Source: EURLEX
Language: en
Format: md

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 25.03.1998
COM(1998) 181 final

COMMUNICATION FROM THE COMMISSION

### **_Building a Comprehensive Partnership with China_**

###### Table of contents

**Page**
###### Summary 3 A. Engaging China further in the international community 5

_A.l_ _Upgrading the EU-China political dialogue_ 5
_A.2_ _Building upon the_ _ASEMprocess_ 5
_A.3_ _Addressing global issues_ 6
_A,4_ _Fostering dialogue on Asian regional issues_ 7
_A._ _5 Underpinning autonomy in Hong_ _Kong_ _and Macau_ 8

###### B. Supporting China's transition to an open society 9 based on the rule of law and the respect for human rights

_B.1_ _Promoting human rights through open_ _debate..._ 9
_8.2 ... and through cooperation_ 10

###### C. Integrating China further in the world economy l \

_C._ _1_ _Bringing China into the world trading system_ ! _\_
**1.** **Supporting China's accession to the WTO** **12**
**2.** **Strengthening the bilateral trade agenda** **14**
**3.** **Promoting investment** **16**
**4.** **Developing bilateral agreements** **16**
**5. Making financial liberalisation and regulation go hand in hand** **17**
**6. Promoting the euro** **18**

_C.2 Supporting economic and social reform_ 19
**1.** **Side-effects of company restructuring** **19**
**2.** **Financial reform** **20**

**3.** **Industrial cooperation** **20**
**4.** **Business dialogue** **20**
**5.** **Legal and administrative reform** **20**
**6. Training** **20**
**7. Science and technology** **21**
**8. Environment** **21**

**9. Energy** **21**
**10.** **Regional disparities, poverty alleviation and social cohesion** **21**

###### D. Making Europe's funding go further 22 E. Raising the profile of the EU in China 24 Conclusion 25

###### **Summary**

China's development since embracing economic reform under Deng Xiaoping twenty
years ago has been remarkable. The country is undergoing a dramatic internal
transformation from a centrally-planned economy, largely closed off to the world,
towards an increasingly market-driven one engaged in global commerce. This has
been accompanied by a significant evolution in China's civil society, even if the full
respect for universal standards in the field of human rights remains incomplete.

In 1995, the European Union responded to the economic and political challenges
posed by the changes in China by drawing up a comprehensive policy for the future
development of the EU's relations with China. It adopted, in the spirit of the "new
Asia strategy" endorsed by the Essen European Council, a _Communication_ _on a long-_
_**term policy for**_ _**China-Europe**_ _**relations**_ _**[1]**_ **that has served the EU well, providing a**
useful roadmap for the future.

Most of the initiatives within the 1995 strategic document are already underway,
while others have yet to mature. The analytical foundations of the 1995
Communication still hold true, and it therefore remains the platform on which the
EU's policy towards China is built. However, several developments of such
significance have occurred since 1995 that the EU should respond by upgrading and
intensifying that policy further.

Firstly, the Chinese Government recently gave its strongest endorsement of market
reform and global integration since reform was launched in 1978. The XVth Chinese
Communist Party Congress in 1997 ushered in the post-Deng era by endorsing an
ambitious economic and social reform agenda for the next five years. This can be seen
as a clear signal of China's intention to consolidate, accelerate and complete the
transition already underway.

Secondly, China has become at once more assertive and more responsible in its
foreign policy, both regionally and globally. China's role in promoting peace in Korea
and Cambodia reflects its renewed commitment to the development of Asia as a
whole. An unprecedented series of summits between China and some of its key world
partners over the last year have demonstrated China's wish to be recognised as a
world power while reflecting a common perception among these partners that
constructive engagement with China should become a key policy priority. The smooth
and successful handover of Hong Kong to Chinese sovereignty in July 1997 was a
particularly clear expression of China's increasingly mature and responsible approach
to its changing role in the region and on the world stage.

Thirdly, the financial crisis that began to spread across Asia in 1997 has exposed
serious structural weaknesses in the economies of some of China's neighbours and
will inevitably have some impact on China itself. It could be seen as an early warning
for China since it highlighted the risks associated with certain aspects of the

COM (95) 279 du 5.07.95.

dcvdoment paths followed by other Asian countries. The crisis underlines the need
for further reform and liberalisation within China to guard against similar problems
arising in its own economy.

Finally, the EU itself is changing in ways that will lead China to adjust its own
strategic vision of the European continent. The EU stands on the threshold of a single
currency and enlargement eastwards, and with the Treaty of Amsterdam has equipped
itself with new means to assert itself on the world stage.

Such developments call both for long-term vision and for active engagement.
Engaging China's emerging economic and political power, as well as integrating
China into the international community, may prove one of the most important external
policy challenges facing Europe and other partners in the 21st century.

This Communication seeks to meet that challenge by building upon the analysis of
China's political and economic development set out in the 1995 document in order to
set the priorities for a new, comprehensive EU-China partnership.

The new EU-China partnership will aim at:

- **engaging** **China** **further,** **through an upgraded political** **dialogue,** **in the**
**international community**

**• Supporting China's transition to an open society based upon the rule of law**
**and the respect for human rights**

**• Integrating China further in the world economy by bringing it more fully into**
**the world trading system and by supporting the process of economic and**
**social reform underway in the country**

**• Making Europe's funding go further**

**• Raising the** **EU's** **profile in China.**

*******

#### **A. Engaging China further in the international community |**

China's emergence as an increasingly confident world power is of immense historic
significance, both to Europe and to the international community as a whole. China has
become a major partner in a world increasingly bound together by the forces of
globalisation. The EU's prime objectives must be to see China integrated rapidly and
fully into the international community, both politically and economically, and to
support its transition towards an open society based upon the rule of law: this will
facilitate both development in China and greater global stability.

The EU is committed to a strategy of comprehensive engagement with China. This
should be achieved through a renewed and upgraded EU-China bilateral political
dialogue, as well as through the greater involvement of China in both regional and
multilateral initiatives of global interest.

###### **_A. 1 Upgrading the EU-China political dialogue_**

China's willingness to play a greater role on the world stage has been demonstrated
recently by an unprecedented series of bilateral summits with Japan, Russia and the
US, giving each of these key partners the chance to display publicly their shared
commitment to China.

