LEAD: Merkel meets Hu Jintao, heads to southern China

Feb 3, 2012, 6:09 GMT

Beijing - German Chancellor Angela Merkel met Chinese President Hu Jintao Friday for talks that were expected to focus on international economic and political issues.

'This visit to China will strengthen the confidence and understanding between the two countries,' Hu said during the meeting.

After the talks, Merkel left Beijing by plane for the southern city of Guangzhou for meetings later Friday at German businesses.

She was scheduled to meet the state-ordained Catholic bishop of Guangzhou, the provincial capital, on Saturday before returning to Germany.

But a pioneering newspaper group in Guangzhou cancelled a visit by Merkel that had been 'in the process' of planning, sources told dpa.

The sources said the chancellor had hoped to visit the Southern Daily group, which has led the way in investigative reporting in China and sometimes has criticized local officials and the central government.

Merkel received a boost Thursday when Premier Wen Jiabao expressed confidence in the euro and said China was considering greater involvement in resolving the eurozone debt crisis.

Wen said China was considering 'more participation' in the European Financial Stability Facility and the European Stability Mechanism, the eurozone's bailout funds.

But state media said China was unlikely to purchase large volumes of European bonds unless the European Union demonstrated greater unity on reforming its financial system and spurring growth.

Merkel urged China Thursday 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.'

But Wen said China still favoured a negotiated solution to the nuclear dispute with Iran. 'Sanctions will not solve the problem,' he said.

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