After examining the Commission’s communication on the Community’s future relations with China , the Council endorsed the broad lines of its future policy towards China . The policy should focus on the following strategic guidelines: - developing relations: Europe should develop a relationship with China that reflects its global and regional importance and potential influence. In this respect, the Union’s priorities should be to maintain stability in the common and security policy, promote an open economy, support sustainable development, promote China’s gradual integration into the world economy, combat poverty, and promote democracy, the rule of law and human rights; - external policy and security: the Union should help China to implement constructive measures for the management and proliferation of weapons (including nuclear weapons) and to resolve its territorial disputes. As regards the specific issue of Hong Kong and Macau , the EU must play a part in ensuring the smooth transition of these regions into the Chinese system. The Union should also strive to support the establishment in China of institutions and a civil society based on the rule of law; - human rights: the Union once again calls for human rights to be respected fully in China (including Tibet) and welcomes the efforts already made in this direction as part of the bilateral political dialogue and ad hoc dialogue on human rights; - economic reforms: the Union supports China’s participation in multilateral economic agreements and organisations, in particular the World Trade Organisation (WTO). This would be facilitated by the establishment of market economy mechanisms in China and by the convertibility of its currency. Efforts must be made to improve access to the Chinese market and eliminate customs duties and non-tariff barriers. The Union also supports the development of agreements on trade in services, maritime transport and telecommunications. Further measures are expected on company law, respect for disciplines in the field of subsidies and respect for intellectual property; - enhancing cooperation: the Union hopes to focus its cooperation on several key areas that will enable China to promote its integration into the global trading and investment system. The Community will concentrate on four areas in particular: . the development of human resources, . support for training and technical assistance to modernise the Chinese economy, . cooperation among businesses to ensure a greater presence of European companies in China , . support for the authorities responsible for environmental standards. The Union also aims to enhance cooperation in the fields of urban and rural development, women’s rights, the development of research and science, the development of civil society and the rule of law, the fight against illegal drugs trafficking, the fight against organised crime, and illegal immigration; - enhancing coordination: here the Union’s goal is to enhance coordination among the Member States, the Commission, the EIB and the private sector in Europe and in China. The priority is to improve the information on China available to potential European investors, to encourage European studies in China and to develop cultural relations. This requires close coordination. A group of experts could be appointed within the appropriate body to improve coordination. Finally, the Council notes that the programme proposed by the Commission in its communication to support businesses is a positive step and should complement the Member States’ activities. The Council also calls on the Commission to draw up a strategy document for China , setting out the proposed cooperation measures. The Council stressed in particular that the available resources should be used to concentrate on a limited number of priority activities in accordance with the guidelines described above.

The Council instructed the Permanent Representatives Committee to give this communication a detailed examination and to prepare, in the light of delegations’ statements during the debate, draft conclusions to be submitted to the Council at its meeting in November in preparation for the discussions of the European Council on the subject in Madrid .