Chinese and European Union leaders launched a high-level dialogue Friday on tensions over China's swelling trade surplus with Europe disagreements over how to tackle climate change. ´Our meeting today marks a significant step towards the strengthening of the strategic partnership between China and Europe,? European Commission President Jose Manuel Barroso told Premier Wen Jiabao as they met in the Great Hall of the People, the seat of China's legislature. The 27-nation EU is stepping up pressure on Beijing for action over its trade surplus, market barriers and currency controls - areas where Washington long took the lead. China's trade surplus with the EU surged 23 percent to $34.1 billion in the first quarter of the year, surpassing the gap with the United States, according to government data. Barroso gave no details but said the sides agreed to work on narrowing that gap. ´But there are major imbalances and we both agree on the necessity to rebalance our bilateral trade," he said. European businesses say China keeps its currency undervalued, giving their Chinese competitors an unfair price advantage. Europe also echoes US complaints about Chinese product piracy, saying 80 percent of counterfeit goods seized at its ports originated in China. The EU-China meeting mirrors similar dialogue being carried on by Beijing and Washington. Barroso's delegation includes nine EU commissioners - one-third of the EU executive - including trade chief Peter Mandelson. Mandelson said that in five hours of talks on Friday, he told the Chinese side, including Vice Premier Wang Qishan, that Europe wanted wider access to China's growing markets and better protection for European property rights. He said the two sides had to work to fight protectionism because of uncertainties over the global economy. “The best way to guard against protection is to show that openness works,” he said. Besides trade, the two sides discussed sustainable development, energy, product safety and Africa. No specific agreements were made on ways to resolve disputes about Chinese currency controls or measures to narrow China's widening trade surplus with Europe. “Both sides agreed to continue opening up and to oppose protectionism.... this is the shared demand of the 1.8 billion people of China and Europe,” Wang said. Barroso said that Chinese and EU officials had discussed cooperation on fighting climate change and other environmental issues. “As far as climate change is concerned, we had a very deep exchange of views, particularly on the vital international negotiations,” he said. Barroso said China had repeated its long-established position that it was willing to discuss emission reductions as part of a global agreement on climate change. “We welcome indications of Chinese readiness to include its domestic emission reduction policies in an international agreement, provided that developed countries commit to midterm reduction targets for 2020.” He said Beijing also repeated calls for “an effective financial mechanism is put in place to promote technology transfer.”
