The relationship between China and EU countries

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China gets access to the petrochemical technologies of Europe
Saturday, 14 May 2011
　

Yesterday, the EU Antitrust Authority approved the agreement about getting a Chinese company PetroChina control over certain assets of third in the world (after BASF and Dow Chemical) petrochemical company Ineos. The transaction amount is estimated at 1.015 billion U.S. dollars, the Chinese company PetroChina will control of two refineries in Scotland and France. INEOS Group of Companies is the third largest global manufacturer of chemical products - petrochemicals, specialty chemicals and petroleum products. The INEOS Group includes 15 companies, and its production network more than fifty companies in 13 countries. Every year INEOS Group produce over 40 million tons of petrochemicals and 20 million tons of refined products (fuels). Annual sales of the INEOS Group is about 29 billion U.S. dollars. The INEOS Group has unique technology of chemical and petrochemical production, operates in 17 countries, introducing their development at 68 production sites. Back in 2008, the INEOS Group has patented a unique method of production of motor fuel from waste - including solid waste that is put into municipal landfills, and waste of agricultural products and organic debris. With the help of its technology, Ineos can produce 400 liters of ethanol from tons of solid waste. In 2010, Ineos began producing fuel from waste on an industrial basis. Until now, biofuels are produced mainly from grains, particularly maize. Chinese enterprises are very long-sought access to technology of Ineos-even in 2006, Ineos has already provided a license to Sinopec for the production process «Innovene S Process», and in 2009 Ineos has granted a license «Innovene S Process» to Chinese Petrochemical Company (China Petrochemical International) for the production of polyethylene of high and medium density. License the production process used by Sinopec Wuhan in Wuhan, China. The Chinese company PetroChina has long held talks with Ineos about how to obtain access to the latest petrochemical technologies, PetroChina receives a significant economic benefit from their use, especially after the increased demand of China in the oil refining products. PetroChina is engaged in processing of transportation and distribution of petroleum and petroleum products and petrochemicals. For the first time in recent history, the EU Antitrust Authority gave consent for such a large transactions between PetroChina and Ineos, in the future it will allow technologies of oil refining in China to switch to more high level, that will allow the Chinese company PetroChina in the near future to press on the world market Western oil corporations - Exxon Mobil and British Petroleum Plc. Chairman of PetroChina said: "Our goal - to become an international integrated energy company." In the past five years, PetroChina spends about $ 2.3 billion to buy foreign assets. However, during the crisis amounts of foreign investment companies have risen sharply due to falling asset prices. In 2009, PetroChina has spent $ 7 billion to buy oil refineries and blocks from the fields Australia, Canada, Singapore, as well as in Central Asia. Total amount for 2011-2020 indicates, that over the next ten years, PetroChina is ready to spend annually to acquire of foreign assets about $ 6 billion. PetroChina in the years 2011-2020 will become one of the leading suppliers of oil and petroleum products on world markets. Interest in the latest European technology of oil processing for China mainly due to the fact, that objects of PetroChina interest in the years 2011-2020 will be the first large undeveloped fields, especially in Angola and Nigeria. In addition, a lot of potential in terms of development, are the oil fields in Venezuela and Canada. The development of these oil fields improve of existing technologies for processing of oil in China, which will not be able to provide processing of increased volumes of oil. China spends at least $ 6 billion annually for the purchase of assets (and technology) of oil companies abroad, and it is important for any major oil company. This puts PetroChina on equal or even better than the position of the amount of oil assets in the world.

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President of the European Council came to China to expand cooperation between EU and China
Tuesday, 17 May 2011

Harman Van Rompuy, President of the European Council came on May 16, 2011 in Beijing, starting a 5-day visit to China. During her visit, President of the European Council will visit Chengdu (Sichuan province) and Shanghai. Harman Van Rompuy for the first time visit to China after the inauguration of President of the European Council. In Beijing, President of the European Council will hold talks with President Hu Jintao and Premier Wen Jiabao. Visit of President of the European Council held at the time of the sharp tightening of EU trade policy towards for Chinese goods. More recently, the EU imposed an anti-dumping tariffs of 39,1% on imports of Chinese coated paper production, in order to confront the Chinese paper manufacturers, which, as believed in the European Commission, sell their products at dumping prices, as well as support of European producers of paper. The formal pretext to introduce an anti-dumping tariffs, was the neglect of China's to EU comments about an undervalued yuan, and the European Union found its decision of problems - it has introduced anti-dumping tariffs on imports of paper, which will be valid for six months. Union's actions are similar to measures of U.S. and are the outcome of the investigation, which began in February 2010 in respect of pricing of Chinese paper manufacturers. Also, there is reason to believe, that the EU would not restrict the introduction of tariffs against Chinese manufacturers of paper and try to impose new anti-dumping tariffs and raise the old anti-dumping tariffs on an entire category of goods from China, because in recent months, representatives of EU countries sharply criticized an undervalued yuan, therefore became necessary to hold negotiations between Chinese leaders and President of the European Council. It should be noted, that in the past, almost always after such massive criticism of the undervalued yuan from Europe, was the introduction of anti-dumping tariffs on Chinese goods in European Union countries, to protect producers in Europe. Even after the beginning of 2005 the EU countries have moved in trade with China on WTO principles and have removed customs tariffs, the EU market was immediately occupied by a much more cheap Chinese textiles, knitwear, footwear. As a result- a number of European textile production declined by 30-50 percent. Light textile industry in Europe was on the brink of ruin and mass bankruptcies. About one million jobs could disappear in just a few months. This situation almost immediately led to a crisis in relations between the EU and China, and ultimately the EU was forced to restore import quotas on Chinese textiles. These measures of the European Union, in turn, has led to major losses producers of China, few of them have now been profitable to export goods to Europe by the prevailing high tariffs. In 2007, the European Commissioner for Trade Peter Mendelson has warned China, that the EU will be forced to " a significant raise tariffs on goods from China", if China does not reduce the size of the positive trade surplus with the EU. According to Peter Mendelson, trade between the EU and China has developed an unacceptable situation, then the EU's trade deficit with China increased by "15 million euros per hour". Cumulative trade deficit 27 EU countries with China from 2000 to 2008 increased by 121 billion euros, reaching 170 billion euros. China is the second largest trading partner of European Union after the USA. Between 2000 and 2008, trade turnover EU-China increased in value more than tripled. Exports from the EU to China grew to 78 billion euros in 2008, compared to 26 billion euros in 2000, while imports - up to 248 billion euros in 2008 from 75 billion in 2000. China's share in foreign trade of EU countries, over the same period, increased more than twofold. Largest exporter in China is Germany, second place is occupied France, the third place - is the United Kingdom. All EU countries have completed the last year with a deficit in a trade with China, in what, according to representatives of EU countries, primarily to blame an undervalued yuan. However, representatives of China see the this problem on the other hand, in their opinion, the main cause of deficit in trade with China is the obstacles to exports high-tech products from EU to China, so the talks the President of the European Council with the leaders of China will undoubtedly be discussed by the removal obstacles to exports from countries in Europe high-tech products, that can significantly reduce the deficit in trade EU with China. It is very likely, that the EU will increase exports of high products in China, as recently as the first time in the history of relations between the EU-China, the EU Antitrust Authority approved the agreement about getting a Chinese company PetroChina control over certain assets of third in the world (after BASF and Dow Chemical) petrochemical company Ineos- we have already written about this on our website. Therefore, the current visit President of the European Council in China should expect further expansion of cooperation between the EU and China in the field of high technology products.

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