King's visit to China: a great prospect for trade

During King Willem-Alexander and Queen Máxima’s state visit to China late October, the Dutch monarch promised that free trade between Europe and China will get a boost next year as The Netherlands will be taking the rotating presidency of the EU. He also said that his country will actively participate and cooperate in the framework of the Road and Belt Initiative – a Chinese development strategy that focuses on connectivity and cooperation between countries – and the Asian Infrastructure Investment Bank, of which The Netherlands is one of the 57 founding members.

Dutch Minister of Foreign Affairs Bert Koenders (PvdA Labour Party) told Chinese media ahead of the visit: “We are very much aware of the enormous importance of China in the world. I believe in what is called ‘the peaceful rise of China’. China is growing economically and socially. … I see the possibility of China and Europe working together as a necessity.

In September China announced that it will participate in the €315 billion (US $347 billion) EU investment plan, being the first country outside the EU investing in the EU project. With The Netherlands being China’s third largest trading partner within the EU, Chinese President Xi proposed that the two countries now take the lead in exploring and promoting cooperation in the field of trade and investment, aerospace, biomedicine, renewable sources of energy and smart city planning.

Attending stakeholders immediately took those propositions to heart. The spirit of cooperation in the field of trade and investment was present during King Willem-Alexander’s entire visit. For instance in the form of a report King Willem-Alexander received from Xiaoyong Zhang – researcher at LEI Wageningen UR, an Agricultural Economics Research Institute – conducted in collaboration with the Rabobank, that explored opportunities for the Dutch regarding trade via railway.

In December 2014 Zhang attended the opening ceremony of the YuXinOu Railway between Rotterdam and Chongqing in China. There she learned that goods can be transported by train between the two cities in just thirteen days. After she found out that most of the trains return to China with hardly any cargo, Zhang researched whether the Dutch agri-food sector could utilise them.

According to the report – compared to transport by ship – transport by train is approximately thirty five days faster, while only one and a half times more expensive. Although not as fast, compared to transport by plane, train transport is even five times cheaper and much more environmentally friendly. The report shows that transport of foods and flowers from The Netherlands to China by railway would indeed be a viable option, opening doors for the Dutch agri-business community.

On his state visit the Dutch king comprised 250 representatives from 150 Dutch companies and organizations, with a majority having an agri-business background. Not only larger companies were present but also CEO’s of smaller companies, Dutch mayors and directors of universities.

All of them had one thing in common: they were all eager to be as close to the Heads of State as possible. Carolien Gehrels – European Director of Arcadis – commented: “If the king becomes close friends with Xi Jinping, sixteen CEOs and mayors are right behind him. The king opens doors at the highest level – especially here – because the Chinese mindset is much more hierarchical.” And indeed many doors opened as several contracts and MoU’s were signed.

Holland Marketing NBTC – responsible for branding and marketing the Netherlands nationally as well as internationally – signed a strategic cooperation agreement with Alibaba. Albert Heijn, Spar Netherlands and Holland Buy are all going to sell via Alibaba’s online grocery store Tmall. Tmall has become an important driving force behind the international growth of Chinese internet giant Alibaba.

Alibaba has a tremendous market share and is able to bind the biggest names, but it is no longer the sole ruler it once was. Merchant – which was one of the first Dutch parties to open a shop on Alibaba’s Tmall – managed to sign agreements with Chinese platforms and YMT as well and soon will open new stores on platforms like Amazon China and KJT.

Spar Netherlands and the world’s largest flower auctioneer FloraHolland were also looking at other parties. FloraHolland closed a deal with Yihaodian, which is part of Walmart. The online store Yihaodian makes an interesting business partner because it has an enormous customer base that orders via smart phones, which is the fastest growing mobile device market.

Although Alibaba has some competitors, Dutch airliner KLM was still very content being able to agree serving the Chinese market via Jack Ma’s company. KLM will be selling tickets to the Chinese consumer via Alitrip as soon as December and the cooperation increases its range of potential website visitors a hundredfold. China is one of the fastest growing travel markets and ranked number one in the world when it comes to tourism spending.

In 2014 107 million Chinese travelled abroad, while spending €165 billion. Within the next decade the number of Chinese visitors to The Netherlands is expected to increase more than threefold. With some 250,000 tourist and business visitors, China is the ninth biggest contributor in visitors to the Netherlands per year.

This alone marks the rise and growth of China and – as Dutch Minister of Foreign Affairs Koenders said – cooperation is a necessity to make sure to tap into the opportunities that China brings along. The Dutch trade delegation accompanying King Willem-Alexander understood this and made cooperation an absolute priority.

With the heads of state witnessing the signing of 15 deals and collaboration agreements in total, the State Visit and accompanying trade mission resulted in approximately €500 million worth of orders and contracts for the Dutch business community. This bodes well for Dutch and Chinese relations and trade in the future, the more so as it was only King Willem-Alexander’s first visit to China since ascending to the Throne in 2013. 

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