China and the European Union (EU) are moving on to a new phase of regulatory contacts with a view to enhance mutual relations, a senior EU official said Friday.

Charlie McCreevy, European Commissioner for International Market and Services, said in a speech at a luncheon that since the EU started building up regulatory contacts with China two years ago, both sides have been pleased by the way this relationship has evolved.

"The first phase in this relationship was focused on confidence-building and the exchange of general information. But we are now ready to move on," he said.

Both sides have agreed that 2006 should be used to further enhance the relations on financial services and markets, intellectual property and public procurement, said McCreevy, who is on the last leg in Hong Kong for his first visit to China as European Commissioner. He stopped at Beijing and Shanghai early this week.

During his stay in the Chinese mainland, McCreevy attended the opening of the second EU-China Dialogue on macroeconomic and financial regulatory issues and talked with some of the Chinese government officials on financial sectors.

While in Hong Kong, he met Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, Frederick Ma, Secretary for Financial Services and the Treasury, Paul Chow, Chief Executive of Hong Kong Exchanges and Clearing Limited and Martin Wheatley, Chairman of the Securities and Futures Commission.

"I believe that through this dialogue we will be able to make good and solid progress," he said.

He was satisfied with the achievements gained during the first phase of dialogue. In banking, the EU will implement the "standardized" approach in Basel II accord next year. So will China from 2010 onward as it has announced recently.

In accounting, by adopting International Financial Reporting Standards (IFRS) in Jan. 1, 2005, the EU is moving forward the development of IFRS as a global set of accounting standards.

McCreevy hoped to narrow the gap between the IFRS and the Chinese accounting standard over the next years.

Besides the financial services, he also mentioned a number of other areas where EU-China dialogue is being advanced, including intellectual property and government public procurement.

"I am pleased that in China, Europe has found an excellent and constructive partner and I am convinced that our work together will be rich and rewarding," he said.

Source: Xinhua