China backs Europe amid debt crisis (2)

14:25, May 10, 2011      

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Economic interdependence

In late April, a fleet of 172 Chinese King Long buses, dubbed "Big Golden Dragon", were delivered to Malta.

The buses were designed for European markets by manufacturer King Long Corporation based in China's southern city of Xiamen.

This is the biggest order for King Long since its entry into the EU market in 2005, also one of the biggest orders for exports of Chinese buses and coaches.

As the European market has become the largest destination for Chinese exports, a sharply weaker euro has inevitably increased cost pressure for Chinese exporters, while dwindling European demand has also dragged down China's exports, a main driving force behind China's development.

In 2009, China's exports to Europe posted a drastic decline of 19.4 percent.

Meanwhile, Europe is becoming increasingly reliant on exports to emerging markets, China in particular, said Lou Jiwei.

Bucking the trend amid a sluggish global economic recovery, China-EU trade is staging a quick and remarkable comeback as Europe is grappling with the crisis.

China is now the EU's second-largest trading partner. EU exports to China remained on the rise in 2009 when its exports to other destinations saw declines across the board.

During the crisis, China-EU trade registered a rapid recovery, reaching 433.88 billion dollars in the first 11 months of 2010, a year-on-year increase of 33.1 percent.

And China's economy grew at a faster-than-expected 9.7 percent in the first quarter of this year.

China and the EU are economically complementary and their interests closely interwoven, Li Keqiang stressed during visits to Europe.

"It stands to reason that each must strive to reinforce the others in order to draw maximum benefit, or risk the negative consequence of a collapse anywhere. That's what interdependence is all about," said David Fouquet.

Broader partnership

A tour of Spanish grid operator Red Electrica de Espana was one of the highlights during Li's visit to Spain in January.

Li suggested that China and Spain should further expand cooperation in trade, investment and new energy as a way of fighting the global financial crisis and achieving common development.

Two months later, State Grid, China's leading power grid operator, announced it has reached an agreement with Red Electrica de Espana.

According to the agreement, the two sides will work together closely to strengthen cooperation in developing grid-access technologies for renewable energies, as well as extra-high-voltage power transmission which is a top priority of the State Grid in the coming five years.

The ongoing crisis offers opportunities for cooperation in new energies, high-tech areas and other industries as well as economic restructuring, said Chen Xin.

As the two sides have already realized, a stronger and broader China-EU relationship serves their common interests.

"Both China and the EU share a strong will to boost bilateral ties," Foreign Ministry spokesperson Jiang Yu told a regular press briefing last week, ahead of the second round of the China-EU high-level strategic dialogue.

The two sides should seize the opportunities brought about by China's 12th Five-Year Program and European 2020 strategy, so as to expand bilateral cooperation, said Jiang.

"Every crisis is an opportunity, and there is certainly room for much better relations between China and Europe. It is also clear that this is a good moment for them individually to offer global economic leadership," said Fredrik Erixon.

The reform of the international monetary system will also be high on the agenda of this year's G20 summit, whose rotating chair is currently held by France.

China is ready to strengthen joint studies and deliberations with the European countries, dedicating itself to the perfection of the global monetary system, pushing for the diversification of international reserve currencies and contributing to the formation of a stable reserve currency system, said Yi Gang, deputy governor of China's central bank.

Source: Xinhua

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