China pushes for wider ties with east Europe

CHINESE PREMIER LI KEQIANG
CHINESE PREMIER LI KEQIANG

SOFIA • China remains open for trade with foreign partners and can only benefit from an economically strong Europe, Premier Li Keqiang said, as he pressed for expanded ties with the continent's eastern wing while waging a tariff war with Washington.

Mr Li told a summit with central and eastern European leaders yesterday that China would stick to the path of opening its markets and other reforms that had fuelled its economy, providing opportunities for European Union members and aspirants in the bloc's poorer half.

"It is two-way traffic," he said.

"Opening up has been a key driver of China's reform agenda, so we will continue to open wider to the world, including widening market access for foreign investors."

Mr Li's attendance at the seventh "16+1" summit in Sofia, Bulgaria's capital, coincided with the firing of the first salvos in what risks becoming a protracted global trade war, as Washington and Beijing slapped tariffs on US$34 billion (S$46 billion) worth of each other's goods.

Countries taking part in the summit include the region's EU states, plus Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia.

NEED FOR TRANSPARENCY

If Europe is weakened, it will only be bad news for China, not the other way around. This platform needs to stay open. It needs to be transparent.

CHINESE PREMIER LI KEQIANG, speaking at the Sofia summit. China has come under pressure to reassure that its courting of individual countries from the Baltics to the Balkans will not hurt the European Union.

China has come under pressure to reassure that its courting of individual countries from the Baltics to the Balkans will not hurt the EU as a whole.

"If Europe is weakened, it will only be bad news for China, not the other way around," Mr Li said.

"This platform needs to stay open. It needs to be transparent."

Officials from the EU, the World Bank and the European Bank for Reconstruction and Development were invited, and Mr Li said those organisations were welcome to jointly fund projects in the region.

Mindful of the need to keep ties with the EU on an even keel, Mr Li had been careful to stress China's support for European integration and rules in trade and procurement.

China has promised billions of dollars for development projects in central and eastern Europe as part of its Belt and Road Initiative to carve out new export markets.

More than 250 Chinese companies and 700 business people from central and eastern Europe were expected to attend an economic forum alongside the summit, seeking deals in trade, technology, infrastructure, agriculture and tourism.

Bulgaria hopes the summit will help secure much-needed funds to build new roads, highways and other infrastructure in eastern Europe, a region that still lags richer states in the western wing of the EU.

"16+1 is a format that aims to strengthen Europe," Bulgarian Prime Minister Boyko Borissov said. "It gives more opportunities to those who joined the EU later to catch up faster."

China has confirmed it is willing to back Bulgaria's Belene nuclear power project. Last month, Hungary finalised the construction timetable with Beijing for a Budapest-Belgrade rail link.

The Sofia summit takes place just weeks ahead of the larger EU-China summit in Beijing, and also amid China's trade battle with the United States.

The escalating fight between the US and China meant that it could "take economic and political pain to get these two parties to the (negotiating) table", said Professor Scott Kennedy at the Centre for Strategic and International Studies in Washington.

US President Donald Trump is already threatening additional rounds of tariffs, but it will take weeks or months for the US Trade Representative to review and possibly activate any new rounds of punishment.

"The key questions during that time are what will happen to financial markets, how will US voters react and will China's economy start to wobble," Prof Kennedy said.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on July 08, 2018, with the headline 'China pushes for wider ties with east Europe'. Print Edition | Subscribe