Trade, Crimea to set tone as China's Xi heads to Germany

Trade, Crimea to set tone as China's Xi heads to Germany

BERLIN - Chinese President Xi Jinping begins a landmark visit to fellow export powerhouse Germany Friday, the third leg of his European tour, expected to cement flourishing trade ties and focus on the Crimea crisis.

On his first visit to Europe's top economy since taking office a year ago, Xi is due to hold talks with Chancellor Angela Merkel during the two-day stay which comes the week before Berlin hosts a major exhibition by dissident Chinese artist Ai Weiwei.

While human rights may not feature publicly, analysts say economic relations will play a key role, as Germany is China's biggest EU trading partner while the Asian giant provides a massive market for German machines, technology and cars.

Hans Kundnani, of the European Council on Foreign Relations, said the visit was largely aimed at "relationship-building" with Xi and China's new leaders. "The economic relationship, in particular the massive growth of German exports to China in the last decades, is the basis for their increasingly close political relationship," he told AFP.

Last year German-Chinese trade amounted to US$161.5 billion (S$204 billion), or 30 per cent of China's overall trade volume with Europe, according to figures cited by the Chinese Chamber of Trade in Germany, which opened in January.

After a clutch of multi-billion-dollar business deals were inked on his previous stop in France, no reports have so far emerged of big deals on the horizon while Xi is in Germany, where he will also be accompanied by his singer wife Peng Liyuan.

"In concrete terms I'm not expecting a lot," Gudrun Wacker, of the German Institute for International and Security Affairs said, regarding trade pacts.

Eberhard Sandschneider, from the German Council on Foreign Relations think tank, said a key part of the trip would be about forging ahead with the Chinese-German economic relationship.

"It's clear that the economy plays a central role even if there aren't a lot of announcements in terms of contracts," he said.

According to Handelsblatt business daily, a centre for Chinese yuan trades could be opened in the financial capital, Frankfurt, the first of its kind in the eurozone.

A preliminary accord could be signed during Xi's trip between the Bundesbank and China's central bank, which currently sets the rates and carries out exchanges, the daily's online version said.

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