Merkel meets Chinese premier, backs EU recovery

Feb 2, 2012, 9:17 GMT

Beijing - German Chancellor Angela Merkel on Thursday told Chinese officials that the European Union was 'on track' to financial recovery, before meeting Premier Wen Jiabao for talks at which she was expected to seek China's help with the eurozone crisis.

The euro had 'made Europe stronger' and EU members were convinced that an agreement on Monday to limit overspending had put them 'on the right track' to financial recovery, Merkel said before her talks with Wen.

'The European Union - in particular those states that have adopted the euro - has made considerable progress in the last two years,' she said in a speech on economic and financial policy at the Chinese Academy of Social Sciences (CASS), a state-run think-tank.

Germany saw China as possessing 'more and more' power in the International Monetary Fund and wanted to cooperate with Beijing to move its remminbi currency towards free convertibility, Merkel said.

She said German firms operating in China wanted to be 'treated on an equal footing with Chinese companies,' an apparent reference to foreign companies' long-standing complaints about a range of non-tariff barriers.

Wen gave Merkel a formal welcome before their closed talks at Beijing's Great Hall of the People.

The two leaders were scheduled to give a joint press briefing after the talks, which were attended by China's finance and commerce ministers and the governor of its central bank.

In remarks following her speech, Merkel urged China to press Iran to be more 'open and transparent' and help 'make Iran understand that the world must not have another power with nuclear weapons.'

Germany hoped the United Nations Security Council, of which China is one of five veto-holding permanent members, would be able to agree a unanimous resolution on Iran, she said.

She also said the Security Council should speak out against human rights abuses in Syria.

Her meeting with Wen on Thursday and planned talks with President Hu Jintao on Friday were also expected to cover a wide range of international economic and political issues, while German officials said Merkel would raise concerns over China's recent human rights record.

'Germany has always advocated an open, political dialogue, including on controversial issues such as human rights and building a state of law,' she said on Thursday before her talks.

State media on Thursday warned that China was unlikely to purchase large volumes of European bonds unless the European Union could demonstrate greater unity on reforming its financial system and spurring growth.

'The EU has a unified currency, but it doesn't have a unified finance system to ensure every country sticks to its promise to cut their deficits,' the Global Times newspaper quoted Shen Jiru, a CASS researcher, as saying.

But Shen said Merkel shared 'a similar idea with China that European countries have to take reforms before outside help can come in.'

Her two-day visit was 'a good opportunity for her to explain to Chinese leaders and investors how the EU will handle the crisis,' he was quoted as saying.

Merkel was accompanied by a large business delegation and planned to visit German companies in the southern province of Guangdong on Friday.

The visit is her fifth to China in the seven years she has been Germany's chancellor.

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