German chancellor Angela Merkel aims to expand trade ties on visit to China | South China Morning Post
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German chancellor Angela Merkel aims to expand trade ties on visit to China

China is key market for EU powerhouse while mainland's rising class eager to buy German

PUBLISHED : Friday, 04 July, 2014, 12:07pm
UPDATED : Saturday, 05 July, 2014, 2:19am
 

German Chancellor Dr Angela Merkel heads to China this weekend for her seventh visit, eager to deepen trade and investment ties between the export powerhouses of Europe and Asia.

For the EU's biggest economy, China is a crucial mass market, where companies want its technology and the millions of newly prosperous crave German goods from Audi cars to luxury home appliances.

Merkel is set to travel with a high-powered business delegation including top executives of Siemens, VW, Airbus, Lufthansa and Deutsche Bank, the Bild daily reported this week.

Government officials did not confirm the line-up but said corporate chieftains hoped to sign deals in Beijing's Great Hall of the People that could further cement bilateral business ties.

China is the second biggest market for German exports outside Europe, after the United States. It sold goods worth €67 billion (HK$708 billion) to China last year, while imports from the Asian giant topped €73 billion.

"Over the last decade or so German exports to China have grown exponentially," said Hans Kundnani, research director at the European Council on Foreign Relations.

"The big turning point was the 2008-09 financial crisis and the subsequent euro crisis, when the bottom fell out of some of Germany's markets in Europe and … the Chinese market became even more important.

"There is now this almost perfect symbiosis: Germany needs an export market and China needs technology."

Merkel starts her three-day trip tomorrow in Chengdu in Sichuan province, where she will visit a plant of VW's local joint venture and attend a forum on urbanisation. She will meet Premier Li Keqiang on Monday and later President Xi Jinping .

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