29 October – 3 November European Commission-China talks

Date: 05/11/1998

EUROPEAN Commission President Jacques Santer's six-day visit to China produced a commitment from the Chinese to convert a significant amount of their currency reserves into euro next year. But calls from Trade Commissioner Sir Leon Brittan for Beijing to make more concessions in order to gain World Trade Organisation membership went unheeded as the Chinese asked the EU to ease its demands. Santer raised the question of human rights in China, praising China for signing the International Covenant on Civil and Political Rights.

SANTER, who met China's President Jiang Zemin, Prime Minister Zhu Rongji and other high-ranking government figures, praised Beijing's decision not to devalue the juan in response to the Asian financial crisis, saying that resisting the temptation to devalue had made China “an important stabilising force in the world system”.

BUT the Commission president called on Beijing to remove obstacles to trade in exchange for Europe's willingness to absorb extra exports from China. “The Asian crisis is taking its toll, disrupting traditional trading patterns ... leading to a major upswing in Asian exports to the EU,” Santer told a meeting of business figures He warned that the price that Europe was paying would only remain politically sustainable if China removed obstacles to bilateral trade.

ON THE politically tricky issue of human rights in China, Santer praised China's decision to sign two United Nations' covenants on human rights, adding that he hoped they would be ratified soon. On Tibet, the president repeated the view of EU foreign ministers following their troika that Beijing and the Dalai Lama should enter into direct dialogue as soon as possible. Both parties reviewed the EU-China human rights dialogue, focusing on the situation of prisoners held under the law against “counter-revolutionary crimes” although that law has recently been suspended. However, Santer's talks with the Chinese came as the authorities renewed their crack down on human rights activists.

SANTER announced the Commission would shortly finalise a major scholarship programme to enable around 2,000 Chinese students to study in the EU. The scheme is expected to be operational in 2000. The president also signed a new programme to help Beijing meet the challenges of WTO membership, plus a memorandum of understanding on industrial cooperation in aeronautics and telecommunications, and visited flood victims in the central Yangzi province of Hubei where the EU is providing 3.6 million ecu of aid.

BRITTAN, who accompanied Santer along with Economics Commissioner Yves Thibault de Silguy, said that China was planning to convert a “serious amount” of its 155-billion-ecu foreign currency reserves into euro when the new EU single currency is launched next year. But Chinese officials would not confirm exactly how many euro they were planning to buy.

COMMENTING on China's failure to meet the terms of entry for membership of the WTO, Brittan said that China had been unsuccessful because it had not done enough to open its markets to foreign investment and trade. “We have not made sufficient progress because China has not been prepared to move sufficiently in opening up its markets to financial services - to insurance, banking and securities - and in the areas of telecommunications,” he insisted. Brittan also asked Beijing to remove conditions on investment which he called “very restrictive”, highlighting China's emphasis on joint ventures and on exporting products made by joint ventures. China's Vice Premier Li Lanqing said he hoped that the EU would ease its demands on China over WTO membership.