1.Short introduction to the European Union

On May 9, 1950 French Foreign Minister Robert Schuman issued a statement, proposing for "establishment of a coal and steel community between France and Germany", which was called in history "the Schuman Plan". In July 1952, France, West Germany, Italy, the Netherlands, Belgium and Luxembourg formally established the European Coal and Steel Community. In January 1958, the above six countries also established the European Economic Community and the European Atomic Energy Community. In July 1967, the three communities merged into one organization, called by a joint name the European Communities (EC). In November 1993, the Treaty of the European Union (also called the Maastricht Treaty) came into force, and the European Communities changed into the European Union (EU).

The EU now has 15 member states. France, Germany, Italy, the Netherlands, Belgium and Luxembourg are founding countries of the European Communities. After that there were four expansions of the EC. The United Kingdom, Denmark and Ireland in 1973, Greece in 1981, Spain and Portugal in 1986 and Austria, Finland and Sweden in 1995 joined the EC. The population of the EU is about 370 million and the area is 3.337 million km2. The EU has its headquarters in Brussels. The Union flag of the EU is a flag with a round ring formed by 12 golden stars, the union song is the overture of "Ode to Merry-making" of the Ninth Symphony made by Ludwig van Beethoven and the celebration day is May 9 every year, which is also called "Schuman Day".

The main organizations of the EU are: 1.the Council: The main decision-making bodies of the EU are the European Council (that is the EU Summit Meeting) and the EU Council (that is the Council of Ministers). The former is responsible for deciding on major policies. It holds a regular meeting every half a year, and a special summit meeting may be convened when necessary. And the latter is responsible for making decisions on routine matters, having the most part of law-making right of the EU. The Council institutes the presiding country on-duty-in-turn system and the term of office is half a year; and in handling external affairs, it institutes a "troika" representative system (namely, the representatives of the current and next presiding countries and the EU organization). Sweden is the on-duty-in-turn presiding country for the first half of the year of 2001,and Belgium for the second half. 2. The European Commission. It is a permanent executive body, responsible for implementing decisions made by the Treaty of the European Communities and the Council, making reports and legislative motions to the Council and the European Parliament, handling day-to-day affairs of the EU and making external contacts on behalf of the EU, and is in charge of negotiations in the field of economy and trade. The present European Commission with Romano Prodi, the former Italian Prime Minister, as its President, formally assumed office on September 15, 1999. 3. The European Parliament: It is a supervisory and consultative body, having part of the right to participate in legislation. The present Speaker is Nicole·Fontaine, a French lady. In addition, there are such bodies as the European Court (an arbitration body), the European Auditing Administration, the Economic and Social Committee and the Regional Committee (advisory body) as well as the European Central Bank.

EU economy and its internal construction. The GDP of the 15 countries of the EU for 1999 was approximately US$ 8500 billion (according to the current exchange rate), and the total volume of external trade was US$1700 billion. The EU economy has begun to recover in recent years and entered a new round of growth period. The economic growth rates from 1997 to 1999 were 2.6%, 2.8% and 2.3% respectively, and it was estimated that the rates would be 3.4% for 2000 and 3.1% for 2001. In March 2000, the EU Summit Meeting in Lisbon adopted the economic development plan for the next 10 years, deciding to accelerate the readjustment of the economic structure and energetically develop the knowledge economy. The EU structural problems such as high salary, high tax and high welfare are still fairly conspicuous. According to an announcement by the EU Statistics Bureau, in July 2000, the unemployment rate in the 15 countries of the EU was 8.3% and the number of the unemployed was 14.30 million; and the unemployment rate in the 11 countries of the euro area was 9.1% and the number of unemployed was 11.80 million.

