China, EU leaders to discuss eurozone in key summit

(BEIJING) - Chinese and European Union leaders will gather Tuesday for a summit likely to be dominated by Europe's debt crisis, as Beijing considers stepping in to help resolve the continent's financial woes.

Chinese Premier Wen Jiabao will meet EU president Herman Van Rompuy and European Commission president Jose Manuel Barroso in Beijing, in talks that may also touch on Syria, Iran and a controversial EU tax on airlines.

The annual summit -- originally due to take place in October but postponed due to the debt crisis -- will also see the two EU leaders meet Chinese President Hu Jintao on Wednesday.

China is increasingly concerned about the crisis in Europe -- its biggest export market -- and has repeatedly urged EU leaders to get a grip on the situation.

The International Monetary Fund (IMF) warned last week an escalation of the crisis could slash China's economic growth in half this year.

"The debt issue is at a critical juncture," foreign ministry spokesman Liu Weimin told reporters Monday.

"We believe that as China's largest trading partner and the largest economy in the world (collectively), it is important for the European Union to resolve this issue."

European leaders have already asked China, which holds the world's largest foreign exchange reserves, to invest in a bailout fund to rescue debt-stricken states.

Beijing has so far made no firm commitment, but Wen said this month it was considering offering assistance through the IMF or bailout funds, and there is speculation Chinese leaders may make their position clearer at the summit.

Chinese companies and funds, meanwhile, have ramped up their investment in Europe, buying up utilities, energy firms and even luxury yacht makers, in a move welcomed by some but eyed with concern by others.

On Monday, the People's Daily, mouthpiece of the ruling Communist Party, sought to calm concerns in a front-page commentary, saying the country was not seeking to "buy out Europe" -- comments also made by Wen earlier in the month.

In an interview published Monday in another state-run newspaper -- the China Daily -- Van Rompuy sought to reassure his Chinese counterparts about the situation in Europe.

"The debt crisis in the eurozone is being solved by its members," he was quoted as saying.

EU and Chinese officials are also likely to touch on a new EU law that imposes charges on airline carbon emissions, which China has banned its carriers from paying.

The issue of market access may also be on the agenda, as foreign firms complain China favours domestic companies and squeezes them out of some markets, including lucrative government procurement contracts.

EU trade commissioner Karel De Gucht, who said last month he is drafting a law in response to Chinese protectionism in public markets, will be present at the summit.

The crisis in Syria is also likely to come up after China and Russia vetoed a UN Security Council resolution condemning the regime's bloody crackdown on protests, as are concerns over Iran's nuclear ambitions.