China gears up for economic meet

China gears up for economic meet

Peter Harmsen, Agence France-Presse, Dalian,China

A meeting of Asian and European economic ministers, meant to be China's first high-profile post-SARS event, is likely to be marred by European no-shows and a Chinese reluctance to touch the hot issue of the yuan.

The question of whether the Chinese currency is undervalued is expected to be on many participants' minds during the fifth Asia Europe Meeting (ASEM) of economic ministers in the northeastern port city of Dalian this week.

Significantly, when Chinese Commerce Minister Lu Fuyuan addressed senior Asian and European officials Tuesday, he failed to mention the yuan or the fact that it has been effectively pegged to the U.S. dollar for nearly a decade.

Instead, he chose to put emphasis on China's contribution to the world economy in the form of speedily growing imports.

"I want to especially point out that imports are growing very fast and that the import growth rate is 10 percentage points higher than the export growth rate," Lu told the assembled officials.

In the first six months of the year, China's imports increased 44.5 percent from the same period in 2002 to US$185.8 billion, while exports rose 34 percent to $190.3 billion.

The ASEM economic ministers meeting began Tuesday with a gathering of senior officials discussing the global economy, economic cooperation between Asia and Europe, and trade and investment in China.

Economic ministers, or their representatives, are scheduled to gradually arrive in Dalian, and meet in two separate Asian and European for Wednesday, before a full meeting on Thursday.

The gathering, which includes officials from China, Japan, South Korea, seven Southeast Asian nations and the 15 countries of the European Union, coordinates and directs trade and economic cooperation between Asia and Europe.

Over the next three days, delegates are likely to exchange views on issues such as the economic aftermath of the SARS epidemic and a new global round of trade talks.

The crisis over North Korea's nuclear ambitions is also likely to be discussed, at least on the sidelines, according to observers.

Dalian, a city of 5.9 million, has pulled all the plugs to make the meeting a success and commandeered hundreds of police to ensure the event does not become a terrorist target.

To avoid glitches is all the more crucial because it is the largest international gathering in China since the outbreak of Severe Acute Respiratory Syndrome (SARS).

However, only a small handful of European economic ministers are likely to attend.

"I heard only five or six European economic ministers will attend," said a delegate from Europe. "Some are afraid of SARS and some don't think it's important enough." Reflecting the low level of European interest, Commerce Minister Lu was scheduled to meet one-on-one with only three regular European ministers, according to a list of his bilateral arranged for Tuesday and Wednesday.

One exception to the apparent lack of European commitment is likely to be European Trade Commissioner Pascal Lamy, who was in China only last month and is scheduled in Dalian as well.

"From the European Commission's side, there's definitely a high level of interest," said a spokeswoman of the EU's office in Beijing.

Attendance has not been helped by transportation chaos evolving at the outset of the ASEM meet.

All afternoon and evening flights from Beijing to Dalian Monday were canceled due to dense fog, meaning delegates had to take a nine-hour overnight train to be present at Tuesday's opening ceremony.

Flights to Dalian still did not go ahead according to schedule on Tuesday, according to the organizers.

"It's a mess," said one Chinese official.