Through the construction for several decades, the EU has established the tariff union, implemented common policies on foreign trade, agriculture and fishery, founded the European monetary system and established the general budgetary system. The free flow of commodities, personnel, capital and services has been basically realized and the single market has begun to take shape. On March 26, 1995, the Schengen Convention, aimed at lifting border inspection, formally came into effect in France, Germany, the Netherlands, Belgium, Luxembourg, Spain and Portugal. Greece, Italy and Austria acceded to the Convention soon after that. Finland, Denmark and Sweden as well as two non-EU member states Norway and Iceland plan to execute the Convention in March 2001 though it has not yet become effective so far. The United Kingdom and Ireland have not yet signed the Convention due to internal reasons. In October 1997, the 15 EU countries concluded the Amsterdam Treaty, making headway in strengthening cooperation in the common foreign and security policy and internal affairs and judicature, and incorporating the Schengen Convention into the EU Treaty. On May 1, 1999, the Amsterdam Treaty formally took effect. At the EU Summit Meeting in Kola in June 1999, Javier Solon, former Spanish foreign minister and the then secretary-general of the EU, was appointed as the High Representative for Common Foreign and Security Policy. On January 1, 1999, the euro was launched. The first batch of euro states were 11 countries including Germany, France, Italy and Spain, and Greece joined them on January 1, 2001. Euro notes will begin to circulate beginning from January 1, 2002. On March 1, 2002, the euro will entirely replace the currencies of various countries in the euro area and become the single legal tender. The United Kingdom and Sweden as non-euro states are also making active preparations. On September 29, 2000, Denmark decided not to join the euro area through a franchise. In March 1998, the EU began negotiations on the accession of the first batch of 6 candidate states: Poland, Hungary, Czech, Slovenia, Estonia and Cyprus. The EU has conditionally confirmed the qualifications of Turkey as an EU candidate state and in February 2000 began negotiations for the accession of 6 countries: Bulgaria, Romania, Slovak, Latvia, Lithuania and Malta. It plans to begin the admission of the first batch of new member states in 2003.

The EU has established ties with most of the countries and regions in the world and concluded agreements on trade or on economic and trade cooperation or associate state agreements. At present, 165 countries have sent diplomatic missions to station in the EU while the European Commission has sent delegations to station in 126 countries or the seats of international organizations.

In recent years, the EU has developed all-directional diplomatic activities by keeping close cooperative relations with the United States and Japan and strengthening its relations with Russia and other CIS countries. It has implemented an eastward expansion strategy and made active preparations to admit countries in the middle and eastern European countries into the EU. It has advanced a "going-down-south" strategy by planning to complete the establishing of a European-Mediterranean Sea Free Trade Zone with 12 countries along the coast of the Mediterranean Sea by 2010. The EU attaches great importance to strengthening its relations with the developing countries in Asia, Africa and Latin America. In 1994, it formulated "a new strategy for marching towards Asia". Three Asia-Europe summit meetings were held successively in Bangkok, London and Seoul in 1996, 1998 and 2000 respectively. In June 1999, the EU and Latin American countries held the first Europe-Latin America Summit Meeting in Rio de Janeiro and planned to hold the second Europe-Latin America Summit Meeting in Spain in 2002 and to establish a transcontinental free trade zone with the South Cone Common Market by 2005. In April 2000, the EU and African countries held the first Europe-Africa Summit Meeting in Cairo, deciding to establish a Europe-Africa strategic partnership oriented towards the 21st century. In June, the EU and 77 African, Caribbean and Pacific countries signed the "Cotanou Accord" to replace the fourth Lomé Agreement. The Accord will be valid for 20 years, during which period the European side will provide aid totaling 22.5 billion euro.

2.China-EU relations

(1)Bilateral political relations

On May 6, 1975, China and the European Economic Community reached agreement on the establishment of formal relations. On November 1, 1983, China and the European Coal and Steel Community and the European Atomic Energy Community established formal relations. Up to that time, China and the European Communities realized the establishment of full diplomatic relations. In May 1988, the EC Council established a Delegation in China.

