EU vows review of high-tech ban to boost China exports

The European Union (EU) agreed on Tuesday to set up a working panel to examine boosting high-tech sales to China, while also seeking help from Beijing on combating the spreading sovereign-debt crisis.

Discussions on high-tech sales and the debt crisis took place at the Third China-EU High-Level Economic and Trade Dialogue held in Beijing and signal the probable expansion of European exports to China despite recent trade disputes, experts said.

"China and the EU reached a consensus on enhancing high-tech trade cooperation and a meeting between the two sides on the specific issue will be held as soon as possible," said Vice-Premier Wang Qishan, at the meeting's closing ceremony.

The EU has set restrictions on high-tech exports to China, although it is the largest exporter of technology to China. The export controls have been a major reason for its trade deficit with China, analysts said.

The EU has been China's largest trade partner for six years and the fourth largest investor, while China is the EU's second-biggest export market. China's trade surplus for the 11 months of this year with the EU is $130.7 billion (99.5 billion euros).

Experts believe that the decision by the EU, to examine greater high-tech sales, is a "positive" step.

"The EU sends a positive signal for cooperation, although the announcement does not mean the EU will loosen restrictions of high-tech exports soon," said Chen Xin, researcher at the Institute of European Studies with the Chinese Academy of Social Sciences.

"Lifting high-tech export bans would translate into more exports from the EU, leading to a trade balance between the two."

The two sides also agreed to "speed up a feasibility study for a China-EU bilateral investment treaty, and the EU agreed to enhance communication with China for early recognition of China's market economy status".

The United States also has high-tech export controls targeting China but no commitment was made by the US to re-examine them during the China-US Joint Commission on Commerce and Trade held last week.

"While the EU is struggling to address the debt crisis, China is playing a more important role in bilateral relations," Chen said.

China and the EU agreed to "enhance cooperation to promote steady and sound economic development for China and the EU, and also for the strong, sustainable and balanced growth of the global economy", rather than focus on "frictions", according to a statement issued after their meeting.

The areas for cooperation include "new energy, new materials, energy saving, protection of the environment and aerospace", Vice-Premier Wang said.

According to the Chinese Customs, bilateral trade surged by 33.1 percent year-on-year to $433.88 billion from January to November. EU exports to China grew by 32.6 percent while its imports rose by 33.3 percent.

Premier Wen Jiabao said in October that China supports a stable euro and will not reduce European bond holdings. Wang echoed those remarks on Tuesday.

China supports the "International Monetary Fund's measures to help stabilize the EU's financial stability and has taken concrete action to help some EU members counter the sovereign-debt crisis", he said.

The sovereign-debt issue is still experiencing fluctuation, said Olli Rehn, EU commissioner for economic and monetary affairs, adding that the EU appreciates China's support.

During the past year, the EU has been more aggressive in introducing protectionist measures against China.

According to the Ministry of Commerce, during the first 10 months of this year the EU initiated 10 trade remedy cases against China, more than the number for 2009. The value of the 10 cases was $4.74 billion, 5.5 times last year's total.

The latest case targets China's wireless networking modems, which is worth $4.1 billion and accounts for much of the increase over last year's total. It is also the largest trade remedy case against China in terms of value.

Bao Chang contributed to this story.