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Chinese 'will invest to help boost euro'

The Local · 30 Aug 2012, 08:49

Published: 30 Aug 2012 08:49 GMT+02:00

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"I told Premier Wen that very many reforms are going on now, and that there is an absolute political will to turn the euro into a strong currency again," Merkel told reporters after meeting Wen.

Wen said at a joint press conference held by the two leaders that he was reassured by Merkel's comments on the euro, and that China would continue to invest, but he cautioned that the road to recovery would not be smooth.

"China has always had confidence in the eurozone, and we are happy to see greater use of the renminbi by European countries in trade and economic transactions," he added, referring to China's currency.

Europeans have expressed the hope that China could deploy some of its foreign exchange reserves -- the world's largest - to invest in European Union bailout funds, although there is little sign of this happening yet.

The country was prepared to invest in planes though, signing a $3.5 billion deal to buy 50 Airbus A320 jets, the official Xinhua news agency said.

The agreement between ICBC Leasing and Airbus was part of a series of agreements signed by China and Germany at the start of Merkel’s visit. ICBC Leasing is a unit of state-owned bank ICBC.

Other agreements include one relating to assembling Airbus planes in China, Xinhua said, as well as deals in areas such as automobiles, energy, the environment and health.

China, the world's second-largest economy, has a fast-growing aviation sector and manufacturers are racing to capture orders as the country's increasingly affluent consumers more frequently take to the air when travelling.

Merkel, making her second visit to Beijing in seven months, met Chinese Premier Wen Jiabao on Thursday. She was accompanied by a high-level business delegation.

Bilateral trade between the two countries reached $169 billion in 2011, an 18.9-percent rise on the previous year. Continued growth in this area could help everyone, said Wen.

"Strengthening practical cooperation between China and the EU is conducive to overcoming the eurozone debt problem," Wen said. "China will continue to invest in the EU."

Wen said the international community had "serious concerns" about the European debt crisis, citing worries over a possible Greek exit from the eurozone and whether Italy and Spain would accept comprehensive rescue measures".

Story continues below…

"Resolving these two problems depends on whether Greece, Spain, Italy and other countries have the determination for reform," he said.

Merkel’s visit is on her second in just seven months, as Europe's debt crisis begins to drag on the two global economic powers.

With the nearly three-year-old crisis showing signs of spreading to China, the world's second-largest economy, Beijing views Germany as a key player in tackling the problem.

AFP/The Local/hc

The Local (news@thelocal.de)

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Your comments about this article

09:47 August 30, 2012 by smart2012
Germany (merkel) is seens as the key player as so far it is the oner that has completely missed the strategy. in the last weeks Merkel is changing (after being warned by recession in Germany, see German latest manufactuing data), however we have to hope this is not too late. And about Chinese money, everyone in the world is interested in Chinese investement (incl USA), as at the moment China (and Russia and Arabs) is the only one with money... As said in a previous post, Merkel just needs to say that she wants Europe, then pray that China believes her...
12:49 August 30, 2012 by Herr Rentz
Airbus may as well sell them the plans and licensing for the A320. They'll be churning out copies in three to five years.
16:52 August 30, 2012 by marimay
This is kinda like deciding I don't want to clean the house, so i set it on fire instead.
02:34 September 3, 2012 by mos101392
Merkel must take the Chinese for fools. Any average invester can see Europe is a bad investment. Just wait and see if Greece gets the next bailout. My money is on Greece needing another extension or more money. The Chinese would be fools to pour more money in a never ending Black hole or endlesss pit!
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