00:00How would you say relations are right now, trade relations?
00:04Obviously, there's a truce between the U.S. and China right now.
00:08The Europeans have had similar complaints about export licenses on rare earths.
00:13Where are we right now?
00:15We are following up the meeting that President Xi had with Trump in Seoul.
00:20It's a good beginning.
00:21We want to see a bit the implementation of this agreement.
00:25Export control is definitely one of the main issues that European companies are facing now here in China.
00:32Already in July, during the U-China Business Summit, as the European Chamber,
00:36we had the opportunity to speak with the Chinese leadership,
00:39and especially with the Minister of Commerce, Wang Wen Tao,
00:42to ask a task force in order to boost the issuance of this license.
00:48At the moment, we are seeing some progress, but still is lack of continuity of fluidity in the process.
00:54It's not resolved.
00:55Because there were production disruptions throughout Europe or here,
01:01just because of the supply of magnets, supply of critical minerals from August and September.
01:07And you say it has not necessarily been resolved yet.
01:10I would say that there's still things to be done.
01:13We have still our member that they are telling us that they have a problem in Europe,
01:18but also a problem here in China,
01:20because many of these products are utilized here in China to be used in the local market.
01:25So we want to highlight that it's important, the political talk,
01:29but they need to implement the procedure as fast as they can.
01:33Right.
01:33So you've seen some discrepancies on the speed at which export licenses are granted, right?
01:39Sometimes really fast, sometimes really slow.
01:42Has that clarity, has there been more clarity since there is a truce?
01:46Because I know you didn't have a truce, the U.S. and China did, but you're kind of caught in the middle on that.
01:51As always, you know, like Europe in the relationship with China and the U.S., they always have a state control effect.
01:58Yeah.
01:59So good that they had this meeting in Seoul, we want to see what's going to happen.
02:03You're right, there are very differentiation between the sector, between where you are based,
02:08but overall what we are saying here to the Shanghai authority is they want to advocate to the central authority
02:14to have a more precise procedure that once you set all the document, when you apply, you know exactly when you're going to get it.
02:22Because we have companies, remember that they are losing millions per day.
02:25Obviously, Li Chiang, the premier, was here at CIE, he was talking a lot about boosting consumption.
02:32We all know that China needs to boost domestic consumption to rebalance its economy, to get the households to spend right now.
02:38Confidence is pretty low, though.
02:40Retail sales have been extremely sluggish.
02:42So an event like this is intended to at least promote the importation of goods from around the world.
02:49How useful?
02:50I'm not necessarily getting you to criticize it.
02:53You did a couple of years ago.
02:55But is this working?
02:57Is China importing more?
02:59And do events like this help the Europeans?
03:02So we would like to specify that we are the voice of European business here in China.
03:07We speak after data.
03:09And what we want to say to the CIE, the original idea was the one to help to eliminate the trade imbalance
03:16or reduce the trade imbalance between EU and China.
03:19At the moment, it doesn't work because we'll see over the years the trade imbalance is growing.
03:23So what we suggest is to come back to the original core of the CIE, to the one to bring to China new European product, new international product, never seen before, in order to boost the relationship, in order to bring more new, small, medium enterprise.
03:40Because at the moment, the pricing that they are applied for this booth, beautiful booths, I believe you showed to your public, are very expensive.
03:48There are other cities in the near region that they even offer tickets, flight tickets, booths for free in order to attract small, medium enterprise to come to China and to sell and to see for the first time China.
04:01I believe that the CIE should come back to that.
04:05And regarding the sentiment, I want to say that the consumption in China grew by 4.4%.
04:12So in Europe, it would be a great news.
04:14The other issue is that the manufacturing output grew by 6.2%.
04:18So you have more things in the market than the one people can buy.
04:22And this is one aspect of Li Chang's pitch, was the one to recalibrate the overcapacity or the irrational competition, the dimension.
04:32We hope that it's going in this direction because the competition price on our members are making them rethink their strategy here in China.
04:40How dire is it right now, for example, let's pick one sector, European automakers.
04:45They've lost the top spot to Ito Series in the luxury space, a Chinese domestic EV.
04:52They're playing catch-up.
04:53We're getting a report from other media that Porsche is considering a gradual withdrawal from China because of diminished deliveries in this local market.
05:03The Xiaomi Su7, some say, is an almost exact copy of a Porsche.
05:08What does this represent as far as the future of European automakers, a key, key industry for Germany?
05:16Okay.
05:17We do believe that China is a fitness center for our members.
05:20So you have to be here not only for the market but also for the innovation ecosystem.
05:25Of course, the new energy vehicle sector in China is a success story because we have seen in a few years they become leaders in the sector.
05:34The other issue is that we are seeing, and this was news of the last summer in July, the consumption luxury tax threshold was reduced from 1.3 million RMB to 900,000 RMB.
05:48So more European cars were taxed at the higher level.
05:51Yes.
05:51For an additional 10%.
05:53So it's another way to say, you know, guys, beautiful product, but if by Chinese.
05:59And that, again, benefits the local players.
06:02Very quickly, well, actually, we've run out of time, but you're coming out Wednesday with a new paper on Shanghai.
06:06Yes.
06:07We're going to have to talk to you again about that.
06:09We want to give suggestions to the Shanghai Authority in order how they can improve to invest in Shanghai and let Shanghai to become even more international.
06:18We're going to have to talk to you again about that.
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