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China-EU Relations

DW staff (ls)January 30, 2009

Despite past differences over Tibet, China and the European Union on Friday, Jan. 30, vowed to work together to combat the global financial crisis. The two agreed to convene an EU-China summit in the near future.

EU Commission President Jose Manuel Barroso, right, and China's Prime Minister Wen Jiabao talk during a media conference at the EU Commission headquarters in Brussels, Friday Jan. 30, 2009
Barroso, right, and Wen indicated that the talks were successfulImage: AP

Following talks in Brussels on Friday, Jan. 30, it appears that China and the European Union have put aside their past differences -- especially around Tibet -- and are moving forward together.

"I believe that the larger trend of the EU-China relationship cannot be reversed, like no one can reverse the trend of history," Chinese Premier Wen Jiabao told reporters on Friday during his first visit here in five years.

"As long as China and the European Union work hand-in-hand, we will be able to overcome the financial crisis and get through the tough times," he said.

The two sides signed nine deals worth close to 60 million euros ($78 million) on issues ranging from student exchanges to civil aviation.

Tensions between the EU and China have risen in recent times, particularly when China cancelled a December summit with the EU following French President Nicolas Sarkozy's decision to meet with the Dalai Lama. But after the meeting in Brussels, Wen and European Commission President Jose Manuel Barroso also announced that a China-EU summit would take place soon.

"We have decided today we will soon have a new summit between the European Union and China," Barroso told a news conference after meeting Wen.

Trade imbalance leads to friction

French President Nicolas Sarkozy, left, is welcomed by the Dalai Lama in Gdansk, Poland, Saturday, Dec. 6, 2008
China was enraged when Sarkozy met with the Dalai LamaImage: AP

With trade between China and the EU booming in recent years to some 300 billion euros ($384 billion), officials in Brussels warned China about the need to keep markets open. A trade imbalance with China perpetuated by the fact that Europe's imports from China have grown by about 21 percent for roughly the last five years, has led to frictions.

"Globally we face an economic crisis without precedent in the postwar era and no one can claim to be completely immune. It is important that we address those issues in a global spirit," said Barroso.

The Chinese delegation to Brussels also signed several agreements with the EU on matters ranging from counterfeiting and piracy to illegal logging, mine safety and civil aviation.

Summarizing the relations between Beijing and Brussels, Wen said that "all things are moving ahead amid twists and turns."

As part of his European tour, Chinese Premier's Wen's visited Berlin on the previous day, where he met with German Chancellor Angela Merkel In a joint statement, Germany and China said on Thursday that they wanted to reform the international financial system and ensure concrete results at a meeting of leaders from the Group of 20 nations in April.

Exchange rates

The Volkswagen logo with Chinese text
Trade between Germany and China blossomed in 2008Image: picture-alliance/ dpa

Wen also defended the yuan exchange rate as "reasonable and balanced" against US accusations that Beijing was manipulating its currency to boost exports and demands that China let the currency appreciate.

Wen said China's foreign exchange rate policy stuck "to the principle that it is oriented towards market needs and the exchange rate is flexible or bound to a currency basket."

He acknowledged that global currencies were facing dramatic fluctuations -- comparing the ups and downs to a "rollercoaster" -- but sharply rejected charges that China was exercising undue influence over exchange rates.

"The fault is not with China," he said.

Trade between Germany and China grew significantly in 2008 and both Wen and Merkel said there were aiming for least an equal trade volume this year.