EU 'grateful for Chinese involvement'

EU foreign policy chief Catherine Ashton has thanked China for its "continued involvement" in European sovereign bond markets, saying the confidence in the turbulent period has provided maneuvering room for affected countries to carry out macro reform.

"The EU gratefully acknowledges continued Chinese involvement in European sovereign bond markets during the recent and quite turbulent period," Ashton says. "Investor confidence is a key condition for macro policy and reforms to succeed in any circumstance and certainly now."

Ashton, High Representative of the Union for Foreign Affairs and Security Policy, sent the thank-you message during an exclusive interview with China Daily shortly before she held the second High-Level Strategic Dialogue with her Chinese counterpart Dai Bingguo on May 12.

The calm and objective communication by the Chinese side has been helpful in avoiding "undue and unfounded" turbulence and speculations regarding the fate of countries in the euro area periphery, she says.

"This has been important in helping to underpin confidence and stabilize markets," she says, adding that the EU remains resolved to take all necessary measures to stabilize the affected economies and continue ensuring euro stabilization.

China has already bought debt bonds from Greece, Spain and Portugal and other countries amid the sovereign debt crisis in Europe. The total sum involved is not available.

The dialogue between Ashton and State Councilor Dai is the prelude to European Council President Herman van Rompuy's visit to China on May 15-19. This is his first visit to China since he took the position at the beginning of last year.

Ashton hopes that the talks she is holding this time with Dai will be as "open, frank and constructive" as the one in Guiyang, capital of Southwest China's Guizhou province, where they jointly chaired the first such dialogue last September.

High on the agenda are a number of international issues and in particular North Africa and Asia, Ashton says. Bilateral relations will also be discussed.

"A dialogue should be able to embrace positive and negative issues," she says. "We hope that future dialogues will be able to focus more and more on concrete areas of cooperation, particularly in helping China to create a more rules-based system."

China has undertaken the most intense industrialization of any nation in history and the positive and negative impacts of this have been profound, Ashton says. But the country continues to face 150 million people living in poverty, with an increasingly large middle class and many residents in cities as well as in the countryside.

"How to create an environmentally sustainable development model that addresses inequality, continues to deliver growth, and is socially inclusive, and one in which other nations and entities are stakeholders, is a key issue," Ashton says.

She says China and EU want to identify more concrete areas of specific cooperation, so that both sides can help each other face common problems and challenges in the decade ahead.

She says China is a developing country, but it is now the world's second-largest economy with immense importance for global stability. It has been responsible for most of the wealth creation in the developing world in the last decade.

"We all understand that the rise of China as an economic power is a huge opportunity for the rest of the world," Ashton says. "And in particular we want to participate more in the domestic market."

China will not seek hegemony and it identifies its key interests with those that preserve global stability and order, she says.