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China pledges continued support to resolve euro crisis

BRUSSELS (AFP)

China pledged continued assistance Thursday to help tackle the eurozone debt crisis, saying Europe was "on the right track" but needed to implement the measures agreed to fix its problems.

Premier Wen Jiabao told EU and Chinese business leaders that China had continued purchases of European government bonds in recent months and discussed cooperation with the new eurozone rescue fund, the European Stability Mechanism (ESM).

As the 500-billlion-euro ESM becomes operational next month, "China will continue to play its part in helping resolve the European debt issue through appropriate channels," Wen said.

"Europe is on the right track in tackling its debt issue... What is crucial now is to fully implement the policies agreed" to put it on firmer ground, he told the meeting, held alongside the annual EU-China summit.

Chinese Prime Minister Wen Jiabao speaks on September 20 at an EU-China business summit at EU headquarters in Brussels. Wen on Thursday praised Europe for being "on the right track" in tackling the euro crisis and pledged continued assistance to help overcome sovereign debt fallout.

The EU and China form "one of the most important partnerships in the world," added Wen, who will step down early next year as China changes leadership.

"I hold the development of this relationship close to my heart," he said after signing a 49-point, four-page agreement with the EU ranging from foreign policy to research and development, and thousands of student scholarships.

European Council President Herman Van Rompuy told the businessmen that, faced with slowing world growth, China and the 27-state bloc had to do their utmost to bolster the relationship, worth one billion euros a day in trade alone.

China's Prime Minister Wen Jiabao (centre) sits with Chinese officials at the EU-CHINA Summit in Brussels on September 20. Wen, in opening remarks, gave a lengthy list of achievements over the past 10 years, stressing: "We do not have major conflicts of interest."

"Our economies are integrated to the point where it is difficult to imagine one without the other," he said, stressing the need for open markets and free trade -- an apparent allusion to a series of trade disputes with Beijing.

Both sides, however, argued that the wider relationship was bigger than any trade spat, reaffirming in the summit statement "the importance of trade openness to sustainable economic growth and development."

Van Rompuy also highlighted efforts made to stabilise the eurozone through closer economic and political integration, speaking of an "unrelenting commitment to the euro."

In opening remarks to the summit earlier in the day, Wen noted a long list of positives but expressed regret that two issues were unresolved -- an end to an EU arms embargo imposed after the 1989 Tiananmen Square pro-democracy protests and China's market status.

"I have to be very frank in saying this... but the solution has been elusive over the past 10 years. I deeply regret this and I hope the EU side will take greater initiative to solve these issues," Wen added.

European Commission President Jose Manuel Barroso descends a staircase prior to their EU-CHINA Summit in Brussels on September 20. The 27-state EU bloc is China's single largest export market while China is the EU's second largest trading partner after the United States, with total trade worth nearly 430 billion euros ($560 billion) in 2011.

This was Wen's last attendance at these summits, ahead of planned Chinese leadership changes due in the coming months.

China will not get full market status until 2016 after accepting a 15-year transition period when it joined the World Trade Organization.

EU sources said that Wen's comments were taken as his summing up of his summit record and that both issues were not addressed in the later discussions.

On China's bond investments, the sources said they reflected a positive assessment of EU efforts to remedy the debt crisis and Beijing would "continue the support, as it has been given, as long as the conditions are right."

Van Rompuy and European Commission president Jose Manuel Barroso meanwhile paid tributes to Wen's role in fostering burgeoning ties over the past 10 years.

"Your role has been essential in bringing us to where we are today," Van Rompuy said.

Home to half a billion people, the EU is China's single largest export market while China is the EU's second largest trading partner after the United States, with total trade worth nearly 430 billion euros ($560 billion) in 2011.

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