PREVIEW-Sarkozy to woo China’s Hu ahead of G20 summit

By Michael Martina

BEIJING, Nov 3 (BestGrowthStock) – 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. [ID:nLDE69100N]

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. [ID:nLDE6A1104]
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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)

PREVIEW-Sarkozy to woo China’s Hu ahead of G20 summit