European Union strengthens ties with China

By Anna Varfolomeeva

BEIJING— (October 8 —M4relay) – China is attracting the whole world, and the European Union does not want to be left out. Chinese Prime Minister Wen Jiabao’s presence at the 13th China-European Union Summit in Brussels, Belgium signals the intention of EU member states to continuously strengthen Sino-EU relations.

Promoting the two sides’ comprehensive strategic relationship, enhance mutual trust, deepen cooperation and coordinate efforts to cope with the global challenges were top on Wen’s agenda, according to Chinese Vice Foreign Minister Fu Ying.

Europe has overtaken the U.S. as China’s biggest trade partner. Chinese trade with the EU soared to $306 billion through July of this year, compared with $243 billion trade with the U.S. According to a report by the Council on Foreign Relations, China has begun to shift part of its estimated $2.7 trillion foreign-currency reserves from dollars into euros.

China has signed thirteen agreements – 11 of which are trade deals, with Greece following a meeting between Wen and Greek Prime Minister George Papandreou.

China has also buying Greek bonds, and is planning to continue further transactions with Greece.

Pleased with China’s purchase of Greek bonds, Papandreou said “this is vote of confidence to continue buying Greek bonds — a vote of confidence also for the EU; it’s a vote of confidence that investments will increase in Piraeus, allowing it to become a China-Europe transport hub; a vote of confidence that you want to double Greek imports to China, and many other decisions, such as the Greece-China development fund for ship-building in China and a call to your entrepreneurs to invest in Greece.”

China has also developed strong economic ties with the other European countries. Next month a group of Chinese manufacturers is planning to gain an approval and start developing a €50m (£40m) plot in Athlone, central Ireland. It is planned to build a “Chinese hub” of factories that will eventually employ 8,000 Irish staff.

Britain is also an important destination for Chinese companies. Since 1997, London has attracted 34 Chinese foreign direct investment (FDI) projects, and 15% of all Chinese FDI into Europe since 2002.

After Wen Jiabao’s visit to the EU, some European newspapers, like Spanish Rebelión and Polish Gazeta Wyborcza, came out with the articles full of concern about Chinese expansion to the region and its new markets in the EU.

These papers may have just gotten it all wrong. EU export to China is soaring at an annual rate of 49 percent as China takes up European infrastructure, machinery, and high-end consumer goods. Italian companies are specializing in exporting luxury goods to China. German companies moved to the area of high-tech materials for Chinese firms. And European automakers, like Volkswagen, which will sell some 2 million cars in China this year, are exploring the market. European companies have achieved great successes in China.

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