In recent years, the relations between China and the EU and its member countries have developed smoothly and both sides have maintained frequent mutual visits and contacts. President Jiang Zemin, Chairman of the NPC Standing Committee Li Peng, Premier Zhu Rongji, Chairman of the National Committee of the CPPCC Li Ruihuan and others have paid visits to most EU member countries respectively. And leaders of many EU member countries and the European Commission have also visited China early or late. Vice Premier Li Lanqing and Vice Premier Wu Bangguo visited the EU headquarters respectively in February 1998 and January 2000. Premier Zhu Rongji visited the EU headquarters in July 2000 and held talks with Romano Prodi, President of the European Commission, and met Javier Solana, High Representative for Foreign and Security Policy of the EU and concurrently Secretary General of the EU Council.

On April 2, 1998, Premier Zhu Rongji and Tony Blair, Prime Minister of the United Kingdom, the then on-duty-in-turn presiding country for the EU, and Jacques Santer, President of the European Commission, held the First Meeting Between Chinese and EU Leaders in London. The two sides issued a joint statement, expressing the hope to establish a long-term and stable China-EU constructive partnership oriented towards the 21st century and deciding to establish a mechanism of annual meeting between the leaders of the two sides. On December 21, 1999, the Second Meeting between Chinese and EU Leaders was held in Beijing. Premier Zhu Rongji and Lipponen, Prime Minister of Finland, the then on-duty-in-turn presiding country for the EU, and the President of the European Commission Prodi held a discussion on deepening the relations between China and the EU. The Third Meeting between Chinese and EU Leaders was held in Beijing. Premier Zhu Rongji and Jacques Chirac, President of France, the then on-duty-in-turn presiding country for the EU, and Romano Prodi, President of the European Commission, held talks and had an in-depth exchanges of views on China-EU relations, economic and trade cooperation, China's entry into the WTO, cooperation in cracking down on illegal immigration, human rights, the Taiwan question and other international and regional questions, and extensive consensus was reached on further strengthening of the China-EU relations. State Councillor Wu Yi and Minister of Foreign Trade and Economic Cooperation Shi Guangsheng exchanged views respectively on China's entry of the WTO with Pascal Lamy, the EU Trade Representative, who was a member of the visiting EU party.

Since China and the EU established the mechanism of political dialogue and consultation in 1994, the political consultations at various levels have progressed smoothly. The Chinese Foreign Minister and the EU "troika" Foreign Minister have held regular meetings in the UN General Assembly. So far, China and the EU have held 8 political consultations, 10 dialogues on human rights, 5 forums on judicature and 2 forums on women's rights. On May 8-9, 2000, the Fourth Forum on Judicature between China and the EU was held in Lisbon. On May 26, the 7th China-EU Political Consultation between Experts at Director Level was held in Lisbon. On September 29, the 10th China-EU Dialogue on Human Rights was held in Beijing. On November 30, Errera, Vice General Secretary and Director of Political and Security Affairs of the Foreign Ministry of France, the then presiding country for the EU, led an EU "troika" delegation to come to China to attend the 8th Political Consultation.

On September 24, 2002, Premier Zhu Rongji and Poul Nyrup Rasmussen, Prime Minister of Denmark and the Danish Presidency of the EU, and Romano Prodi, President of the European Commission, held the fifth Sino-European Leaders Meeting in Copenhagen and exchanged views in depth on the Sino-European relations and the current major international and regional questions and reached extensive consensus on further strengthening Sino-European cooperation in various fields. After the meeting, the two sides issued a joint press communiqué.

In recent years, the EU has actively adjusted its policy towards China. In December 1995, the EU adopted a document on "the Long-term Policy on China-EU Relations". In November 1996, the European Commission put forward "a New Strategy of the EU on China". On June 29, 1998, the EU Council of Foreign Ministers deliberated and adopted a new document concerning the EU policy on China for "the Establishment of a Comprehensive Partnership with China", deciding to elevate its relations with China to the level of equal importance to those with the US, Japan and Russia, strengthen the China-EU political dialogue and the cooperation and exchanges in the economic and trade and other fields and support China to enter the WTO. In September 2000, the European Commission submitted a report to the EU Council and the European Parliament, making a review and assessment of the implementation of the policy document on "the Establishment of a Comprehensive Partnership with China". The report stood for expanding the scope of the bilateral political dialogue; proposed that the EU give priority to strengthening the cooperation in the areas of sustainable development such as social and economic reforms, human resources development, environmental protection, legal system and human rights and aid to the poor, and helping and supervising China to perform its obligations after its entry into the WTO; and reiterated its adherence to the one China principle while emphasizing a peaceful settlement of the Taiwan question.

