Trade relations between China and Spain look towards a post-Covid future

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China is Spain’s largest trading partner outside the EU, and Spain is the Asian country’s fifth trading partner in the EU

The economic and commercial collaboration between China and Spain harbor immense possibilities for the future, as highlighted by the Chinese ambassador to Spain, Wu Haitao, during the conference ” China-Spain: Great potential for economic and commercial cooperation “, organized by the embassy of the Asian country and Prensa Ibérica, which has broadcast in streaming through its 14 headers.

China is the largest trading partner of Spain outside the EU, and Spain is the fifth trading partner of the Asian country in the EU, with a market of a population of 1.4 billion inhabitants and more than 400 million people with average income. During the first 10 months of 2020, the Spanish Chinese trade volume is close to 30,500 million dollars, with a year-on-year growth of 3.8%, Spanish exports to China have grown by 18%, thanks especially to pork and other products food.

The leading economy in Asia, and in the emerging world, is expected to continue to be the engine of growth in the world economy and great business opportunities, as highlighted by Alfonso Nogales, Product Director of Prensa Ibérica in welcoming this online event, held this morning.

Those attending this event have learned first-hand the perspectives on the economic and trade ties between the two countries, as well as the Chinese development strategies and open-ended reforms. The Asian ambassador recalled the importance of President Xi Jinping’s visit to Spain in 2018 to strengthen said bilateral relations and the joint declaration they signed to strengthen the comprehensive strategic partnership in the new era, defining the bases for collaboration in areas economic and commercial, which since then continue to grow.

Regarding the fight against the pandemic, the Asian representative has highly valued the constant messages of support between the President of the People’s Republic of China, Xi Jinping, King Felipe VI and the President of the Government Pedro Sánchez, and the acts of cooperation between the two countries with the shipment of medical supplies in the worst moments of the health crisis.

Potential market

Once the pandemic is over, China wants to increase the import of typical and quality products, including agricultural products, and promote projects with Spain such as rail and maritime transport within the framework of the Belt and Road, and explore a tripartite relationship with Latin America and other regions.
To this end, the Asian country will fulfill as planned the integral construction of a modestly well-off society and will initiate a new expedition for the construction of a modern socialist country and will promote a broader and more profound opening to the outside, and has created pilot zones of free trade. In order to achieve greater interconnection between its various domestic and international markets, it has created pilot free trade zones in a total of 21 provinces and municipalities.

To conclude, he stressed that the joint fight against the pandemic between the two countries has served to consolidate the friendly relationship, and stressed that his country wants to work to increase strategic mutual trust.

New opportunities

The conference had the participation of María Peña Mateos, CEO of the Spanish Institute of Foreign Trade, ICEX, in her appearance she wanted to highlight the great strengthening between institutional relations and also of the economic relations of the Spanish private sector with China, in the framework of the health crisis, and how it has affected different countries in different ways.

In 2020, it has positively valued the high growth in exports with this country, in a framework in which the global drop rate of exchanges is around 12% accumulated between January and September for Spain.

From the ICEX, the industrial product stands out among the Spanish export items due to its values ​​of technological innovation, quality, and competitiveness, highlighting the machine tool and the automotive industry. This is also a source of exchange and cooperation between both countries for the development of green energy and sustainable mobility.

Other sectors such as agri-food, fashion, and cosmetics, closely linked to the habits of the Chinese consumer, maintain extremely fluid exchanges, as well as the logistics that allow this exchange to be maintained.

For the ICEX representative at this time of uncertainty and future regulatory changes, it is very important that Spanish companies bet on the diversification of markets and seek markets where growth rates are important, as is this case.

Successful relationships

After the opening of this day, Alfonso Nogales has given way to a round table in which Han Shengjian, general director of the Provincial Bureau of Economic Development of the island of Hainan, participated, who took advantage of this space to present the advantages that the port Hainan’s free trade system offers the Spanish business environment, among which are fiscal advantages such as the elimination of tariffs and VAT before 2025, ease of investment, elimination of visas or the improvement of logistics, maritime and land channels, reducing thus costs. This project aims to achieve the free movement of goods, people, services, capital, and data through the latest technologies, becoming a great gateway to the country.

Then, Ramón Tejedor, general director of Aragón Exterior, shared his intention to turn Aragón into the most relevant logistics platform in China for Europe, and reach North Africa. Aragon has worked very intensively with China to value the region’s geostrategic potential, creating the first level logistics hub, Aragon logistics platform, and improving its maritime and air connections through the Zaragoza airport, and which is positioned as an excellent hub for electronic commerce between both countries, and joint development thanks to technologies such as Blockchain.

Meanwhile, Miguel López-Quesada, corporate director of Communication, Marketing, and International Relations at Gestamp, highlighted how the pandemic has affected this automotive engineering group, due to its presence in Wuhan. In his case, the value chain and production costs are highly focused on domestic consumption in the Asian country, which is committed to new technologies and the electric vehicle. The reduction in mobility derived from the virus, caused security changes, putting people first, and a stop in production so they have increased the level of localization but affirms that, although threats spread easily, the opportunities too.

Feng Xubin, president of Yiwu Timex Industrial Investment, YXE, in his speech recalled the solidarity of the Chinese people during the worst moments of the pandemic and has positioned China as a strategic market for Spain, and as an economic engine for recovery. The person in charge of this important infrastructure, which since 2014 connects Madrid with the city of Yiwu, and how it has gone from a single train during that first year, to the current 174. This railway platform, which represents an important physical connection of 14,000 kilometers, has optimized its service, considering establishing a stop in Zaragoza, for example.

Finally, Manuel García, president of Interporc, has pointed out the weight that pork exports to China are reaching, sales that have been multiplied by four despite the pandemic. This country is a strategic partner for the sector and is a market for the future. In 2018, the health safety, traceability, and quality parameters that have made this growing relationship possible were established.

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