Brittan warns China on trade threat

THE TRADE Commissioner of the European Union, Sir Leon Brittan, warned yesterday that any moves by Peking to discriminate against Britain over trade because of the Hong Kong political dispute would be considered a 'very serious matter' by the Community as a whole.

In a sharp exchange - an unusual event on the stage of normally over-polite Chinese- managed press conferences - Sir Leon also reacted angrily to suggestions from Wu Yi, Minister of Foreign Trade and Economic Co-operation (Moftec), that he might be biased because he was British. The joint press conference was soon afterwards brought to an unexpectedly abrupt halt.

If the European Union takes a hard line over China's announcement that Sino-British trade relations are bound to suffer, there would be an obvious parallel with Malaysia's decision not to award any government contracts to British companies because of British press reports about corruption.

Ms Wu, when asked how China's threat to Sino-British trade squared with its attempt to rejoin the General Agreement on Tariffs and Trade (Gatt), said the 'unfriendly and unco-operative position of the British government on the question of Hong Kong cannot but affect the economic and trade relationship between China and the UK'. China would not be held responsible for this, she added.

Sir Leon responded robustly, saying that the foundations of the relationship between the EU as a whole and China was 'one of non-discrimination between the EU and other players on the world stage and non-discrimination between the various member states in the EU. Any action that discriminated against one member state on political grounds would be a very serious matter not just for that member state but for the EU as a whole.'

Ms Wu, the atmosphere by this time distinctly frosty, hit back: 'Sir Leon Brittan is a native of the UK. So he is very concerned over this issue. I understand his concern.'

An incensed Sir Leon did not let this comment pass: 'That has nothing to do with it at all. I speak as the commissioner whose task it is to represent the interests of the EU as a whole. And if Madame Wu doesn't fully appreciate that, I am glad to make it clear now.'

'It's a joke,' a stony-faced Ms Wu retorted.

'Ah, it's a joke,' said Sir Leon, not apparently amused.

Sir Leon had earlier said he planned to raise trade threats over Hong Kong with Ms Wu later in the day. Up to this point, both sides had stressed the friendly and constructive nature of their 'frank' talks which had focused on China's wish to rejoin Gatt.

Sir Leon said the EU believed China's re-entry into Gatt was in the interests of the world community, but that the terms of entry would have to reflect China's incomplete reforms into a market economy. He also said he had expressed European concerns about human rights in China.

(Photograph omitted)

China's inflation, page 31

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