Chinese and EU leaders met yesterday for a major summit set to be dominated by Europe’s debt crisis, as an increasingly worried Beijing considers coming to the rescue of the embattled continent.
The summit came a day after ratings agency Moody’s downgraded Italy, Spain and Portugal and warned that France, Britain and Austria were increasingly vulnerable to the crisis, which China said had reached a “critical” stage.
Beijing has made clear its growing concerns over the crisis in Europe, its biggest export market, repeatedly urging EU leaders to get a grip on the situation.
EU President Herman Van Rompuy said the economic destinies of Europe and China were “interlinked,” as he and European Commission President Jose Manuel Barroso opened talks with Chinese Premier Wen Jiabao (溫家寶).
“The times we are living in are challenging and it is of utmost importance the European Union and China advance our common agenda and address global problems,” Van Rumpuy told the Chinese premier. “We became so interdependent that change in the growth rate in one of the two strategic partners has a direct and palpable impact on the other one. Our economic destinies are interlinked.”
European leaders have already asked China, which holds the world’s largest foreign exchange reserves, to invest in a bailout fund to rescue debt-stricken states.
Beijing has made no firm commitment, but Wen said this month it was considering offering help through the IMF or bailout funds and there is speculation China will make its position clearer at the summit.
“Helping stability in the -European market is actually -helping ourselves ... We have to keep import and export policies stable,” Wen said after talks with the visiting German Chancellor Angela Merkel.
Yesterday, Wen said the two sides should work with “mutual understanding” toward their “common goals” in the talks, which are expected to touch on Syria, Iran and a controversial EU carbon charge on airlines, which China has banned its carriers from paying.
The issue of market access might also be on the agenda, as foreign firms say China favors domestic companies and squeezes them out of some markets, including lucrative government procurement contracts.
EU Trade Commissioner Karel De Gucht, who said last month he is drafting a law in response to Chinese protectionism in public markets, will take part in the summit.
De Gucht has been a fierce critic of China’s restrictions on rare earths exports, 17 elements crucial in the manufacturing of many high-tech products such as smartphones and flat-screen televisions.
The crisis in Syria is also likely to come up after China and Russia vetoed a UN Security Council resolution condemning the regime’s bloody crackdown on protests, as are concerns over Iran’s nuclear ambitions.
However, concerns over Europe’s economy and financial -sector were expected to dominate.
The IMF warned last week that an escalation of the crisis could slash China’s economic growth in half this year, and Chinese Ministry of Foreign Affairs spokesperson Liu Weimin (劉為民) said on Monday the debt issue was “at a critical juncture.”
“We believe that as China’s largest trading partner and the largest economy in the world [collectively], it is important for the European Union to resolve this issue,” Liu said.
Wen, Barroso and Van Rompuy will hold a joint news conference after the summit, which was originally due to take place in October last year, but had to be postponed because of the debt crisis.