By Chris Buckley
BEIJING (Reuters) - China's Premier flies to Europe on Tuesday bearing vows of support for its crisis-rattled economies, in a bridge-mending visit that shows Beijing's potential to use its financial muscle for diplomatic sway.
Premier Wen Jiabao is travelling during China's big Spring Festival holiday and his diplomats have said his seven-day "journey of confidence" will sprinkle agreements and uplifting declarations on European states battered by economic woes.
This holiday cheer comes less than two months after China called off a summit with the European Union, venting anger over French President Nicolas Sarkozy's meeting with the Dalai Lama.
"This visit is intended to have a lot of symbolic value. I think the Spring Festival time was chosen for good reason," said Zhou Hong, an expert on relations with Europe at the Chinese Academy of Social Sciences, a leading state thinktank in Beijing.
"China wants to show it's ready for a fresh start after the recent troubles, ready to expand communication and coordination, especially over the financial crisis."
Such heartening sentiment from the world's third biggest economy with its $2 trillion (1.5 trillion pounds) in reserves will probably be welcomed at Wen's five destinations: Switzerland and the World Economic Forum in Davos, Germany, the European Union headquarters in Brussels, Spain and Britain.
But Beijing's gifts have price-tags attached.
China is still fuming over Sarkozy's meeting with the Dalai Lama, the exiled Tibetan leader condemned by Beijing as a separatist for demanding autonomy for his homeland.
Paris is conspicuously off Wen's itinerary. Too little time for that, Chinese Assistant Foreign Minister Wu Hongbo told reporters last week.
Wen can use the lure of investment and deals to remind the often jostling European states that Chinese cooperation comes with perhaps unspoken but nonetheless clear conditions, said John Fox, a former British diplomat in Beijing now at the European Council on Foreign Relations in London.
"Certainly, from the European side and Number 10 Downing Street the focus of this visit will be almost entirely on the financial crisis," said Fox, referring to the British Prime Minister's residence.
"But China is also looking for Europe to rebalance relations, to take the sting out of these disputes."
TROUBLED TIME
Both sides certainly have a big stake in sound economic ties at this troubled time. The EU is China's biggest trade partner. And China is the 27-member bloc's second biggest external trade partner, behind only the United States.
But that tight embrace can also be uncomfortable.
The EU's trade deficit with China hit a record 160 billion euros (150.7 billion pounds) in 2007 and has continued to expand, fanning anti-dumping disputes over Chinese-made goods from shoes and garments to most recently screws, steel fasteners and steel rods.
China has partly addressed Europe's complaints about currency exchange rates by allowing the yuan to rise against the euro. And with the global economy shaken by falling growth, bilateral disputes have receded as both sides work to shore up confidence.
Beijing officials and state media have said Wen will press Europe to avoid any tougher barriers on Chinese goods.
"We must strive to reduce trade friction," Feng Zhongping, an expert on Europe at a Beijing foreign policy institute, wrote last week in the Global Times, a Chinese newspaper. "The spreading financial crisis has made stressing Sino-European bilateral trade cooperation even more urgent."
Beijing too is wrestling with slowed growth and rising joblessness, and Wen is unlikely to depart from his stance that it must first use its savings to bolster domestic growth.
But London will host the next summit of the G20 club of top wealthy and developing nations on April 2, and Wen's talks there will offer a chance to strike hopeful mood music for that summit.
"I think they're increasingly realising that China's not going to solve its own problems on its own," Fox said of Beijing's leaders. "Europe is really looking for China to join an international recovery effort in substance as well as symbolism."
HARDNOSED DIPLOMACY
But the European powers have also feuded with Beijing over human rights and Tibet, issues that irk Chinese officials, who prefer hardnosed diplomacy. As Wen sells his economic tonic, he will also be seeking to subdue such political frictions.
Chinese foreign policy researcher, Xu Jin, wrote in a recent Beijing policy journal that "politically and diplomatically, the financial crisis may not be a bad thing for China."
"In these circumstances, the U.S. and Europe will increase their efforts to win over China," wrote Xu, "and China should strive to use this opportunity to achieve its corresponding political and economic interests."
Indeed, the capitals hosting Wen have so far made little fuss about Tibet, Beijing's abrupt cancellation of the EU summit, and its sidelining of France, said Fox.
"The European leaders are pretending none of that happened."
(Editing by Jerry Norton)