Up until 1994, the EU's political dialogue with China was limited to short annual
meetings in the margins of the United Nations General Assembly. The EU has
steadily intensified this political dialogue, following an exchange of letters in 1994.
The time has now come for the EU and China to raise the status of their relationship
by holding annual summits at Head of State and Government level, encouraging
contacts at ministerial level, and by holding meetings between Political Directors in a
similar vein to contacts with other key partners. Annual EU-China Summits would put
the EU-China relationship on a commensurate footing with the EU's approach
towards other major international partners such as the US, Japan and Russia, raise the
profile of the EU in China and vice versa, as well as injecting added momentum into
the negotiation and resolution of key issues in the EU-China relationship.

###### **_A, 2 Building upon the ASEMprocess_**

The Asia-Europe Meetings (ASEM) process, launched in Bangkok in 1996, has
developed into a broad forum for in-depth consultations between European and Asian
partners at political and expert level, and has stimulated a wide series of cooperation
initiatives. By virtue of its informal nature and the variety of issues addressed in its
framework, ASEM has added a new dimension to the EU-China relationship. China

has taken a constructive approach in the process and has been particularly active in all
AS EM economic cooperation initiatives.

Dialogue with China should be upgraded in the context of the EU's broader regional
strategy towards Asia as embodied in ASEM. The EU should aim to encourage
China's continued commitment to taking an active part in ASEM and the ASEM
follow-up process. Promoting dialogue with China on sustainable development in the
Asia region, addressing the issue of maritime security in the Asia region, combatting
illegal drugs trafficking, coping with the effects of the Asian financial crisis and
addressing the issue of arms control and non-proliferation are prime examples where
the EU should seek China's active involvement in ASEM.

###### **_A. 3 Addressing global issues_**

Over recent years China has been forging a more coherent and outward-looking
foreign policy to match its growing economic weight. The EU should build on this by
encouraging China to play a proactive and responsible role in global issues.

The EU should engage China, a permanent member of the United Nations Security
Council, in dialogue on major UN developments, in particular UN reform.

The EU should endeavour to raise issues related to China more regularly during G7/8
meetings. It should also work to intensify the increasingly substantial dialogue with
China launched by the OECD in 1995.

China's status as a nuclear power gives particular importance to its disarmament and
non-proliferation policy. In recent years, China has taken the welcome steps of joining
the Nuclear Non-Proliferation Treaty, the Chemical Weapons Convention, the
Biological Weapons Convention and the Zangger Committee (a nuclear export control
regime), as well as respecting key provisions of the Missile Technology Control
Regime. It also signed the Comprehensive Nuclear Test Ban Treaty. Continued
support and encouragement should be given to Beijing's greater involvement in
multilateral negotiations on such issues. Europe should also establish dialogue with
China on the anti-personnel landmines issue, urging it to adopt a permanent export
ban and to engage positively in the international process to eliminate these weapons.

Illegal immigration and international crime are issues of grave concern both to China
and the EU. The EU should promote a substantial dialogue and encourage cooperation
with China on combatting illegal drug trafficking, money-laundering, organised crime
and illegal immigration. Previous EU experience in other third countries on such
issues could constitute a useful platform on which to consider launching specific
cooperation initiatives in China.

The EU will continue to take every opportunity, within the political dialogue, to raise
human rights issues in addition to the specific bilateral dialogue on human rights
detailed in section B of this communication.

The way China's economy develops, its energy demand increases, and the pace of
rapid industrialisation continues, is having a profound environmental impact at the
national, regional, and global level. The EU should aim to ensure China's continued
commitment to addressing world environmental challenges such as global warming
and greenhouse gas emissions, not least through EU funded cooperation projects
mentioned in section C2. In particular, the EU should encourage China's further
involvement in the pursuit of global environmental objectives in the context of the
1992 Rio Earth Summit and its follow up, notably in the area of climate change.

###### **_A, 4 Fostering dialogue on Asian regional issues_**

The EU has a role to play in maintaining stability in the Asian region through the nonviolent resolution of conflicts there, notably as a participant in ASEAN-sponsored
regional fora. China shares its frontiers with fourteen countries and has unresolved
border disputes with some of them. The growing demand for a multilateral security
dialogue in East Asia provides opportunities for Europe to increase its overall
influence in the region. As the ASEAN Regional Forum (ARF) [1] develops further, and
as China shows willingness to engage further in confidence-building measures in
Asia, the EU should use this forum more systematically to discuss security issues with
China.

Europe, a key contributor to the Korean Peninsula Economic Development
Organisation (KEDO) and a major provider of food aid to North Korea, has a clear
interest in the peaceful resolution of the Korean question, as does China. The Korean
peninsula should be among key issues that feature in the EU's regular dialogue with
China.

Likewise, the EU and China could consider launching a dialogue on other countries in
the region, such as Cambodia, Vietnam and Burma, where China has strong influence.

China's increasing reliance on energy imports from Central Asia is bound to make it
perceive stability in the region as a strategic priority. Given the EU's own strategic
interest in Central Asia and privileged relationship with Russia, developments in
Central Asia should be addressed at the appropriate time and in the appropriate forum.

Recent indications of an improvement in relations across the Taiwan Straits and the
prospect of a more open and direct dialogue between Beijing and Taipei are
encouraging. As before, the EU should welcome any steps which can be taken to
further the process of peaceful reconciliation.

The ASEAN Regional Forum (ARF) was established in 1994 as a forum bringing
together intra and extra regional powers to examine issues of security in the AsiaPacific region with a view to maintain peace and stability. It comprises the nine
ASEAN member States, the ten ASEAN dialogue partners (Australia, Canada, China,
South Korea, United States, India, Japan, New Zealand, Russia and the European
Union) and the two ASEAN observers (Cambodia and Papua New Guinea).

##### **_A. 5 Underpinning autonomy in Hong Kong and Macau_**

Strong economic links and historical ties with Hong Kong and Macau make it
inevitable that Europe will continue to take an active interest in the two territories, not
least in view of the hitter's handover in 1999. In the spirit of ils 1997 Communication
**entitled** _**"The European Union**_ _**and**_ _**Hong**_ _**Kong:**_ _**Beyond**_ _**1997**_ **"",** **the EU should seek**
to underpin further the autonomous responsibilities of the Hong Kong Special
Administrative Region, following the smooth handover in July 1997 and the
successful management of the post-handover period so far. The Commission will
publish an annual report on EU-Hong Kong relations. It will also aim to ensure that
the EC-Macau Trade and Cooperation Agreement remains fully implemented after
Macau's handover to support Macau's autonomous responsibilities. Hong Kong and
Macau have important roles to play as gateways to other regions of China, and the EU
should develop bilateral cooperation initiatives with both territories.

