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EU RIVALS US, CHINA SAYS
 
BEIJING - The European Union is the world's rising superpower, poised to overtake both America and Japan as the biggest trade and investment force in China, according to a strategic policy paper published by Beijing and quoted in the Financial Times.
 
The Chinese government said the EU was transforming the global landscape with its successful currency launch and strides towards a joint foreign policy, defense, and judicial union.

Describing EU integration as "irreversible", Beijing marveled at Europe's 25% to 35% share of the global economy and its projected 450 million population after expanding into the former communist bloc next year.

The white paper follows a flurry of Sino-EU ventures, including the Galileo global satellite system, seen as a direct challenge to the American GPS monopoly in space, the Financial Times said.

The two sides are also working together on nuclear research.

France and Germany have been pushing hardest for closer ties with China, hoping to cash in on a lucrative market but also to develop a strategic alliance as a counterweight to American power after the diplomatic trauma of the Iraq war.

Last June, the French defense minister, Michele Alliot-Marie, proposed sharing sensitive military technology with Beijing. She called for a softening of the arms embargo imposed on the country after the Tiananmen Square massacre in 1989.

The Chinese already have the world's second biggest defense budget, but they have to rely on outdated weaponry bought from Russia and Ukraine.

The strategic white paper said the ever-closer military ties rendered the EU embargo a relic from the last century.

China's efforts to court Brussels reflect a new mood of respect for the EU across Asia. India is also rushing to upgrade its ties with Europe, recruiting extra staff to lobby EU officials and MEPs, the London-based newspaper said.

MEXICO ECONOMY TO GROW, OFFICIAL SAYS

MEXICO CITY - Mexico's Treasury Secretary Francisco Gil Diaz has predicted Mexico's economy would expand by 3.5% in 2004, just one day after he lowered growth predictions for 2003 to 1.5%.

Gil Diaz' comments were blamed in part for the weakening of the peso in exchange markets recently, when the Mexican currency fell to 11.19 against the US dollar.

"We believe that, if the structural reforms are carried out, we could easily see GDP growth of a couple of points above 3.5 percent, which is our prediction right now" for 2004, Gil Diaz told legislators.

He called the 3.5% goal "a conservative estimate."

Mexican officials had previously predicted 3% growth for 2003, but later reduced that estimate, based on what they called weakness in the world economy.

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