Trade, Crimea to set tone as China’s Xi heads to Germany

March 28, 2014
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Chinese President Xi Jinping waves after a meeting with French Prime Minister Jean-Marc Ayrault in Paris, on March 27, 2014 /AFP
Chinese President Xi Jinping waves after a meeting with French Prime Minister Jean-Marc Ayrault in Paris, on March 27, 2014 /AFP

, BERLIN, March 28 – Chinese President Xi Jinping begins a landmark visit to fellow export powerhouse Germany Friday, the third leg of his European tour, expected to cement flourishing trade ties and focus on the Crimea crisis.

On his first visit to Europe’s top economy since taking office a year ago, Xi is due to hold talks with Chancellor Angela Merkel during the two day stay which comes the week before Berlin hosts a major exhibition by dissident Chinese artist Ai Weiwei.

While human rights may not feature publicly, analysts say economic relations will play a key role, as Germany is China’s biggest EU trading partner while the Asian giant provides a massive market for German machines, technology and cars.

Hans Kundnani, of the European Council on Foreign Relations, said the visit was largely aimed at “relationship building” with Xi and China’s new leaders.

“The economic relationship, in particular the massive growth of German exports to China in the last decades, is the basis for their increasingly close political relationship,” he told AFP.

Last year German Chinese trade amounted to $161.5 billion, or 30 percent of China’s overall trade volume with Europe, according to figures cited by the Chinese Chamber of Trade in Germany, which opened in January.

After a clutch of multi-billion-dollar business deals were inked on his previous stop in France, no reports have so far emerged of big deals on the horizon while Xi is in Germany, where he will also be accompanied by his singer wife Peng Liyuan.

“In concrete terms I’m not expecting a lot,” Gudrun Wacker, of the German Institute for International and Security Affairs said, regarding trade pacts.

Eberhard Sandschneider, from the German Council on Foreign Relations think tank, said a key part of the trip would be about forging ahead with the Chinese-German economic relationship.

“It’s clear that the economy plays a central role even if there aren’t a lot of announcements in terms of contracts,” he said.

According to Handelsblatt business daily, a centre for Chinese yuan trades could be opened in the financial capital, Frankfurt, the first of its kind in the eurozone.

A preliminary accord could be signed during Xi’s trip between the Bundesbank and China’s central bank, which currently sets the rates and carries out exchanges, the daily’s online version said.

– ‘A window is opening’ –

With all eyes fixed on Russia’s possible next move over Ukraine, the worst stand off since the Cold War is also expected to loom large in talks between Xi and Merkel, analysts said.

Xi’s four country European tour began after China lodged a rare abstention on a Western backed UN Security Council resolution condemning Crimea’s referendum on joining Russia, rather than vetoing it alongside its ally Moscow.

Sebastian Heilmann, director of the Mercator Institute for China Studies, said Merkel could try to urge Xi for Beijing to take on a “moderating position” in the crisis.

With its own separatist concerns in Tibet and Xinjiang, he said Beijing cannot have liked the direction Russia has taken with its annexation of Crimea and noted its new leadership wanted to position China as an active and responsible big power.

“For the West a window is therefore opening to solicit China’s cooperation,” he said.

Xi, who after Germany carries on to Belgium, including an historic visit to EU headquarters, will also meet President Joachim Gauck, a former East German rights activist, and deliver a speech on China’s role in the world later Friday.

Just ahead of the visit, Amnesty International’s German chapter called on Merkel to openly address “incarceration and abduction of critical citizens in China”.

Speculation that Xi would seek to visit the Holocaust Memorial in Berlin to highlight how Germany has confronted its Nazi past as a way to embarrass Japan over its wartime actions was denied by Chinese vice commerce minister Wang Chao ahead of the trip.

Beijing regularly calls on Tokyo to express contrition for its invasion of China and atrocities committed during World War II.

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