The EU considers the continued expression of differing opinions through the media
and other channels in Hong Kong to be a healthy sign of political maturity. The EU
will continue to watch the electoral process in Hong Kong closely, placing particular
emphasis on the EU's support for the eventual development of universal suffrage in
the SAR.

**Proposed initiatives:**

**Propose annual EU-China Summits and other top-level meetings as well as**
**EU-China Political** **Directors'** **meetings**
**Enhance still further** **China's** **involvement in ASEM**

**Cooperate on the future of** **the** **UN**

**Raise awareness of China-related issues within** **G7,** **and encourage further**
**dialogue between China and OECD**
**Propose dialogue on non-proliferation and cooperate on reinforcing related**
**export controls**
**Urge** **Chfna** **to integrate fully into the global arms control process, notably to**
**introduce a permanent ban on the export of anti-personnel landmines**
**Cooperate on combatting drug** **trafficking,** **money-laundering, crime and**
**illegal immigration**
**Raise the issue of human rights within the political dialogue**
**Develop dialogue on environment and sustainable development**
**Discuss Asian regional security with China**
**Develop dialogue with China on Korean peninsula, Central and South-East**
**Asia**

**Work to underpin autonomy of Hong Kong**

**Ensure a smooth transfer of sovereignty in Macau in 1999 and develop**
**cooperation with Macau**

COM (97) 171 final, 23.04.1997.

#### **B. Supporting China's transition to an open society** **based on the rule of law and the respect for human rights**

China is still far from meeting internationally accepted standards on human rights.
Serious shortcomings in China's human rights record remain, including in such areas
as the suppression of freedoms among certain ethnic minorities and political
dissidents, use of enforced prison labour, a still under-developed system of rule of
law, and the extensive use of the death penalty. These remain matters of grave concern
to the EU, its Institutions and public opinion at large.

Nonetheless, the situation of human rights in China has improved over the last twenty
years. Economic reform has introduced greater freedom of choice in education,
employment, housing, travel and other areas of social activity. China has passed new
civil and criminal laws to protect citizens' rights and has signed several key
instruments bringing the country closer to international norms. It has also taken steps
to develop the electoral process at local level, allowing villagers to designate their
local authorities.

A commitment to universally recognised human rights and fundamental freedoms lies
at the heart of the EU's policy worldwide. Full respect for these principles is
inextricably linked to economic development and prosperity, as well as the long-term
social and political stability of any country.

The challenge for China now is to sustain economic growth and preserve social
stability while creating an open society based on the rule of law. If Europe wishes to
have a role in this process, it should continue to use all available channels to promote
the cause of human rights in China in an active, sustained and constructive way. The
resumption of the EU-China human rights dialogue without any pre-conditions gives
the EU a real opportunity to pursue intense discussions which, coupled with specific
cooperation projects, remains at present the most appropriate means of contributing to
human rights in China.

###### **_B. 1 Promoting human rights through open debate..._**

The EU believes in the merits of dialogue, in all appropriate fora, over confrontation.
The EU and China should therefore tackle their differences in a frank, open and
respectful manner.

An EU-China specific dialogue on human rights was launched in 1995 and interrupted
in the Spring of 1996. Since its resumption in November 1997, China has shown a
new-found willingness to engage in a serious and results-oriented dialogue. All
subjects of concern, even the most sensitive ones, have been addressed during the
discussions and the prospect of continued, regular dialogue has now been established.
Furthermore, this dialogue has enabled the EU to obtain China's agreement in
principle on a cooperation programme designed to strengthen the rule of law and

promote civil, political, economic and social rights. Since the dialogue resumed,
China has given a series of encouraging signals, including its decision to sign the UN
Covenant on Economic, Social and Cultural Rights. China has also given an
underlaking lo examine the I IN Covenant on Civil and Political Rights with a view to
signing it, and has increased dialogue with the UN authorities in the field of human
rights.

The EU will continue to urge China to sign and ratify the UN Covenant on Civil and
Political Rights, to ratify the UN Covenant on Economic, Social and Cultural Rights
and to fully implement both covenants. Furthermore, the EU will encourage enhanced
cooperation with specialised UN bodies and raise all issues of concern, including the
plight of certain Chinese citizens.

As it attaches great importance to the respect for the cultural, linguistic and religious
identity of ethnic minorities, the EU will continue to raise issues relating to these
matters in Tibet within the bilateral dialogue on human rights.

Finally, the Commission will continue to press, within the International Labour
Organisation, for the ratification by all members, including China, of the ILO
conventions on core labour standards, including those on freedom of association, the
right to collective bargaining, the prohibition of forced labour, of exploitative child
labour and anti-discrimination.

###### **_B. 2 ...and through cooperation_**

The resumption of the EU-China dialogue on human rights has placed renewed
emphasis on the constructive resolution of differences. This gives the European Union
a chance to put its good intentions into practice and deliver tangible assistance. Two
major priorities should be pursued:

- **Promoting the rule of** **law.** The EU should help China's efforts to develop a
society based on the rule of law. Developing a sound and transparent legal
framework, both in the civil and criminal sphere, providing rights to Chinese
citizens - including the right to a fair trial - making them aware of those rights, and
training lawyers and judges, would help achieve this goal as a first step. The EU is
currently devising an ambitious programme of legal and judicial cooperation with
these objectives in mind which will be discussed with Chinese authorities and
ready for implementation by Autumn 1998.

- **Strengthening civil society.** The EU should aim to strengthen those practices
which make up the fabric of a strong civil society. It should promote civil and
political rights through initiatives such as the support for a training centre in China
for officials engaged in the implementation of the village governance law. It could
also allow for assistance to the most vulnerable groups in society, including ethnic
minorities, women - as a follow up to the Beijing 1995 conference on Women - and
children. Initiatives aimed at promoting consumers' rights and at supporting
consumers' organisations could also be a way of strengthening civil society. The

role of Non-Governmental Organisations in implementing projects aimed at
strengthening civil society should be fully exploited.

