German firms secure trade deals and invest in China

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br China Germany Merkel~11 Associated Press German Chancellor Angela Merkel, left, chats with Chinese Premier Li Keqiang during the signing ceremony for several major trade and investment deals between the two exporting giants at the Great Hall of the People in Beijing yesterday. Photo: AP

Beijing - China and Germany signed a string of trade and investment deals in Beijing yesterday during Chancellor Angela Merkel’s visit, including commitments to build two new Volkswagen factories and the sale of 123 Airbus helicopters.

The world’s second-largest economy and the EU’s biggest are both exporting giants and Merkel was looking to strengthen their economic relationship during her seventh visit to China since coming to power in 2005. She was accompanied on the three-day trip by executives from Siemens, Airbus, Lufthansa, Deutsche Bank and others, German media said.

Merkel and China’s Premier Li Keqiang oversaw the signing of a series of agreements.

Volkswagen said it would build two new plants, in the northern port city of Tianjin and Qingdao in the east, as the German car maker invests e2 billion (R29bn) with Chinese vehicle manufacturer FAW.

The production capacity of the new plants would be finalised “based on market demand and relevant industrial policies”, the company said.

Merkel toured Volkswagen’s factory in the south-western city of Chengdu on Sunday.

China had become Volkswagen’s largest and most important market, Europe’s biggest car maker said, adding that Chinese sales in the first five months of this year rose 17.7 percent year on year to more than 1.5 million vehicles, including sales by its joint ventures FAW Volkswagen and Shanghai Volkswagen.

Pan-European aerospace giant Airbus announced that its helicopter division had signed contracts to sell “a record” 123 choppers over six years to three Chinese companies. The helicopters – mainly light single-engine aircraft from the Ecureuil family and the light twin-engine EC135 – would be used for general aviation activities, it said. No financial details were provided.

“It is evident that China’s relaxation of its low-altitude airspace regulations is enabling the country’s burgeoning helicopter market to realise its potential,” Airbus Helicopters chief executive Guillaume Faury said.

Also yesterday, German airline group Lufthansa said it had signed a memorandum of understanding to form a joint venture with Air China.

The partnership, which would come into force in October, would provide passengers with additional travel options and flight connections and allow Lufthansa “to have even better access” to the largest aviation market after the US, it said.

China is a crucial mass market for Germany, with Chinese companies wanting its technology and millions of newly prosperous citizens craving German goods ranging from Audi sedans to luxury home appliances.

Last year Germany sold goods worth e67bn to China, its second-biggest export market outside Europe, trailing only the US. Imports from the Asian powerhouse, meanwhile, topped e73bn.

Merkel angered Beijing in 2007 by meeting Tibet’s exiled spiritual leader, the Dalai Lama, whom ruling Communist Party leaders consider a dangerous separatist.

But during the latest visit, any discussion of human rights is likely to take place behind closed doors, an approach that German officials have argued can be more effective in China than finger-wagging reprimands. – Sapa-AFP


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