Permalink to China, Germany downplay row

STATUS IN WTO: Li says China doesn’t want a trade war as Merkel hopes for a solution –BEIJING: China does not want a trade war with Europe, Premier Li Keqiang said on Monday at a news briefing with Germany’s Chancellor who said she was sure a solution could be found to tensions over Beijing’s status in the World Trade Organization.
As both sides appeared to play down simmering differences between China and European powers, Airbus Helicopters finalised an agreement to build an assembly line on a Sino-German business bark in China and sell 100 helicopters to a Chinese consortium.
Daimler AG and its Chinese partner, BAIC Motor, also pledged to jointly invest 4 billion yuan ($608 million) to expand engine production.
Beijing sees Germany, China’s largest trading partner in the European Union, as influential in the 28-member bloc’s debate on the politically sensitive issue of its market economy status.
The European Commission is set to accept a change to China’s trade status at the WTO by treating it as an economy controlled by the market, not the state. That would make it easier for Beijing to export into the bloc.
But the Commission also wants to enhance the bloc’s ability to defend itself against cheap China’s heavily subsidised goods. Reluctance in Europe to give up a method to defend against cheap Chinese imports has set up a looming dispute at the WTO and the prospect of broader trade friction.
“China has already fulfilled its obligations on joining the WTO. What’s needed now is for the other parties to fulfil the matching obligations they had promised,” Li said.
“We don’t want to fight a trade war because this will benefit nobody.”
German Chancellor Angela Merkel, who on Sunday began her ninth trip to China since taking office, said: “It does not help us to emotionalise the whole subject. I am convinced that we can find a solution on the lines of what was promised 15 years ago.”
The chancellor linked market access for Chinese banks in Germany to a liberalisation of the sector in China.
“We will certainly pay even more heed to reciprocity in the financial sector than in classic industry,” she said, adding that German banks were currently restricted by a 20-per cent limit on the size of stakes they can buy in Chinese banks. “In the banking sector, we are at the start of a cooperation,” she said.
Li said there were informal barriers in Europe for Chinese banks, which were disadvantaged compared to those based in Europe and the United States.
“We need to talk more about how both sides will be treated equally,” he said.
Merkel said during a trip to China last year that Germany favoured granting China market economy status in principle but that Beijing still had work to do, including further opening its public procurement markets. — Reuters
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