PREVIEW - Sarkozy to woo China's Hu ahead of G20 summit
By Michael Martina
BEIJING | Wed Nov 3, 2010 12:16pm IST
BEIJING (Reuters) - French President Nicolas Sarkozy will woo his visiting Chinese counterpart this week with his bold agenda for global financial reform, although Hu Jintao may be wary of commitments.
President Hu's visit to France and then Portugal will nonetheless be another opportunity for China to wield its growing economic clout to counter trade tensions with Europe and ensure Hu has Sarkozy's ear as he takes up the G20 presidency.
"China hopes the talks between China and France will advance policy coordination and help stabilize its relationship with the European Union," Chen Qi, a professor of international relations at Tsinghua University in Beijing, said in an email.
"Advancing political relations with France will buffer against coordinated pressure from the U.S., the EU, Japan, South Korea, and other countries at the G20 summit."
Seoul hosts the next G20 summit on Nov. 11-12, after which France assumes the presidency of the group.
Portuguese President Anibal Cavaco Silva, struggling to rein in the country's debt, will hope for a repeat of a Chinese performance in Greece that boosted the ailing Greek economy with promises of investment and debt buying.
European concerns about China's human rights and climate change record appear muted compared with two years ago, when Sarkozy riled China by meeting the exiled Dalai Lama.
Sarkozy wants China, the world's second-largest economy, to back his plans to use the G20 platform to preach major shifts in how economies manage their currencies and trade balances.
China has its own complaints about the current financial system. But with its pile of foreign exchange wealth, Hu is unlikely to risk climbing aboard the Sarkozy reformist express.
"I don't think Hu expects a tremendous amount from the G20, and he is aware of the dangers of being pressured on currency revaluation and trade surplus," said Francois Godement, a senior policy fellow at the European Council on Foreign Relations.
Sarkozy's G20 agenda boasts a new monetary order, commodity price regulation, and stronger international economic governance.
"Why would China turn down legally binding targets on climate change and then agree to targets on something even more important, like exchange rates?" Godement said from Paris.
Even without a firm G20 deal, Sarkozy may get deals to sell China more Airbus planes and on civil nuclear cooperation as a consolation.
FRIENDLY TERRITORY
Sino-French relations have steadied since 2008, when Chinese citizens called for boycotts of French goods and companies after Sarkozy criticized China's record in Tibet.
As Hu's trip approaches, France has avoided confrontation over Chinese dissident and Nobel Peace Prize winner Liu Xiaobo.
Sino-European trade relations have grown testier thanks to a trade deficit that reached 133.1 billion euros in 2009, although relations with France and Portugal are smoother.
After years of mildly pressing China over the trade gap, attitudes within Europe have hardened, with leaders exasperated over imbalances they say stem from an undervalued yuan.
"Europe itself has taken a more stern approach with China and has been voicing its need for reciprocity," Godement said.
"I see what Europe has given up, but I don't see what is coming in return for the concessions," he said, referring to two seats at the International Monetary Fund that EU members have agreed to cede to developing nations.
China's voting strength in the IMF will jump from sixth to third place as a result, overtaking Britain, Germany and France.
France and Portugal are among the EU members who favour lifting an EU arms embargo imposed after the crackdown on the 1989 democracy movement centred on Tiananmen Square in Beijing.
Spain and Greece have also backed an end to the embargo, and both countries have gotten promises from Beijing of economic support. Portugal could be next.
"Portuguese debt could be a good opportunity for China because it could yield relatively high interest rates," Godement said.
"For China, it would be a return to the theme of political trade, which has served it so well is the past."
(Editing by Ken Wills & Kim Coghill)
By Michael Martina
BEIJING | Wed Nov 3, 2010 12:16pm IST
BEIJING (Reuters) - French President Nicolas Sarkozy will woo his visiting Chinese counterpart this week with his bold agenda for global financial reform, although Hu Jintao may be wary of commitments.
President Hu's visit to France and then Portugal will nonetheless be another opportunity for China to wield its growing economic clout to counter trade tensions with Europe and ensure Hu has Sarkozy's ear as he takes up the G20 presidency.
"China hopes the talks between China and France will advance policy coordination and help stabilize its relationship with the European Union," Chen Qi, a professor of international relations at Tsinghua University in Beijing, said in an email.
"Advancing political relations with France will buffer against coordinated pressure from the U.S., the EU, Japan, South Korea, and other countries at the G20 summit."
Seoul hosts the next G20 summit on Nov. 11-12, after which France assumes the presidency of the group.
Portuguese President Anibal Cavaco Silva, struggling to rein in the country's debt, will hope for a repeat of a Chinese performance in Greece that boosted the ailing Greek economy with promises of investment and debt buying.
European concerns about China's human rights and climate change record appear muted compared with two years ago, when Sarkozy riled China by meeting the exiled Dalai Lama.
Sarkozy wants China, the world's second-largest economy, to back his plans to use the G20 platform to preach major shifts in how economies manage their currencies and trade balances.
China has its own complaints about the current financial system. But with its pile of foreign exchange wealth, Hu is unlikely to risk climbing aboard the Sarkozy reformist express.
"I don't think Hu expects a tremendous amount from the G20, and he is aware of the dangers of being pressured on currency revaluation and trade surplus," said Francois Godement, a senior policy fellow at the European Council on Foreign Relations.
Sarkozy's G20 agenda boasts a new monetary order, commodity price regulation, and stronger international economic governance.
"Why would China turn down legally binding targets on climate change and then agree to targets on something even more important, like exchange rates?" Godement said from Paris.
Even without a firm G20 deal, Sarkozy may get deals to sell China more Airbus planes and on civil nuclear cooperation as a consolation.
FRIENDLY TERRITORY
Sino-French relations have steadied since 2008, when Chinese citizens called for boycotts of French goods and companies after Sarkozy criticized China's record in Tibet.
As Hu's trip approaches, France has avoided confrontation over Chinese dissident and Nobel Peace Prize winner Liu Xiaobo.
Sino-European trade relations have grown testier thanks to a trade deficit that reached 133.1 billion euros in 2009, although relations with France and Portugal are smoother.
After years of mildly pressing China over the trade gap, attitudes within Europe have hardened, with leaders exasperated over imbalances they say stem from an undervalued yuan.
"Europe itself has taken a more stern approach with China and has been voicing its need for reciprocity," Godement said.
"I see what Europe has given up, but I don't see what is coming in return for the concessions," he said, referring to two seats at the International Monetary Fund that EU members have agreed to cede to developing nations.
China's voting strength in the IMF will jump from sixth to third place as a result, overtaking Britain, Germany and France.
France and Portugal are among the EU members who favour lifting an EU arms embargo imposed after the crackdown on the 1989 democracy movement centred on Tiananmen Square in Beijing.
Spain and Greece have also backed an end to the embargo, and both countries have gotten promises from Beijing of economic support. Portugal could be next.
"Portuguese debt could be a good opportunity for China because it could yield relatively high interest rates," Godement said.
"For China, it would be a return to the theme of political trade, which has served it so well is the past."
(Editing by Ken Wills & Kim Coghill)