Wen Cements German Trade, Government Ties On
Visit
The German auto maker Volkswagen has committed to China
as its most important market outside Germany, and German
chancellor Schroder has promised to work to lift arms
sales sanctions during a visit to Munich and Berlin by
Chinese premier Wen Jiabao.
Volkswagen CEO Bernd Pischetsrieder announced that Volkswagen,
an early investor in China through Shanghai Automotive
Industrial Corp., a joint venture, was stepping up its
manufacturing capacity in China from the current 150,000
vehicles a year, to 1.6 million vehicles a year by 2008.
To achieve this, Volkswagen would invest 5.3 billion euros
to expand its current facilities.
The Chinese central government is trying to cut back
investment in the auto industry by smaller players, but
Volkswagen is seen as a major player, and has a close
working relationship with the Chinese government.
If the present trend continues, Volkswagen will depend
on China for most of its revenue and profit. In several
years time, the only thing left for it to do would be
to move its corporate headquarters to Shanghai.
German chancellor Schroder announced in a communique
with Chinese premier Wen Jiabao, that the two sides had
agreed on five points to bring ties closer. They are:
- Regular meetings between the Chinese and German government
leadership;
- Further improve and strengthen economic ties between
China and Germany;
- Improve technology transfer in both directions between
the two countries, and to improve collaboration in high
technology development;
- Improve cooperation between Chinese and German small
and medium sized enterprises;
- Establish regular communications between China and
Germany regarding international developments, and to
seek each others' point of view with regard to rapidly
developing international situations.
Schroder also promised to work to lift the arms embargo
on China which was imposed in 1989. This move is strongly
opposed by the Bush administration, which continues to
sell arms to the Taiwan government, and sees them as a
major source of income.
Germany was the first leg of Wen's European visit. He
will also visit the European Union headquarters in Brussels,
where he will pay an early call on the newly-expanded
European Union, which added ten new members, mostly from
central and eastern Europe, on May 1.
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