**Proposed initiatives:**

**Urge China to sign, ratify and fully implement UN Covenants on human**
**rights and** **ILO** **conventions on core labour standards**
**Reinforce bilateral human rights dialogue with China**
**Back up dialogue with concrete cooperation programmes**
**Promote rule of** **law**

**Strengthen civil society**

### **C.** **Integrating China further in the world economy**

The scale and speed of China's economic growth are making it one of Europe's major
economic partners. China's trade with the world has almost doubled in value over the
last five years, and it now runs a massive trade surplus both with Europe and with the
United States. It has become the second largest recipient of foreign direct investment
in the world after the United States, and the tenth largest trading nation. It is forecast
by the World Bank to become one of the top three traders in the world by 2020.

China's unprecedented economic development has required a delicate balance
between rapid economic growth, far-reaching reforms and the need to preserve social
cohesion. This process has potential repercussions both for China and for the world
economy, and it is in Europe's overwhelming interest that this transition be nurtured
right through to its fruition, making China a strong, stable and open partner.

It is the EU's view that the objective of assisting China to become a global economic
player fully integrated in the world economy and able to comply with common rules
should be achieved through a combination of trade discussions and targeted
cooperation initiatives. This strategic approach should seek to accelerate and
consolidate China's integration into the world trading system while supporting the
reforms that are so vital for China to thrive within that system.

###### **_C.l Bringing China into the world trading system_**

EU-China trade has increased more than twenty-fold since the beginning of the
reforms, making China the EU's third extra-European trading partner and creating
vast potential for European trade and investment there. The EU's trade deficit with
China reached 20 billion ECU in 1997, reflecting China's growing export capacity as
well as the obstructive effect of market barriers in China itself. The EU should use all

available channels, notably China's WTO accession process and the EU's bilateral

**11**

trade negotiations, to iron out such barriers and help create an open Chinese economy
that benefits European and global interests alike. Improving the climate for European
investment in China should also be one of the EU's top objectives.

**1.1.** **Supporting China's accession to the WTO**

The EU remains one of the keenest advocates of China's early accession to the WTO.
It will provide an important boost for China's economic reform and will signal
strenghtened international confidence in the reform process. It will also cement
China's place in the global economy and provide traders and investors with greater
certainty when doing business in China. Furthermore, striking the right terms of
accession for China will be a determining factor in the pace and scope of further
multilateral trade Rounds.

Financial turbulence in Asia has triggered a crisis of confidence in several Asian
economics which could have spillover effects in China. Against this background,
China has a prime interest in demonstrating its continued commitment to the WTO
accession process as a means of sustaining outside confidence in the fundamental
health and dynamism of the economy. Closing markets or delaying reforms would be
a misguided and counterproductive response to financial market instability.

China has made significant progress in recent years to liberalise its trade regime and
open its economy to the world. Whether on tariff cuts, currency reform or the
development of the legal system, the pace of change has been remarkable, and
together, the EU and China are progressing towards a trade relationship which should
culminate in China's membership of the WTO. However, for this goal to be achieved,
sustained efforts still need to be made by China to respect the following
commitments:

- Meet key WTO principles such as:

**transparency,** including prompt publication of all relevant laws and

regulations, clear licensing criteria and better identification of the authorities
responsible for granting licences.
**national treatment,** notably by offering the same operational conditions to

foreign companies as to domestic ones.
**non-discrimination** against EU companies vis-à-vis those of other trading

partners.

- Offer real market access for industrial and agricultural goods by cutting tariffs
significantly - including the removal of tariff "peaks" (duties of 15% and higher)
and adherence to the Information Technology Agreement - and by removing all
quotas, unjustified technical barriers to trade and other non-tariff measures. This
should be achieved as a follow-up to the conceptual breakthrough negotiated by the
European Commission with China in October 1997, in which a series of precise
principles were agreed which provide clear parameters in which the negotiations on
China's detailed tariff commitments are being pursued.

**12**

**•**

**•**

Rapidly remove the current monopolies on foreign trade so that all Chinese or
foreign nationals in China can engage in import and export.

Provide substantial opening of China's services market in distribution, télécoms,
financial services, professional services, tourism, travel and medical services.
China is today moving into a new phase of economic development in which
services will be the engine of future growth. Foreign companies would bring vast
assets to China in terms of jobs, technology, on-the-job training and management
skills.

Open the financial sector (banking, securities and insurance) in a more systematic
and comprehensive, if gradual, manner. This would boost China's long-term
growth and outside confidence in the economy, and can be pursued without
prompting uncontrollable capita! movements and excessive volatility. It is also in
China's interest to set up a proper regulatory framework and independent
supervisory authority.

Improve the conditions for foreign companies establishing in China. This includes
removing all restrictions on the legal form of establishment (whether as a joint
venture or a wholly-owned company), lifting geographic restrictions and those on
the scope of permitted activity, and removing pre-establishment conditions. It also
includes the removal of export performance requirements and export subsidies.

Eliminate WTO-incompatible measures designed to promote priority industries.

Rapid implementation of the WTO TRIPS Agreement and full enforcement and
protection of intellectual property rights.

® Establish a transparent, open and competitive procurement regime. A key objective
in this regard would be to secure China's membership of the WTO Agreement on
Government Procurement as part of the WTO accession package. China has the
largest procurement market in the world and failure to obtain access to that market
would significantly reduce the overall value of the market access package.

- Join the WTO-related Civil Aircraft Code.

The EU's approach during the accession negotiations should continue to be
characterised by the following features:

Firstly, the EU must negotiate resolutely to secure firm and viable market opening
commitments commensurate with China's stage of development, potential and size, in
order to make China's accession a lasting success.

Secondly, the EU has developed the concept that part of the final package may require
the use of clearly defined transition periods for sectors where China needs to phase in
its WTO obligations beyond the date of accession while adjusting its laws and

**13**

practices. This approach has been put forward by the EU to respect China's own
policy of implementing reforms gradually.

Thirdly, the EU should encourage China to anticipate accession by setting as an early
priority the amendment of domestic laws and regulations that affect foreign
investment, the aim being to make its investment regime less restrictive, more unified
and its evolution more predictable.

Finally, the EU should be on hand to assist China as it makes the necessary
adjustments, whether through cooperation or by offering practical assistance during
the negotiations themselves. The EU is already drawing up a series of cooperation
programmes designed to support China's reforms during and beyond the accession
process, especially while it is adapting to WTO disciplines during transition periods.
This initiative will include programmes to raise awareness of WTO principles - such
as on intellectual property, public procurement, norms and standards, and customs among Chinese officials at all levels of government and business executives, as well
as aligning China's legislative and regulatory framework with WTO rules. WTO will
also be a central theme in a broader training programme for the Chinese
administration. Furthermore, the EU will develop a specific post-accession dialogue
with China to ensure the implementation of its WTO commitments both during the
phasing-in period and beyond.

