Economic relations main focus of state visit to China

Largest state visit in Austrian history

Headed by Federal President Alexander van der Bellen and Federal Chancellor Sebastian Kurz, a delegation comprising some 250 members paid a state visit to China from 7 to 12 April. Cabinet members Foreign Minister Karin Kneissl, Sustainability Minister Elisabeth Köstinger, Minister for Digital and Economic Affairs Margarete Schramböck and Infrastructure Minister Norbert Hofer were also part of the delegation. Christoph Leitl, president of the Austrian Economic Chamber, led a 170-strong business community delegation. The fields of science and culture were represented as well.

In the run-up to the visit, Federal Chancellor Sebastian Kurz had pointed out that China was “one of the fasted growing economies”, quoting this year’s 6.5% growth rate in support of his statement. The country offered “serious potential for Austrian businesses”, 900 of which were already operating on the market there. Moreover, China was “an important international player in the fight against climate change or in the context of the North Korea conflict”.

Led by Federal President Alexander Van der Bellen and Federal Chancellor Sebastian Kurz, the delegation had met with China’s head of state and party leader Xi Jinping in the Great Hall of the People on Sunday. Praising the host country’s enormous economic strength, the Federal Chancellor said: “China is not only a political superpower, but also on the way to becoming the most important economy in the world, which is why we are interested in establishing closer ties. We support the One Belt One Road initiative and are trying to forge a close economic cooperation. Austria has know-how and expertise to offer in many areas where China is looking for the same.”  Federal President Van der Bellen called the visit of the 250-strong delegation – the largest ever in Austria’s diplomatic history – a great success. “China wants to establish a sound basis for a successful cooperation. We share goals, for instance with respect to environmental protection, sustainability and climate protection”, said Federal President Van der Bellen. During their talk, Federal President Alexander Van der Bellen invited the Chinese head of state to pay a return visit to Austria soon. “The president’s response to my invitation to Austria was very friendly and favourable. We may assume such a visit to take place within the course of the coming year”, explained Van der Bellen.

Austria Connect China 2018 economic forum

At the bilateral Austria Connect China 2018 economic forum on Sunday, Federal Chancellor Kurz emphasised that the visit could be a key driver of closer economic cooperation between the two countries. “We can sign agreements worth EUR 1.5 billion. China is a growth engine”, said Kurz, who on Monday also met with Yi Huima, chairman of ICBC, the largest bank in the world. One of the subjects addressed in the talk was Vienna potentially hosting the ICBC headquarters for Central and Eastern Europe. Federal Chancellor Sebastian Kurz saw this as sending out a strong signal for the  “strengthening of Austria as a financial centre and our position as gateway to Central and Eastern Europe”. The Austrian Financial Market Authority and the European Central Bank are currently looking into this proposal.

Federal President Alexander Van der Bellen, Minister for Digital and Economic Affairs Margarete Schramböck, Sustainability Minister Elisabeth Köstinger, Foreign Minister Karin Kneissl, Infrastructure Minister Norbert Hofer and president of the Economic Chamber Christoph Leitl also took part in panel discussions at Austria Connect China 2018.

Federal Chancellor Kurz highlighted the importance of free and fair world trade. A trade war was to be avoided, as a country as export-oriented as Austria might be especially hard hit by the repercussions of trade barriers. Furthermore, Sebastian Kurz underlined that he was against any form of protectionism. The Chinese market was protectionist, too, and not as easily accessible as one might wish, was the criticism voiced by Federal Chancellor Kurz. “We would appreciate a stronger rule of law and better planning security.” He hoped that China’s leaders would take further steps towards opening up the Chinese market, as they were already becoming aware of how beneficial past steps in this direction had been for their country. 

New Silk Road project

On Sunday, cabinet minister Norbert Hofer signed a memorandum of understanding on Austria’s cooperation in the New Silk Road project, which, according to Hofer, offered great opportunities to Austrian businesses. Federal Chancellor Sebastian Kurz confirmed that the federal government was in favour of this process. “What is important, however, is that we act in concert”, said Federal Chancellor Kurz.

On Monday, environmental issues were on the top of the agenda of the government delegation’s visit. Federal President Van der Bellen and Sustainability Minister Elisabeth Köstinger visited the Huaifang wastewater recycling plant in Beijing and also met with the non-governmental platform ECO-Forum Global. 

Kurz on China’s opening-up: Encouraging, but still some reservations

Federal President Alexander Van der Bellen congratulated China on the reforms already put in place and pointed out that openness and innovation need a high level of quality in order to become a source of wealth for the country. Speaking at the opening of the plenary meeting, the Austrian head of state warned against trade wars. While Federal Chancellor Sebastian Kurz found the keynote speech given by the Chinese head of state encouraging, especially on the topic of China’s opening-up to the world, he also made it clear that “what counts is how these announcements are now translated into practice.” Amid punitive tariffs and other controversial economic plans being contemplated by US president Donald Trump, one had to keep in mind that China was much more protectionist in many ways than the US, he said. The Boao Forum was also attended by UN Secretary General Antonio Guterres, Dutch Prime Minister Mark Rutte and head of the IMF Christine Lagarde. 

