In the high-tech district of Taicang, a city with less than one million residents in east China's Jiangsu Province, one can observe the influence of German enterprises at various bus stops along Nanjing East Road.

Within a 4-kilometer radius, more than 40 foreign enterprises have clustered, and a leisurely ride on the No. 103 bus line offers a unique vantage point to witness the assembly line of new energy vehicle (NEV) propulsion systems on the move.

Industry experts believe that many German enterprises have designated Taicang as a globally important research and development (R&D) center and production base, especially as the city is gradually strengthening innovative leadership in fields such as NEVs and high-end equipment manufacturing.

The flourishing of German enterprises in Taicang showcases upbeat prospect of China-Europe cooperation in areas including the green sector. According to Zheng Yun, senior partner of Roland Berger, a global strategy consulting firm, the carbon neutrality commitments made by both China and the European Union (EU) in 2020 provided new impetus for global low-carbon development.

Chinese enterprises have supported Europe's transition to sustainable battery production and use, as well as other clean circular energy sources. Leveraging long-term stable cooperative relationships already established with European car manufacturers, Chinese enterprises have begun investing in the establishment of power battery production capacity in Europe, Zheng added.

Mutual benefit

China-Europe cooperation encompasses a broad spectrum of initiatives in green energy transformation, energy conservation, emissions reduction, and the pursuit of green, low-carbon solutions.

Ma Xiaoming, chief analyst of new energy at Nomura Orient International Securities Co., Ltd., said China has actively absorbed the EU's expertise in policy frameworks concerning carbon markets and climate finance, enriching its own strategies for a sustainable future. Additionally, China has forged partnerships with the EU to develop an array of new energy projects.

The collaborative spirit is not one-sided. European firms are also heavily involved in the development of new energy endeavors within China. A strong example is the Jiangsu Dongtai offshore wind power project, jointly developed by the CHN Energy Investment Group and EDF, France's state-owned electric utility company.

This project is expected to produce a staggering 1.4 billion kilowatt-hours of electricity annually, enough for nearly two million people to use. In addition, it promises significant environmental benefits: an estimated saving of 441,900 tonnes of standard coal and a substantial reduction in emissions, including 937,500 tonnes of carbon dioxide and 1,704 tonnes of sulfur dioxide each year.

Helmut Stettner, chief executive officer of Audi FAW NEV Co., Ltd., describes the overall trend of the future cooperation between China and Germany in the NEV sector as "complementing each other's strengths to achieve a global lead."

Audi FAW NEV Co., Ltd. is Audi's first production base in China designed specifically for pure electric vehicle models. Currently, it has fully entered the pre-mass production stage.

NEV plays a key role in global sustainable development and carbon emission reduction, and addressing climate change is a common task for the global community, said Li Bin, founder of the leading Chinese electric automaker NIO.

He pointed out that the opportunities for cooperation between China and Europe in green transition far outweigh their competition. Instead of creating barriers, it is better for the two sides to work together in a more open manner. This would greatly benefit the global energy transition, climate change mitigation, and sustainable development.

"We believe that good products and good services should be available to users worldwide," Li noted.

Since entering Europe in 2022, NIO has introduced six vehicle models to the local market and set up seven flagship locations, with the latest one opened in Amsterdam at the end of May.

As one of the earliest Chinese car companies to enter the European new energy market, BYD has expanded the presence of its pure electric buses at over 100 cities in more than 20 European countries. In 2022, BYD officially began to deploy the European passenger car market and established collaborations with top-quality dealers in various European countries.

According to BYD's marketing department, in December 2023, BYD announced the construction of a new energy vehicle production base in Szeged, Hungary. The project, which will be built in stages, is expected to create thousands of jobs locally.

With the joint layout of upstream and downstream enterprises in the industrial chain, not only can the stability and resilience of the local supply chain be improved, but it also helps promote the exchange of new energy technology between China and Europe and drive local industrial advancement, according to the company.

Healthy trade relations matter

However, Ma, the analyst, warned that pure electric cars sold in Europe are facing a penetration gap based on latest data from the European Automobile Manufacturers' Association.

Amid the phase-out of subsidies by major European countries, consumers are increasingly choosing hybrid electric vehicles due to their cost-effectiveness. If battery electric vehicle prices rise, the penetration rate of pure electric cars may further decline.

Statistical data have shown that if the EU increases tariffs by 20 percent, the number of Chinese electric cars imported into the EU is estimated to decrease by a quarter, according to Ma.

"For consumers, this may lead to an increase in the price of electric cars because the internal energy, material, and labor costs of the EU are significantly higher, which are very likely to delay the EU's energy transition goals," Ma added.

"So how Europe expects to survive without healthy trade relations with China, above all when it comes to green products, is a lesson that requires careful consideration given the experiences of the last five years," commented Josef Gregory Mahoney, a professor of politics at East China Normal University.