Expert says Europe, China ought to coordinate policies to avoid protectionism

BRUSSELS, Feb. 9 (Chinese media) -- Economic ties are still the most important part of Sino-European relations and the two sides should coordinate policies to avoid protectionism, an European expert said here on Monday.

Jonathan Holslag, head of research at Brussels Institute of Contemporary China Studies, said that in the face of the global financial crisis, the European Union and China should take measures to stabilize their financial sector, and continue to invest in new dynamic and cleaner industries.

Apart from that, Europe and China should coordinate policies and to make sure that mutual protectionism doesn't take root in this climate of uncertainty, he said in a written interview with Chinese media.

"The crisis challenges us to reform and to do better, not to lock ourselves up with our struggling economies," he said.

As for the impact of Europe's economic recession on China, he said that Europe's demand for "Made in China" products would certainly diminish, indicating "how interlinked our two economies are."

Financial uncertainty and decreasing profitability would also halt European investments in China, he said.

In the past few years Chinese exports to Europe expanded further, and also started to diversify, citing as one of the main reasons that Asian and European high-end producers moved their production to China.

"It is precisely this new sector of expensive, advanced goods that is going to be hit hardest by the economic crisis," he said, "Exports of cheaper consumer goods to Europe will not shrink that much in the short term."