China's Hu promises Europe debt crisis support

Feb 3, 2012, 10:48 GMT

Beijing - Chinese President Hu Jintao on Friday promised German Chancellor Angela Merkel there would be 'no lack of Chinese support' for the European Union to help it overcome the eurozone debt crisis.

Merkel has been appealing to China, as the holder of the world's largest foreign exchange reserves, to contribute to bailouts to quell the EU's sovereign debt crisis.

German government sources said that at the Beijing meeting, Hu expressed China's confidence in the euro, echoing similar remarks by Premier Wen Jiabao, and said Merkel's visit would 'strengthen the confidence and understanding between the two countries.'

Later, at a business forum in the southern city of Guangzhou, Wen reiterated China's support for Europe but said reports that 'China wants to buy Europe' were exaggerated.

'China doesn't have this intention and doesn't have this ability,' he said.

Merkel said later that she had discussed with Wen the need for a 'level playing field' for foreign companies in China.

'It is important that German companies in China and Chinese companies in Germany face the same competitive environment,' she said at the business forum.

Wen had said a day earlier that China was considering 'more participation' in the European Financial Stability Facility and the European Stability Mechanism, the eurozone's current and future bailout funds respectively.

But in a commentary on Merkel's visit, state media said China needed to make 'thorough investigations before announcing concrete moves' to help the eurozone.

'To walk out of the crisis, fiscal austerity is essential, while measures to boost growth are also needed (in Europe),' the official Xinhua news agency wrote.

Merkel said she and Wen had 'reached consensus' on bilateral cooperation in international forums such as the G20 group of the world's 20 leading economies.

On Friday, Merkel and Wen visited a German factory making robotic tunnelling equipment in Guangzhou.

'In the financial crisis, without China we would be in an even worse situation,' Martin Herrenknecht, the head of the Herrenknecht (Guangzhou) Tunneling Equipment Company, told reporters before the arrival of the two leaders.

The business forum in the city was attended by Wen, Merkel and the heads of companies including Volkswagen AG, Siemens AG and Lenovo.

Merkel was scheduled to meet Wang Yang, the provincial leader of Guangdong, of which Guangzhou is the capital, on Saturday, the last day of her three-day stay before returning to Germany.

Wang is tipped to be promoted to the elite nine-member Standing Committee of the Communist Party's Politburo later this year.

Merkel also planned to meet the state-ordained Catholic bishop of Guangzhou on Saturday.

Mo Shaoping, a leading rights lawyer, told dpa on Friday that police had held him at his office on Thursday to prevent him from attending a scheduled dinner with Merkel.

A pioneering newspaper group in Guangzhou also 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 has criticized local officials and the central government.

During her visit, Merkel has also 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.'

But Wen has responded by saying China still favours a negotiated solution to the nuclear dispute with Iran.

'Sanctions will not solve the problem,' he said.

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