Li's visit to Europe timely

Li's visit to Europe timely
Chinese Premier Li Keqiang.

CHINA - Chinese Premier Li Keqiang will use his attendance at the Asia-Europe summit in Milan on Oct 16 and 17 as an opportunity to visit Germany and Italy. The ASEM summit is an important gathering of European and Asian leaders every two years to discuss global issues. It also provides a useful occasion for bilateral meetings. One of the important bilateral meetings for Premier Li in Milan will be a working dinner with outgoing European Union President Herman van Rompuy and Commission President Jose Manuel Barroso.

The Chinese Premier's visit takes place against slowing economic growth in Europe and China. While the worst phase of the eurozone crisis is over, there is still much to do to rekindle growth rates and tackle high unemployment. The European Commission estimates growth in the EU this year will barely reach 1 per cent while youth unemployment in Spain and Greece is over 30 per cent.

In these circumstances, the EU is looking to China to maintain its high growth rates and act as the driver for the global economy. Europe and China are each other's biggest trading partners so when one catches a cold it affects the other. European leaders are confident that Beijing knows what levers to adjust to continue China's remarkable growth. But they also know there will be no return to double digit growth. China has to tackle massive environmental problems, debt-ridden State-owned enterprises and local authorities, and root out corruption.

This will be a tall order, but as the Chinese economy slows there will be potential to increase cooperation with the EU. The EU has the know-how and technology, for example, to help China tackle its huge environmental problems. It also has useful experience in regional policy that may be helpful for China. Both sides need to work together for a successful outcome at the climate change conference in Paris next year.

Premier Li's meeting with van Rompuy and Barroso will be the last meeting with the current EU leaders. A new team is scheduled to take over in November - Donald Tusk as President of the European Council, Jean Claude Juncker as Commission President and Federica Mogherina as the High Representative for foreign and security policy.

It will be a top priority to establish good contacts between China and the new EU leadership and proceed with the implementation of the 2020 Strategic Agenda. This vision document agreed earlier this year sets out areas in which Beijing and Brussels can work together in the next five years.

Next year will mark the 40th anniversary of EU-China relations and a host of events are planned to mark the occasion. These will include a special summit, several ministerial meetings, exhibitions, sporting and cultural events.

In the meantime negotiations continue for an important bilateral investment treaty. Premier Li is also keen on innovation, while the EU leaders will highlight the need for fair competition and the stability of financial markets.

The Milan dinner will also cover international issues, such as Iraq, Syria and Ukraine. Events in the Hong Kong Special Administrative Region might cast a shadow over the meeting, but it seems the situation has calmed now.

In Italy, Li will meet with Prime Minister Matteo Renzi who has made a name for himself as an energetic promoter of reform. But he now needs to follow up his rhetoric with deeds. The Italian economy remains weak and Renzi will be looking to China for a boost in investment. China has the capital to invest in European infrastructure. It is already buying into nuclear power in the UK and ports in Greece. It has also established a 16+1 framework to boost investment with Eastern Europe.

In Germany, Chancellor Angela Merkel remains the country's and Europe's dominant politician. As the paymaster of the EU, she has imposed austerity on most EU member states whether they like it or not. Li will be looking to maintain and boost the excellent bilateral relations between China and Germany. Li will also speak at an important business summit in Hamburg where the main theme is improving economic relations between the EU and China.

In between Germany and Italy Premier Li will visit Russia for talks with President Vladimir Putin and Prime Minister Dmitry Medvedev. Russia and the EU are at odds over Ukraine. Both will be seeking Li's support for their respective viewpoints.

In the absence of a second full EU-China summit this year because of the change in the EU's leadership, Li's dinner with van Rompuy and Barroso should provide a welcome boost to the bilateral relationship.

The author is director of the EU-Asia Centre.

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