Romano Prodi, former president of the European Commission said in Beijing on Wednesday that he hopes the European Union (EU) can solve its differences with China through dialogue instead of containment.

Prodi made the remark during a China-European panel discussion held at the China Foreign Affairs University (CFAU).

The year 2005 marks the 30th anniversary of the establishment of China-EU diplomatic ties.

The EU is threatening to restrict textile imports from China. It alleges that after quotas were eliminated on January 1 according to World Trade Organization (WTO) agreements, China has experienced unusually phenomenal growth. 

The EU should adopt the policy of "contact" rather than "containment" in dealing with problems with China, he said. China is emerging fast not only as a "big market," but also a "strong competitor," he said.

"China and the EU are not linked by markets, but by the political conditions of the world," Prodi said.

The EU has two reasons for establishing relations with China, he said. "One is that China is of economic interest to us; the other is that the EU likes a multi-polar world."

Prodi said the EU should cordially face the complementary competition between the EU and Chinese economies. Bilateral cooperation is in the interest of both sides.

Both China and the EU need patience to cope with issues such as textile trade and the renminbi exchange rates, Prodi added.

"In the long term, the cooperation between us will push forward world peace and stability," Prodi said.

Former German Defense Minister Rudolf Scharping, Chairman of the China Reform Forum Zheng Bijian, and CFAU President Wu Jianmin also participated in the panel discussion.