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EUR: China, EU join forces to fight economic crisis

By Lorne Cook
31 Jan 2009 2:17 AM

BRUSSELS, Jan 30 AFP - China and the European Union set aside past differences on Friday and vowed to work together to confront the global economic crisis and climate change.

After talks in Brussels, Chinese premier Wen Jiabao and European Commission president Jose Manuel Barroso also said a major summit, dropped due to differences over Tibet, would take place soon.

"I believe that the larger trend of the EU-China relationship cannot be reversed, like no one can reverse the trend of history," Wen told reporters during his first visit to the city 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.

Trade between China and the EU has boomed in recent years to about 300 billion euros ($A590 billion) annually, and officials in Brussels warned their counterparts from Beijing about the need to keep markets open.

However Europe's imports from China have grown by about 21 per cent per year for the past five years, leaving a trade deficit with the Asian economic giant of about 160 billion euros ($A318 billion) in 2007.

That imbalance has contributed to trade frictions, which have also flared over numerous anti-dumping cases against Chinese imports believed to be made at below cost.

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

"Not only in terms of reinforcing confidence, looking for new supervisory and regulation mechanisms at global level, but also improving our dialogue on macro-economic issues that are most of concern," he said.

In Berlin on Thursday, Wen and German chancellor Angela Merkel had agreed that protectionism must not be the answer to economic woes and pledged closer coordination on economic, trade and monetary policy to fight the slump.

The Chinese delegation, which included four ministers and several deputies, inked a raft of agreements on subjects ranging from counterfeiting and piracy to illegal logging, mine safety and civil aviation.

In another sign of the improved goodwill, Barroso and Wen said a long-planned summit postponed in December would take place soon, although no date was fixed, and commission officials declined to explain why.

"The China-EU summit will be convened at an early date," Wen said.

His visit is the first European trip by a senior Chinese official since Beijing cancelled a summit with the EU in December to protest against French President Nicolas Sarkozy's decision to meet the Tibetan Dalai Lama.

France held the rotating EU presidency until December 31 and the baton was handed to the Czech Republic on January 1 for six months.

EU officials acknowledge privately the summit cancellation was uniquely in retaliation for Sarkozy's meeting with Tibet's spiritual leader, who is viewed by Beijing as a separatist, and that China is keen to continue dialogue.

Wen gave a reasonably upbeat assessment of relations between Beijing and Brussels, saying that "all things are moving ahead amid twists and turns".

Czech prime minister Mirek Topolanek suggested the summit could take place in Prague in May, after the G20 summit of major industrialised and emerging nations in London on April 2, according to a Czech diplomat.

He also endeavoured to encourage China, a major world polluter, to join EU efforts to fight global warming ahead of key climate change talks in Copenhagen late this year.