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-EU Vice President Jyrki Katainen Talks To MNI About Obstacles To China Trade
By Iris Ouyang
     BEIJING (MNI) - Barriers to reaching a reciprocal trading agreement with
China remain a big obstacle for the European Union (EU), Jyrki Katainen, vice
president of European Commission, told MNI Monday following high-level economic
talks in Beijing.
     China's state subsidies for state-owned enterprises and trading practices
such as forced technology transfers are the biggest problems in trading with
China, Katainen said.
     "The EU is not siding with any party or any country," but it is working
with China to establish a working group to assess ways forward under the
auspices of the World Trade Organization, Katainen said at a press conference
following his talks Monday with Chinese vice premier Liu He, one of Chinese
President Xi Jinping's most trusted economic aides.
     The EU would solve trade problems based within the WTO framework, he said,
adding that it is "the only way to keep multilateralism and globalization on a
healthy path."
     China and the EU had "open and frank discussions" in a good atmosphere,
Katainen said of the annual top-level economic dialogue between officials from
both sides, though talks about overcapacity, technology transfer and cyber
security were still difficult and unresolved.
     "Our relationship with China is so good and strong that we can directly
address this kind of this issues," he said.
     "We don't start doing trade when forced," he said of the EU's stance in
trade dispute with the U.S. 
     Some EU member countries are interested in buying more energy to counter
the negative impact of the trade tension with the States, but that decision
would be made on their own for their own countries, and the EU bloc would not be
forced to agree such deals.
     As more countries are in trade disputes with the U.S., products from other
countries including China could be dumped to the European countries, he
cautioned. But the EU is making preparations for that, he added.
     National security concerns among European countries still surround tech
cooperation between China and EU but the situation is not as bad as many people
imagine, he said.
     "If there are concrete issues, both sides can discuss," he stressed.
     China and the EU are discussing an investment treaty, which only can be
achieved after the EU companies are treated equally and fairly.
     The EU is developing a new system to solve disputes regarding investment,
he said, without elaborating.
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,MX$$$$,MBQ$$$,MGQ$$$]