The EU is ready to conclude the negotiations as soon as China shows it can offer
genuine market opening, if necessary phased in gradually according to an agreed
timetable, and ensure that the country becomes an open, proactive and forwardlooking WTO member ready to participate in further liberalisation. Above all, China's
WTO accession should not be seen as a new constraint imposed by the outside world
on China, but rather as a supportive process which will strengthen its own internal
reform programme.

**1.2.** **Strengthening the bilateral trade agenda**

The EU has a long history of trade relations with China, as embodied within the 1985
EC-China Trade and Cooperation Agreement [1] and the EC-China Joint Committee
meetings. Bilateral trade discussions should be pursued alongside the WTO process as
an effective means of exchanging information and resolving bilateral issues. They
provide a useful forum for ensuring strict adherence to the principle of nondiscrimination, for example in fields such as maritime transport and financial services.
Issues pursued within this bilateral dialogue should dovetail with the EU's Market
Access Strategy, launched in 1996 to target the removal of obstacles to EU exports
and investments worldwide. In parallel, the EU should use this bilateral channel to
gain information concerning the implementation of China's WTO commitments and
to ensure that these commitments are given concrete effect.

OJECL 250/1, 19.09.1985.

14

China is, by far, the main beneficiary of the EU's Generalised Scheme of tariff
Preferences (GSP), with more than 30% of the value of all beneficiaries' imports in
1997. However, the implementation of the scheme's graduation mechanism (in which
GSP advantages for certain sectors are withdrawn due to the high level of industrial
development in those sectors) will necessarily reduce the advantages previously
enjoyed by China. Nevertheless, the new GSP special incentive arrangements (social
and environmental clauses) [1], will allow beneficiary countries to obtain an additional
preferential margin, provided they meet international standards of labour rights
(International Labour Organisation standards on child labour, freedom of association
and rights of bargaining) and environmental protection (International Timber
Organisation standards on sustainable management of tropical forests). In the event of
applications from China, the Commission will examine carefully if China meets the
requested standards.

The European Commission has proposed amendments to the EC anti-dumping
legislation vis-à-vis China that take account of the market reforms underway in the
country. The proposal [2] includes the removal of the label "non-market economy"
which applies to China under the current legislation, by instituting a new case-by-case
approach in anti-dumping proceedings whereby Chinese exporters, who are found to
operate within clearly defined market economy conditions, will be granted market
economy treatment. This means that the domestic prices and costs of such exporters
will be used to establish normal value rather than information from a market analogue
third country.

The proposal also introduces a more systematic approach to the granting of individual
treatment and calculation of comparative advantage. The proposal will reflect the
specific behaviour and operating conditions of individual firms, whilst at the same
time acting as an incentive for further reforms among Chinese companies. As such, it
will interact positively with the ongoing WTO accession negotiations.

The EU has confirmed to China that it is ready to phase out its quantitative restrictions
on Chinese products as rapidly as China is able to remove its own. The removal of
both sets of quantitative restrictions should be pursued as part of an overall market
opening strategy and in the context of the WTO accession negotiations.

The Commission and Member States need to be fully updated at all stages on
commercial legislation and administrative practice governing trade in goods and
services in China. A strengthening of coordination and the regular exchange of
detailed information between the Member States' Embassies and the Commission's

Delegation in Beijing would make for a more efficient and focused bilateral trade
dialogue.

COM (97) 534 final, 29.10.1997.
SEC (97) 2290.

**15**

1.3 Promoting investment

The development of Foreign Direct Investment (FDI) has been a key element of
China's economic growth since it engaged in reforms in 1978. For several years,
China has been the largest recipient of FDI among developing countries, and has now
become the second largest recipient of FDI, after the United States. Investments
originating in the Asia-Pacific region, notably from Hong Kong and Taiwan,
dominate FDI in China, thus highlighting the regional dimension of China's
integration into the world economy. The Asian financial crisis, which will reduce
incoming FDI in China, makes it all the more important for China to further attract
investment from its other partners, especially Europe and the United States.

The EU should aim at improving the investment environment for European companies
in China. The construction of a sound and transparent regulatory framework for
investment and a better enforcement of Chinese regulations on intellectual property
rights are prime examples to achieve this objective.

The EU trade policy must be backed up by a comprehensive strategy to promote
investment, as well as business and industrial cooperation with China, so as to
strengthen the European presence in the Chinese market. The EU should launch such
a strategy, focusing primarily on those industrial sectors - such as
telecommunications, energy, environmental technology and services, transport and
financial services - where Europe has a clear competitive advantage _(see also section_
_C.2)._ The EU should strengthen the EU's export and investment promotion facilities
for China, in particular the _European Community Investment Partners_ (ECIP)
programme, which aims at supporting the creation of joint-ventures between European
and Chinese companies in China, and the _Asia-Invest_ programme, which aims at
helping European small and medium-sized enterprises identify potential partners in
China. The EU should continue to devote particular attention to small and mediumsized enterprises in its business and investment promotion strategy in China.

**1.4** **Developing bilateral agreements**

The EU-China trade dialogue could be further strengthened through the conclusion of
specific bilateral agreements in areas of particular interest, such as:

- Maritime transport. A sectoral agreement on maritime transport, for which the
Commission has a negotiating mandate, should aim to strengthen cooperation with
China and improve market access conditions for European operators in China. The
EU intends to base this agreement on the principles of freedom to provide maritime
services, free access to cargo activities and unrestricted access to ancillary services.
The agreement may provide for the establishment of a Working Party which could
report to the Joint Committee set up under the EC-China Trade and Economic
Cooperation Agreement.

- **Air transport.** The conclusion of a Memorandum of Understanding between the
Commission, China and the European Association of Aeronautical Industry on

**16**

**•**

Industrial Cooperation in the Aeronautical Sector could be a starting point for
cooperation in the field of air safety, environment and infrastructure. This
cooperation should be accompanied by the commencement of a dialogue in
aviation matters.

**Nuclear trade and safety.** The Commission should study the merits of
negotiating a bilateral agreement with China in areas related to nuclear trade and
nuclear safety in the framework of the Euratom Treaty. China's policy on nuclear
non-proliferation is a key issue that should be taken into account in such an
analysis.

