EU FOREIGN POLICY CHIEF HOLDS KEY TALKS WITH STATE COUNCILOR DAI

BUDAPEST -- The European Union's foreign policy chief Catherine Ashton thanked China for its "continued involvement" in European sovereign bond markets, saying the confidence displayed by Beijing gave countries room to carry out economic reform.

"The EU gratefully acknowledges continued Chinese involvement in European sovereign bond markets during the recent and quite turbulent period," Ashton said. "Investor confidence is a key condition for macro policy and reforms to succeed in any circumstance and certainly now."

Ashton, High Representative of the European Union for Foreign Affairs and Security Policy, sent the thank-you message during an exclusive interview with China Daily shortly before she held the second Strategic Dialogue with State Councilor Dai Bingguo on Thursday in Hungary, the current holders of the EU presidency.

She also said that China's calmness and objectivity had been helpful in avoiding "undue and unfounded" turbulence and speculation regarding some countries in the euro zone.

"This has been important in helping to underpin confidence and stabilize markets," she said, adding that the EU is determined to take all necessary measures to ensure the success of euro stabilization.

Following the sovereign debt crisis in Europe, China bought debt bonds from Greece, Spain and Portugal, and other countries, for an undisclosed sum.

The meeting between Ashton and Dai is a prelude to the visit by the President of the European Council Herman Van Rompuy to China on May 15-19. This is his first visit to China since he took office at the beginning of last year.

Dai and Vice-Premier Wang Qishan just concluded a two-day China-US Strategic and Economic Dialogue in Washington on Tuesday. The talks with the US and the EU provide an opportunity to compare notes before the G8 Summit in France later this month.

Ashton expressed her hope that the talks with Dai will be as "open, frank and constructive" as September's meeting in Guiyang, capital of Guizhou province, where they jointly chaired the first dialogue.

A number of international issues are on the agenda, in particular North Africa and Asia, according to Ashton. Bilateral relations and domestic affairs will also be discussed, she said.

"A dialogue should be able to embrace positive and negative issues.

"We hope that future dialogue will be able to focus more and more on concrete areas of cooperation, particularly in helping China to create a more rules-based system."

China, according to Ashton, has undertaken the most intense industrialization of any nation in history, and the consequences, both positive and negative, have been profound.

"How to create an environmentally sustainable development model that addresses inequality, continues to deliver growth, is socially inclusive and one in which other nations and entities are stakeholders, is a key issue," she said.

Ashton said China and the EU want to identify more areas of specific co-operation, so that both sides can help each other face common problems and challenges in the decade ahead.

She said that while China is a developing country it is also the world's second-largest economy, which has immense importance for global stability, and has been responsible for most of the wealth creation in the developing world in the last decade.

"We all understand that the rise of China as an economic power is a huge opportunity for the rest of the world," said Ashton. "We want to participate more in the domestic market."

She said China does not seek hegemony and identifies its key interests as those that preserve global stability and order.

"After all, China has benefited enormously from this in the last decades, but it has also contributed to stabilizing the global economic system after the economic crisis of 2008," she said.