European Union hails breakthrough with China on industry subsidies

Chinese President Xi Jinping with Indian Prime Minister Narendra Modi

Chinese President Xi Jinping with Indian Prime Minister Narendra Modi

In their joint statement, the two trading powers said they recognised their responsibility to lead by example for an open global economy based on multilateral rules.

Marking a significant shift, Mr Li's pledge at the annual EU-China leaders meeting yesterday follows similar offers to the United States and potentially signals an opening that European companies have long lobbied for.

In an indication of tensions throughout the meeting between Prime Minister Li Keqiang and leaders Donald Tusk and Jean-Claude Juncker, officials worked to arrange a summit joint statement.

Last week, French President Emmanuel Macron hosted President Xi Jinping for a summit, though he also invited German Chancellor Angela Merkel and the EU's Juncker for one leg of the meeting.

The contrast was implied with U.S. President Donald Trump's "America First" agenda, his administration's attempts to disrupt the World Trade Organization, and the U.S. trade war with China.

This year's meeting comes a month after the European Commission branded Beijing "a systemic rival" in a special 10-point report that stressed China's unwillingness to play fair on trade. It is also growing concerned over state-led Chinese companies' dominance of some European Union markets and acquisitions of strategic industries.

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Moon's Thursday meeting with Trump will be his first since the Hanoi summit. Moon had said he will use the meeting with Trump to discuss restarting U.S.

In a private meeting, Tusk also raised with Li the incarceration of what the West says are hundreds of thousands of Muslims in China's western Xinjiang region, European Union diplomats said. Also bilateral talks will be setup for industrial subsidies.

The EU is also keen for Chinese help in the fight against climate change after the USA withdrew from a landmark worldwide accord to cut greenhouse-gas emissions.

An attendant walks past EU and China flags ahead of the EU-China High-level Economic Dialogue at Diaoyutai State Guesthouse in Beijing, China June 25, 2018.

The Trump administration on Monday threatened a sharp escalation in transatlantic commercial tensions by proposing to impose tariffs on US$11 billion (S$14.9 billion) of U.S. imports of goods from the EU in response to alleged European subsidies to planemaker Airbus, a rival of Boeing.

China, he added, hopes that the two sides will reach broad consensus on practical cooperation and make substantial progress on their investment agreement negotiations, so as to further enrich the China-EU comprehensive strategic partnership and steer their relationship towards higher levels, broader areas and deeper degrees.

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