France, China urge balanced trade, reform

NICE, France Fri Nov 5, 2010 6:37pm EDT

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NICE, France (Reuters) - France and China have reached a "real convergence" over the need to reform the global financial system after two days of talks between President Nicolas Sarkozy and his Chinese counterpart Hu Jintao.

France told China that balanced trade and close cooperation was the best way to shield the world from future crises and the menace of protectionism, and China promised its support for Paris as it takes over the G20 presidency this month.

Sarkozy has big ambitions for his year at the helm of the Group of 20 leading economies and would score a coup if he can get Beijing to back his goals of finding ways to reduce volatility in commodity markets and diversify currency reserves.

A close aide to Sarkozy said Beijing had agreed to organize a seminar of experts in 2011 on reviewing the international monetary system.

Between talks with Hu in the Riviera resort of Nice and taking him for dinner near the city's promenade, Sarkozy told reporters the two leaders also discussed human rights and added that he hoped France could encourage progress in that area through "gentle" dialogue with Beijing.

Of Sarkozy's aim to improve economic stability, the aide said there was a "real convergence of views between China and France on the objectives to achieve."

"France's ambition is that everybody agrees to sit around the table to set down the bases of a new system that guarantees stability in the world," Sarkozy later told reporters.


The statement came as global anger at a fresh round of liquidity injections into the U.S. economy grew, notably from emerging nations and a highly critical Germany.

On human rights, Sarkozy said: "Hu Jintao is somebody with whom one can talk. There are many differences between the Chinese and the French but we covered all subjects."

"There is no taboo, notably on the issue of human rights," added Sarkozy, who also sat down with Hu in Paris on Thursday.

"To resolve the big problems in the world we need China, and a frank, constructive, amicable dialogue," Sarkozy said. "This is what we have been doing for two days.

Before Hu flew to Nice, French Economy Minister Christine Lagarde told Chinese officials and business leaders that Paris wanted much more balanced trade relations with Beijing.

Concerns over global trade imbalances, largely China's huge surpluses with Western nations, and the threat of "currency wars" will top the agenda at next week's G20 leaders' summit in Seoul, after which France takes on the group's presidency.

"The strength of our trade is the best defense against the real risks from the financial, economic and social crises which have struck all economies, including France of course and China, of which protectionism is the most ugly threat," Lagarde said.

France has not mentioned China's yuan currency, whose weakness has upset Washington and the European Commission, adopting a conciliatory approach it hopes will win over Beijing.

But Lagarde, who said on Thursday that the U.S. monetary easing had reinforced the need for a shake up of the global financial system, raised French concerns over China's handling of intellectual property rights and the openness of its markets.

"We're not necessarily very proud to owe China our largest commercial deficit, 22 billion euros," Lagarde said. "We must pass to a sustainable economic cooperation founded on both a fruitful friendship and responsibilities."

In response, Chinese Trade Minister Chen Deming said Beijing was not deliberately targeting a trade surplus and would welcome a more balanced relationship, but Europe must play a role by ensuring its own markets were open for Chinese investment.


Hu's two-nation visit to France and Portugal comes at a time when EU leaders have closed ranks with Washington in urging China to let the yuan appreciate more quickly, unsettling relations between Beijing and Brussels. China hopes this week's trip will ease those strains before the Seoul summit.

Hu also oversaw with Sarkozy the signing of around $20 billion worth of airline, petrochemicals and nuclear fuel deals, including contracts to buy 102 Airbus planes.

Human rights groups have accused Sarkozy's government of selling out to win Chinese favor.

The Reporters Without Borders group said six people were arrested when protesters called for the release of a jailed Chinese dissident awarded the 2010 Nobel peace prize as Hu's car passed them on the Champs Elysees. Police snatched away their big white umbrellas with "Free Liu Xiaobo" written on them.

"It is unthinkable that France, the country of human rights, is saying nothing about the situation of China's dissidents," said Reporters Without Borders head Jean Francois Julliard.

In Beijing, a senior Chinese diplomat warned European nations against supporting Liu.

Sino-French relations have only slowly recovered since Sarkozy outraged Beijing in 2008 by meeting the exiled Dalai Lama, prompting some Chinese citizens to boycott French goods.

Sarkozy accompanied Hu on Friday for a short walk along Nice's grand seafront promenade, a favorite spot for foreign tourists, as several dozen Chinese students from nearby universities waved French and Chinese flags and cheered.

(Additional reporting by Daniel Flynn, Yann Le Guernigou, Jean-Baptiste Vey and Antony Paone; Writing by Catherine Bremer; editing by David Stamp)

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Comments (6)
surfinStevePi wrote:
The Chinese government is a criminal entity comparable to the drug cartels of Mexico. Anyone who does business with them has blood on their hands.

Nov 05, 2010 7:26pm EDT  --  Report as abuse
kc10man wrote:
Wow, thank god you are not representing anyone but yourself. Western countries just have not given China that much incentive to let their products be competitive in China. And I doubt they ever will.

Nov 05, 2010 8:16pm EDT  --  Report as abuse
Anti-West wrote:
Hah! The Europeans and the Americans are “saints”. They “saved the world” by creating a financial crisis. And their government officials are really intelligent in imposing strict austerity measures in reducing debts they created and raise the age of retirement. They are so friendly and united. They helped Greece and all those nations in financial trouble with no conditions attached. They have a shiny clean human rights record and have never sent a single person to the Middle East killing civilians. Their don’t have blood on their hands only moisturiser and money. They are so wealthy and rich. Everybody is employed. They have never stolen any ideas or technology from other countries in the history of the world.

Honestly, all the European and American governments are criminals. China and all Asian countries should stop doing business with them and let them have their jobs back. This can create an massive inflation with all products and services cost higher and no body can afford those products, then their economy will go bust. China should produce stuff for their own people and mind our business. Don’t invest in them now! Do it after they go bust. It’s cheaper!

Nov 05, 2010 8:21pm EDT  --  Report as abuse
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