China, Germany agree slew of trade deals
Print Edition
CHINA and Germany yesterday signed a series of trade and investment deals during a visit by Chancellor Angela Merkel.
They included agreements to build two new Volkswagen factories in China and the sale of 123 Airbus helicopters.
The two countries are both exporting giants — with Germany the European Union’s biggest economy and China the world’s second-largest — and Merkel was looking to strengthen their economic relationship on her three-day visit, her seventh since coming into power in 2005.
After their talks in the morning, Premier Li Keqiang and Merkel oversaw the signing of a series of agreements.
According to a statement by Volkswagen, the German carmaker will build two new vehicle plants in the northern port city of Tianjin and Qingdao in the east as it invests 2 billion euros (US$2.7 billion) along with Chinese auto manufacturer FAW.
The production capacity of the new facilities will be finalized “based on market demand and relevant industrial policies,” the company said.
Merkel toured a Volkswagen factory in the southwestern city of Chengdu on Sunday.
China has become the carmaker’s largest and most important market, it said.
It sold more than 1.5 million cars in the country in the first five months, including sales by its joint ventures FAW Volkswagen and Shanghai-Volkswagen, an increase of 18 percent on the same period of 2013, it said.
Meanwhile, European aerospace giant Airbus announced that its helicopter division has signed contracts to sell “a record” 123 aircraft over up to six years to three Chinese companies.
The helicopters — mainly light single-engine aircraft from the Ecureuil family and the light twin-engine EC135 — will be used for general aviation activities, it said in a statement.
“It is evident that China’s relaxation of its low-altitude airspace regulations is enabling the country’s burgeoning helicopter market to realize its potential,” Airbus Helicopters CEO Guillaume Faury said in a statement.
Also yesterday, German airline group Lufthansa said it had signed a memorandum of understanding to form a joint venture with Air China.
The new partnership, which will come into force in October, will give passengers additional travel options and flight connections, and allow Lufthansa “to have even better access to the second largest aviation market after the United States”, according to the German carrier.
During a joint press briefing following his talks with Merkel, Li said that China and Germany established a high-level fiscal and financial dialogue mechanism.
One of the outcomes of the talks was China granting Germany an 80 billion yuan (US$13 billion) investment quota under the qualified foreign institutional investor program.
Merkel said that the Chinese economy is full of vitality and German firms are keen to expand their investment in China, and participate in the development of its central and western regions.
In his meeting with Merkel, President Xi Jinping pledged to cement the strategic partnership between the two countries, calling Germany an “important strategic partner.”
China and Germany should “take bigger steps” in their practical cooperation and work harder to create more joint-venture brands, highlight cooperation on manufacturing and make best use of the new renminbi offshore trading center in Frankfurt, Xi said.
“Germany is a country with sizable influence in the world,” he said. “China places high importance on the development of our relationship.”
The Chinese president also wished Germany good luck in the World Cup in Brazil.
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