Asia, Europe complete each other, says Bank of China chief in Budapest

Budapest (MTI) – Linking Asia and Europe could establish the world’s longest trade route, Tian Guoli, chairman of the Bank of China, told the Lámfalussy Lectures conference in Budapest on Monday.

Europe offers experience and advanced technologies while Asia offers an abundance of labour coupled with rapid growth and high demand, Tian said.

Speaking about the advantages of China’s One Belt, One Road initiative aimed at establishing a link between East Asia, the Middle East, Africa and Europe, Tian highlighted the upgrade of the Budapest-Belgrade railway line, the completion of which he said could make Hungary into a regional hub.

Over the past three years, more than 100 countries have expressed support for the One Belt, One Road initiative and 56 countries and numerous international organisations have signed memorandums of understanding with China, he said.

Hungary was the first European country to join the initiative, which not only symbolises the Hungarian government’s “great vision for the future” but also shows how aligned the two countries’ visions are, the chairman added.

Despite China’s growth, investment activity between China and Europe is very low, with only 6.5 percent of the EU’s foreign investments going to China, he said, adding that the situation was similar vice versa.

Still, China’s bilateral ties with Hungary have intensified, with bilateral trade turnover exceeding 8 billion dollars last year, Tian said.

Jacques de Larosiere, former director of the IMF, said Europe should boost convergence in its economic policies in order to gain credibility and fulfil its goals. The former IMF chief said national governments rather than EU institutions were to blame for a lack of policy convergence and slow growth. De Larosiere warned that collective discipline could weaken further and become “a victim of demagogy”. The integrated European model, no matter how weak it may be, is the best possible way to prevent Europe’s downhill slide, he argued.

He said European member states needed to embrace sustainable debt management and cut government spending in order to sustain a growth rate above 1.5 percent. He also underlined the importance of structural adjustments, the elimination of administrative barriers to new investments and encouraging labour mobility with a view to reducing unemployment.

Photo: MTI

Source: MTI