China hints at links between euro bailout and trade

China’s Ministry of Commerce issued a statement on Thursday saying that a European Union trade investigation into steel products would hurt joint efforts to address the euro-zone crisis, The Wall Street Journal reported. The statement said the investigation “will not only cast a shadow over normal steel trade between Europe and China, it will also harm efforts for China and Europe to jointly respond to the crisis.” Analysts have predicted that China would demand trade concessions in return for aid in the sovereign debt crisis, but officials have only hinted at this conditionality thus far. Chinese Premier Wen Jiabao last week said that the country is preparing to increase involvement in a euro bailout and that he hopes the EU will be careful in taking trade actions against China. China claims the EU investigation violates World Trade Organization rules, which the EU denies.