Mandelson warns China on backlash over trade

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BRUSSELS, June 13 (AFP): China faces a backlash of "impatience and anger" if Beijing fails to redress increasingly lopsided trade relations with the European Union, EU trade chief Peter Mandelson warned yesterday.
In "frank, concentrated and prolonged" talks in Brussels with Chinese Trade Minister Bo Xilai, Mandelson stressed that the European Commission could be forced to take action against China if Beijing held back European exports.
"If European public opinion is not satisfied that the Chinese authorities are ... putting aside what we regard as unnecessary obstacles and barriers to our market access, then impatience and anger is going to rise," he said.
As a result, "pressure is going to come on us at the (European) Commission to start limiting in different ways the access that Chinese producers and exporters have to our market," he told journalists.
The European Commission is concerned about what it sees as Europe's increasingly unbalanced trade relationship with the growing Asian economic giant, blaming Chinese trade barriers and a lack of respect for intellectual property rights.
The EU ran a trade deficit of 128 billion euros (171 billion dollars) with China last year and the shortfall is likely to ballon to 170 billion euros this year on current trends, according to figures from the European Commission.
China is Europe's fastest growing trade partner, with Chinese exports to the EU expanding by 15 to 20 per cent every year.
Fuelling fresh tensions with its major trade partners, Chinese figures released Monday showed that China's trade surplus surged by nearly 73 per cent in May from a year earlier.
In Mandelson's talks with Bo, China acknowledged "for the first time" that the increasingly unbalanced trade relation was a problem that needed to be solved, according to the EU trade commissioner.
"We need to look very seriously at what is causing this spiralling deficit" in Europe's trade position with China, Mandelson said.
"I heard for the first time from the lips of a Chinese government minister that something must be done," he added.
Mandelson said that while he and Bo had not "agreed on solutions," they had "discussed the reasons and the factors of the deficit in a very intensive way for a very long time."
As the web of trade between China and the EU grows tighter, Brussels and Beijing have clashed in recent years over numerous issues ranging from Chinese clothing exports to copyright piracy.
In their disputes, Mandelson has sought a softer line than Washington, notably by negotiating bilateral deals with China rather than head-on confrontation by opening cases at the World Trade Organisation (WTO).