China seeks to avoid a trade war with EU
Print Edition
CHINESE Premier Li Keqiang told German Chancellor Angela Merkel yesterday that he did not want trade tensions with the European Union, a vital market for a huge economy facing falling exports, to descend into a trade war.
Merkel has already said she favors, in principle, granting China market economy status at the World Trade Organization, and Beijing hopes she can encourage more sceptical EU voices to accept the move.
“China has already fulfilled its obligations on joining the WTO. What’s needed now is for the other parties to fulfil the matching obligations they had promised,” Li told reporters in Beijing alongside the German leader.
“We don’t want to fight a trade war because this will benefit nobody,” he said, echoing a similar comment Merkel made on Sunday.
Merkel, who is on her ninth trip to China since taking office, said: “It does not help us to emotionalize the whole subject. I am convinced that we can find a solution on the lines of what was promised 15 years ago.”
She linked market access for Chinese banks in Germany to a liberalization of the sector in China.
“We will certainly pay even more heed to reciprocity in the financial sector than in classic industry,” she said, adding that German banks were currently restricted by a 20 percent limit on the size of stakes they can buy in Chinese banks.
“In the banking sector, we are at the start of a cooperation,” she said.
Li said there were informal barriers in Europe for Chinese banks, which were disadvantaged compared to those based in Europe and the United States.
“We need to talk more about how both sides will be treated equally,” he said.
Merkel said during a trip to China last year that Germany favored granting China market economy status in principle but that Beijing still had work to do, including further opening its public procurement markets.
European commissioners are expected to debate the issue in late June or July, at a time of trade tension after rivals accused China of dumping cheap steel exports after a slowdown in demand at home.
Li said unilateral trade protection measures wouldn’t help resolve the problem and that low-end steel was not something China wanted to produce or sell and was committed to phasing out.
Merkel has also stressed the need for a level playing field for foreign firms.
“Germany has always presented itself as an open investment market,” Merkel said. “We expect reciprocity also from the Chinese side.”
Foreign critics accuse China of not “following through” on its reform agenda and of introducing new regulations that further “restrict” market access.
“The facts prove that China’s market is open. We will be even more open,” Li said. “We will take even more steps based on the principles of treating everyone equally, fairness and transparency.”
Delegates at a Sino-German cooperation conference on the sidelines of Merkel’s visit agreed 96 deals valued at US$15 billion, Xinhua news agency reported.
Airbus Helicopters finalized an agreement to build an assembly line on a Sino-German business park in China and to sell 100 helicopters to a Chinese consortium.
Daimler AG and its Chinese partner, BAIC Motor, pledged to jointly invest 4 billion yuan (US$608 million) to expand engine production.
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