The giddying Chinese goods pouring into the European market
often causes alarm on the Western continent. But is the flow of
China's exports an opportunity or a challenge? It is a recurring
question that divides Europe and some even see the challenge as a
threat.
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Henri de Groot, of the Department of Spatial Economics of Vrije
University, Amsterdam, however, is one leading economist who does
not buy that theory.
"Considering China as a threat is not a fruitful standpoint," he
said in an interview with Xinhua recently, "the net effects are
positive."
Those who complained about China's strong exportation to the
European market are actually benefiting from Chinese products, said
de Groot, who recently published a report on the economic effect of
emerging China on the Netherlands.
Thanks to Chinese exports, a characteristic shopping basket of
an average Dutch household is currently around 300 euros per year
cheaper, the report said.
"I am convinced that the gains from trade that we emphasize in
our report are also relevant for other European countries," said de
Groot, adding that access to cheap inputs and consumer products
help reduce inflation.
Wim Suyker, an economist from CPB Netherlands Bureau for
Economic Policy Analysis, said another advantage brought by China's
economic development was lower mortgage rates caused by strong
Chinese demand for foreign government bonds, prompted by its huge
current account surplus.
Estimates vary, but Suyker said enormous Chinese foreign
reserves might have led to the lowering of interest rates by one
percentage point globally.
Suyker suggested Europe should adjust itself rather than head
for protectionism.
"European policy makers should facilitate required adjustments
prompted by the increasing role of China," he said.
"It has become a cliche to say that we should see China as an
opportunity and not as a threat," Suyker said.
China's staggering development has also created a vast market
irresistible to EU companies. They are investing heavily in
China.
Sino-EU trade held on to its double-digit growth pace in 2006,
with an annual volume set to approach US$300 billion.
Official figures show that the EU's real investment in China had
added up to US$47.78 billion by the end of 2005, ranking the fourth
largest source of foreign investment for China. There were
altogether 22,680 Chinese enterprises jointly or solely invested by
EU companies.
Taking this into consideration, the European Commission last
month distributed a green paper for public consultation on its
anti-dumping measures.
The EU executive arm said EU companies outsourcing were actually
being hurt by its own anti-dumping measures, as illustrated in last
year's shoe dispute with China and Vietnam.
(Xinhua News Agency January 15, 2007)
