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Opinion / Op-Ed Contributors

Europe must not let itself be guided by fear

By Luigi Gambardella (China Daily) Updated: 2016-05-16 07:54

To deny market economy status to China would be a strong political signal from the EU and could cause the deterioration of the warming political relationship between the two economies. In the short term, there are concrete risks of retaliation from China that would cause the EU economies serious pain and uncertainty about the end result. It would also threaten the positive outcome of the ongoing negotiations for a bilateral investment treaty and the potentiality to conclude an FTA between China and the EU-which, according to Commission estimates, could raise European prosperity by 250 billion euros ($282.71 billion).

Closing the door to China would thus likely have very negative effects.

As the saying goes, the best way to win a dispute is to avoid it. A wise decision would be to adopt a forward looking political approach, whereby granting China market economy status could be used by the European institutions to strengthen dialogue with the Chinese authorities in support of the business activities of the EU companies in China.

One of the main drivers of the market economy status debate is the fear of job losses in Europe's less competitive manufacturing industries. It is however time for the EU to reflect on why its ability to compete with other economies is getting worse in many sectors. One of the reasons is no doubt the burden of too many EU regulations that hamper the overall ability to innovate and invest. There would probably be fewer dumping disputes if European governments proceeded with the necessary structural reforms.

In conclusion, what is needed is more dialogue not less. We need to find win-win solutions rather than start a new fight. Today the key word is cooperation. History has demonstrated that dialogue and cooperation overcome misunderstandings and reduce distances. Europe must not to be afraid of China. Fear is a bad advisor.

So let us not to allow fear to guide us. On the contrary China and Europe should work together more closely in the future and for the future. Cooperation with China on the fourth industrial revolution will be crucial if we want to keep European industry competitive and strong.

The author is president of the business-led international association ChinaEU, which is headquartered in Brussels.

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