German Chancellor Angela Merkel is in China on a visit aimed at forging stronger economic links between the countries. But, while the chancellor described the talks as friendly, she also called for more market reforms.
Merkel is in Beijing after her visit to Russia
Chancellor Angela Merkel said the EU is not yet ready to recognize China as a fully fledged market economy after a meeting with Prime Minister Wen Jiabao in Beijing.
"I think we have not yet reached the point where every criteria has been fulfilled," Merkel told reporters after holding key trade talks with her Chinese counterpart on Friday.
Wen said China would continue to invest in the euro as part of its currency reserves, despite concerns over the eurozone's viability as member countries battle rising deficits and debts. Merkel described China's commitment to the currency as a "very important signal."
"We support the fact that the EU and the IMF have taken collective measures to ensure the stability of the eurozone," Wen said in their joint press conference.
Merkel said that she had pressed the case for China to do more to protect intellectual property rights and described talks with Wen as "friendly."
Prime Minister Wen was due to accompany the Chancellor as she celebrates her 56th birthday on a visit to landmarks in the city of Xian on Saturday, including the famous underground Terracota Army statues.
First visit since 2008
Merkel and Wen could toast a host of bilateral deals
The German chancellor was received with military honors by Wen early on Friday before their talks. She also met Chinese President Hu Jintao later in the day.
After spending two days in Russia overseeing major business deals between Russia and Germany, Merkel is in China on the second stop of her five-day trip. Despite pledging to visit China every year during her time in office, Merkel could not make the trip in 2009.
The latest visit comes at an opportune time according to Adrienne Woltersdorf, head of Deutsche Welle's Chinese service.
"The relations between China and Germany haven't been that stable in the last two years," said Woltersdorf.
"I think Angela Merkel is mainly there to stress the economic aspect of the two countries' relations, and also to make sure relations get better after she leaves the country," she added.
Bilateral relations had suffered in recent years after Merkel received Tibetan spiritual leader the Dalai Lama in Berlin in 2007, causing Beijing to complain that Germany was interfering in its domestic matters.
Daimler has gained a foothold in China's truck market
A delegation of 25 top-ranking German business leaders is accompanying Merkel on her trade-focused trip.
Daimler, one of the firms represented on the trip, has signed a joint enterprise deal with China's Beiqi Foton, allowing the German auto giant a foothold in the growing Chinese heavy goods vehicle market.
Daimler says the partnership deal was necessary for the company to attain licenses to produce and sell trucks in China. European competitors in the sector like MAN and Iveco already have similar deals in place, and the Stuttgart-based firm was keen to keep pace with them.
Engineering company Siemens has also sealed a deal with the Shanghai Electric Power Generation Equipment Company - founding a joint venture to manufacture steam and gas turbines, and also involving cooperation in the renewable energies sector.
A German tech company is also looking to work together with a Chinese company to produce a GPS system for monitoring CO2 concentrations in the atmosphere.
Meanwhile, the governments in Berlin and Beijing are signing a host of bilateral deals to cooperate in areas ranging from plant safety and chemicals management to preserving water resources, energy-saving, electric mobility, and renewable energies.
While business deals will remain in focus during Merkel's talks with Chinese leaders, the environment, the Korean peninsula, Iran and Afghanistan are also said to be on the agenda.
China is Germany's largest trading partner in Asia, and Germany is the biggest European trading partner for China. Bilateral trade was valued at 82 billion euros ($105.7 billion) last year, accounting for more than a quarter of the total trade between China and the EU, according to Chinese statistics.
Author: Matt Zuvela, Nicole Goebel, Mark Hallam, Richard Connor (dpa/AFP)
Editor: Martin Kuebler