The European Union yesterday pledged to work towards lifting its 15-year-old arms embargo on China, suggesting this could be done next year.

The embargo had been imposed following China's bloody crackdown on pro-democracy protesters in Tiananmen Square in 1989. The embargo issue was the main item discussed during an EU-China summit in the Netherlands yesterday.

The EU's intention will definitely upset the United States fearing that an end to the embargo could mean a buying spree for weapons that could be used to threaten China's diplomatic foe, Taiwan, and upset the strategic balance in Asia.

In a joint statement following the summit, the two sides stated that the EU confirms its political will to continue to work towards lifting the embargo. China welcomed the positive signal and considered it beneficial to the sound development of the comprehensive strategic partnership between China and the EU.

Dutch Foreign Minister Bernard Bot, whose country currently holds the presidency of the EU, said he hoped the arms ban would be lifted next year. He said "we are working assiduously but... the time is not right to lift the embargo".

The decision on whether to lift the embargo could come at an EU summit in March but Dutch Prime Minister Jan Peter Balkenende said there was no guarantee it would be done.

France has led a drive to scrap the embargo, which could open up lucrative trade opportunities with the world's fastest-growing economy. The EU's trade deficit with China stood at €64.2 billion last year. Britain and Sweden, however, are among the most adamant that China must demonstrate clear progress on human rights before it can be removed from a list of states under an EU arms embargo, which includes Myanmar, Sudan and Zimbabwe.