**Customs.** The Commission has been authorised to negotiate an agreement on
customs cooperation and mutual administrative assistance. This will serve the dual
purpose of facilitating trade between the EU and China on the one hand, and
creating a framework through which to fight customs-related fraud on the other.

**Science and technology.** A specific EU-China science and technology agreement
should be concluded in order to enhance and expand cooperation in fields such as
energy, environment, life sciences, material sciences, transport, telematics,
information and communication technologies. It will strengthen the presence of
European economic operators in China.

**1.5** **Making financial liberalisation and regulation go hand in hand**

The creation of a sound financial environment is vital to sustain the confidence of

investors and traders in China. The financial crisis that has struck some of China's

neighbours in 1997 can be seen as an early warning signal from which China can
learn. It throws into sharp relief the need for China to build a solid, transparent and
open financial and banking system, and to make bank lending market-driven and
commercially viable in order to avoid exposure to weaknesses similar to those of other
Asian economies in future.

Together with the reform of its State-owned enterprises, China has embarked on an
ambitious reform of its financial system. This includes the creation of a sound
regulatory framework for financial activities. The EU fully supports this and is ready
to offer China, through cooperation projects, its own expertise in financial regulation
and prudential supervision. This should also be pursued through any initiative which
could be taken within ASEM.

At the same time, the EU should seek to persuade China that liberalisation of its
financial services markets - notably market access for foreign financial service
providers in banking, insurance and securities - would strengthen the wider banking
reforms. It would increase liquidity, prompt a more viable and effective allocation of
credit within the economy, raise standards and increase available expertise, boosting
jobs and growth in the process. An early commitment to include financial services
within China's WTO offer would increase investor confidence at a time when it is

severely lacking in some of China's neighbours. This would not entail any sudden

**17**

exposure to market risk, as the EU has not suggested that China should introduce full
freedom of capital movement in the near future.

**1.6** **Promoting the euro**

The advent of Economic and Monetary Union makes it important for the EU to inform
China of the major changes EMU will bring to its economic ties with Europe, as well
as to the international monetary system itself. In parallel with its commitment to the
construction of a sound and open financial and banking system in China, the EU
should establish a regular EU-China macro-economic dialogue. This dialogue should
aim, _inter_ _alia,_ at informing China - which already has the world's second largest
foreign currency reserves - about EMU and about the potential of the euro as a stable

reserve currency.

Within the information actions on the euro aimed at third countries which the

European Commission will develop, special attention should be given to China.

**Proposed initiatives:**

**Give continued impetus to WTO accession negotiations until a viable**
**accession package is achieved**
**Allow China to benefit from transition periods while certain sectors adapt to**
**WTO obligations**
**Offer China cooperation projects to help its economy adapt to WTO**
**obligations**

**Re-activate bilateral trade talks to exchange information and resolve issues of**
**mutual concern**

**Use bilateral trade talks to cement commitments made in the WTO process**
**and improve synergy of these talks with the EU's market access strategy**
**Adopt the Commission's proposed new anti-dumping regulation towards**
**China and Russia**

**Pursue gradual and reciprocal removal of EU and Chinese quantitative**
**restrictions**

**Develop a comprehensive EU investment promotion strategy and business and**
**industrial cooperation in China**
**Develop bilateral agreements in specific sectors**

**Urge China to liberalise financial services in step with reform of its financial**
**system and provide relevant EU expertise**

**Inform China about the importance of the Euro as a stable reserve currency**

**18**

###### **_C.2. Supporting economic and social reform_**

China's reforms are radically changing the economic and social landscape of the
country. The pace of reform is impressive, but the process remains fragile and
incomplete. The challenge for China is to pursue its economic transition whilst at the
same time integrating the concept of sustainability into economic growth and
guarding itself against social instability. The EU should therefore not just seek to
negotiate the removal of trade and investment obstacles, but also help China build the
institutions, policies, human resources, management techniques and other flanking
instruments that constitute the fabric of a modern, outward-looking economy.

The resources available for this process will always be small in comparison with the
needs. If the EU is to maximise the impact of these resources, cooperation needs to be
concentrated on a small number of key objectives.

The five traditional pillars of EU-China cooperation set out in the 1995
Communication - human resources development, administrative and social reforms,
business and industrial cooperation, environmental cooperation, rural and urban
poverty alleviation - have stood the test of time through the successful implementation
of a range of projects, and the principles behind the 1995 long-term strategy will
continue to underpin the EU's approach to its cooperation programme. This approach
was further developed in the EC-China Memorandum of Understanding on the
programming of EC-China cooperation projects signed in Beijing in October 1997
between the Commission and the Chinese Authorities.

Given the pace of change in China, it is important to further update the objectives of
the EU-China cooperation programme in keeping with the reforms taking place in
China. The following specific priorities - to which must be added WTO-related
cooperation projects (section C.l.l) and human rights cooperation projects (section B)

- should be highlighted:

1. **Side-effects of company restructuring.** China is restructuring many of the StateOwned Enterprises (SOEs) which still form the core of its industry. This process of
unprecedented scale and complexity could have major social and political sideeffects. The EU should not try to address all aspects of a reform process of this
magnitude, but rather focus on limited priorities, in close coordination with other
donors, notably the World Bank. From its experience with restructuring and
privatisation, both within the EU and in Central and Eastern Europe and the New
Indépendant States, the EU would be well placed to offer its expertise as China
introduces new models of ownership, corporate governance, accounting and
management. The EU could also help China address welfare reform, which is one
major fall-out of SOE restructuring since the Chinese welfare system in urban
centres is largely taken care of by SOEs themselves. In keeping with China's desire
to minimise the social side-effects of economic reform, and in order to contribute
to urban poverty alleviation, the EU could help China in its search for new models
of welfare, including medical care, social security, unemployment insurance and
pensions.

**19**

**2.** **Financial reform.** China has wisely embarked on the reform of its financial
system, whose fate is closely linked to that of the debt-ridden state-owned
enterprises. A sound, transparent and market-driven banking system is
indispensable for the creation of a sustainable economy. The EU - in close
cooperation with both international and Member States' financial institutions
responsible for financial supervision and prudential standards - should help China
to develop the kind of rules, supervisory mechanisms and prudential standards that
will enable it to guard against structural weaknesses exposed elsewhere during the
Asian financial crisis.

