China and EU revive summit called off over Tibet

Saturday, January 31, 2009

The Financial Times
By Tony Barber in Brussels
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China and the European Union put aside their differences yesterday, agreeing to hold a summit soon and co-operate more closely on overcoming the world economic downturn.

"All things are moving ahead, amid twists and turns. The larger trend of EU-China relations cannot be reversed, just as no one can reverse the trend of history," said Wen Jiabao, China's premier, after talks with José Manuel Barroso, the European Commission president.

China cancelled a summit with the EU in early December in protest at a meeting between Nicolas Sarkozy, the president of France, which then held the EU's rotating presidency, and the Dalai Lama, Tibet's exiled spiritual leader.

Mr Wen and Mr Barroso, speaking to reporters, gave no precise date for the rescheduled summit, but said they had agreed that high-level trade and economic officials from the EU and China should convene in April in a forum which met for the first time last year.

The financial crisis, recession, climate change, Tibet and human rights were among the themes of the two leaders' talks, but the most concrete outcome was the signature of a new EUChinese accord on strengthening intellectual property rights to combat the counterfeiting of goods.

China is by far the largest source of counterfeit goods entering the EU, with about 60 per cent of articles seized in 2007 of Chinese origin. However, EU trade officials contend that China has an ever stronger interest in defending its own intellectual property rights, as it evolves into an advanced economy less dependent on low-cost mass production.

Mr Wen, who is on a tour of Europe, taking in Germany and the UK but not France, brushed aside the US criticism that the Chinese authorities were "manipulating" the renminbi's exchange rate and should let the currency appreciate faster against the dollar. He made clear that China believed its present exchange rate policies were appropriate for the world economy.

Since China adopted a managed exchange rate regime in 2005, the renminbi had risen by 20 per cent against the dollar, he said. "To maintain the stability of the Chinese currency on a reasonable and balanced basis at this moment will play a positive role in stabilising international finance and the economy," Mr Wen said.

EU officials said they regarded the need to boost Chinese domestic demand as more important than the exchange rate issue, in terms of the specific measures Beijing could take to help pull the world out of its downturn.

They said they drew some comfort from Mr Wen's promise that China would "develop and improve" a $585bn fiscal stimulus that it announced last November.