Premier Wen Jiabao on Thursday told German
Chancellor Angela Merkel that China had confidence in the euro and
the European economy, after Merkel said the European Union was "on
track" to financial recovery.
Wen said he held "a series of important discussions on the economy and culture" with Merkel, which would push ties between China and Germani in a "new direction."
It was important to protect national interests in the current "complicated political-economic situation," Wen told reporters.
Merkel said both sides should avoid protectionism and she urged the Chinese government to give "German companies a chance to compete in China."
Merkel was expected to seek China's help with the eurozone crisis during her three-day visit.
But state media warned that China was unlikely to purchase large volumes of European bonds unless the European Union could demonstrate greater unity on reforming its financial system and spurring growth.
"The EU has a unified currency, but it doesn't have a unified finance system to ensure every country sticks to its promise to cut their deficits," the Global Times newspaper quoted Shen Jiru, a researcher at a state-run think-tank, as saying.
Before her talks with Wen, Merkel said the euro had "made Europe stronger" and E.U. members were convinced that an agreement on Monday to limit overspending had put them "on the right track" to financial recovery.
"The European Union -- in particular those states that have adopted the euro -- has made considerable progress in the last two years," she said in a speech on economic and financial policy at the Chinese Academy of Social Sciences.
Germany saw China as possessing "more and more" power in the International Monetary Fund and wanted to cooperate with Beijing to move its remminbi currency towards free convertibility, Merkel said.
The two leaders were scheduled to give a joint press briefing after the talks, which were attended by China's finance and commerce ministers and the governor of its central bank.
In remarks following her speech, Merkel urged China to press Iran to be more "open and transparent" and help "make Iran understand that the world must not have another power with nuclear weapons."
Wen said later that that China still favoured a negotiated solution on Iran. "Sanctions will not solve the problem," he said.
Germany hoped the United Nations Security Council, of which China is one of five veto-holding permanent members, would be able to agree a unanimous resolution on Iran, Merkel said.
She also said the Security Council should speak out against human rights abuses in Syria.
Her planned talks with President Hu Jintao on Friday were also expected to cover international economic and political issues, while German officials said Merkel would raise concerns over China's recent human rights record during her visit.
"Germany has always advocated an open, political dialogue, including on controversial issues such as human rights and building a state of law," she said on Thursday before her talks.
Merkel was accompanied by a large business delegation and planned to visit German companies in the southern province of Guangdong on Friday.
She was scheduled to meet the state-ordained Catholic Bishop of Guangzhou, the provincial capital, on Saturday before returning to Germany.
The visit is her fifth to China in the seven years she has been Germany's chancellor.
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