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European Union leaders press China on trade issues


Beijing : European Union (EU) leaders Wednesday pressed Chinese President Hu Jintao to reduce his country’s growing trade surplus by eliminating trade barriers, revaluing its currency and stimulating domestic demand.

Portuguese Prime Minister Jose Socrates told Hu he hoped the EU-China summit, scheduled for later Wednesday, would help resolve the two sides’ differences on trade and the environment.

Socrates, representing the rotating EU presidency, met Hu along with European Commission President Jose Manuel Barroso and EU Trade Commissioner Peter Mandelson.

Hu told the EU trio that the annual leaders’ summit was “playing an important role in deepening the development of China-EU relations.”

The EU leaders have tried to persuade China to reduce its trade surplus with Europe and allow more flexibility and faster appreciation of its undervalued currency.

But Chinese officials Tuesday repeated their position that they will only continue gradual reform of their currency exchange rate mechanism.

The EU’s current trade deficit with China was not sustainable, Barroso said in a speech in Beijing Tuesday.

He urged China to eliminate trade barriers preventing the access of European goods and services to “many sectors” in China.

“We believe that your growth model also puts too much accent on savings and over-investment, relying on exports to the detriment of internal consumption,” Barroso said.

The EU’s top financial officials also held talks on currency and trade issues with their Chinese counterparts Tuesday.

The appreciation of China’s currency renminbi against the dollar, while it has fallen against the euro, helped push China’s trade surplus with the European Union to a record 131 billion euros ($194 billion) last year.

EU officials expect the surplus to jump again this year to about 170 billion euros.

Barroso Tuesday said the EU’s growing trade deficit with China was adding to EU citizens’ anxiety about globalisation.