labels: World economy
China boosts German economy with $10-billion trade deal news
26 February 2009

The sagging German economy received a fillip when a Chinese business delegation signed a slew of 36 procurement deals worth around $10 billion yesterday with several German companies.

China says the new deals would help curb protectionism in the wake of Europe's worst recession in six decades.

China's trade minister, Chen Deming, is leading a 200-strong delegation comprising government officials and business executives from sectors such as food, textile, mining and healthcare from nearly 90 companies to Germany, the UK, Spain and Switzerland.

The trade mission's visit is taking place ahead of President Hu Jintao's trip to London for the Group of 20 nations meet on 2 April.

China's commerce ministry had said last week that the 200-member delegation plans to buy automobiles, engineering equipment, aircraft engines and railway equipment.

Chen said that 37 contracts were signed with German companies in the electronics, automotive, textile and medical industries among others but the main focus was on engineering equipment and automobiles.

Chen Deming said that the contracts signed are composed of two parts -- purchasing contracts, as well as cooperation agreements that need further negotiations.

Among the contracts the Chinese signed were the purchase of nearly 37,000 BMW cars and Minis worth $2.2 billion and 27,000 Mercedes Benz cars from Daimler AG.

China's Yankuang Light Alloy Co signed a contract worth approximately $73 million with German company SMS Meer for purchase of extrusion production lines.

The contracts ''are good news for the German economy and come at the right time and with this, both countries have set a clear sign against the economic crisis," German economy minister Karl-Theodor zu Guttenberg told reporters at a joint news conference in Berlin yesterday.

Speaking at the news conference, Chen said apart from the current 200-member delegation, China will depute more businessmen to hold meetings with German counterparts for further investment in both countries.

Both Chen and Karl-Theodor zu Guttenberg condemned the trade protectionism that some countries had adopted and said that such deals were the right approach to solve the global recession.

Vohskaemper, vice president of SMS Meer said "I believe today's contract-signing and the talks between German and Chinese business leaders have sent a strong signal to the world that we are striving to turn the economic crisis into commercial opportunities."

China is the world's biggest exporter after Germany and Germany is China's leading trade partner within the 27-nations EU as last year Germany and China's trade was $115 billion.

China's trade rose by 19.5 per cent last year to the EU to $425.6 billion, but China has a $160 billion trade surplus with the EU, which has been a bone of contention with many EU nations.

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China boosts German economy with $10-billion trade deal