A self-driving bus made in China is on display during a tech innovation expo in Paris, France.GAO JING/XINHUA
China and the European Union enjoy ample space and broad prospects for bilateral cooperation amid downward pressure and mounting uncertainties around the globe, which will help inject a strong impetus for global economic recovery, experts said on Tuesday.
Their comments came as South China Morning Post reported on Sunday that China and the EU are set to hold a high-level trade dialogue to discuss several global economic challenges such as food security, energy prices, supply chains, financial services, bilateral trade and investment concerns.
Chen Jia, a researcher at the International Monetary Institute of the Renmin University of China, said China and the EU enjoy ample space for cooperation in several areas amid global pressure from geopolitical tension and mounting uncertainties over the global economic outlook.
Chen said the two sides could deepen cooperation in fields including technological innovation, energy security, food security, and climate and environmental issues.
For instance, he said China's achievements in new energy applications will help the EU to make more progress in sectors essential for people's livelihoods like new energy vehicles, batteries and carbon emissions. And the EU could also help Chinese companies grow faster in core fields such as aerospace, precision manufacturing and artificial intelligence.
Ye Yindan, a researcher with the Bank of China Research Institute, said stable relations between China and the EU will help promote sustained and healthy economic development for both sides as well as contribute to the stability of the international situation and the global economic recovery.
The National Bureau of Statistics said China's GDP expanded by 0.4 percent year-on-year in the second quarter after a 4.8 percent growth seen in the first quarter, while posting a 2.5 percent growth in the first half.
"China's steady economic growth and its economic transformation also need the support of the European market and technologies," Ye said.
Looking to the future, Ye took a rosy view of prospects for cooperation between China and the EU, especially in fields including green development, climate change, digital economy, technological innovation, public health and sustainable development.
The EU has become China's second-largest trading partner, with 2.71 trillion yuan ($402 billion) in bilateral trade during the first six months, said the General Administration of Customs.
In recent days, as stagflation pressure and debt risks clouded growth prospects, the attractiveness of the eurozone for global investors has weakened, with the euro down to parity against the dollar last week for the first time in 20 years.
Liang Haiming, dean of Hainan University's Belt and Road Research Institute, said it is generally believed that for every 1 percentage point decline in eurozone economic expectations, the euro will fall by 2 percent against the dollar.
Considering factors including the eurozone's economic slowdown, the energy shortage amid geopolitical tensions, high inflation risks and the rise in imported product prices from a weaker euro, he said that will leave open the possibility that the European Central Bank may adopt stronger policies, such as raising interest rates.
Meanwhile, Liang also warned of pressure and challenges ahead, saying the euro could sink to 0.9 against the dollar in the following months if the current situation continues.
Against that backdrop, Liang said China and Europe should strengthen their cooperation and leverage their comparative strengths in fields including developing third-party market cooperation, which will inject new impetus into the economy.
He also said it is advisable for the two sides to expand the scale of bilateral currency swaps and settlements, which will help prevent risks and boost bilateral trade.
Citing risks faced by the EU from high inflation and economic recession, as well as China's recent moves to reduce its US debt holdings, Ye from the Bank of China Research Institute said China and the EU could further strengthen cooperation in financial sectors including further opening up China's financial market in an orderly manner.
Ye said that will bring new market investment channels for European institutions and offer more international cooperation opportunities for Chinese financial institutions.