EU 2020 Strategy and Policies towards China’s Presence
To stimulate economic recovery, EU 2020 was schemed with three priorities namely smart, sustainable and inclusive growth. The targets include 75% employment rate of 20—64 year-olds, 3% of GDP invested in R&D, energy structural adaptation, a wider coverage of education, and poverty reduction.
Therefore, European Commission urged to pursue differentiated, growth-friendly fiscal consolidation, restore lending to the economy, promote growth and promote sustainable growth and competitiveness, tackle unemployment and social consequence, and modernize public administration.
However, the dilemma here is to balance fiscal spending while to invest more to R&D and labor market. Meanwhile, it’s difficult for EU to launch fiscal and financial reforms as a whole as problems confronting different countries are quite different.
In many studies into EU 2020, great importance is attached to institutional ...view middle of the document...
Protectionism risks the chance to utilize investment from China as a supplement to insufficient market confidence and fiscal scrutiny. Laissez-faire seems to allow mass media to demonize Chinese investment and thus aggravate public panics. Therefore, policy incentives should be provided to guide Chinese investment to fields consistent with EU 2020. Possible policies can be:
1. Attract more trade and investment
1) Simply the administrative procedures
2) Negotiate with China for support to overseas investment
3) Improve European public perception of China for better cooperation
2. Optimize investment structures
1) Encourage investment in R&D
* Stimulate establishment of R&D center in EU
* Encourage investment in renewable energies
2) Encourage investment in and establishment of SMEs
* Lobby Chinese government and legislative branch to provide more incentives for private companies to go overseas, especially SMEs
* Provide lending to SMEs
3) Encourage investment in education
* Stimulate joint investment in vocational education such as to introduce foreign investment in facilities while hire European expertise to provide training
* Negotiate with China for more government-supported scholarship for young European talents to China
4) Encourage investment in Eastern EU members
3. Labor policy
1) Negotiate with China for higher labor mobility especially for young talents
2) Set reasonable mandatory employment rate for European workers in transport and infrastructure construction deals
Besides these policies, financial systems including banking, taxation and foreign exchange should also be taken into consideration.
The leverage for EU to negotiate such policies is that the economies of both sides are highly complementary in areas of market and technologies. China’s determination to reform and institutional market hinders for European companies can be used to argue for EU’s benefits.
[ 2 ]. SIESTA, Spatial Indicators for ‘EU 2020 Strategy’ Territorial Analysis, ESPON, 10.08.2012 Luxembourg
[ 3 ]. Annual Report Survey 2014, European Commission, 13.11.2013 Brussels
[ 4 ]. Report on China’s Outbound Investment in EU, EUCCC, 1.2013