German leader looks to reassure Chinese on euro

Tue Aug 28, 2012 3:20pm EDT
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By Noah Barkin

BERLIN (Reuters) - Germany's Angela Merkel makes her second trip to China in half a year this week, hoping to strengthen booming trade ties and obtain assurances from Beijing that it will support the fragile euro zone by buying the bonds of its stricken southern members.

The relationship between the world's top two exporters went through a decidedly chilly phase after Merkel received the Dalai Lama in Berlin in 2007, but she has toned down her criticism of China's human rights record in recent years and shifted her focus to economic links.

In a sign of how much ties have improved, Merkel will be taking seven ministers with her for full-fledged consultations between the two governments, a format the countries launched last year and until recently was reserved for Berlin's closest European partners.

The trip is the sixth to China since Merkel took office in 2005. She was in Beijing as recently as February, then hosted Chinese premier Wen Jiabao at the Hanover trade fair in April.

On this trip, which kicks off on Thursday morning in the Chinese capital and lasts through Friday, Wen will give her a tour of the Forbidden City - the Beijing landmark that housed China's emperors - and the leaders will travel in a high-speed train to his hometown of Tianjin, visiting an Airbus factory where a mega-deal for 100 narrow-body jets could be signed.

German officials say the talks will cover a wide range of issues, from energy, climate and cultural links, to sensitive subjects like Syria.

But the focus for Merkel and her delegation - which includes some 20 top executives from bluechip firms like EADS EAD.PA, Siemens (SIEGn.DE: Quote) and Volkswagen (VOWG_p.DE: Quote) - will be reassuring Chinese leaders about the stability of the euro zone and Germany's determination to keep it together.

"We need to convince China, as we do other investors, that euro investments are stable and secure," a senior aide to Merkel told reporters on Tuesday in Berlin.   Continued...

German Chancellor Angela Merkel speaks during the closing ceremony for the 'Dialogue about Germany's future' in the conference room of the Chancellery in Berlin, August 28, 2012. REUTERS/Bundesregierung/Guido Bergmann/Pool