| Europe calls on China to open markets further as Chirac visits Beijing |
BEIJING, Oct 25 (AP) -- The European Union called on China on Wednesday to open its markets wider to foreign competition ahead of a visit by French President Jacques Chirac that was expected to include talks on trade and North Korea.
A report issued by the EU said Beijing should show trade is a "two-way street" by allowing in more foreign companies and easing barriers to trade. It called on China to improve protection of intellectual property, end subsidies to Chinese industry and do more to abide by World Trade Organization standards on free trade.
The EU report marks a tougher approach toward Beijing and comes amid disagreements between the EU and China over trade.
The EU, which has overtaken the United States as China's biggest export market, ran a €106 billion (US$133 billion) trade deficit with China last year and the two have sparred over low-cost Chinese textiles and shoes.
"With growing economic muscle ... come growing expectations," the EU ambassador to Beijing, Serge Abou, said at a news conference.
"China has reached the proper point in its development when it is legitimate to insist that it fulfill all its WTO obligations, that it trades fairly, opens its markets and gives foreign companies fair treatment when they trade and invest here," Abou said.
Among EU members, France has been an outspoken advocate of engagement with China. In a sign of that commitment, Chirac was due to arrive in Beijing on Wednesday leading a 30-member delegation of French business executives. The French president hoped to expand trade in areas such as nuclear power and rail transport where France is a major player.
Chirac was scheduled to meet with his Chinese counterpart, Hu Jintao, and talks were expected to touch on the North Korean and Iranian nuclear disputes. Both France and China are among five permanent U.N. Security Council members with power to veto U.N. actions.
In an interview with China's official Xinhua News Agency, Chirac said booming Chinese growth "naturally raises questions" about its respect for free-market rules, its political evolution and ambitions and its environmental impact. A copy of the interview was released by Chirac's office.
The European Union report sounded a note of concern about China's environmental record, saying Beijing should be more energy efficient and use cleaner and renewable fuels in order to cut carbon dioxide emissions that cause climate change.
It said Europe wants to help China evolve into a "more open and plural society ... making the case that better protection of human rights, a more open society and more accountable government would be beneficial to China and essential for continued economic growth."
It called China's human rights record questionable and said the EU must stick with its twice-annual human rights dialogue with Beijing even though "the EU's expectations ... are increasingly not being met."
The report called on Beijing to improve legal protection for foreigners doing business in China, to cease demands for European companies to hand over technology to Chinese partners and to end unfair subsidies to industries.
"EU companies often find themselves competing on unfair terms in China," it said. "The absence of conditions of fair market competition and inadequate legal protection pose serious problems. China's policies on the environment, social standards, currency valuation and natural resources can distort trade."
The report echoed the concerns of the United States about possible rising nationalism in Chinese economic policy toward such key industries as cars, steel, semiconductors or shipbuilding.
It said tax, banking and content requirements favor Chinese companies over EU exporters and expressed concern that antitrust policy would give preference to Chinese companies.
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