be proactive, and make good preparation for launching the negotiation for the China-Europe free trade agreement sooner.

5. Promote participation of various parties of the “Belt and Road”

Viewed from the result of this exchange, the “Belt and Road” related intergovernmental exchange and cooperation is very important, but it requires participation of various parties so as to form a resultant force.

Firstly, establish a cooperation mechanism between Chinese and European enterprises, for example, establish the Chinese Chamber of Commerce in the EU in Brussels, so as to promote exchange and cooperation at the enterprise level, and let them learn the demands of Chinese enterprises.

Secondly, establish cooperation mechanisms between think tanks. Over the recent years, the China Institute for Reform and Development, the Friends of Europe and the Europe Policy Research Center have conducted several discussions surrounding the free trade between China and Europe. From the perspective of actual needs for China-Europe cooperation, more sufficient exchange between think tanks should be conducted at a higher or deeper level. It is suggested that, China should support these think tanks to establish branches in the EU, to conduct study about the important problems in the “Belt and Road”-based China-Europe cooperation, and to provide the Chinese enterprises with a consultation service.

(The author is a member of the Academic Committee of Shanghai Academy, and President of China (Hainan) Research Institute for Reform and Development)