International

EU reassures China on euro, presses on rights

BEIJING: President of the European Council Herman Van Rompuy sought to reassure China Monday that the euro remained a strong, trustworthy currency, but also gently pressed Beijing on Europe’s concerns about human rights.

Van Rompuy’s China visit coincides with a deterioration in Europe’s 18-month sovereign debt crisis, with growing concerns that Greece could be forced to restructure its debts and Ireland and Portugal also under pressure.

China signaled last month it was ready to buy more debt from the eurozone’s weaker states, dubbed the periphery, in a move to help stabilize the bloc. There are no precise figures, but China has said it has bought billions of euros of debt.

“I informed President Hu that in the EU, economic recovery was on track,” Van Rompuy said in a statement after meeting Chinese President Hu Jintao in Beijing.

“Overall, our macroeconomic fundamentals are strong, the euro remains a very strong currency in which investors worldwide continue to trust.

“I expressed my appreciation to the president for the strong confidence China displayed in the euro area, both with direct investments and through reserve investment policies. The stability of the euro area is a shared interest and a key for the recovery of the world economy.”

Van Rompuy, who represents EU governments, also made an oblique reference to the value of China’s yuan currency, which some say Beijing keep purposefully cheap to help boost its exports.

“I confirmed to President Hu the importance the EU attaches to the implementation of the agreements reached in Seoul to move toward more market-determined exchange rate systems that reflect underlying economic fundamentals,” Van Rompuy said, referring to last November’s G-20 summit in South Korea.

He also raised human rights, a long-standing source of friction between China and Western nations.

China has this year jailed, detained or placed in secretive informal custody dozens of dissidents, human rights lawyers and protesters it fears will challenge Communist Party rule.

“China and the EU have both signed up to the international instruments that enshrine the universal values of human rights, and we have a shared responsibility to uphold them,” Van Rompuy said.

“This work is among the core values the European Union is built on. It is of deep concern for European citizens, and it is reflected in our diplomacy across the world. China’s contribution to this work will be an important element shaping its reputation and influence in the future.”

In response, Hu told Van Rompuy that a “stable, prosperous and developing Europe” was good for the world, Chinese state media reported.

“No matter whether in the past, now or in the future, Europe is a trustworthy partner,” state television paraphrased Hu as saying. It did not say whether the Chinese president mentioned the crisis in the eurozone.

Hu called on Europe as well to ensure an “accommodating investment environment” for Chinese companies, adding that Beijing would continue to “provide convenience” for European firms investing in China.

Van Rompuy’s trip to China comes amid a flare up in trade tension between the two.

China hit the European Union with its first anti-subsidy duties Monday, just days after the EU imposed a five-year increase in duties on imports of Chinese glossy paper in its first challenge to Chinese state subsidies.

The Commerce Ministry said China’s first anti-subsidy investigation against the EU found European firms enjoyed stock starch subsidies of as much as 11.19 percent, singling out producers Roquette Freres at 7.7 percent and Avebe at 11.19 percent.

“Starting May 19, Chinese importers of EU potato starch must, according to the subsidy rates for each company established in this decision, pay corresponding anti-subsidy duties at customs,” a statement on the ministry’s website (mofcom.gov.cn) said.

China’s move followed the EU’s imposition Saturday of a five-year increase in duties on imports of glossy paper from China to combat what it says is illegal Chinese state aid that is hurting EU producers.

China and the EU’s trade in goods was valued at nearly 400 billion euros ($579.8 billion) last year.

Experts said the anti-subsidy rulings from both parties are carefully calculated moves that do not imply an out-of-control trade war despite the timing.

“These are common tricks between countries, but even if you assume they are motivated by retaliation, it can never be proved,” said Wang Jiangyu, a law professor and WTO expert at the National University of Singapore.

“Although these trade disputes are high profile, they only involve small portions of bilateral trade and it is unlikely they will greatly impact discussions among the leaders,” Wang said of Van Rompuy’s meetings with Chinese officials this week.

 
A version of this article appeared in the print edition of The Daily Star on May 17, 2011, on page 5.

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