China's Premier Li Keqiang (R) talks to Germany's Chancellor Angela Merkel during a meeting at the Diaoyutai State Guesthouse in Beijing, July 6, 2014.[Photo by Xu Jingxing/Asianewsphoto]
Merkel's visit opens opportunities for investment, economic development
Premier Li Keqiang welcomed visiting German Chancellor Angela Merkel on Sunday and said the China-German relationship is "breaking ground on a high level".
Observers said what is behind Merkel's visit is efforts by the world-leading exporters to address their domestic economic challenges and seek economic growth from cutting-edge sectors.
Before flying to Beijing on Sunday evening, Merkel spent part of the day in China's southwestern city of Chengdu as the first stop of her China tour.
Cui Hongjian, director of the Department for European Studies at the China Institute of International Studies, said the priority of Merkel's trip is to seek stronger support and weather the storms of the domestic economy.
Berlin is "fighting to maintain domestic economic growth", while Beijing is faced with declining external confidence, Cui said.
Premier Li expected the two sides to "strengthen bilateral communication and coordination in major international and regional affairs".
Beijing considers improving people's livelihood a top priority and China's development requires a peaceful environment, he told Merkel.
"I am looking forward to the official meeting tomorrow with the chancellor to promote bilateral political mutual trust, and deepen beneficial cooperation in fields including economy and trade, finance, sustainable growth and culture," Li said.
Merkel said stronger bilateral cooperation benefits both sides and the world, and Berlin is willing to seek closer contact with Beijing on international issues to jointly ensure world peace and development.
Germany is China's largest trading partner in Europe, while China is Germany's biggest in the Asia-Pacific region. Two-way trade stood at $161.6 billion last year, accounting for nearly one-third of the trade between China and the European Union.
The two countries are expected to "unveil a range of detailed cooperative programs" during the visit to bring about pledges in financial and eco-friendly sectors, Cui said.
Before her trip ends on Tuesday, Merkel will meet with President Xi Jinping and top legislator Zhang Dejiang.
As the Chinese president paid an official visit to Germany in late March, observers were amazed to find that the upcoming meeting between the leaders was made within four months.
Mei Zhaorong, former Chinese ambassador to Germany, said China and Germany are joining hands in seeking free global trade and fighting trade protectionism, although there are also doubts about the good ties.
"There have been some questioning voices within the European Union because the China-German relationship is growing fast. ... Some of them are trying to alienate the two sides. There is jealousy behind it," Mei said.
The in-depth and comprehensive relationship is presenting a good example and a good lead for the China-EU relationship, Mei added.
Chinese investing big in Berlin
New investors cautioned of complicated laws, taxation
Chinese companies are making big investments in Germany, eyeing the country's advanced technology and management, a senior Chinese commerce official said.
"The value and the amount of Chinese investment in Germany are both rising quickly," said Meng Fanzhuang, mini ster counselor for commerce at the Chinese embassy in Germany.
Embassy figures show that about 2,300 Chinese companies are investing in German industries - such as finance, aviation , telecommunication and machinery - with a total investment of more than $4 billion.
Apart from setting up traditional trading firms, manufacturing bases and service companies, more Chinese investors are building research and development centers, bolstered by Germany's outstanding talent reserve and technologies, Meng said.
More Chinese investors are trying to make their ventures fit better into the local business environment. For instance, they dispatch a handful of executives to Germany for decision-making, financial management and other essential tasks, and employ local workers to prime the pump, he said.
Meng said the financial crisis that began in 2008 forced some German companies into difficulties - such as financing or finding the company's successor - to sell out to or team up with foreign companies, including Chinese ones.
Cao Yi, a media officer with Germany Trade and Invest, a promotional agency set up by the German government, said the Chinese government's support for companies' outbound investment is an important catalyst for the steadily increasing Chinese investment in Germany.
Chinese enterprises are also eager to expand their turf and create brand-names in the international market, she said.
"Made-in-Germany is a good label for them," Cao said, adding that Chinese investors also covet the well-trained German workforce.
Hong Gang, executive chairman of Greatview Aseptic Packaging , said the traditional high-caliber training system in Germany guarantees the quality of the labor pool.
