China, Germany sign trade pacts

Premier Li Keqiang and German Chancellor Angela Merkel speak with reporters at a news conference on Monday at the Great Hall of the People in Beijing. Wang Ye / Xinhua

Agreements include air services cooperation, new vehicle factories

China and Germany signed a series of trade and investment deals on Monday during a visit to Beijing by Chancellor Angela Merkel, including agreements on two new factories for Volkswagen AG and the sale of 123 helicopters by Airbus SAS.

The two countries are exporting giants - with Germany the European Union's biggest economy and China the world's second-largest - and Merkel aims to strengthen the economic relationship on her four-day visit, her seventh since taking office in 2005.

She was accompanied by executives from Siemens AG, Airbus, Deutsche Lufthansa AG and Deutsche Bank AG, among other companies, according to German media.

Merkel and Premier Li Keqiang oversaw the signing of a series of agreements on Monday.

According to a statement by Volkswagen, the German carmaker will build two new vehicle plants in the northern port city of Tianjin and Qingdao in the east as it invests 2 billion euros ($2.7 billion) along with Chinese auto manufacturer FAW Group Corp.

The new plants' production capacity will be finalized "based on market demand and relevant industrial policies", the company said in an e-mail to AFP.

Merkel toured a Volkswagen factory in the southwestern city of Chengdu on Sunday.

China has become Volkswagen's largest and most important market, the company said, adding the group sold more than 1.5 million vehicles in the country in the first five months of this year, including sales by its joint ventures FAW Volkswagen and Shanghai-Volkswagen.

European aerospace giant Airbus announced that its helicopter division has signed contracts to sell "a record" 123 aircraft over six years to three Chinese companies.

The helicopters - mainly light single-engine aircraft from the Ecureuil family and the light twin-engine EC135 - will be used for general aviation activities, it said in a statement. No financial details were provided.

"It is evident that China's relaxation of its low-altitude airspace regulations is enabling the country's burgeoning helicopter market to realize its potential," Airbus Helicopters Chief Executive Officer Guillaume Faury said in the statement.

Also on Monday, Lufthansa said it had signed a memorandum of understanding to form a joint venture with Air China Ltd.

The new partnership, which will come into force in October, will give passengers additional travel options and flight connections and allow Lufthansa "to have even better access to the second-largest aviation market after the United States", according to the German carrier.

China is a crucial mass market for Germany, with Chinese companies wanting its technology and millions of newly prosperous citizens craving German goods ranging from cars to luxury home appliances.

Germany last year sold goods worth 67 billion euros to China, its second-largest export market outside Europe after the US. Imports from China topped 73 billion euros.

Merkel later met President Xi Jinping, who said her country was an "important strategic partner".

"Germany is a country with sizable influence in the world," he said. "China places high importance on the development of our relationship."

He also wished Germany good luck in the ongoing 2014 FIFA World Cup soccer tournament in Brazil.

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