**3.** **Industrial cooperation.** Sectoral cooperation schemes focusing on those sectors
where EU industry has clear competitive and technological advantages and China
has specific needs should be developed as a way of tackling issues such as
regulation, the definition of common norms and standards, the development of
mutually recognised certification procedures, the integration of cleaner production
processes, as well as industrial and commercial training. Administrations,
regulatory bodies, and industries from both sides should be involved in this
exercise. Small and medium-sized enterprises should be encouraged to participate
in this process. Priorities for forthcoming initiatives could include
telecommunications, information technologies and aeronautics.

**4.** **Business dialogue.** The EU should support a greater involvement of European
business and industry in China. A business dialogue should bring together EU
executives and Chinese businessmen and policy-makers in order to increase
awareness of China's transition process and provide expertise on market reform.
The results of this dialogue should also be used to identify further priorities for EU
trade policy and cooperation initiatives.

**5. Legal and administrative reform.** The EU should back up its bilateral and
multilateral trade negotiations with concrete assistance to China in reforming and
modernizing the overall legal and administrative framework of its economy.
Definition and enforcement of legislation - for example in intellectual property,
company law and public procurement - as well as administrative organisation and
management should be among the specific targets. The EU's continued support to
the construction of a sound and competitive procurement regime would, in
particular, increase industrial competitiveness and help China establish a modern
and efficient public sector.

6. **Training.** Cooperation should help China strengthen its own training capacities by
proposing modern professional training standards and practices. This should
address the needs of both administration and industry. Vocational training
programmes for industry would both help up-grade the quality of manpower in
China and promote European management practices, technical know-how and
standards, thus facilitating European investment. Likewise, training initiatives for
public servants would help them face the challenges of a market-driven economy
open to the world.

**20**

**7. Science and technology.** Scientific and technological cooperation should be used
more actively as a means to strengthen European companies' position on the
Chinese market as well as supporting China's own economic development. It
should focus on agriculture, information and communication technologies,
biotechnology, material sciences, transport, energy, the environment and natural
resources. A specific EC-China Science and Technology Agreement should be
negotiated rapidly _(see Section_ _CI.4),_ and a web of partnerships should be created
to allow the exchange of young scientists, managers and engineers in selected
economic sectors.

8. **Environment.** China has become increasingly aware of the environmental cost of
its former industrial model, and of its impact on the global environment. It is now
seeking to reconcile rapid growth with sustainable production and consumption
patterns. The EU should, along the lines set out in the _Communication on a_
_Europe-Asia Cooperation Strategy in the Field of Environment_ _I_ develop
cooperation projects focusing on clean production methods, waste minimisation,
environmental standards and training, and environmental management capacities as
well as appropriate technology transfer. The EU should in particular help China
integrate environmental priorities - such as the prevention of industrial pollution
and greenhouse gas emissions, and the conservation of biological diversity - further
into national economic policy-making processes and into development schemes at
regional and local levels. Where desirable, and in line with the Chinese objective of
reducing poverty, environmental conservation and poverty alleviation projects
should be integrated together.

9. **Energy.** Europe should offer its environmental and energy know-how to China to
help it develop efficient and clean industries and also to establish a presence in its
potentially lucrative market for green technology, along the lines set out in the
Commission's _Communication on a_ _Europe-Asia_ _Cooperation Strategy for_
_Energy?_ Promoting energy efficiency, as well as developing clean coal
technologies and alternative energy resources, notably natural gas, should be top
priorities. The EU should seek to develop synergies with international financing
institutions (IFIs) on these issues.

10. **Regional** **disparities,** **poverty alleviation and social cohesion.** Despite a
significant rise in living standards, China is still a developing country. Rural and
urban poverty are rife, China's vast floating population presents a serious threat to
social stability and lasting economic prosperity, and disparities between advanced
coastal regions and less developed inner provinces have become a key concern for
both Chinese local and central authorities. The EU should help China accelerate the
spread of prosperity across the country and improve regional and social cohesion
through, inter alia, projects aimed at developing all communication links between
coastal and less developed inland regions. This could in particular increase the
attractiveness of inner regions for both Chinese and foreign investment.

COM (97) 490 final, 13.10.1997
COM (97) 308 final, 18.07.1996

**21**

**Proposed initiatives:**

**• Provide expertise to reduce side-effects of company restructuring, notably**
**welfare reform**

**• Provide expertise for financial sector reform**

**• Strengthen industrial and business cooperation**

**• Cooperate on legal and administrative framework**

**• Develop human resources cooperation with focus on professional training and**
**exchange schemes**

**• Expand** **scientific** **and technological cooperation**

**• Promote sustainable development and help China integrate environmental**
**policy concerns**

**• Foster transfer of know-how and technology in energy sector**

**• Develop cooperation to reduce regional disparities, alleviate poverty and**
**improve social cohesion**

#### **D. Making Europe's funding go further**

A comprehensive policy for relations with China needs to be backed up with the
appropriate financial means to implement it. The EU's budgetary resources for China
have more than tripled as a direct result of the policy launched in 1995, rising to
around 70 million ECU per year up to 1999, from an annual average of 20 million
ECU over the 1991-1994 period. This has enabled the EU to demonstrate its
commitment to cooperation with China by pushing forward with the vast majority of
new ideas proposed. As such, the current envelope appears sufficient at this stage to
finance both the shorter and longer-term initiatives outlined in this Communication,
so long as the budget is maintained for the 2000 to 2006 period.

Nevertheless, the EU should consider all possible avenues for improving the
efficiency of its activities.

One key message of this Communication is that EU-funded cooperation programmes
need to be even more closely linked with the EU's broader China policies. From the
human rights dialogue through the WTO accession negotiations to questions relating
to China's economic development, the EU should seize the chance to underscore its
policies with concrete assistance projects where at all possible. The EU is emerging as
one of the most important grant donors in China, and every effort should be deployed
to maximise this advantage. Giving projects direct relevance to key policy objectives
is one of the best ways of improving their efficiency. It is a simple exercise in value
for money which could be achieved without increasing the overall budget allocated
for China.

**22**

Like other international donors, the EU is continually looking for ways to improve the
delivery of projects. So far, it has tended to concentrate on relatively high-budget
programmes spread over several years. This maximises the impact of a cooperation
budget which will remain small in relation to the needs of a country the size of China.
Nevertheless, there are five important refinements that should be introduced:

Firstly, the EU faces an ever-increasing demand for supporting small but highly
visible projects. Some of these initiatives - such as making European expertise
available rapidly for the development of new legislation, professional training,
networking with EU counterparts, organisation of seminars, and the production of
information and communication material etc - have a potential impact going way
beyond the small budget involved. The European Union should develop a facility
whereby a selection of the very best of these smaller projects could be funded directly
and rapidly from the Commission's Delegation in Beijing.

