Beijing expresses confidence that euro zone difficulties are 'temporary'

CHINA REACTION:BEIJING HAS full confidence in European economic stability and views ongoing euro zone difficulties as "temporary", Chinese prime minister Wen Jiabao has said.

China is prepared to assist Europe by buying a limited volume of sovereign bonds, he said in Berlin yesterday, where Chinese companies signed contracts worth €10.5 billion with Germany, Beijing’s new “strategic partner”.

“When Europe has problems we extend our hand,” Mr Jiabao said at the end of his three-country European tour.

German chancellor Angela Merkel said Berlin would guarantee the “solidity and solidarity” of the euro and described Mr Jiabao’s Berlin visit, which included a joint cabinet meeting, as “a new chapter” in German-Chinese relations.

Aiming to boost bilateral trade to €200 billion annually within five years, up from €130 billion at present, Dr Merkel said Germany would act as the “motor” for closer co-operation between Europe and China.

“What’s already pretty good can get even better,” said Dr Merkel, describing trade ties as an important support in the “broad bridge” of bilateral relations.

The Chinese delegation signed contracts worth €3.5 billion for 62 Airbus A320s and announced new co-operation contracts: an electric vehicle co-operation with Volkswagen and a new Daimler engine factory and research centre.

China’s human-rights record hung over the prime minister’s visit, with a demonstration by human-rights protesters at the Brandenburg Gate.

Over dinner on Monday evening, Dr Merkel said the two leaders had held a “thorough” discussion that touched on “working conditions for journalists”.

She welcomed last week’s release of regime-critical Chinese artist Ai Weiwei.

After dismissing human-rights “finger-pointing” during his London visit, Mr Wen was more mild in his remarks in Berlin. “There are differences between [our] history, cultures, political systems and there are some questions in which we have a different outlook,” said Mr Wen.

“China hopes with all its heart that we can find a way to respect each other and work for a peaceful and harmonious century.”

The two leaders admitted differences of opinion on Libya. Mr Wen said the West “might win the war but will find it difficult to win the peace”, and described Libya’s future as a matter for its population.

Dr Merkel defended western intervention, saying Nato allies would “organise the process after his [Muammar Gadafy’s] departure so that it is successful”.