The presented paper analyzes whether governmental spending for Chinese companies in tender processes of European countries is line with the Union's trade rules because of the political situation in the partnering country China. The paper thereby analyzes European Union's trade rules, describes specific member state behavior in public tendering processes and investigates European Union trade surveillance mechanisms. Finally, the paper judges about potential improvements in EU’s competencies and outcomes of currently applied behavior.
Table of Contents
1 Introduction
2 Trade rules of the European Union
3 Individual member states' China trade policy
3.1 Governmental investment projects involving Chinese companies
3.2 Motivation of China-involving EU countries
4 Trade policy analysis of the European Union
4.1 European Union's China trade policy targets
4.2 Trade policy competences of the European Union and individual member states
4.3 EU's trade rules surveillance and intervention mechanisms
5 Critical judgment and long-term outcomes of EU's China trade policy
6 Conclusion
Objectives and Topics
This paper examines the consistency between individual EU member states' trade engagements with Chinese state-backed enterprises and the overarching trade rules of the European Union. It investigates whether current national behaviors align with the EU's established trade policy framework and explores the challenges of balancing national economic interests with supranational regulations.
- Analysis of European Union trade principles and WTO-related rules.
- Evaluation of governmental infrastructure projects involving Chinese companies in Poland and Greece.
- Investigation of the shifts in trade policy competency resulting from the Lisbon Treaty.
- Assessment of EU surveillance and intervention mechanisms regarding fair trade.
- Critique of the long-term strategic outcomes of EU-China trade relations.
Excerpt from the Book
3.1 Governmental investment projects involving Chinese companies
As a result of the financial crisis 2008 several European countries were forced to sell state-owned assets to private investors, in other countries the height of governmental spending was reduced enormously. This "tight budget policy" opened doors for Chinese investors and companies aiming at entering European prestige market. Governmental bids have also been targets of Chinese penetration strategy. Chinese OFDI abroad has increased faster in Europe than in any other region in recent years.
As public investment in infrastructure has a high share of governmental budgets and also because it is transparent to access, this chapter presents governmental infrastructure investments of EU member states including Chinese companies as preferred contractors.
Poland: The first entry contract for a Chinese construction company to European Union's market was signed in September 2009 by the Polish government: Chinese Overseas Engineering Group Company (COVEC) won a bid to construct a motorway between Warszawa and Lodz partly financed out of EU funding. COVEC convinced its Polish customers with a low cost offer: The Chinese construction company asked for only 30 percent of the overall estimated costs.
Two years after the contract was signed, the Polish decision turned out to be a wrong choice: On June 16th, 2011, Chinese COVEC canceled the construction project due to unexpectedly higher costs exceeding COVEC's initial plan by 76 percent. Reasons for the failure can be found in (a) the local production requirements of the Polish government and (b) opposition of local competitors to supply the Chinese in the project, (c) an unknown legal environment resulting in a impossibility of using Chinese machines because of missing EU certificates and (d) probably also a lack of managerial experience to cope with such unknown situations in an unfamiliar environment.
Summary of Chapters
1 Introduction: Provides an overview of the global trade context, the importance of the EU market, and the research focus on Chinese state-backed enterprises.
2 Trade rules of the European Union: Outlines the core trade principles of the EU and its commitment to the World Trade Organization standards.
3 Individual member states' China trade policy: Examines specific governmental infrastructure projects and the economic motivations behind member states' engagements with China.
4 Trade policy analysis of the European Union: Discusses policy targets, the impact of the Lisbon Treaty on competencies, and the EU's various surveillance mechanisms.
5 Critical judgment and long-term outcomes of EU's China trade policy: Evaluates the coherence of current trade practices and the future strategic outlook for EU-China relations.
6 Conclusion: Summarizes the research findings and discusses the necessity of aligning national trade behaviors with a unified European approach.
Keywords
European Union, China, Trade Policy, State-Owned Enterprises, Infrastructure, Lisbon Treaty, FDI, Trade Rules, Globalization, WTO, Market Access, Economic Policy, Investment, Protectionism, Market Economy Status
Frequently Asked Questions
What is the core subject of this paper?
The paper examines the interaction between European governmental spending on projects involving Chinese state-backed enterprises and the overarching trade rules of the European Union.
What are the central themes explored?
Key themes include the evolution of EU-China trade relations, the impact of the 2008 financial crisis on state spending, the role of the Lisbon Treaty in trade competency, and the conflict between national and EU-wide trade interests.
What is the primary objective of the research?
The primary goal is to critically evaluate whether the trade-related actions of individual EU member states are coherent with the collective trade policy of the European Union.
What research methodology is applied?
The paper employs a qualitative analysis of trade policy frameworks, an examination of historical development in EU-China relations, and a case-based analysis of specific governmental infrastructure projects.
What content is covered in the main section?
The main sections cover the EU's established trade rules, the practical implementation of projects in member states like Poland and Greece, and the regulatory mechanisms the EU uses to oversee imports and exports.
Which keywords best characterize this work?
The work is characterized by terms such as European Union, China trade policy, State-Owned Enterprises, trade competency, and the Lisbon Treaty.
How does the Lisbon Treaty impact trade policy between the EU and its members?
The Lisbon Treaty significantly shifted trade policy toward EU competency, limiting the autonomy of individual member states to negotiate Bilateral Investment Treaties (BITs) independently.
Why did the Polish infrastructure project involving the Chinese firm COVEC fail?
The project failed due to unexpected cost increases, a lack of local knowledge regarding legal and environmental standards, and challenges in dealing with an unfamiliar regulatory environment.
- Arbeit zitieren
- Tobias Schmidt (Autor:in), 2011, European governmental spending for Chinese state-backed enterprises - In line with the European Union’s trade rules?, München, GRIN Verlag, https://www.grin.com/document/188887
