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Xi Victory Lap: Europe's Carmakers Bet Big On China

Xi Jinping and Belgian King Philippe unveil the 300,000th car to be exported to China during Xi's visit at Volvo's plant in Ghent.
Xi Jinping and Belgian King Philippe unveil the 300,000th car to be exported to China during Xi's visit at Volvo's plant in Ghent.
Wang Guoxin and Yang Xiaolin

GHENT — When the Volvo factory in the Belgian city of Ghent hosted China President Xi Jinping last week, along with the Belgian king and queen, the facility was covered in red Chinese knotting, a decorative Chinese folk art. It was a festive touch meant both to welcome the Chinese leader and to celebrate the carmakers’s identity as a Chinese-owned manufacturer.

As the last stop on President Xi’s visit to Europe, the choice of Volvo is particularly symbolic. Its Ghent facility was established in 1965 and is the biggest Volvo assembly plant outside of Sweden, where the company is based. Since China’s largest car company, Geely, bought Volvo from Ford nearly four years ago, production at the Ghent facility has increased steadily, creating more than 600 new jobs and making Volvo Belgium’s largest car manufacturer.

“Volvo is a Chinese factory, and we welcome chairman Xi home,” Volvo’s public relations officer said warmly, welcoming him before the Belgium carmaker’s chief executive officer handed over a handmade “Chinese Red” model car as a gift to the Chinese leader.

Volvo’s change in identity and its stimulating effect on the local economy correspond to Xi’s visit to Europe. Throughout Xi’s 11-day visit, the once-dominant Western countries were all lowering their gaze and competing among one another with gun salutes, red carpets, and military aircraft escorts to please the Chinese leader and his wife. They all want to strengthen their economic cooperation with China and attract Chinese investment.

Thanks to the booming Chinese automobile market, all major European carmakers are looking to China. During his four-country visit, Xi visited four different signature ceremonies for auto projects in Paris and Berlin. Among them were events for Dongfeng Motor; for the Beijing Automotive Group, which is expanding its cooperation with Daimler in its production capacity of the Beijing Benz; for BMW, which is signing an agreement to deepen its cooperation with its Chinese partner Brilliance; and for the Volkswagen Group, which will cooperate more closely with its Chinese joint venture partners SAIC Motor Co. and First Automotive Works in the field of forward-looking green technologies.

Among the agreements that were struck, the Brilliance partnership with BMW — valued at about 1.8 billion euros — represented one-fourth of the total Chinese-German deals made during Xi’s visit.

The European car market has been in decline for six consecutive years. In contrast, the Chinese car market, as the world’s largest, is one of the fastest growing. That’s why European car manufactureres want to form alliances in China.

Given the significant role car manufacturing plays in the national economy, supporting European car makers in a certain sense helps to safeguard Europe’s economic backbone.

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