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Europe

China and EU to Tackle Trade Issues

China will use upcoming visits to Europe by its top leaders to push an ambitious diplomatic agenda, with trade issues -- including the possible EU anti-dumping tariffs for Chinese shoes -- likely to dominate talks.

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China to the European Union: Try walking in our shoes!

Chinese President Hu Jintao will kick off a European tour on Tuesday with stops in Britain, Germany and Spain, while Premier Wen Jiabao will visit four EU countries, including France, in early December.

"This is evidence of China's increasing influence on the world stage," says Gilles Guiheux, director of the French Center for the Study of Contemporary China in Hong Kong.

A diplomatic offensive

Hu Jintao

Chinese president Hu Jintao will kick off his European tour in the UK

After talks with British Prime Minister Tony Blair in London, Hu will meet with incoming German chancellor Angela Merkel in Berlin, where he is expected to sign a contract with engineering giant Siemens for 60 high-speed ICE trains.

"For China, Europe is above all a source of capital and technology," says Guiheux, adding that the EU lags far behind the United States in terms of political influence in Beijing.

As evidence of Washington's higher profile in China, US President George W. Bush is due in Beijing on November 19 after the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.

"On all the major issues, the Europeans stand out because of their absence," Guiheux notes, emphasizing the stronger positions taken by Washington on a number of points, including concerns over increased Chinese military spending.

Troubled waters

Wen Jiabao in Deutschland

Premier Wen Jiabao will visit France, Portugal, the Czech Republic and Slovakia

Just a few days before Hu's arrival in Britain, which currently holds the EU's six-month rotating presidency, China revived one of the thorniest issues in their relations -- the bloc's arms embargo against Beijing.

"All the leaders of the EU that I have come in contact with believe that (the embargo) is a legacy of the Cold War, is poorly founded and is useless and only harmful," Chinese Foreign Minister Li Zhaoxing told journalists Friday.

"This should have been thrown into the trash heap of history a long time ago," Li said, highlighting the fact that the embargo was having a negative impact on trade and should be lifted.

EU leaders once pledged to remove the ban by June this year, but China's anti-secession law on Taiwan, passed in April, stymied the effort due to heightened concerns that the law could eventually lead to war in the Taiwan Straits.

A new trade war?

Chinesische bu xie Schuhe

Italian Wootwear Association is worried about the Chinese competition

The arms embargo, however, is not the only thorny issue in the Chinese-European relations. The Financial Times reported on Friday that the European Union is preparing new anti-dumping tariffs on China's leather and reinforced shoes in a bid to control the country's booming exports.

Following an investigation that found Chinese exporters were dumping footwear -- selling it below production cost -- EU Trade Commissioner Peter Mandelson will unveil the punitive measures in the coming month, the newspaper said quoting a senior EU official.

After inspectors toured Asian factories and European distribution outlets, there was "quite compelling evidence of dumping," the official in Brussels said.

A preliminary discussion about the shoe tariffs among representatives from the 25 EU member states is scheduled for Wednesday, the newspaper said.

Overcrowded markets

While not directly linked to the recent spat over booming imports of cheap textiles from China, the anti-dumping tariffs would also be aimed at protecting European producers by invoking World Trade Organization (WTO) rules.

The measures follow a complaint from European shoe manufactures lodged on May 17. The Italian Footwear Association says imports of leather shoes from China rose 900 percent in the first five months of this year, the newspaper said.

EU statistics showed an increase on average of 700 percent in import volumes and a 28 percent drop in prices for six categories of leather and fabric shoes. China is the worlds largest exporter of footwear and Asia already accounts for about three-quarters of worldwide production. European production fell 19 percent between 1995 and 2003.

EU will take action if necessary

Peter Mandelson Textilhandel China

EU Trade Commissioner Peter Mandelson take action if necessary

EU Trade Commissioner Peter Mandelson pledged Friday to only take action against China on alleged dumping of footwear if it is "warranted" and "justified."

In a joint news conference with Chinese commerce minister Bo Xilai, Mandelson said he expected the results of an EU anti-dumping probe opened at the end of June to "come in due course."

"But I will not be taking action unless I'm absolutely convinced that it is justified and warranted," Mandelson added.

Bo said he hoped the commission would stave off imposing the measures.

"We don't want to see these industries facing anti-dumping measures by the EU. Our trading relationship is of a complimentary nature," Bo said.

Although Mandelson said his talks with Bo had touched on footwear only in passing, there were more focused discussions on China's cherished goal of gaining market economy status, which is important regarding how anti-dumping charges are handled.

Mandelson, however, would not be drawn into issuing precise timing on granting China market economy status, saying: "We are working on the substance and not deadlines."

Hamburg spoils

Textilhandel China Waren beim Zoll in Brüssel

Will Chinese shoes be banned in the future?

In a separate development, German customs officers said Friday they had seized 700,000 shirts, trousers and pairs of shoes from China at the northern port of Hamburg since September on suspicion that the shipments violated import laws.

The Hamburg customs investigation office said the 32 containers of clothing that have been seized did not carry the relevant import approval documentation and that the invoices were misleading.

Although the shipments were purportedly bound for importers in Hungary, Poland and the Czech Republic, authorities said they suspected that the clothing was bound for other European Union countries.

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