EU Trade Commissioner Peter Mandelson has today warned that China's partners must balance their protest over Chinese policy with a recognition of the need to engage with China as it "grapples with a governance challenge on a scale that probably has no precedent in political history". Speaking to the Britain-China Business Council in London, Mandelson previewed the launch of the new EU-China High Level Mechanism for trade and economic issues in Beijing next week. He said that the new dialogue, which would provide a channel for high level strategic planning and problem-solving on trade issues between the EU and China, had to be part of a wider engagement strategy that could keep the EU and China talking – even when political differences were strong. 

• Mandelson argued that engagement with China as it struggled to transform its "superheated growth model into something that is economically more balanced, and politically and environmentally more sustainable" would be unavoidable. The West's greatest mistake, Mandelson argued, would be to imagine that it had no stake in that transformation. For the international system, Mandelson said "China is like a bridge being rebuilt beneath our feet… We will not be able to dictate the solutions to China's problems. But we do not have the luxury of ignoring them either."
  
• Mandelson said: "Modern China presents us with a dilemma. Our concerns, our protest, must go hand in hand with a strategy for ensuring that China continues to look outwards, to pursue internationalism. We can and should insist on our values and our concerns. But we must also not lose sight of the fact that we are bound to work with China, to live alongside China, to help China succeed". 
  
• Mandelson said that the new High Level Mechanism would have the potential to give new momentum to shared EU-China trade policy issues such as the improving protection of intellectual property rights, ensuring an open investment climate for investment in both directions and balancing the EU's trade deficit with China by boosting domestic demand for EU imports in China.
  
• Mandelson said he did not support trade boycotts as a form of protest against Chinese saying that such moves could only damage the interests of ordinary Europeans and Chinese.
  

Read the full speech: Living with China.

More on Mandelson: http://ec.europa.eu/commission_barroso/mandelson/index.htm