Urbanization projects to dominate new era of cooperation, says envoy

China and the European Union are exploring opportunities to enhance bilateral economic and trade relations, with urbanization projects highlighted, according to the Chinese ambassador to the EU.

Wu Hailong, also a member of the 12th National Committee of the Chinese People's Political Consultative Conference, said the two sides are looking at methods of advancing the nation's urbanization process, including transfer of EU technology and management to China.

Due to a slackening in global demand, China has pledged to expand domestic consumption by shifting emphasis away from exports, a pillar of the country's sustained economic growth in past decades.

An accelerating urbanization push is seen as an essential role in unleashing the nation's consumption potential.

"Urbanization will be a focus for both sides — a new engine for enhanced bilateral economic relations," Wu said.

During his stay in Brussels in May, as part of a 10-day official visit to Europe, Vice-Premier Li Keqiang told the EU-China Urbanization Partnership Conference that accelerating urbanization will provide a new growth engine, which would help economic recovery in the EU and promote the transformation of China's growth model.

The two sides signed a series of agreements related to urbanization and energy during his visit, and according to Wu, that bilateral urbanization cooperation has already started.

"China and the EU are actively seeking possible ways to cooperate," he said.

The 16th China-EU Leadership Summit, set to be held in the autumn, will provide the "platform for the two sides to focus on the topic", he added.

The number of Chinese living urban areas has grown over the past three decades, from 170 million to 700 million, but still short of the 80 percent found in developed countries.

It is estimated that urbanization will create new domestic consumption worth 2.8 trillion yuan ($450 billion) in China each year, leading to new investment worth 6.5 trillion yuan, on an annual basis.

According to Wu, many sectors could be included in the cooperation projects, including energy conservation, environmental protection, transportation and city management.

Solar panel case

However, relations between the two sides have been strained at times, particularly by "rising trade frictions", Wu said.

Shortly after the United States announced punitive duties from 18 to 250 percent on billions of yuan worth of Chinese solar products last year, the EU also announced anti-subsidy and anti-dumping investigations into Chinese photovoltaic products.

"We will hear the EU's preliminary decisions on those investigations this June," Wu said.

Although he was unsure about the result, he said he still believed the EU "will be cautious in making any decision that is not in favor of China, but the US really has set a bad example".

More than 70 percent of Chinese solar panel exports go to Europe. But the EU's investment in China dropped in 2012 due to its sovereign debt crisis.

"But I don't believe this will last," Wu added.

He attributed the decline to insufficient capital in the region, rather than other reasons suggested, such as rising costs, China's business environment and the nation's economic slowdown.

Contact the writer at dingqingfen@chinadaily.com.cn