EU-China cooperation for coming decades launched this week in Beijing

26 November 2007

Beijing, China, 26 Nov – This week’s summit between the European Union and China, with Portugal leading the EU, is the tenth meeting between two blocs that are becoming increasingly intertwined in economic terms and the Beijing event will initiate bilateral cooperation for many years to come.

This future relationship will be based on the Partnership and Cooperation Agreement (PCA) negotiated since January by China and Europe, which is a revision and widening of a trade and economic accord of 1985 that is widely considered to be out of step with today’s reality.

In the 22 years following this original accord, the EU has become China’s main trading partner and China is Europe’s main source of imports. Around 120,000 Chinese students attend European universities and the EU is considered to be China’s foremost partner in the area of research and technology.

A tourism accord was signed in 2004 by both parties for reciprocal granting of approved destination status and this is a sector with the most visible potential for rapid growth in two-way relations. Some 1.23 million visas for Chinese visitors were issued by the EU last year, while 3 million Europeans visited China in the same period.

Serge Abou, head of the European Commission’s bureau in China, said earlier this month that negotiations on the PCA were proceeding at good pace and there could even be an “early harvest” in Beijing.

The EC, led by former Portuguese prime minister José Manuel Barroso, who will travel to Beijing with acting EU president Prime Minister José Sócrates of Portugal, has already expressed hope that the new framework for EU-Sino relations will open up Chinese markets to reduce Europe’s huge trade deficit with the Asian state.

EU exports to China “are growing strongly”, around 21 percent yearly, “but the 27 still export less to China than to Switzerland,” EU Trade Commissioner Peter Mandelson said before departing to China to prepare this week’s summit.

Brussels forecasts that the EU’s trade gap with China will hit a record 170 billion euros this year.

It is hoped that the Beijing summit will gave “an impetus” at the level of leaders, said Serge Abou, but resolution of the trade deficit problems will not be “easy” or “immediate”.

“The growth in trade is admirable,” China’s ambassador to the EU, Guan Chengyuan, said recently in an interview with Xinhua, adding that China “did not seek a trade deficit (with Europe) and the imbalance in bilateral trade has to be solved in a way for exchanges to increase.”

The Chinese diplomat added that the phenomenon is of a transient nature, underscoring that the trade balance was historically in favor of the EU. Only in recent years have some EU states begun to increase their imports from China due to industrial restructuring, added Guan.

In relation to Europe’s goal of opening up China’s markets, Guan stressed that annual reports from the World Trade Organization have given “very high marks” to China in relation to fulfillment of accords.

An important impulse in trade talks could be given with the recognition of China as a market economy by Europe, which some analysts say could occur shortly.

The agenda of the Beijing summit includes other “sensitive” issues such as conditions for business and services and the protection of intellectual property.

The European Commission, through Ambassador Serge Abou, has offered its collaboration to implement the scientific development plan launched at the 17th National Congress of the Chinese Communist Party last month.

“Europe has something to offer in all sectors of this plan,” Abou was cited as saying by the Beijing Review.

Among the areas where Europe can offer China guidance are in the cohesion policy between the richest and poorest regions of the EU, social policy related to health, unemployment and pensions, as well as technologies and standards and legislation to protect the environment and promote energy saving.

“Energy saving, environmental protection and development of alternative energy sources in China are the sectors with most growth potential. Protecting the environment and energy saving do not preclude high growth levels. They could lead of very rapid growth and serve the general interest of the Chinese,” added Europe’s ambassador to China.

In a first step in this area, the Beijing summit will see the concession of a US$ 500 million loan from the European Investment Bank (EIB) for projects to combat climate Change in China.

Another accord valued at 10 million euros will be inked to train management professionals at the China-Europe International Business School in Shanghai.

It is also expected that the Beijing summit, running Tuesday to Wednesday, will see an announcement of progress in projects to create an EU-China law school and implementation of a joint “clean energies” center in China.

The EU and China will also finalized their positions for next month’s international conference on clime change in Bali and will also debate the international situation, particularly Burma, the Korean Peninsula, Africa, Iran, the MidEast and Kosovo.

Business negotiations will also occur on the margins of the Beijing summit between around 500 company chiefs from the EU and China. Talks between the two business delegations, who will issue a series of recommendations to political leaders, will center on ways of making the two-way partnership “more sustainable”.

There will also be talks on “responding to environmental challenges with new technologies” and respect for sustainable development, the role of finance ministries and “how small to medium-sized enterprises can contribute.” (macauhub)