China and EU vow to work on trade and ease Tibet tension

By Chris Buckley

BEIJING (Reuters) - China and the European Union vowed on Friday to seek balanced trade and foster cooperation in climate change in high-level meetings as they sought to ease tension over Tibet protests and the Olympics.

EU officials led by European Commission President Jose Manuel Barroso had intended meetings with senior Chinese officials in Beijing this week to help ease rifts over China's big trade deficit and to foster agreement on "sustainable" growth.

Economic disputes have festered as China's trade surplus with the EU bloc surged to nearly 160 billion euros ($251 billion) last year, according to EU data.

Chinese Premier Wen Jiabao said the two sides agreed to strengthen cooperation on saving energy and reducing greenhouse gases fueling global warming.

"Our mutual benefits by far outweigh the conflicts," Wen told reporters.

Barroso said China had signaled it could to make domestic emissions part of a global agreement to tackle climate change after 2012. He also said there were "major imbalances" in trade and both sides had agreed on the need to balance economic flows.

TALKS UPSTAGED

The long-prepared talks were upstaged by anti-Chinese unrest across Tibetan areas last month, followed by Tibet protests that upset the Beijing Olympic torch relay in London and Paris and then nationalist Chinese counter-protests.

Barroso welcomed China's announcement that it would hold talks with representatives of the Dalai Lama.

"While fully respecting the sovereignty of China, we have always advocated the need for dialogue," Barroso told reporters.

"As far as I understand the Chinese position, the Chinese say they are ready to discuss everything except sovereignty for Tibet."

Speaking to reporters after the trade talks, EU Trade Commissioner Peter Mandelson warned that worldwide economic uncertainties risked lifting trade barriers.

"We meet at a time when the global economic environment is uncertain, and uncertainty strengthens the political temptation of protectionism," he said.

But Mandelson said he was encouraged by the long discussions with Chinese officials that covered energy, intellectual property rights, expanding trade, technology cooperation and African development.

His Chinese counterpart, Vice Premier Wang Qishan, added to the rhetoric favoring economic engagement. "Both sides agreed to continue adhering to openness and opposing trade protectionism," Wang told reporters.