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Business

China and Germany: A Lucrative Relationship

During his trip to China, German Chancellor Schröder signed off on several contracts worth about 10 billion euro.

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Chancellor Gerhard Schröder and Premier Zhu Rongji at the maglev construction site in Shanghai Friday Nov. 2.

On Friday Chancellor Gerhard Schröder wrapped up his whirlwind tour of China by heaping praise on the country's financial standing and promising to strengthen relations between the two countries.

The Chancellor described his visit to China as positive, and said the bilateral talks had contributed to the development of a relationship based on mutual trust.

A day earlier several of Germany's industrial powerhouses sealed a slew of deals that will ensure Germany's place as China's top European trading partner. The attendance roster was first class: BASF, Siemens, Bayer. They and others are deepening ties in Asia's fastest-growing market. And the timing is perfect: China is scheduled to join the World Trade Organization later this year.

Transrapid

The centerpiece of the German-Chinese economic cooperation is the high speed Transrapid railway in Shanghai. The railway, a 1,300 km high speed maglev track linking Shanghai and Beijing, is a joint partnership between the German government, Thyssen and Siemens AG. According to Thyssen Vice Chairman Ulrich Middelmann the project is worth as much as $40 billion.

So far the consortium has only started building a 30 km track between Shanghai's eastern airport and the city's financial district. The section is due to go into operation in 2003 and could prove the feasibility of the longer rail link.

On the last day of his visit to China, Chancellor Schröder visited the Transrapid construction site himself, and dedicated the first segment of track. Later, he pointed out that deals like this are good for both sides:

"Of course, it's not just a matter of German firms doing business in China. Of course, they want to do business here -- but what they really want is a true partnership, so that they provide the technological know-how that the Chinese want."

Mutual Benefits

Germany is working hard to increase trade with China. Trade between the two countries rose 35 % last year to nearly 28-billion euro. But some experts warn that the "golden days" of spectacular Chinese economic growth are over:

"China's economic growth rate is slowing down -- and they're not exporting as much as they used to. But the rate of exports is still growing, even though it's falling in other countries."

China regards Germany as a key source of foreign investment and technology transfers, but also as an important political counterbalance to the US.

German Economics Minister Werner Müller, who accompanied Chancellor Schröder on this visit, signed nearly 30 business deals with the Chinese -- and those deals are worth about 10-billion euro.

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