In recent years, the Sino-European political dialogue has deepened continuously. In March 2002, the 13th Dialogue on Human Rights between China and Europe was held in Madrid, Spain. In July, the 3rd Consultation between China and Europe on cooperation in cracking down on illegal immigration was held in Brussels. In August, while attending the 9th Foreign Ministers' Meeting of the Forum of the SEATO Region in Brunei, Foreign Minister Tang Jiaxuan met with Javier Solana, High Representative for Common Foreign and Security Policy of the European Union, and exchanged views on the Sino-European relations and regional hot-spot questions. In September, while attending the UN General Assembly, Foreign Minister Tang held a meeting with the EU "Troika" Foreign Minister. In the same month, The Sino-European Consultation on Arms Control was held in Vienna. In order to correspond with the development of the situation, China and the European Union renewed the agreement on political dialogue in June this year.

In March 2002, at the invitation of the Delegation for Relations with China of the European Parliament, Mr. Raidi, Chairman of the Standing Committee of the Tibet Autonomous Regional People's Congress, led a delegation of the Tibet People's Congress to visit the European Parliament. In April, a delegation of the Green Party Group of the European Parliament visited China. In May, a delegation of the People's Party Group of the European Parliament visited China. In July, Mrs. Elly Plooij-Van Gorsel,President of the European Parliament for Relations with China, led a delegation to come to Beijing to hold the 19th Working Conference between the Chinese and European Parliaments with the Sino-European Parliamentary Friendship Team of the Chinese National People's Congress. Li Peng, Chairman of the National People's Congress, and Qian Qichen, Vice-Premier, met with the delegation respectively. The delegation also visited Tibet.

On July 31 and August 5, 2002, the European Commission issued the report on the EU-Macao relations and the report on the Hong Kong question in 2001 respectively.

(2)Bilateral economic and trade relations and economic and technical cooperation

Along with the deepening of the China's reform and opening-up and continuous development of its economy, China-EU economic and trade relations have developed fairly rapidly. In 1985, China and the EU signed "the Agreement between China and the European Communities on Trade and Economic Cooperation" and held meetings of mixed economic and trade committee at ministerial level at irregular intervals. On October 24, 2000, the 17th Meeting of China-EU Mixed Economic and Trade Committee was held in Beijing.

The EU is China's third largest trade partner, next only to Japan and the United States. According to statistics of the China General Administration for Customs, the total volume of bilateral trade between China and the European Union in 2001 was US$76.62 billion, an increase of 11% year on year. China's export value was US$40.90 billion, a growth of 7.1% year on year, while its import value was US$35.72 billion, increasing by 15.8% year on year. From January to July 2002, the China-EU trade volume was US$46.23 billion, up by 6.8% year on year. China's export value was US$25.16 billion, up by 8.4% year on year while its import value was US$21.07 billion, up by 4.9% year on year. Up to July 2002, the number of investment projects in China contracted by the EU member countries added up to 13,283, with contracted foreign capital amounting to US$58.7 billion, and the investment actually made was US$32.57 billion. Of this, from January to July 2002, the projects with EU direct investment numbered 785 in total, and the contracted capital reached US$3.12 billion, a drop of 32.6% year on year, and the capital actually invested was US$2.34 billion, a drop of 2.3%. According to statistics of the Ministry of Foreign Trade and Economic Cooperation, up to the end of July 2002, China had introduced 14,291 technologies from the EU member countries with the contracted sum of approximately US$70.08 billion. Of this, from January to July 2002, the number of contracts by which China introduced technologies from the EU member countries totaled 796, with contracted sum of US$2.906 billion. According to the statistics of the Ministry of Finance, up to the end of 2001, the EU member countries and official financial institutions have provided China with government loans of approximately US$17.84 billion in cumulative total. Of this, the government loans they provided to China in 2001 totaled US$530 million.

