Germany is to push for the Europe to recognize China as a market economy, after a bilateral agreement on economic co-operation. Chinese Premier Wen Jiabao was in Berlin after an EU-Asia summit produced mixed results.
Merkel has agreed to talk to other EU members about China
Germany has agreed to forge closer economic ties with China and press Beijing's case to be recognized as a market economy by the European Union.
Chancellor Angela Merkel met Chinese Premier Wen Jiabao at the Meseberg Palace near Berlin following an EU-Asia summit in Brussels.
Merkel and Wen met to build on discussions in Brussels
A joint statement issued by the German and Chinese delegations after the meeting said that both leaders supported "strengthening European-Chinese economic relations and want to encourage them through consultation and building up cooperation."
It said there was a need for China and the EU to strengthen mutual political confidence and deepen strategic co-operation."
The statement said that Germany would work to get the European Union to recognize China as a market economy by 2016, giving the country certain benefits under international trade rules.
Leaders at the summit in Brussels had earlier reached broad agreement on reforms to help stabilize the international economy.
However, efforts to gain concessions from China to allow a more rapid appreciation in the value of the yuan appear to have failed.
Changes in global economy
The biennial Asia Europe Meeting (ASEM) brought together 27 EU and 19 Asian leaders, with agreement that reforms were needed to keep pace with changes in the world economy.
The G20 is to discuss issues such as financial regulation
"The priority is now to reach agreement on a system of global financial, monetary and economic governance: we have to act together very closely on this," said summit chairman and president of the European Council Herman van Rompuy.
Leaders from the nations represented, 12 of which are members of the G20 group of leading economies, agreed that the next G20 summit in the South Korean capital, Seoul, next month should address a range of issues.
Issues up for discussion at that summit include ensuring better government spending control and tighter regulation of the financial industry.
States also moved closer to a firm deal on the redistribution of voting rights within International Monetary Fund (IMF), for which European states retain disproportionate power compared with Asian states. A broad agreement on the need for reform was reached, although disagreements remained on the precise details.
No movement on Chinese currency
European nations also pressed - without success - for a China to allow its currency, the yuan, to increase in value, amid charges that Beijing is deliberately devaluing its money to aid its export industry.
Western countries say the yuan is being kept artificially low
The chairman of eurozone finance ministers, Jean-Claude Juncker said euro nations had urged an "orderly, significant and broad-based appreciation" of the yuan. When asked about the Chinese response, Juncker said. "The Chinese authorities do not share our view."
Leaders also pledged to seek an urgent, legally-binding deal on global warming at United Nations climate talks in Cancun, Mexico, beginning next month.
The German and Chinese negotiations also touched on climate change, with both countries saying that they hoped progress would be made at the talks.
Recognition of China as a market economy would make it less vulnerable to charges that it is dumping products onto global markets against World Trade Organization rules.
Author: Richard Connor (dpa/AFP/AP/Reuters)
Editor: Chuck Penfold