Premier Wen Jiabao says China is to maintain its efforts to help resolve the eurozone debt crisis, after months of investing in European sovereign bonds.

 

"China will continue to play its part in helping resolve the European debt issue through appropriate channels," Wen told a business summit yesterday after talks with European Union leaders in Brussels.

 

"In the past few months China has continued to invest in bonds of European governments and discussed ways of cooperation with the ESM," Wen said, referring to the European Stability Mechanism, a new 500 billion euro (US$647 billion) rescue firewall set up by eurozone leaders and due to become operational next month.

 

"Europe is on the right track in tackling its debt issue," Wen said. "What is crucial now is to fully implement the reforms" it has agreed on economic governance.

 

After starting a one-day EU-China summit by demanding an end to a more than 20-year arms embargo and the lifting of all tariffs on Chinese goods, Wen hailed China-EU ties as "one of the most important partnerships in the world."

 

"I hold the development of this relationship close to my heart," he said after signing a 49-point four-page agreement with the EU ranging from foreign policy issues to mutual agreements to increase research and development, and create tens of thousands of student scholarships.

 

In a world challenged by a slowdown in growth, China and the 27-state bloc, already the world's second biggest economic market with a billion euros in two-way trade per day, needed to "focus on deepening our dialogue," said EU President Herman Van Rompuy.

 

Saying Europe was committed to its currency, Van Rompuy notably called for improved trade with China.

"We can and have to do more in opening our markets and guaranteeing a level playing-field for everyone," he said.

 

The Chinese premier raised the issue of an EU arms embargo imposed since 1989, and the EU's refusal to treat China as a fully fledged market economy and so ease tariffs.

 

"I have to be very frank in saying this ... but the solution has been elusive over the past 10 years. I deeply regret this and I hope the EU side will take greater initiative to solve these issues," Wen said.

 

China will not get full market status until 2016 after accepting a 15-year transition period when it joined the World Trade Organization.

 

Home to half a billion people, the EU is China's single largest export market while China is the EU's second largest trading partner after the United States, with total trade worth nearly 430 billion euros in 2011.

 

Having visited 18 EU member states since 2003 to cement a trading relationship worth a billion euros a day, Wen said the present challenges also presented "huge opportunities" on both sides.

 

While the economic picture was at a "critical juncture," China and the EU were working on a host of levels to "scale-up" trade.

 

The levers through which this would be achieved, Wen said, involved two-way investment with a "need to expand Cooperation in infrastructure development" that could see China invest in new EU project bonds.

 

Likewise investment in technological innovation, where he cited nuclear energy or the information technology sector, or European offers of expertise whether in smart cars or sewerage as China steps up urban planning. 
 

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