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TRADE WARS
China's Xi begins Belgium visit on last leg of Europe tour
by Staff Writers
Brussels (AFP) March 30, 2014


China, Germany rev up political, economic ties on Xi visit
Berlin (AFP) March 28, 2014 - Export giants Germany and China pledged to deepen their strategic ties Friday during a landmark visit by Chinese President Xi Jinping to Berlin, which also saw the inking of a raft of economic pacts.

Germany's leading car industry took centre-stage on Xi's third stop of a European tour, with auto giant Daimler announcing a production deal with its Chinese partner worth one billion euros ($1.4 billion).

The partnership with Beijing Automotive Industry Corporation (BAIC Group) plans to expand production capacity at their joint venture Beijing Benz (BBAC) by 2015.

Xi road-tested a few motoring metaphors for the occasion, saying that as long as the two countries' partnership had "a full tank" and good steering, it would have a "promising future".

"When driving a car one mustn't just keep the few metres ahead in view but one must also look into the distance. That's the only way to guarantee a safe trip," Xi told a joint press conference with Chancellor Angela Merkel.

Germany is China's biggest EU trading partner, while the Asian giant is a massive market for German machines, technology and cars.

The two leaders said they were dedicated to building on their close ties with regular consultations on regional and global issues and stronger coordination in the UN, G20 and other international bodies.

With all eyes fixed on Russia's next move in Ukraine, Merkel said their talks had also covered the crisis in Crimea and reiterated that Germany was "very clearly for the observance of territorial integrity... and international law".

For his part, Xi said China sought to stay out of the internal affairs of other states and respected all nations' integrity and sovereignty, but he called on all parties to continue to push for a political and diplomatic solution.

"We support the constructive efforts which the international community is undertaking to reduce tension," he said.

- Rights 'important' in dialogue -

While Xi made no reference to human rights issues, Merkel said that the topic was an "important" part of German-Chinese dialogue and stressed the importance of freedom of expression in a constantly changing world.

Xi's visit comes the week before the largest-ever exhibition of Chinese dissident artist Ai Weiwei opens in Berlin. The outspoken artist is unable to attend as his passport was confiscated by Beijing in 2011 after a nearly three-month detention.

Accompanied by his singer wife Peng Liyuan, Xi was earlier greeted with military honours by his counterpart Joachim Gauck, a former East German rights activist, in the grounds of the presidential palace.

Outside, about 50 pro-Tibet campaigners staged a peaceful protest.

Gauck welcomed economic reforms announced by Beijing's new leadership and urged China to continue its push towards more liberal markets and a system of justice "in which nobody is to stand above the law".

He also indirectly addressed human rights, saying reforms could help balance different interests, including between religious communities.

"The alternative to that would be discord, conflict and violence", he said in a speech attended by Xi.

Last year German-Chinese trade hit $161.5 billion, according to the newly-established Chinese Chamber of Trade in Germany.

After a clutch of multi-billion-dollar business deals were inked during Xi's last stop in France, a raft of 18 political and economic pacts, many of them declarations of intent or preliminary accords, were signed in Berlin Friday.

Among them, the Bundesbank and China's central bank agreed a declaration of intent to set up a yuan clearing and settlement centre in Germany's financial capital, Frankfurt.

Chinese leader Xi Jinping began a three-day visit to Belgium Sunday on the last leg of his European tour that will include meeting the Belgian royals and seeing giant pandas ahead of an historic EU visit, the first ever by a Chinese president.

Xi was welcomed at the airport by Belgian Prime Minister Elio Di Rupo and he is set to go to the royal palace in central Brussels to meet Belgium's King Philippe and Queen Mathilde.

The tiny country is presenting a showcase royal touch for Xi and his wife Peng Liyuan, with the power couple rolling up to the Brussels palace escorted by officers on horseback, and dining in the castle's halls on the city outskirts Monday.

King Philippe, who ascended to the throne last year, and glamorous wife Queen Mathilde will join the Chinese pair for the official opening Sunday of a special park for two giant pandas on loan from China for the next 15 years.

Xi's maiden swing through Europe as president has taken him to the Netherlands, France and Germany for bilateral talks and mega business deals, as well as to last week's Nuclear Security Summit where he met US President Barack Obama.

In a tour of many firsts, his three days in Belgium will see a Chinese president visit European Union headquarters for the first time, when he meets Monday with European Council president Herman Van Rompuy, European Commission president Jose Manuel Barroso and European Parliament president Martin Schulz.

Business has loomed large through the tour, and with the European bloc as China's largest trading partner -- two-way trade is at more than a billion euros a day -- economic issues are likely to dominate too at the EU, though human rights and diplomacy, in particular Ukraine, will also come up.

- Pandas divide Belgium -

The Chinese leader's trip to the park to see female Hao Hao and companion Xing Hui, who arrived in Belgium in February, is an acknowledgement of China's "panda diplomacy".

But the two furry national treasures have unwittingly opened a new rift in the longtime turmoil dividing Belgium's rival Dutch- and French-speaking communities.

The problem is that the rare bears, a reliable draw for visitors, are in a zoo in French-speaking southern Wallonia, some 60 kilometres (37 miles) from Brussels, not far from the city of Mons whose last mayor is none other than Di Rupo.

The Pairi Daiza zoo has since seen its ticket sales boom and share price soar, angering Belgium's oldest and most well-known zoo, located in the heart of the port city of Antwerp in northern Flanders.

In other bilateral encounters with Belgium's leaders, Xi will hold talks with Di Rupo and parliament leaders on Monday, and Tuesday visit the largest Chinese-owned company in Belgium, carmaker Volvo in Ghent, bought by Geely from Ford in 2010.

Belgium will be hoping for new investments.

Though it has sought to sell itself to Beijing investors as "a gateway to Europe", there has been little interest up until now though trade has grown and the balance improved in Belgium's favour due to a 65 percent hike in exports in the last five years.

On the wider European front, talks between Xi and the EU's top officials Monday are likely to take place in an easier atmosphere than expected after both sides took steps in recent days to settle trade tiffs.

The 28-member EU is China's biggest trading partner, but relations have seen periodic turmoil over trade and human rights. Trade totalled $559 billion in 2013, according to China.

Days ahead of Xi's landmark EU visit, the European Commission announced it was dropping plans to open anti-dumping and anti-subsidy inquiries into Chinese telecom firms, which though not named would have targeted Huawei and ZTE.

And the European move followed Beijing's own announcement on the eve of the president's departure to Europe that it was ending an anti-dumping inquiry into EU wine imports, the second trade dispute settled in less than a week after China said it had reached an agreement on exports of polysilicon from Europe.

Both the polysilicon and wine disputes were widely seen as resulting from a fierce 2013 battle over the dumping of Chinese solar panels on the European market.

Polysilicon is an important element in some types of solar panels, while China's announcement that it was probing if European wine was being sold below cost and enjoyed unfair subsidies came a day after the Commission said it would slap tariffs on Chinese producers of solar panels.

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