China, EU Meet For Annual Summit To Talk Trade
By Daniel Schearf
China, EU Meet for Annual Summit to Talk Trade
The 10th EU-China summit was held in Beijing with EU officials pushing China to appreciate its currency, the yuan, against the EU currency, the euro, and allow more market access for European goods and services.
China has a fast-growing trade surplus with Europe that EU finance officials say, if not reduced, could lead to calls in Europe for protectionist policies against Chinese goods.
"We have stressed very clearly to the Chinese authorities that we cannot be the only ones who has to support the burden of the adjustment," said Joaquin Almunia, the EU Commissioner for Economic and Monetary Affairs.
"But, also we have stressed the need to introduce more flexibility in the exchange rate of the yuan and not to consider that all the adjustments should be focusing on the relations between the yuan and the dollar."
The Chinese yuan since 2005 has gradually risen by almost 12 percent against the dollar, but has fallen by about eight percent in trading with the euro, making EU exports to China more expensive.
The EU-China trade gap last year stood at $192 billion and is expected to rise to $251 billion this year.
After the summit, Chinese Premier Wen Jiabao said the sharp drop in the value of the U.S. dollar was mainly to blame for the euro's appreciation.
Mr. Wen says China will firmly continue to push forward reform of the exchange-rate mechanism of the Chinese currency to face the market and to increase the yuan's flexibility.
The European Union and China agreed to establish mechanisms for high-level trade talks similar to those held annually between the United States and China.
European Commission President Jose Manuel Barroso said the talks would address all issues that affect the EU trade deficit, including market access and intellectual property rights.
While focusing mainly on trade, the EU-China Summit also addressed international issues including Burma, non-proliferation in North Korea and Iran, the Middle East Peace Process, and Africa.
Prime Minister Jose Socrates, of Portugal, which holds the rotating EU presidency, said the two sides would discuss EU concerns about human rights violations in China later, because trade issues had taken up all their time during the summit.