Sino-German financial ties set to deepen

China and Europe should strengthen financial and economic cooperation rather than allow differences to encumber their ties, officials and business representatives said at the second Sino-European Finance Summit in Beijing, highlighting the resilience of cross-border investment and growing opportunities for cooperation between the two markets.

"It is evident that China and Germany have significant economic ties through trade and the global financial system," Martin Wieland, permanent deputy director-general of markets at Deutsche Bundesbank, Germany's central bank, said in his keynote speech at the summit on Tuesday.

"We may not agree on everything, but differences in certain areas should not undermine our shared interests," Wieland said, adding that both countries would be worse off in a global economy divided into isolated blocs, while both could benefit from "prudent and reliable arrangements for trade and financial markets".

He said central banks have an important role to play in supporting resilient and well-functioning financial markets, adding that his main message to the summit was that resilience and international cooperation "can go hand in hand", rather than having to be mutually exclusive.

The event was jointly held by Bank of China and the German Investment Funds Association in Beijing, drawing more than 270 guests from the People's Bank of China, the Beijing Financial Street Services Bureau, Deutsche Bundesbank, the Delegation of the European Union to China, as well as nearly 90 financial institutions and industry associations.

The summit comes as German firms continue to maintain a significant presence in China. Around 5,000 German companies operate in China, with about two-thirds engaged in manufacturing and roughly 80 percent classified as small and medium-sized enterprises.

German businesses are also becoming more optimistic about the Chinese economy. More than one-third of member companies of the German Chamber of Commerce in China expressed a positive outlook for the second half, up from 15 percent a year earlier, said Oliver Oehms, executive director and board member of the German Chamber of Commerce in China — North China.

More than half of the chamber's member companies plan to increase investment in China over the next two years, a share that has remained stable for a couple of years and saw an uptick earlier this year, Oehms said, adding: "China obviously is no longer only a sales market or production location for German companies. Increasingly, it is becoming a starting point for global product strategies and innovation. German companies in China are part of this development."

The expansion of Chinese companies into third markets, often described as "going global", is also emerging as a major opportunity for German businesses in China, according to the chamber's latest survey, published last week. More than two-thirds of member companies identified the trend as their top business opportunity.

"At the German Chamber of Commerce, we believe in the power of partnerships, not in zero-sum games," Oehms said. He described the global expansion of Chinese companies as an example of how win-win outcomes can be achieved, saying Chinese and German strengths and expertise are often complementary.

"Competition, when fair and transparent, can be an accelerator for efficiency and innovation."

Huang Xueling, executive vice-president of Bank of China, said economic, trade and financial cooperation between China and Europe has continued to deepen.

BOC will make greater use of its overseas network covering 64 countries and regions to support China-Europe economic, trade and financial ties, Huang said, as the bank seeks to strengthen cross-border financing and investment.

In the first half, BOC's institutions in Europe handled more than $550 billion in international settlements, while the outstanding balance of guarantees issued in China in support of European countries reached $10.6 billion.

The bank will continue to support European firms investing in China and Chinese firms expanding in Europe, Huang said.

BOC is also seeking to deepen links between China and European capital markets. In June, it acted as lead underwriter for a 5 billion euro ($5.77 billion) sovereign bond issue by China's Ministry of Finance in Luxembourg.

The bank plans to expand financial services covering two-way investment, bond issuances, custody and settlement, and risk management, Huang said.

It will also promote wider international use of the Chinese currency, strengthen cooperation across the financial ecosystem and support further financial opening between China and Europe.

jiangxueqing@chinadaily.com.cn