August 9, 2022

Chinese Leader’s Visit to Germany Ends With Large Trade Deals

BERLIN — Wrapping up a five-day visit to Europe, Prime Minister Wen Jiabao of China concluded trade deals in Germany worth several billion euros, including a contract to purchase 88 Airbus A320 aircraft.

The deals, announced during a signing ceremony in the Chancellery here, signaled a major shift in German-Chinese relations as China tries to modernize its economy and Germany seeks more markets for its high-technology goods.

Germany and China agreed to establish special government consultations, which means representatives of the two countries will meet regularly and will discuss a wide range of topics, like trade, investment, education, environment, human rights, security and the rule of law. “A new chapter has been built,” Chancellor Angela Merkel of Germany said during a news conference with her Chinese counterpart.

Mrs. Merkel’s decision to meet the Dalai Lama, the exiled spiritual leader of Tibet, in 2007 provoked sharp criticism from the Chinese leadership and the threat that German companies would lose out on lucrative contracts as a result of that meeting — also held in the Chancellery.

While no contracts were canceled, Mrs. Merkel has in the meantime given far more attention to trade and economic ties with China as Germany has ridden out the global financial crisis. Germany is Europe’s strongest economy, with one of the bloc’s lowest unemployment rates, because of its export-driven economy and more flexible labor force.

Earlier Tuesday, Mrs. Merkel said bilateral trade with China could increase to €200 billion, or $285 billion, by 2015 as the two countries “significantly deepen” their ties. Trade between the two countries amounted to €130 billion last year, an increase of 34 percent from 2009, according to the Federation of German Industry.

Mr. Wen said that trade between Germany and China could double within five years. Mrs. Merkel and Mr. Wen spoke at a Chinese-German business forum. The entourage Mr. Wen took with him to Hungary and Britain, earlier in his European visit, paled in comparison to the delegation in Germany: 13 ministers and more than 300 managers.

He called for “mutual respect” for the different historical and cultural backgrounds of China, Germany and the European Union.

“China respects the European political system,” Mr. Wen told the business forum. “On the other hand, we expect respect for China’s system and China’s territorial integrity.”

Mrs. Merkel, who spent more than four hours in talks with Mr. Wen on Monday evening in a government lakeside villa in south Berlin, gave him the full red carpet treatment, including military honors Tuesday morning.

Accompanied by almost all of the German cabinet, Mrs. Merkel began her government’s consultations with China.

China overtook Germany as the world’s biggest exporter in 2009. China is Germany’s third-biggest trading partner, after France and the Netherlands and ahead of the United States.

“We both take the view that what is good can become better,” Mrs. Merkel said at the business forum. She added that China and Germany were “ideal partners” to develop electric cars, for example, and said both countries wanted to “deepen our investment relationship.”

Despite the bonhomie of the public meetings and the trade and investment deals won by German companies, Mrs. Merkel, on behalf of German industry, raised several sensitive issues with Mr. Wen.

One was technology transfer, in which Chinese companies dismantle a machine, copy it and manufacture it. “This is a big issue,” said Friedolin Strack, director of the Asia unit of the Federation of German Industries.

Mrs. Merkel also brought up intellectual property rights.

German industry, too, was critical of the way Chinese companies are subsidized in their international activities, especially in Eastern Europe. A recent study by the Committee on Eastern European Economic Relations, a lobby for German industry, criticized China for providing low-cost loans and subsidies to Chinese firms competing for contracts in Eastern Europe.

Mr. Wen, for his part, said Chinese companies wanted to invest much more in Germany. Direct German investments in China amount to €20 billion.

Chinese investments in Germany total €600 million, according to Germany Trade and Invest, an industry lobby.

Article source:

Speak Your Mind