Schröder, Wen Pledge to Boost Bilateral Trade

Wen was received by Schröder at the Berlin chancellery on Monday during a four-day visit to Germany focused on promoting German business ties with China.

In one of the most unequivocal statements to date, Schröder said the German government agreed with China over its Taiwan policy. "The German government is opposed to the independence of Taiwan," Schröder said in a joint statement. "It is also opposed to all steps that are aimed at intensifying tensions in the streets of Taiwan," it read.

Most countries do not recognize the island as an independent country although Taiwan has been separated from mainland China since a 1949 civil war. Beijing views Taiwan as a runaway province and has threatened it with war if it formally declares independence. Taiwanese leaders have said they won’t agree to Chinese reunification attempts until China has a democratically elected government.

German human rights groups and left-wing lawmakers have urged Schröder in the past to press China on human rights issues. The government says human rights are best promoted by supporting economic and political reform in China.

Germany appreciates "the provisions for human rights in the constitution of the People's Republic of China," Monday's statement said, adding that the relationship between the two countries "is a good basis for an open conversation . . . on differences of opinion."

Schröder in favor of easing arms sanctions

Schröder also spoke in favor of lifting the arms embargo on China, but added that in the end it was for the EU to make the final decision. The arms embargo was imposed on China in 1989 over human rights violations during the Tiananmen Square massacre.

During his visit to China last December, Schröder promised to push for the lifting of the embargo in Brussels. Although several member states such as France advocate the removal of the restrictions, the EU as a whole has not yet finished analyzing the issue, and many say the decision should hinge on improvements in China's human rights records.

Compounding the discussion is the fact that the United States has warned the EU about lifting the embargo.

The joint declaration in Berlin on Monday however welcomed new Chinese restrictions on exports of missile, nuclear and biological technologies that can be used to make or deliver weapons of mass destruction.

China has been under pressure to stop what U.S. officials say is the transfer of missile and weapons technology by Chinese companies to Iran, Pakistan and other countries.

The statement also lauded China for its "commitment to a solution to the nuclear question on the Korean peninsula."

Business tops the agenda

On Monday, Schröder and Wen also pledged to strengthen economic ties, particularly in high technology and to double bilateral trade by 2010 from a current €50 billion yearly.

Earlier Monday, Wen toured a Siemens AG plant that makes power generating equipment that the German company wants to sell to China. He also presided over a deal for DaimlerChrysler to make Mercedes cars with a partner in Beijing.

During Wen's visit to a Siemens power turbine plant in Berlin, Siemens chief executive Heinrich von Pierer said Germany's largest electronics and engineering company hopes to exploit rising demand for power generation in China for orders.

China adds the equivalent of a quarter of Germany's electricity production capacity every year and is looking at all energy sources, including nuclear, oil, hydroelectric and gas, von Pierer said. China is a "booming market," von Pierer said as Wen toured the plant. The visit could be could be the start of a "very good cooperation," he said.

DaimlerChrysler to build cars in China

Also during Wen's visit, DaimlerChrysler announced a government go-ahead for a key part of the Chinese approval process for plans to build Mercedes C- and E-class cars at a new factory in Beijing with Chinese partner BAIC Ltd.

The German-U.S. automaker is joining German rivals Volkswagen and BMW in seeking a stronger foothold in the booming Chinese market. The Beijing plant would have an initial production capacity of 25,000 vehicles, which would be built from kits shipped by Mercedes-Benz, the company said.

Approval for the project from the Chinese National Development and Reform Commission is a major step toward approval for the Beijing plant, DaimlerChrysler said. "Establishing a manufacturing presence for Mercedes-Benz passenger cars in China is a key part of our Asian strategy, and further complements our activities in the Chinese market," CEO Schrempp said in a statement.

On Sunday, Volkswagen announced plans for a new Shanghai factory as Wen began his visit, part of the automaker's plans to invest €5.3 billion (US$6.35 billion) in China in the next five years. VW plans to expand to expand its Shanghai operations with a new factory that can produce 150,000 cars annually.

Wen's European trip also includes stops in Belgium, Italy, Britain and Ireland.