EU rebuffs China on lifting arms embargo

"The Chinese side reiterated its view that lifting the arms embargo would be conducive to the sound development of EU-China relations," the statement said.

But while the EU said it "recognised the importance of the issue," there was no promise to end the ban in the near future.

However, EU leaders said they were willing to "carry forward work towards lifting the embargo."

The arms ban was put in place by the EU following the violent crackdown by China's communist regime against pro-democracy protestors on Beijing's Tiananmen square in 1989, which left more than 2,000 civilians dead, according to numbers from the Chinese Red Cross.

Human rights were also mentioned in the statement with the two sides underlining their "commitment to the protection and promotion of human rights and continued to place a high value on the EU-China human rights dialogue," which has been criticised by human rights organisations for being too vague.

No market economy status

The EU also declined to give China an "market economy status," highlighting the strained economic relations between the two major trading partners.

Market economy status plays a decisive role in anti-dumping cases - when there is suspicion that goods are being exported below their production price – with China under frequent investigation by Brussels for dumping goods on the EU market, such as shoes.

European Commission president Jose Manuel Barroso said specific technical criteria had to be met by China before a decision on market economy status could be made, such as the influence of the state, accounting rules, bankruptcy law and reform of the financial services sector.

"These are relevant to determining prices and costs in anti-dumping. Once these criteria are fulfilled, we won't wait a day," he said according to the Financial Times.

After EU enlargement in 2004, the bloc overtook Japan in becoming China's largest trading partner, with total trade up 29 percent in the first half of this year, while China is the EU's second largest trading partner after the US.

Mr Wen objected once again to the EU's policy of linking "economic and trade issues with the so-called human rights issues," reports the FT.

Darfur

The EU and China made only limited progress over the Sudanese region of Darfur, where the crisis has worsened recently after the Sudanese government told 7,000 African Union (AU) peacekeeping troops to leave the country because of the union's plans to hand over to a United Nations force at the end of this month.

China abstained in a UN Security Council vote authorising the transition to a UN force in Darfur, primarily because it buys oil from Sudan.

In the statement the two sides said "leaders expressed their serious concern about the deteriorating security and humanitarian situation in Darfur [and] emphasized that transition from an AU [African Union] to a UN led operation would be conducive to the peace in Darfur."