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Top EU Trade Official: China Must Open Markets

China's rise as a global trading power and status as the EU's top trading partner obligates it to drop barriers preventing foreign competition, according to Commissioner Peter Mandelson.

BEIJING (AP) — China's rise as a global trading power obligates it to drop barriers preventing foreign competition in its domestic market and contributing to its ballooning trade surplus, the European Union's top trade official said Wednesday.
The EU is China's largest trading partner and this status gives the Asian giant ''real responsibilities,'' Trade Commissioner Peter Mandelson said in a speech at the 10th annual EU-China summit in Beijing.
His comments came as EU impatience is growing over the trade surplus, which hit $190 billion last year and expected to reach $253 billion this year. The yuan's weakness against the euro also makes exports to China more expensive.
''This is not because of any lack of competitiveness by Europe,'' Mandelson said. ''The EU has a surplus with the rest of the world where we are allowed to compete freely.''
The commissioner's remarks, while pointed and critical, did not contain any new proposals or mention any possible EU sanctions.
''Sometimes it is necessary to deliver difficult messages on trade ... but they are always constructive,'' he said.
The high-level talks in Beijing focused also on other economic concerns, such as boosting Beijing's fight against copyright piracy.
Chinese Premier Wen Jiabao, who spoke after Mandelson, tried to address some of those points, saying Beijing has put in measures to expand imports and stimulate domestic demand.
He also said China was ''sincere and ambitious'' in its efforts in protecting intellectual property rights and was giving market forces more determination over the value of the yuan.
''In China's open market, every trading partner is treated equally,'' he said, adding that Beijing doesn't seek to have a trade surplus with its partners.
Also in Beijing Wednesday, the EU's top finance officials warned that the weak yuan and looming Chinese trade surplus threatened to spark a backlash in Europe.
''It could have the result that a protectionist reaction could occur in Europe,'' said Jean-Claude Juncker, Luxembourg's prime minister and finance minister.
Juncker, European Central Bank President Jean-Claude Trichet and EU Economic and Monetary Affairs Commissioner Joaquin Almunia traveled to China for talks with Wen and other officials. Discussions covered currency markets and other economic issues, although neither side indicated any breakthroughs.
Juncker, speaking as head of a committee of eurozone finance ministers known as the Eurogroup, said he and the other members were befuddled by the euro's continued strength against the yuan, even as the Chinese currency gains steadily against the dollar.
''It is difficult to understand, whereas China is exporting less to the U.S. than to Europe, why the yuan is appreciating vis-a-vis the dollar and why the yuan is depreciating against the euro,'' Juncker told reporters.
''We do think we have to correct this obvious imbalance,'' Juncker said.
Earlier Wednesday, European Commission President Jose Manuel Barroso, who is leading the EU delegation, met with a rising star of the Chinese political establishment.
Li Keqiang, 54, was recently promoted to the Politburo Standing Committee — the nine-member body that is the apex of Chinese political power. An economist and legal scholar who formerly headed the industrial province of Liaoning, Li is considered a possible successor to President Hu Jintao.
The group also met with the Chinese president, who called the summit ''an effective platform for cooperation and exchanges between the two sides.''
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