Secondly, synergy between the EU and Member States' cooperation programmes is
still underdeveloped. Mechanisms for improving coordination, complementarity and
possible joint projects should urgently be considered.

Thirdly, in view of the limits imposed by a relatively modest cooperation budget, the
Commission has been exploring ways of collaborating more closely with international
financing institutions. New opportunities have opened up for using EU grant-funded
projects to prepare the way for larger funding from organisations such as the World
Bank. In addition, the EU should envisage funding European experts in some of the
Bank's policy related discussions with the Chinese government. This benefits all
partners concerned and is particularly well suited to sectors like welfare reform,
energy and the environment.

Fourthly, the European Investment Bank (EIB), which has a mandate for intervention
in Asia up to the year 2000, has currently a modest degree of involvement in China.
Up to now, it has launched one project - in the field of energy - with a budget of 50
Mccus. It appears, however, that there is room to improve the EIB's involvement in
China within the existing mandate. This is even more important in the context of the
World Bank's intention to scale down its development assistance through
concessional financing and to abolish all concessional financing from 1999 onwards.
The issue of the size and allocation of the EIB's financial envelope in Asia after the
expiry of its present mandate remains open.

In order to ease the EIB's entry into China, make its lending more competitive and
strengthen its implementing capacity, the Commission is ready to consider
apportioning part of its cooperation budget to the EIB in order to fund feasibility
studies and pre-investment analysis which would prepare the ground for EIB loans for
projects of common interest implemented by institutional borrowers in China. An
improved intervention of the EIB in China would increase the visibility of its
cooperation work in China and raise the profile of its relations with the country more
generally.

**23**

Fifthly, it is essential to continue close dialogue with the Chinese authorities in order
to ensure that project development responds to shared objectives. This dialogue
should encompass all phases of the project cycle, with particular attention put to the
programming phase, as illustrated hy the Memorandum of Understanding on
programming of 1998 and 1999 cooperation signed in October 1997 between the
Commission and the Chinese Authorities.

As a result of this dialogue, an early discussion and exchange of information with
Member States on the basis of multiannual programming would also contribute to
increased synergies with Member States programmes. The same applies for the EIB,
World Bank and other donors.

**Proposed initiatives:**

**Facilitate rapid funding of small, short-term projects out of Beijing**
**Increase synergy between EU's China policy objectives and cooperation**

**programmes**
**Improve synergy with EU member states**
**Investigate different means and approaches for collaboration with World**
**Bank and other lenders**

**Cooperate with** **I.IB** **to expand EIB activities in China within existing mandate**
**Strengthen regular dialogue with China on programming and project** **cycle,**
**and ensure early information of Member States and** **IFIs**

#### **E. Raising the profile of the European Union**

The reemergence of China is having a profound effect on public opinion. Few
businesses, institutions or individual people outside China are not aware in some way
of its rapidly growing profile on the world stage. For some it is perceived as an
inexhaustible source of opportunities, others are more cautious in their assessment;
most see it as a broadly positive development that requires a carefully balanced but
decisive response from their public authorities, including the European Union. For
such a response to be effective, it must be visible, not just in Europe, but in China and
the world at large. Greater visibility will give the EU added weight in its dealings with
China.

Close coordination within the EU itself will be needed if the EU is to raise its profile
in China succssfully. Annual summits and other high-level meetings with the Chinese
leadership, of the kind recommended in section A.l of this Communication, would go
some way to improving visibility, and should be given adequate exposure to the
media.

The EU should also upgrade its information policy towards China substantially. As a
first step it should draw up its first-ever information strategy devoted solely to EU
relations with China. The strategy should identify key target audiences within
business, government, academia, NGOs, the media and other groups in order to
diffuse information about the relationship. Such audiences should, where possible, be

**24**

sought in China as well as in Europe. A new information strategy could include the
following actions, among others:

**Proposed initiatives:**

**1**
**Set up a Commission Press and Information Service** **(SPI)** **in Beijing, to add to**
**those already existing in Washington and Tokyo**
**Expand the number of Chinese visitors travelling to Europe i.e. through the**

**EU** **Visitors'** **Programme**
**Increase the intensity of cultural exchange through schools, universities and**
**other educational establishments**
**Organise cultural initiatives such as exhibitions and explore** means **to** develop
**future cooperation in the cultural field**
**Increase the presence of the EU at conferences** devoted to Chinese **affairs and**
**organise seminars and conferences on the subject** of EU-China **relations**

**Expand cooperation with existing EU Studies Centres in Chinese universities**
**and with the Chinese Society for EU Studies**

###### **Conclusion**

China's growing political and economic self-confidence should serve as an incentive
for the EU to engage the country more fully. Its growing strength has been matched,
by and large, by a growing sense of responsibility. China's increasing assertiveness on
the world stage therefore deserves a positive response from Europe. It also requires
vision. This Communication seeks to set out that vision by laying the ground for a
comprehensive partnership based on a set of specific, action-oriented initiatives.

The focal point of that vision must be to ensure the successful and lasting integration
of China as an equal partner in the world economy. This should be coupled with an
active commitment to creating a strong and open civil society based on fundamental
freedoms and human rights, in step with China's move towards a market economy.
China's WTO accession process, as well as the EU's bilateral trade agenda with
China, remain key instruments, together with Europe's elaborate cooperation
programme with China, to bring this to fruition. At the same time, the EU must be
ready at short notice to adapt its policy to any unforeseen changes prompted by the
speed and scope of China's transition.

Europe and China both stand on the threshold of critical change. This should give the
former the added incentive to craft its own genuinely European strategy towards the
latter.

The Council is invited to endorse the initiatives laid out in this Communication, and
to invite the Commission, the European Parliament, Member States, business and
other actors to cooperate in pursuing the approach outlined. The Commission stands
ready to move forward with the initiatives outlined in the months ahead.

**25**

The Commission will regularly report to the Council and the European Parliament
about the progress made in the implementation of the proposals of this
Communication. A yearly report will be produced to this end.

**26**

###### **ISSN 0254-1475**

## COM(98) 181 final

# **DOCUMENTS**

### EN 11 02 10 Catalogue number : CB-CO-98-212-EN-C ISBN 92-78-32897-9

**Office for Official Publications of the European Communities**

**L-2985** **Luxembourg**