Chancellor attended high-ranking bilateral meetings

In the margins of the Economic Forum, Federal Chancellor Sebastian Kurz met bilaterally with the prime ministers of Singapore, Lee Hsien Loong, and Pakistan, Shahid Khaqan Abbassi, as well as with the head of the Dutch government, Mark Rutte. He also exchanged views with high-ranking members of the Chinese business community, among them Jack Ma, founder and CEO of Chinese Internet retail giant Alibaba Group.

The Federal Chancellor called the meeting with Jack Ma “highly instructive”, as digitalisation was bringing about major changes in our lives. “Online retailing, which is on a steep growth path, is also influencing the way we buy things. We have to find solutions to the problem of jobs being eliminated through digitalisation. Our aim must be to create new jobs in Europe. In doing so, we have to place a special focus on education and training, particularly in the IT sector, where new jobs are likely to be created, so we need to keep investing heavily in research and development”, said Kurz. 

As part of the state visit, Federal Chancellor Sebastian Kurz attended the Boao Forum for Asia on the island of Hainan in southern China. The Boao Economic Forum is a meeting place for high-ranking political, business and academic leaders, modelled on the World Economic Forum held in Davos. At this year’s meeting, the keynote by Chinese head of state and party leader Xi Jinping met with special interest. He held out prospects for an opening up of China’s economy, with restrictions on equity investments by foreign companies, including in the automobile sector, to be eased and the financial sector to be opened up further.  Lower customs duties in the auto industry and better terms for investments by foreign companies were to be expected.

Austrian delegation in Chengdu 

Together with Federal President Alexander Van der Bellen and Foreign Minister Karin Kneissl, Federal Chancellor Sebastian Kurz inaugurated Austria’s new general consulate in China’s Sichuan province. Having a general consulate in this location is important as Sichuan province is the largest economic centre away from China’s coast. “They have everything here, from heavy industry to high tech”, commented the Chancellor.

Sichuan is also a very fertile region, and, with around 92 million inhabitants, among the four most-populated provinces in China. Its capital, Chengdu, is a growth engine and the gateway to the west Chinese market. This is also the reason why another bilateral economic forum was organised in Chengdu on Wednesday.
Even in the age of digitalisation, it was imperative to have a closely-knit network of Austrian embassies, general consulates and cultural forums in place, underlined Foreign Minister Karin Kneissl: “They are not only Austria’s eyes and ears in the world, but also remain important hubs for Austrian businesses. With the new general consulate in Chengdu, we are strengthening Austria’s representation in China”. After Beijing, Shanghai and Hong Kong, this is already the fourth Chinese metropolis where Austria has a diplomatic presence.

In the presence of Federal President Van der Bellen, Federal Chancellor Kurz and Foreign Minister Kneissl, Hainan Airlines announced that they would schedule non-stop flights between Shenzhen and Vienna starting in October. Shenzhen is considered to be the world capital of electronics. A Boeing 787 Dreamliner is set to make the trip between Shenzhen and Vienna twice weekly. 

At a festive ceremony held in the vicinity of Chengdu, the Federal President also dispatched the first Austrian Railways freight train on its virgin journey from the China-EU Railway Container Center heading towards Vienna. On this occasion, Federal Chancellor Sebastian Kurz underlined the “strong cooperation between our countries, above all in economic terms.” The close ties between China and Austria were now also being put ‘on track’. Foreign Minister Kneissl and head of Austrian Railways Matthä also attended this First Block Train Ceremony. The Austrian Railways Rail Cargo train is scheduled to arrive in Vienna in 13 days. Cooperation agreements between the Austrian Rail Cargo Group and Chinese transport industry businesses had been signed during the preceding days of the state visit.

For Federal President Alexander Van der Bellen, Federal Chancellor Sebastian Kurz and Foreign Minister Karin Kneissl, the visit to China ended with a stop at Du Jiangyan Panda Park, an institution established in 1987 for the breeding of this endangered species. The sanctuary is modelled on the animals’ specific habitat, featuring forests, lakes and meadows, with artificial mist providing the necessary humidity.
The park is also home to Austrian ‘expats’: 3 of the 30 pandas there were born at the Schönbrunn Zoo. Vienna is now hoping for a new male panda, as the zoo’s panda dad Longhui died in 2016, leaving behind panda mum Yang Yang with her two cubs, which were also born in Schönbrunn. The Austrian delegation had made this wish known also to president Xi Jinping, who promised to consider it.

Federal President Van der Bellen invited China’s head of state Xi Jinping to Vienna for a return visit; potentially, the Chinese president might come to Vienna in 2019.
Photo material from China is being constantly updated and can be downloaded free of charge at the Federal Chancellery Photo Service.