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China's Wen Says Global Crisis Worsening

Thu, 08/30/2012 - 2:25am
Joe McDonald, AP Business Writer

Chinese Premier Wen Jiabao said Thursday that the impact of the global economic crisis is worsening, and called during a visit by German Chancellor Angela Merkel for closer cooperation to revive growth.

Merkel was in Beijing for talks with Wen and other Chinese leaders aimed at expanding trade and allaying fears about Europe's debt problems. The visit comes as global growth slows and China struggles to reverse its deepest economic slump since the 2008 crisis.

Wen said he had increased confidence in the eurozone after being briefed by Merkel but expressed concern about European debt and said Italy, Greece and Spain must increase their determination to reform.

"The impact of the global financial crisis and the European sovereign debt crisis on the world is continuously deepening," Wen said during a meeting with Merkel.

"As important economies and strategic partners, China and Germany should make consistent efforts on promoting the confidence of the international community, joining together in dealing with challenges and creating a better tomorrow."

Later, Wen told reporters: "Recently, the European debt crisis has continued to worsen, giving rise to serious concerns in the international community. Frankly speaking, I am also worried."

Wen and Merkel presided at a signing ceremony for billions of dollars in business deals — a regular event during visits by European leaders.

Airbus Industrie committed to invest $1.6 billion in the second phase of an aircraft final assembly plant opened in 2008 in Tianjin, Wen's hometown. A Chinese state company signed an agreement to purchase 50 Airbus jetliners valued at $3.5 billion.

Volkswagen AG, Europe's biggest automaker, signed a deal to invest $219 million in an "environmentally friendly production facility" and vocational training initiative, also in Tianjin.

Officials of the two governments also signed agreements to collaborate in biotechnology, electric vehicles, agriculture, education, labor and the environment.

A round of regular Chinese-German meetings was scheduled for next year, but German officials say Wen asked Merkel to come early before the Communist Party begins a once-a-decade handover of power to younger leaders in October.

Merkel's two-day visit includes meetings with Xi Jinping, who is due to become party leader and president, and Li Keqiang, in line to become premier.

The German leader was accompanied by a 20-member delegation of executives from German companies in the auto, chemicals, energy, commodities and other industries.

The meetings come amid tension over a request by European manufacturers of solar power equipment for anti-dumping duties on Chinese products they say are improperly subsidized. Chinese manufacturers that depend on the European market have warned Beijing might retaliate.

Germany is China's biggest European trading partner and one of the few developed economies with which it runs a trade deficit, due to large imports of German factory equipment and industrial components. Beijing reported a $16.3 billion trade deficit with Germany last year and $13 billion for the first seven months of this year.

German officials told reporters in Berlin that Merkel wants to assure Beijing that European debt is a "safe and good investment."

The visit focuses mostly on economic issues, but a senior German official told reporters he expects an "open discussion" with Chinese leaders on Syria, which is in the throes of a civil war that has left an estimated 20,000 people dead. Russia and China have repeatedly used their veto power in the U.N. Security Council to block strong Western- and Arab-backed action against President Bashar Assad's regime that could have led to sanctions.

Germany hopes a Security Council agreement on humanitarian issues could help provide a basis for a stronger agreement on political questions, the official said, speaking on condition of anonymity.

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AP writer Geir Moulson in Berlin and APTN producer Aritz Parra in Beijing contributed.

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