Newsmaker

Stronger China-EU ties vital: Mandelson

By Lan Lan (China Daily)
Updated: 2010-11-09 10:47

Lord Mandelson, former EU trade commissioner and business secretary in the last UK Labour government

BEIJING - China and the European Union (EU) need to become "even stronger partners for growth" in the context of a more unpredictable world economic situation, said Lord Mandelson, former EU trade commissioner and business secretary in the last UK Labour government.

The new round of monetary easing in the United States will bring more uncertainties for the global economy, Mandelson said on Friday in an exclusive interview with China Daily in Beijing.

"I have a lot of sympathy over this decision (the US measures). You can't predict what the consequences of such policies are going to be, not only for the United States, but externally as well. We just live together in a more unpredictable world," Mandelson said.

The US government has unveiled plans to pump $600 billion into its slowing economy. The announcement has sparked concerns among other countries who see their exchange rates rising against the US dollar.

Mandelson called for greater cooperation among countries to manage the hazards by coordinating their macroeconomic policies, and working under international institutions such as the upcoming G20 summit, which will open on Thursday in Seoul, South Korea.

Mandelson said China has played an "important and substantial role" in fighting the financial crisis, and Europe and the rest of the world have benefited from the country's robust growth.

China's growth does not mean Europe is in decline or pose a threat to the West, instead it will provide more opportunities as the country becomes the engine for global growth, he said.

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The EU is now China's largest partner in trade and investment, ahead of the US and Japan. Last week, President Hu Jintao signed $20 billion worth of contracts with French President Nicolas Sarkozy in Paris.

In the first nine months of 2010, China's exports to EU member states increased 35 percent to $349 billion, while imports increased 33.4 percent to $226 billion over the same period, according to Customs data.

"The fast-growing economies such as China and others have a legitimate expectation and entitlement to benefit from globalization," said Mandelson, adding that the EU will reap the benefits.

He said that he saw changes in China, such as "a steady rise in domestic demand rather than exclusive reliance on export-led growth, and a policy framework in which it is possible for China to make currency moves smoothly".

As the Chinese government is committed to improving its welfare and anti-poverty policies in the 12th Five-Year Plan (2011-2015), domestic consumption will increase and people will save less in the future, and that will bring huge opportunities for European companies, Mandelson said.

More business opportunities will come for European companies with advanced technologies, as China develops its low-carbon economy and moves to the upper ladder of the value chain, he added.

Meanwhile, Mandelson said the country is likely to face decreasing pressure for a change in the value of its currency.