Austria Wants to Act as Bridge Between EU, China’s New Silk Road

Austria Wants to Act as Bridge Between EU, China’s New Silk Road

© Reuters.  Austria Wants to Act as Bridge Between EU, China's New Silk Road© Reuters. Austria Wants to Act as Bridge Between EU, China’s New Silk Road

(Bloomberg) — Austria wants to function as a bridge between China and Europe, attracting investments from e-commerce to electric automobiles while laying the groundwork for trade over the new Silk Road, according to a top government official.

The Alpine country plans to increase the frequency of business missions to Asia and will present an expanded strategy to boost exports by the end of the year, Economy Minister Margarete Schramboeck said. She took part in a record trade delegation this month that clinched 30 deals worth 1.5 billion euros ($1.9 billion) with Chinese companies.

“We have the knowledge of eastern European markets and China can open the door to other Asian markets,” Schramboeck, 47, said in an interview in Vienna. She and Austrian Chancellor Sebastian Kurz held meetings with executives from Chinese companies including Alibaba (NYSE:) Group Holding Ltd., Great Wall Motor Co and the Industrial and Commercial Bank of China.

Before taking over the European Union’s rotating presidency in July, Austria is signaling it’s ready to buck protectionist trade trends by opening up to countries outside the 28-nation bloc. Schramboeck, the former chief executive officer of Telekom Austria AG’s A1 unit, criticized moves by the U.S. to crack down on Chinese imports.

She urged the creation of tax and data-protection rules to support new digital industries in Europe. Together with innovation in artificial intelligence and automated production, that should bring a “re-industrialization” and additional jobs to the continent.

Austrian Trade Flows

“Nobody ever wins a trade war, even if one side or the other country thinks it can,” Schramboeck said in the interview on Wednesday. Direct negotiations will be needed to avert job losses triggered by tariffs, she said.

Austria’s trade with China swelled 13 percent last year to $11.7 billion, prompting Austrian officials to predict a geopolitical shift from a trans-Atlantic world order to a more Pacific one. The country’s 2017 trade with the U.S., its biggest non-EU partner, rose about 10 percent to $16 billion.

Schramboeck said she supports EU initiatives to boost the bloc’s research in artificial intelligence so that it can compete with researchers in China, as well as Japan and the U.S.

Brussels launched a 1 billion-euro supercomputing project in January that excludes the U.K. because of Brexit. European companies should be able to boost exports and create jobs in these industries, also helped by combined academic and on-the-job education tracks.

U.S., Asian

European data protection rules will be “equally” applied to U.S. or Asian companies offering their services in Europe, and the EU should not be “naive” in dealing with big data companies, she said. Consumers and companies need to wrest ownership of data from multinationals such as Facebook Inc (NASDAQ:). and Alphabet (NASDAQ:) Inc. in order to plot their own destiny, she said.

Austria supports the proposed 3 percent revenue tax on large digital enterprises operating within the bloc. Companies not only need to uphold local privacy laws, they need to pay taxes based on where users are, Schramboeck said. The government will also be more active in presenting planned domestic corporate tax changes that should lower labor costs and boost R&D investments.

Companies including Voestalpine, ABB and Boehringer-Ingelheim are investing in new facilities across Austria as the country’s industrial companies are moving into more automated and seamless productions. Voestalpine next week will start with a 350 million-euro investment in a new steel plant in Kapfenberg where manual work will be the exception.

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