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Sat, Dec 04, 2004 - Page 12 News List

Beijing strongly denies blocking deal with Airbus

EMBARGO An official rejected reports that China was holding up a US$1.4 billion deal due to the EU's refusal to lift a 15-year-old ban on arms sales


Beijing yesterday strongly rejected accusations that it was blocking a deal for up to US$1.4 billion worth of Airbus planes due to the EU's refusal to lift an arms embargo on China.

"For any kind of commercial contract it is up to the enterprises and companies involved to make the decision; it has nothing to do with the arms embargo," Vice Foreign Minister Zhang Yesui told journalists.

He was commenting on a Wall Street Journal report that said Beijing was holding up a deal for five A380 planes, Airbus's newest and largest jetliner, due to the EU's refusal to lift a 15-year-old ban on arms sales.

"My first reaction is that I was surprised by the imagination of the journalist that wrote this report," Zhang said.

"China is in a position to develop tourism; this requires more airplanes. We not only purchase Boeing aircraft, we buy Airbus aircraft and other models. As long as they are beneficial to China's aviation and China's tourism industry, we will buy those airplanes," he said.

Zhang's statement comes amid industry speculation that a deal for the new airliner could be signed during a visit to China by German Chancellor Gerhard Schroeder that begins on Monday.

The issue could also be discussed during Chinese Premier Wen Jiabao's (溫家寶) participation at the EU-China summit in the Netherlands next week.

The EU implemented the arms embargo following the 1989 Tiananmen protests.

It has appeared reluctant to lift the ban due to Beijing's vow to use force to reunify Taiwan.

According to the Journal, citing China Aviation Supplies Import and Export Group spokesman Lu Xiaosong, Chinese regulators and airlines have reached a preliminary agreement for an unspecified number of A380 aircraft.

Several factors were delaying a final deal, however, including the arms embargo, Lu and other Chinese and European officials were cited as saying.

Zhang insisted that the Chinese government does not interfere in commercial deals but said that the continued implementation of the arms embargo would have a "negative influence" on relations between China and the EU.

"If the EU continues to maintain the arms embargo, it may have some negative impact on China-EU relations. Mainly we refer to political cooperation between China and the EU," Zhang said.

"If the EU keeps the embargo, we believe it is a kind of political discrimination, it is kind of an unequal relationship in the political field, so we hope for an end soon to the embargo and for cooperation on a more equal basis," he said.

He added that an early end to the embargo would "greatly push forward bilateral relations."

Last month Philippe Camus, the chief executive officer of the European Aeronautic Defense and Space Company, which is Airbus' parent company, expressed confidence that China would sign an order for A380 aircraft.

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