Illustration: Xia Qing/GT

In a report outlining the EU's challenges to its competitiveness,MKsport the bloc acknowledges it is significantly behind the US and China in the digital sector, warning that the two nations are "already way ahead" on the deployment of artificial intelligence technologies, Bloomberg reported.

The findings are largely a re-articulation of a broader report completed last year by former European Central Bank president Mario Draghi, according to Bloomberg. The Draghi report revealed that between 2008 and 2021, close to 30 percent of the unicorn companies - start-ups with a valuation of more than $1 billion - founded in Europe relocated their headquarters abroad.

However, the EU report also falsely attributed the factors related to trade with China to the challenges facing the EU's economic competitiveness. Bloomberg reported that the EU report claimed that "increased Chinese exports at very competitive prices, in many cases facilitated by state subsidies, might cause serious damage to segments of EU manufacturing." 

The EU's report on future competitiveness serves as a timely warning for the bloc, while also exposing misconceptions regarding economic and trade cooperation with China. These misconceptions are among the factors that hinder the EU's efforts to improve its business attractiveness, foster growth in digital sectors and improve sustainable economic competitiveness.

The EU's initiation of a so-called anti-subsidy investigation against Chinese electric vehicle (EV) companies, along with the imposition of protectionist tariffs, is clearly at odds with the interests of certain member states and many European businesses. This approach undermines the willingness of market participants and has negatively affected Chinese enterprises' investment and cooperation in Europe.

The EU's implementation of protectionist tariffs on Chinese EV companies exposes its underlying economic structural contradictions. Nevertheless, the US' "overcapacity" smear campaign and protectionist tariffs against Chinese products primarily serve the geopolitical interests of the US, and following the US' wrong path cannot address the structural challenges within the EU economy.

Maintaining pragmatic economic and trade cooperation with China is beneficial for the EU's economic response to challenges and enhancing sustainable competitiveness. When dealing with economic and trade issues related to China, if the EU can choose to respect market economy rules and expeditiously return to the right path of healthy competition and open cooperation, it will help to protect bilateral economic and trade cooperation from further damage.

In the digital economy realm, there is vast cooperation potential between China and Europe that remains to be tapped. Pragmatic cooperation between China and Europe can bring shared opportunities for both sides and significantly enhance the economic competitiveness of the EU. For the EU side, pragmatic digital cooperation with China is a beneficial strategic choice for improving business attractiveness and addressing future challenges.

First, China's rapid development in digital technology and its rich market experience provide valuable references and insights for the EU. This cooperation can help the EU accelerate its digital transformation, promote innovative development and improve overall economic efficiency. 

Second, in-depth exchanges between China and Europe in areas such as data security and privacy protection will assist both sides in jointly addressing the challenges of global digital governance. In the context of an increasingly globalized digital economy, establishing effective cooperation mechanisms is particularly important. 

Last August, the EU and China launched the first discussions under the new Cross-Border Data Flow Communication Mechanism. Such communication and exchanges are expected to help the two sides to address the issues emerging from the evolving sector.

Third, China-Europe cooperation will create more business opportunities for enterprises on both sides, promoting technological exchanges and industrial collaboration to achieve mutual benefits and win-win outcomes. By jointly developing new technologies and sharing market resources, both parties can enhance their respective competitiveness and secure a more advantageous position in the global digital economy. 

The author is a reporter with the Global Times. [email protected]