On January 31, 2002, Shi Guangsheng, Minister of Foreign Trade nd Economic Cooperation, and Pascal Lamy,Trade Commissioner of the European Commission, jointly presided over the 18th Meeting of the Sino-European Mixed Economic and Trade Committee in Brussels.

Through several rounds of hard negotiations, the bilateral negotiations between China and the EU on China's entry into the WTO reached a bilateral agreement on May 19, 2000. In meeting the EU delegation, President Jiang Zemin said that the agreement reached by China and the EU on China's entry into the WTO showed the two sides can absolutely reached consensus through negotiations on major strategic issues and that after its entry into the WTO, China would certainly be a responsible member, playing a constructive role.

In recent years, the EU has partially adjusted its anti-dumping policy. On April 27, 1998, the EU Foreign Ministers Meeting in Luxembourg decided to delete China from the list of countries of "non-market economy" for applying its anti-dumping rules. On April 19, 1999, the European Commission decided to give Malong Huajian Co., Ltd. in Yunnan Province the market economy status in the anti-dumping case on yellow phosphorus. This was the first time that a Chinese enterprise obtained the market economy status in the anti-dumping cases of Europe and the United States towards China. On February 2, 2000, the European Commission declared to nullify the prohibition of China's export of aquatic products to Europe.

Since 1983, the EU has provided China with development assistance totaling over US$400 million, covering such fields as economy and trade, science and technology, energy, environmental protection, industry, finance, education, health, and development of areas inhabited by minority ethnic groups. In March 2002, the European Commission issued a country strategy document on cooperation with China in 2002-2006, putting forward a plan of providing assistance to China in the next 5 years totaling 250 million euros.

In recent years, the cooperation between China and the EU in the fields of economy and trade, science and technology, energy and education has further developed. Main agreements signed by the two sides are: the Summary of Talks between China and the European Union on Industrial Cooperation, the Memorandum of Understanding between China and the European Union on Industrial Cooperation in the field of Aviation, the Agreement between China and the European Union on Cooperation in Auto Industry, the Project between China and the European Union on Environmental Protection in Liaoning Province, the Project between China and the European Union on Cooperation in Environmental Management, the Project for Agricultural Cooperation and Development in Bailang, Tibet, the Project between China and the European Union on Vocational Training, the Memorandum of Understanding between China and the European Union on the Industrial Cooperation in the Field of Aviation and Communication, the Agreement between China and the European Union on Scientific and Technological Cooperation, the Elementary Education in Gansu Province, the Project between China and the European Union on Cooperation in Higher Education and the Project of the European Union for Training Young Managers. At the third conference on the cooperation in field of energy between China and the European Union on March 4-5, 1999, the two sides signed a joint statement on strengthening cooperation between China and the European Union in the field of energy. On March 6-7, 2000, the first conference of the Guiding Committee on Scientific and Technological Cooperation between China and the European Union was held in Brussels. At the conference, the two sides exchanged views on such questions as strengthening the scientific and technological cooperation between China and the European Union and promoting the Chinese side to participate in the Fifth Framework Plan for Research and Technological Development. On July 25-26, the international forum between China and the European Union on intellectual property rights was held in Beijing. And on November 23-24, the first round of informal consultation on the cooperation between China and the European Union in the field of nuclear energy was held in Beijing.

In April 2002, Erkki Liikanen,Commissioner of the European Commission for Enterprise and Information Society, visited China. Vice-Premier Li Lanqing met with him and his party. In the same month, the Sino-European Forum on Cooperation in Information Society for 2002 was held in Beijing.