* EU, China relaunch ties, focus on economy, climate change
* Monetary, forex policies not discussed
* China spars with EU on trade and human rights
* EU wants countries to declare Copenhagen climate positions
(Recasts after news conference)
By Darren Ennis and Tamora Vidaillet
PRAGUE, May 20 (Reuters) - The European Union and China patched up differences at a summit on Wednesday, pledging to create a new global order to combat the financial crisis, dwindling world trade and climate change.
Relations between China and the EU became strained after December’s EU-China summit was postponed over Beijing’s opposition to a meeting between Tibet’s spiritual leader the Dalai Lama and French President Nicolas Sarkozy when France held the 27-nation bloc’s rotating presidency.
Brussels and Beijing have also been at odds over Europe’s criticism of China’s human rights record, Beijing’s policies towards Sudan’s Darfur region and Myanmar. A spate of trade squabbles have also rankled relations between the two major trading powers.
However, the worst economic downturn in nearly 80 years has prompted both sides to set aside their differences, they said at Wednesday’s summit hosted by the Czech EU Presidency at Prague Castle.
"During the summit we exchanged views on how to tackle the international financial crisis ... we both recognise that it is important for us to work together, to ride out the storm and make our contribution to an early world economic recovery," Chinese Premier Wen Jiabao told a news conference.
"It is impossible for a couple of countries or group of big powers to resolve all global issues. Multipolarity or multilateralism represent the larger trend. Some say that world affairs will be managed solely by China and the United States. I think that view is baseless and wrong."
EU exports to China rose to 78 billion euros ($106.3 billion) in 2008 from 26 billion euros in 2000, while imports from China rose from 75 billion euros to 248 billion euros over the same period.
Wen said the fact he had travelled 10 hours to the Czech capital for a two hour summit and was returning straight away showed China’s commitment to wipe the slate clean with Europe.
"I’ve come with sincerity, confidence and a sense of responsibility. These are words from my heart," he said alongside Czech President Vaclav Klaus -- whose country holds the EU presidency -- and European Commission President Jose Manuel Barroso.
Three memorandums of understanding covering small and medium size business, science and clean energy were signed by the leaders, who sparred on a number of key issues such as trade, human rights and notably climate change.
However, they left any major decisions until another summit later in the year in Beijing which comes just weeks before talks in Copenhagen aimed at reaching a global climate deal to succeed the U.N.’s Kyoto protocol from 2012.
"Building on our Climate Change Partnership which we agreed in 2005, the EU and China can make a difference on the road to ‘seal the deal’ in Copenhagen by the end of the year," Barroso said.
He urged all major economies, including China to disclose their negotiating positions before Copenhagen.
"Now what is needed is a clear engagement. For that to happen, each of us must put his positions on the table. The EU has already done it to a large extent," Barroso said.
"The United States is moving in the right direction ... I am sure that China will also engage fully."
Brussels wants the Asian industrial powerhouse -- one of the world’s top polluters -- to commit to significantly reduce its carbon dioxide (CO2) emissions by 2020 through cleaner energy.
But China wants tougher targets set for developed nations and is seeking aid from countries such as those in Europe to fund any new green technologies.
Wen urged the EU to recognise China’s market economy status, lift its arms embargo against Beijing, relax restrictions on exports of high-tech products to China and politely asked Brussels to refrain from criticising China’s foreign and human rights policies.
"The most important thing is to stick to the principles of mutual respect and non-interference in each others’ internal affairs, accommodate each others’ major concerns and properly handle sensitive issues and ensure that our relationship will not be adversely affected by individual incidents," Wen said. (Editing by Jon Boyle)