Thriving partnership

China's relationship with the European Union (EU) is so well established that even the EU's Ambassador to China Serge Abou barely recalls the first trade agreement between China and the former European Economic Community signed in 1978.

"It's archeology," he jokes. "I have to check it in the archive."

The agreement, which was signed the year China began it reforms and opening-up policy, was also the first pact between the two sides after they established diplomatic relations in 1975.

According to the agreement, the two granted each other most favored nation status and took measures to encourage bilateral trade flows. This included the creation of a EU-China Joint Committee.

The agreement concentrated on trade that ushered in an era of bilateral economic cooperation between the two economies. From being almost non-existent 30 years ago, two-way trade between the EU and China reached $356.15 billion in 2007.

Abou says it took the two parties seven years to formalize the agreement, which originally had been scheduled to take effect in five years.

A trade and economic agreement signed in 1985 later replaced the 1978 pact. Under the framework of this agreement the EU-China relationship developed in every sector.

"Now, there is no one single domain where we have no cooperation," Abou says.

He says: "We now have intense individual contact, person-to-person, company-to-company, suppliers-to- buyers and investors-to-partners. We also have cooperation in research and higher education."

There are over 20 so-called sectoral dialogues, which annually bring together ministerial-level personnel from China and Europe.

China and the EU are also partners in the Galileo project - a co-operative satellite navigation initiative, and a research nuclear reactor program.

When Abou took his position as EU ambassador to China in 2005, China and the European economic bloc were preparing to update the 1985 trade agreement and formal talks finally began last year.

According to Abou, the latest round of talks in Beijing is "progressing".

"In the next summit, which will probably take place in December in France, we expect there will be an earlier harvest of chapters," he adds.

The ambassador says: "the important thing is to make it a wise and wide-ranging agreement."

The talks will include general topics of a political and economic nature to cooperation and policy discussions. Also on the agenda are exchanges on technical issues such as the protection of intellectual property rights, trade disputes and environmental protection policies.

Disputes occur between intimate trade partners, too. As the EU becomes the largest trade partner of China and China the second largest of the EU, conflicts, such as anti-dumping, technical trade barriers and WTO complaints are also increasing.

Talking about how to strengthen the economic ties, Abou expects Beijing to give foreign investors larger access to service sectors such as insurance, banking, and telecommunications that are currently restricted for outsiders for the most part. He also urges China to enhance its protection of intellectual property rights and trade facilitation.

"Sometimes, Chinese may have the impression that their investments are not welcomed in Europe. It is totally wrong," the ambassador says.

He says Chinese investors are "very welcome" in almost all industries in the EU expect for those linked to national security, which is normal in every country in the world.

Looking back at China's achievement in the past 30 years, Abou says what impresses him the most is not the marvelous figures in GDP, trade or foreign reserves but changes for each individual Chinese.

"That is a fundamental change," he says. "In 30 years all the categories of population are improving."

He explains there are hundreds of millions of people who have been saved from poverty. And Chinese people have better housing, better transportation, and better opportunities for jobs and education, as well as better opportunities to travel.

"In the mind of every young Chinese today, there is hope that his or her future will be better," he says.

(China Daily 03/17/2008 page6)