Sunday

18th Aug 2019

Focus

Chinese business worried by risk of euro volatility

  • Port of Piraeus, which China sees as a gateway to Europe (Photo: Aleksandr Zykov)

The talk of the town in Brussels on Monday (29 June) is the grave uncertainty about the future of the eurozone and the place of Greece in it.

But at the morning plenary session of the EU-China business summit, held ahead of a political meeting, the topic was notable by its absence.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

The only effect the weekend's Greek drama has had on the event, was that European Commission head Jean-Claude Juncker was no longer scheduled to speak in the morning, but was postponed to the afternoon.

However, in the margins, several members of the Chinese business community expressed concern with the situation.

“It really worries everybody”, said He Lian Mingli, vice-president of electrical equipment manufacturing company XD. He urged the EU to “deal well with this challenge”.

Harsh as it may sound, to many Chinese companies and investors whether Greece remains a member of the eurozone is not that important.

According to research by Deutsche Bank the value of Greek and Chinese trade in 2013 was €1.6 billion, while the trade value for the entire EU was €428 billion.

More significant is the effect on the euro the events of this week will have.

Tian Guoli, chairman of the Bank of China, one of the five largest Chinese banks, is worried.

“Recently, the Greek debt crisis and the unstable exchange rate of the euro have raised our concern again”, Tian said, according to English-language newspaper China Daily on Monday (29 June).

“We sincerely hope the euro, as well as the financial markets in Europe, can be stabilised”, he added.

“We only focus on the consequence”, said Wang Xin of Westlake Europe, a company in the automotive spare parts sector.

“Politically, it doesn't matter if Greece stays [in the eurozone], but for our business we need a stable euro”, Wang told this website, adding that whenever the euro depreciates, Westlake has to increase its prices.

“But some customers pay with US dollar, and they then say the price is too high. We are in the middle”.

Guo Taicheng, chairman of the logistical Shing Kee Group, said volatility of the euro “will slow down commerce between EU and China”.

If the euro goes down further, it may have one positive effect, noted Oxford University researcher Lucie Qian Xia, however.

“More Chinese people will travel to Europe”, she said.

Geopolitically, China has an interest in a strong euro, because that way the balance of power moves more towards a multipolar world, as opposed to the US-led unipolar world, noted lawyer Haibin Xue, also present at the event.

“China would like to see a sustainable eurozone”, he said.

Port of Piraeus

While Greece may not account for large volumes of trade with China, it does appear to be of strategic interest to the Chinese government.

Chinese shipping company Cosco obtained a concession for the Greek port of Piraeus in 2009, and is hoping to buy the majority share in the port from the Greek government.

When Chinese prime minister Li Keqian visited the port in 2014, he said it could become “a Chinese gateway to Europe”.

Although the Greek governing party Syriza initially announced halting the privatisation, according to Reuters, the Greek government has now invited Cosco and two other interested investors to submit a binding bid by September.

EU and China leaders to talk trade and climate

EU and Chinese leaders will meet in Brussels on Monday, with the EU hoping for Chinese investment in its new growth fund as well as support for a global climate deal.

News in Brief

  1. Trump turned down: Greenland not for sale
  2. UK Libdems would back Clarke or Harman as new PM
  3. Six countries agree to take 'Open Arms' ship migrants
  4. Gibraltar judge: Iranian ship should be released
  5. Increasing fears of a global recession
  6. Far-right hate crimes on the rise in Germany
  7. EU steel tariffs have 'worked well' so far
  8. Italian court: Migrant rescue ship can enter Italian waters

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Supported by

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Selmayr did not keep formal records of lobby meetings
  2. EU asked to solve migrant rescue deadlock
  3. Internal EU paper: Second Brexit vote was no longer 'distant dream'
  4. EU has 'zero incentive' to break open 'trilogue' deals
  5. Denmark plans import ban on EU-approved pesticide
  6. US offers Johnson helping hand on Brexit
  7. Italy: New government without Salvini in the making
  8. Brexit row delays financial products transparency review

Join EUobserver

Support quality EU news

Join us