Politic-Economic-Society-Tech

Germany's Schroeder lauds China, eyes mega-deals

By Edwin Chan

German Chancellor Gerhard Schroeder wrapped up his whirlwind tour of China on Friday heaping praise on the country's eastern financial capital and lauding a slew of massive German industrial investments.

Schroeder on Friday criss-crossed Shanghai to visit Transrapid's $1.4 billion maglev train project, ThyssenKrupp's $1.43 billion steel venture and Bayer AG's $3.1 billion petrochemical complex.

Much of the investment had been in the works long before Schroeder arrived in Shanghai, but his presence reaffirmed a strengthening relationship between the largest economy in Europe and one of the world's fastest growing economies.



Accompanied by Chinese Premier Zhu Rongji, Schroeder marvelled at China's "dynamism" and strong growth, which has lured Germany's powerful industrial firms.

For its part, China sees Germany as a key source of foreign investment and technology transfers, but also as an important political counterbalance to the United States.

But geopolitics took a back seat to economic ties in Schroeder's visit to China's financial capital Shanghai.

He pushed a button to start work at the Bayer plant, unveiled a gigantic beam for the maglev train project, and -- along with Shanghai Mayor Xu Kuangdi -- switched on the steaming, deafening machines at the steel plant.

"I feel like today is a good day for both China and Germany," Schroeder told a throng of reporters, executives and workers.

But when the German leader left Shanghai bound for Moscow late on Friday, one high-profile deal appeared not to have materialised -- an aircraft order for Airbus Industrie worth as much as $1.14 billion.

A German government source said last week Schroeder might seal a deal with China for 50 A320 shorthaul aircraft. And a spokesman for French President Jacques Chirac said earlier Chirac hoped the Chinese order would be clinched by the end of October.

Schroeder expressed hope that other deals were in the offing, including a project for a 1,300 km high speed maglev train link between Shanghai and Beijing that Thyssen Vice Chairman Ulrich Middelmann said was worth as much as $40 billion.

Transrapid -- a partnership between the German government, Thyssen and Siemens AG -- has been lobbying to build the rail link between Beijing and Shanghai.

The consortium is building a 30 km track between Shanghai's eastern airport and its financial district, which could become operational in 2003 and prove the feasibility of the longer link.

"It's possible that we will see a nationwide maglev project," Schroeder said.

NOT JUST BUSINESS

The China leg of the week-long Asian tour began in Beijing on Wednesday with the signing of agreements worth a potential $4 billion. The largest were a deal with BASF AG to move ahead with a $1 billion joint venture and the Bayer investment.

On Thursday, Chinese and German business leaders signed another 29 agreements, including at least $350 million worth of equipment sales by telecommunications gear maker Siemens, at a high-tech forum attended by Schroeder.

The deals were designed to help Germany position itself for access to China's potentially huge market after its entry to the World Trade Organisation, expected late this year, analysts said.

"One particular characteristic of the Sino-German relationship is that we don't just do business and trade. As Transrapid ... shows, Germany is also willing to provide technology to our Chinese partners," Schroeder said.

Germany puts its trade with China last year at more than 54 billion marks ($25 billion), up about 35 percent from 1999.

The series of investment deals signed during Schroeder's visit are likely to spark more flows of electronics, pharmaceuticals and other goods in future.



source: Reuters Breaking News, 02.11 2001