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Business

China agrees to $3.5 billion purchase of Airbus jets

©

Text by News Wires

Latest update : 2012-08-30

China agreed to a $3.5 billion deal to buy 50 Airbus jets on Thursday during a visit by German Chancellor Angela Merkel. Merkel's talks with Premier Wen Jiabao were aimed at assuaging China's fears over the eurozone's debt crisis.

AFP - China signed a $3.5 billion deal to buy 50 Airbus jets Thursday during a visit by German leader Angela Merkel, who sought to reassure Beijing that Europe is committed to overcoming the eurozone crisis.

Merkel, on her second visit to Beijing in just seven months, conceded in talks with China's Premier Wen Jiabao that the crisis that has engulfed the eurozone was not yet over, but said reforms were starting to take effect.

"I told Premier Wen that very many reforms are going on now, and that there is an absolute political will to turn the euro into a strong currency again," she said in a joint press conference after the discussions.

Her comments came as China agreed to buy 50 A320 jets from European plane maker Airbus, part of a raft of deals between the two world economic powers, eager to bolster trade amid signs both are being hit by Europe's debt turmoil.

A crucial relationship for both sides

With the nearly three-year-old crisis showing signs of spreading to China, the world's second-largest economy, Beijing views Germany as a key player in tackling the problem.

Wen said he had been reassured by his talks with Merkel and China would continue to invest in the European Union, but that "serious concerns" remained.

"China is willing, on condition of fully evaluating the risks, to continue to invest in the eurozone sovereign debt market," he said.

Beijing was prepared to "strengthen communication and discussion with the European Union, the European Central Bank, the IMF and other key countries to support the indebted eurozone countries in overcoming hardships", he added.

Europeans have expressed the hope that China could deploy some of its foreign exchange reserves -- the world's largest -- to invest in European Union bailout funds, although there is little sign of this happening yet.

Germany is China's top trade partner in the European Union, with nearly half of all European exports to China coming from Germany, and nearly a quarter of all EU imports from China landing in Germany.

Trade between the two reached $169 billion in 2011, an 18.9 percent rise on the previous year.

On Thursday, German automaker Volkswagen signed an agreement worth $290 million to construct an environmentally friendly production facility and training centre in in the eastern port city of Tianjin, near Beijing.

The agreement was part of a package of deals worth $3.2 billion, including an extension to Airbus's manufacturing presence in China.

Chancellor Merkel, accompanied by a high-level business delegation, was also expected to raise sensitive topics such as the Syrian crisis and human rights and press freedom in China during her talks with Wen.

China has joined Russia in repeatedly using their vetoes on the UN Security Council to scuttle resolutions aimed at tackling the deadly conflict in Syria, putting them at odds with Western powers.

Merkel was expected to raise the issue of the freedom of the press with Wen following complaints by German journalists who say the difficulties of reporting in China are increasing.

Before her visit, German journalists in the country wrote Merkel a letter saying authorities in Beijing had been "wilfully obstructing" their work by threatening not to renew their visas and intimidating local assistants.

A German official confirmed that the topic of human rights would also be on the agenda, amid pressure on Merkel to raise the issue of Tibet.

She was to meet China's President Hu Jintao later Thursday in Beijing before heading to Tianjin on Friday to visit an Airbus assembly line.
 

Date created : 2012-08-30

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