China's Li says EU and China must promote free and fair trade

BEIJING (Reuters) - China and the European Union should promote a “positive signal” of economic globalization and free and fair trade, Premier Li Keqiang told the EU’s top diplomat Federica Mogherini.

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Some European officials say that China has launched a charm offensive with the EU since U.S. President Donald Trump took office, in an effort to find allies amid fears Trump could undermine it with his protectionist “America First” policies.

“China and the EU, as two great forces in the world, should...respond to global challenges, reform and improve the international governance system, [and] promote a positive signal of economic globalization and free and fair trade,” Li told Mogherini on Tuesday, according to a statement on China’s Foreign Ministry website on Wednesday.

The two sides should “respond to changes and uncertainty in the international situation with the cooperation and stability of China-EU relations,” he said to Mogherini, who is visiting China for a China-EU strategic dialogue.

Speaking to reporters later on Wednesday, Mogherini said both would support the World Trade Organization.

“We both recognize the need of support for WTO and to avoid any protectionist policy or attitude,” she said.

Standing next to Mogherini, China’s top diplomat State Councillor Yang Jiechi said China values its relations with the EU.

“No matter how the situation in Europe will change, China will always firmly support the path of integration that the EU has chosen,” Yang said.

The Chinese statement on the earlier meeting with Li cited Mogherini as saying that China and the EU shoulder the duty to safeguard international order, respond to terrorism and climate change and other global challenges.

Europe’s climate commissioner said last month that China and the EU could not expect the same leadership from the Trump administration, after the U.S. president moved to undo the climate change regulations of his predecessor, Barack Obama.

But the EU remains cautious about the direction of its second-largest trading partner, concerned by China’s massive steel exports, its militarization of islands in the South China Sea and a turn towards greater authoritarianism under President Xi Jinping.

Xi has made a vigorous defense of globalization and painted a picture of China as a “wide open” economy, but foreign business groups complain vociferously that China discriminates against them with policies that limit their access to the Chinese market and support domestic competitors.

The EU is looking to conclude a bilateral investment treaty with Beijing which would make it easier for European companies to do business in China.

Reporting by Christian Shepherd and Michael Martina; Editing by Sam Holmes and Toby Chopra