ACCUMULATED AMOUNT OF CHINA'S DIRECT INVESTMENT IN GERMANY. SU JINGBO/CHINA DAILY
"German workers are very prudent; they pay attention not only to the outcome, but also to the process," he said.
Greatview opened a packaging base in Germany with an investment of 50 million eu ros ($68 million) in 2011 and added an investment of 33 million euros on a second production line in 2013.
However, for newcomers to the country, Meng cautioned that there are always difficulties. He suggested companies fully assess the risks and integrate the investment operation with the company's overall overseas strategy.
It is also noteworthy that Germany provides preferential policies for companies doing business in eastern Germany and other less-developed areas. Investors can benefit from subsidies through communication with local government, he said.
"I also suggest Chinese companies hire local consultants or law firms because German laws and the taxation system are very complicated and can be a major challenge," Meng said.
Meanwhile, German direct investment in China, particularly automation, digitalization and environmental protection, has also been booming in recent years.
More than 8,200 German companies have invested an accumulated $20 billion in China, according to the embassy.
Economy tops agenda of Merkel's visit to China
Angela Merkel is paying another visit to China this weekend - her 7th trip to the Asian powerhouse as German Chancellor, leading a high-level economic delegation.
German analysts believed Merkel's trip is aimed at keeping the dynamic in the current Sino-German relations going further. Given that the bilateral economic relationship has quickly developed, economy is widely regarded as the focus of the chancellor's visit.
FREQUENT HIGH-LEVEL EXCHANGES
How much China means to Germany is obvious given the number of trips that Merkel has made to the country,German media commented.
In recent years, China and Germany have maintained frequent exchanges of high-level visits.
In March this year, Chinese President Xi Jinping visited Berlin. This spring it was Germany's turn: Foreign Minister Frank-Walter Steinmeier and Economy Minister Sigmar Gabriel traveled to Beijing. In the fall, their Chinese counterparts are expected for intergovernmental talks in Berlin.
And now, Merkel is embarking on a three-day visit to China. No other European leader has met with the Chinese leadership as much as Merkel, German media said.
There is a certain dynamic in the Sino-German relations at the moment, and Merkel's current trip is aimed at keeping that momentum going, Sebastian Heilmann, President of the Mercator Institute for China Studies (MERICS) said in a recent interview with Deutsche Welle.
Heilmann believed the main focus of the talks during Merkel's visit will be the upcoming government consultations slated for October, which will cover issues ranging from technology to education and cultural programs.
Not all of those issues can be negotiated at a lower level, hence the importance of a meeting between the heads of state, the Chinese expert said.
BUSINESS HIHG ON THE AGENDA
Economy is widely regarded as the focus of Merkel's China trip, based on an emerging "economic symbiosis" between China and Germany.
Currently, Germany is China's largest trading partner in Europe. The opposite: China is Germany's most important trading partner in Asia and a crucial market for German export goods.
The enormous growth of Sino-German economic relations lies in the fact that the two countries have complementary economies, Heilmann noted.
"Germany provides China with products it needs for industrialization, for example machines, specialty chemicals and electronic goods; On the other hand, Chinese consumer goods with very reasonable prices are in high demand in Germany," he added.
The investment cooperation between China and Germany is no longer a "one-way street". More and more Chinese companies are active internationally and investing in Germany. Heilmann believed the competition for Chinese investment between European countries will intensify in the future.
On her visit to China, which will last until Tuesday, Merkel is accompanied by a large business delegation,including top executives of Volkswagen, Siemens, Airbus, Deutsche Bank. A series of economic agreements are expected to be signed.
On Sunday, Merkel will begin her trip in Chengdu, capital of China's southwestern Sichuan province.
Berlin has had a general consulate there for ten years, given that Chengdu is regarded by German companies as a springboard to the relatively underdeveloped western parts of China. About 160 German companies are now active in the area, among them a Volkswagen factory which the chancellor is set to visit.
German media also noticed that the recently founded Sino-German Advisory Committee on Economy will meet in Beijing for the first time, in the presence of Merkel and her Chinese counterpart, Li Keqiang.
The committee's aim is to identify trade problems between the two countries and make specific policy recommendations, which will then be analyzed by the respective governments, Heilmann told media.