Chinese Prime Minister Focuses on Trade During German Visit

One day after the European Union opened its doors to 10 new countries, China's prime minister kicked off the start of a whirlwind tour of the continent with a view to promoting stronger strategic and economic partnerships with the EU. His first stop on the 11-day visit is Germany, where he is scheduled to meet with both political and business leaders over the course of three days.

In an interview with the German daily Die Welt ahead of his departure, Wen said the focus of his first official trip to Germany was "above all to promote the economy, trade and technology exchange."

Germany is China's biggest trading partner in the EU, and China hopes to double its trade volume with Germany by the year 2010, Wen stated. In 2003, exports from Germany to China totaled 18 billion euros. The prime minister said he believes both countries have vast opportunities to intensify their cooperation, particularly in the high-tech area and the training of skilled workers.

China, Wen said, was also interested in increasing its investment in Germany. There are currently more than 600 Chinese companies in Germany. But more direct investment of German companies in China and a sharing of technology information is also necessary, in order to build up a strong economic partnership.

More German cars and phones for China

Emphasizing the importance of bilateral investment and joint ventures, Wen's first stop in Germany was the southern state of Bavaria, where among other things he was shown around Volkswagen's Audi plant in Ingolstadt. According to the Finiancial Times, VW is hoping to open a large engine-producing outlet in the Chinese port city of Dalian. This would be VW's third factory in China, with plants already operating in Shanghai and Changchun. So far the two plants have proved so successful that more cars roll off the assembly line in China than at VW's headquarters in Wolfsburg. With a 30 percent share of the overall Chinese car market and sales of some 700,000 cars, the German carmaker has definitely become the people's car in China.

But Volkswagen is not the only German company to do business in the Chinese market. Technology giant Siemens, for instance, has extensive investments in China, starting with the construction of the high-speed Transrapid train linking downtown Shanghai with the airport. On Tuesday the Munich-based company is set expand its business when it signs a major deal with China allowing it to sell its mobile phones throughout the country and not just in the major cities as it does now.

The Frankfurter Allgemeine Zeitung reported on Sunday that several other German companies such as Bayer, Degussa and Infineon are also expected to take advantage of Wen's visit and the political focus on strengthening economic ties between Berlin and Beijing to sign partnership contracts with Chinese firms. On Tuesday a high-profile bilateral technology forum in Berlin will serve as the backdrop for the brokering of many deals.

A bit of politics on the side

Between the forging of business relations, Wen will also have time to meet with German Chancellor Gerhard Schröder for political talks. On Monday evening the two are expected to address the issue of lifting the arms embargo which was imposed on China in 1989 over human rights violations during the Tiananmen Square massacre.

Deputy Chinese Foreign Minister Yang Yesui maintained last week that the lifting of the embargo was long overdue. "I've never really seen a justified link between the embargo and human rights issues," he said. "The embargo stands in the way of closer cooperation between us and the whole of the European Union, and it needs to be done away with immediately."

During his recent visit to China, Schröder promised to push for the lifting of the embargo in Brussels. Although several member states such as France advocate the removal of the restrictions, the EU as a whole has not yet finished analyzing the issue, and many say the decision has to hinge on improvements in China's human rights records. Compounding the discussion is the fact that the United States has warned the EU about lifting the embargo.

Last week EU foreign ministers said they were "a long way from making a decision," but Wen told Die Welt he was optimistic it would happen soon.

It's also not clear whether a previously planned export to China of a mothballed plutonium processing plant in the central German town of Hanau will be a topic of discussion for meetings between the two leaders. Bilateral negotiations on the controversial deal stalled last week, and Wen Jiabao said he himself would not bring up the touchy issue in Berlin and would rather wait for Germany to reach a decision. The ruling coalition of Social Democrats and Greens had been at loggerheads over the planned export of the facility, as it remained unclear whether China might use the plant for military purposes.