Wen, Merkel boost EU hope

Chinese Premier Wen Jiabao and German Chancellor Angela Merkel, who is on her second visit to China this year, Thursday injected much-needed confidence into the eurozone, which has been suffering a debt crisis for nearly three years.

The two sides inked a series of business deals, including the purchase of 50 Airbus planes worth $3.5 billion by China, in a bid to shore up economic ties between the two exporting giants amid unfavorable international economic circumstances.

Following a first meeting in Berlin in June last year, Wen and Merkel co-chaired the second round of Chinese-German intergovernmental consultations in Beijing.

While expressing his concern over the worsening European debt crisis, Wen said at the meeting that China and Germany need to make efforts to lift the confidence of the international community in order to jointly face the challenges, the Xinhua News Agency reported.

Wen said China is willing to continue investing in EU government bonds on condition that the risks are fully evaluated, according to Xinhua.

Meanwhile, Merkel also promised that the eurozone has the political will to restore people's confidence in the euro, reported the Wall Street Journal.

Ding Chun, director of the Europe Research Center at Fudan University, told the Global Times that the leaders of the two economic powers sent a clear signal to the world in order to boost people's confidence in the euro at a delicate time.

The remarks came ahead of an inspection tour in September by the troika of the EU, European Central Bank and IMF to Greece and a report compiled by the troika which could shape the eurozone's future.

However, Ding said China is not obliged to purchase the bonds because of the potential risks.

Jiang Yong, director of the Economic Security Studies Center at the China Institutes of Contemporary International Relations, told the Global Times that China should be cautious in investing in EU bonds, which is facing increasing risks, while China's economic growth hasn't bottomed out.

He added that China should invest in Europe's real economy instead.

However, Xiang Songzuo, deputy director of the International Monetary Institute under the Renmin University of China, believed that it is time to buy the government bonds of countries like Germany, France and the Netherlands, which are in relatively good shape, to change its portfolio, which is overly concentrated on US debt.

Accompanied by seven ministers, the chancellor came with the largest German business delegation ever to visit China, including 20 executives from companies such as Siemens, European Aeronautic, Defense & Space Co and Volkswagen.

The two countries also inked more than 10 other cooperative documents, including an agreement on Airbus plane assembling in China, the Xinhua News Agency reported.

Volkswagen also signed an agreement to build an auto parts plant in Tianjin, the Wall Street Journal reported.

According to the German Chamber of Commerce, more than 40 percent of German exports to Asia are now going to China, and more than 30 percent of China's EU-trade is done with Germany.

"The slowdown of the demand in parts of Europe and the US means an even growing importance of our cooperation - not only for Germany and China themselves but also to help stabilize current economic weaknesses in the global economy," the German Chamber of Commerce said in a reply to the Global Times.

Separately, the two leaders said that China and Europe should try to resolve their current dispute over solar panel import duties through consultations and avoid anti-dumping proceedings, reported Xinhua.

Merkel also met Chinese President Hu Jintao, Vice President Xi Jinping and Vice Premier Li Keqiang on Thursday.