Manufacturing News

China Rewards EU With More Business

European leaders came to China this week saying they wanted to lift an arms embargo and settle a textile trade dispute. They left with new business -- including orders for 10 Airbus airliners -- and a promise of more deals to come.

BEIJING -- European leaders came to China this week saying they wanted to lift an arms embargo and settle a textile trade dispute. They left with new business -- including orders for 10 Airbus airliners -- and a promise of more deals to come.

Contrast that with U.S.-China relations, which are bedeviled by a canceled presidential meeting, an unsolved textile dispute, and American fears that China's rise could harm regional security and threaten world oil supplies.

China is finding it a lot easier to deal with Europe than with Washington, a major trading partner but also the source of disputes over everything from Taiwan and human rights to product piracy and how Beijing sets the value of its currency.

"China-EU relations are less complicated," said Liu Jiangyong, a professor of international relations at Tsinghua University in Beijing. "When the EU negotiates with China on economic issues, it isn't clouded by the Taiwan question or security fears."

Beijing is eager to cultivate ties with Europe as a counterweight to the United States -- part of what it calls progress toward a "multipolar world" without a dominant superpower.

When the EU talks to China, it focuses mostly on trade -- Beijing's strong point. European governments are under pressure from companies to help build up their presence in China to compete with U.S. and Japanese firms that were here earlier.

They also believe that trade can be a foreign policy tool on its own, said EU Trade Commission Peter Mandelson in a speech Tuesday at the Central Party School of the ruling Communist Party.

"I want to believe that what happened with European integration over the last 50 years, which has given us an unprecedented period of peace, will also happen on other continents and between them," Mandelson said, according to a text of his remarks.

The United States, meanwhile, has expressed alarm about China's military buildup. The Pentagon says China spends much more on its military than its leaders acknowledge, and questions why.

"Since no nation threatens China, one must wonder: Why this growing investment?" U.S. Secretary of Defense Donald H. Rumsfeld said at a conference in Singapore in June.

The issue of arms sales highlights the U.S.-Europe divide.

The European Union's foreign policy chief, Javier Solana, said Tuesday that the EU was determined to lift its 16-year-old arms embargo, imposed after China's bloody crackdown on Tiananmen Square pro-democracy protesters in 1989.

"We think it is part of history, this embargo," Solana said in Shanghai.

The United States is dead-set against ending the embargo. It has threatened to limit transfers of military technology to Europe if the arms ban on China is lifted.

Washington fears that European arms could potentially threaten U.S. forces in Asia, especially those that might be drawn into any conflict over Taiwan. American leaders argue that their troops have kept the peace in East Asia for 50 years.

On textiles, Mandelson met with Chinese Commerce Minister Bo Xilai for talks that produced a deal that could unblock millions of Chinese textiles stranded at European ports for exceeding import limits.

Officials from the 25 EU governments were meeting in Brussels on Tuesday to discuss the proposed accord with a final approval expected early next week, said spokeswoman Pia Ahrenkilde Hansen for the EU executive commission, which negotiated the deal.

"The first signals that we have received from member states appear to be positive," the commission spokeswoman said, adding that she did not expect a vote Tuesday.

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