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Europeans are also branding a double-edged sword for trade with China

EU exports to China have grown exponentially since the epidemic hit last year, a clear spot in Europe where there was no economy.

But China’s actions in places like Xinjiang and Hong Kong have made it clear to European companies that trade with China could be a two-edged sword, prompting some to re-examine their connection to the world’s second-largest economy and call on their governments to take Beijing’s firm right to human rights. it is an unfair competition.

Since the outbreak, China has been a major EU exporter, with a quarter of the goods imported into the bloc last year, while 10% of EU exports went elsewhere. Trade between the two groups has grown by 67 percent in the last decade, compared with a 19% growth rate between the EU and other countries.

As a result, China is rapidly recovering from the virus has helped keep Europe from becoming overwhelmed by the economic crisis. Figures to be released on Friday should confirm that the euro has fallen sharply on the economy in the first half of this year because the new closure is holding back jobs.

Sales – particularly trade and China – should be one of the few parts of the bloc’s economy to address the crisis.

But even “a great story… Not just [in] Germany and the rest of Europe, ”Wolfgang Niedermark, a member of the BDI executive committee, a major German company, warned of the dangers.

“It is time for China to compete with them as allies and address them when we disagree, such as human rights,” he said.

The Chinese occupation of Uyghurs, Kazakhs and other Muslims in the Xinjiang region has strengthened sanctions against the US, EU, UK and Canada. revenge and Beijing leaving other European companies he is facing conflicts in their actions. The same is true of Beijing’s capture of Hong Kong.

Niedermark said Beijing has been bold in articulating its intentions, meaning that “the tone from China is different, so we have to take a different approach”.

“We also do not accept that China is portraying itself as a growing market that is not ready for… To play by the same rules,” he said.

Earlier this month, three undergrowth groups and a Uyghur woman arrested in Xinjiang filed a lawsuit in Paris against garment manufacturers in Europe and the US, accusing them of smuggling synthetic cotton into the region, which produces about one-fifth. of international cotton.

“Finding cotton in the region has its challenges and the lack of information also makes companies more difficult,” said Miriam Saage-Maass, deputy chief of staff at the European Center for Constitutional and Human Rights. aid case in Paris. “The most reliable companies are the ones that are leaving the region.”

Annual chart (€ bn, current price) showing machines and vehicles is the driving force that the EU exports to China

The ECCHR is also operating similarly in other countries, including Germany and the Netherlands.

This campaign has results. Tchibo, a clothing and coffee maker in Hamburg, has previously told ECCHR to stop buying cotton from a Chinese company that campaigners say they are using it forcibly.

This problem is particularly acute for German companies, since strengthening trade relations is a particular issue in Germany.

More than 40 percent of EU goods shipped to China in the 12 months to February were from Germany.

German Chinese exports grew by 26% in February compared to the same month last year, when the epidemic closed China’s largest economy. This compares with a 1.2% decrease in all German sales over the same period.

Bar chart Export exports, 2020 (€ bn) show Germany gaining significant profits from overseas to China

The prices of German companies are only rising; Berlin and to correct the law which could make companies guilty of violating human rights or environmental standards in their international caterers.

“This is a matter of concern to many corporate governance departments,” Niedermark said, adding that several had encouraged BDI to speak out on human rights. “We need to talk about this with our Chinese friends and not avoid it.”

Volkswagen in particular faces are growing careful observation, as one of the few western car manufacturers with a factory in Xinjiang. It is a difficult issue for VW, due to its coercive use during World War II and because China is their largest market.

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VW denied that any of the participants were “forced to work”, adding that “those who provide what does not meet our needs are not given a contract”. The automaker is incorporating human rights into its “operational management system” and this year it will “inspect within Volkswagen-controlled corporations in China,” it said.

Remote areas can choose this in the hands of European companies, according to Janka Oertel, director of the Asian program at the European Council on Foreign Relations. China’s transition to autonomy in key companies it should be a “concern for European companies” concerning the Chinese market, he said.

Oertel warned that it was “a dangerous decision” considering Beijing would continue to open up its economy after remaining sanctions lifted the EU-China agreement reached in December.

A chart of the line of% of total exports (export for 12 months) shows German exports to China on the rise

“This is bigger than other companies,” he said. “It is a political problem and should be resolved in Europe and not in any company or country.”

There are indications that Brussels is drying up its travel destinations in China. Next week the European Commission is set to release it legislative authority addressing market distortions from the foreign government, which is seen as a response to the Beijing government’s support for its experts around the world.

The BDI is forcing the EU and Germany to use the procurement and savings system as an opportunity to secure China’s economy in a competitive environment.

“It sounds like a defense and we don’t like this as much as we’ve been trying to open up,” Niedermark said. “But if no one is following us then we need to increase our weapons.”

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