From January to November 2004, the trade volume between China and Europe had reached US$159.3 billion, 34.7 percent higher as against the same period in 2003. The EU has surpassed Japan and the US to become China's largest trade partner; and China has become the second largest trade partner of the EU, only next to the US, sources from the Ministry of Commerce of China say.

The Sino-European economic and trade ties underwent a rapid growth last year pushed by the high-level exchanges between China and Europe. Following the EU enlargement May 1, 2004, the EU has surpassed Japan and the US to become China's largest trade partner. Germany, the Netherlands, the UK, France and Italy are principal trade partners of China inside the EU. China's trade volume with the five countries takes 72 percent of gross trade volume with Europe. China and Europe has achieved the goal set at the sixth meeting of the Chinese and European leaders in October 2003: to realize trade volume of US$150 billion, two years earlier than expected.

In addition, the EU is the fourth largest source of foreign investment of the Chinese mainland (Hong Kong, the US and Japan being the top three sources) and the No 1 source of techniques.

Germany has secured the leading role in EU's trade with China which remains Germany's top trade partner in Asia and second only to US in the world.

By the end of October, 2004, EU companies had set up 19193 businesses in the fast growing economy. Contractual foreign capital from EU was worth US$73.46 billion while the actual inflow totaled US$41,74 billion.

EU is also the largest technologies exporter to China so far. By the end of October last year, China had introduced 18530 items of technologies which involved US$80 billion worth of contracts. From January-October, 2004, China bought 1728 technologies from EU with contracts valuing US$4.6 billion, making up 25.4 percent and 41 percent of China's total imports of technologies respectively.

There are pending issues which hinder the further rise of the Sino-EU trade. China hopes EU will recognize China's market economy status. It also complains against EU's trade barriers, especially technical and environmental barriers, as well as increasing anti-dumping charges against Chinese exports. EU asks for wider market access to China.

Fortunately, the two sides understand the importance of resolving disputes through communications and take positive actions to address the issues. An array of dialogue mechanisms are in place covering trade policies, industrial polices, competition policies, intellectual property rights and textile trade to help settle any disputes that may arise. Chinese companies are making efforts on improving their quality. China has initiated taxes on its textile exports.

As President of European Commission Prodi puts it, EU-China relation is at its best. Chinese Premier Wen Jiabao also said recently that he thought the bilateral relation was in the most active and fruitful period in history.

In another development, in 2004 the Sino-Russian cooperation in economy and trade maintains a good momentum too. The trade volume exceeds US$20 billion for the first time; therefore the goal set in May 2003 at a meeting of Chinese and Russian presidents is realized.

(People Daily January 7, 2005)