Angela Merkel kept the focus squarely on trade on her ninth visit to China in more than a decade as Germany's chancellor, but she has suggested that human rights will be on the agenda during her three-day trip.
There are thorny trade issues between the world's second largest and Europe's biggest economies, but Ms Merkel struck a conciliatory tone on the EU's refusal so far to grant China much-cherished market economy status under the World Trade Organisation.
Premier Li Keqiang insisted China does not want a trade war with Europe over market economy status, and Ms Merkel responded by saying there should be more talks to find a compromise. "No one is interested in trade wars," Ms Merkel said. "This means also that we have to talk openly about existing problems."
Germany is China's largest trading partner in the EU and Ms Merkel and Mr Li were speaking after signing business deals worth €2.7 billion.
Last month, EU parliamentarians voted against a resolution to grant China market economy status, saying it must reform and fully meet criteria that describe a market economy, including a need to cut back the influence of the state on business.
There is a belief within the EU that Beijing is dumping heavily subsidised goods from sectors with huge overcapacities, such as steel.
“China has already fulfilled its obligations on joining the WTO. What’s needed now is for the other parties to fulfil the matching obligations they had promised,” Mr Li said.
Ms Merkel’s mantra while in China is equal playing fields, a line also repeated often by the EU Chamber of Commerce and other lobby groups.
The state-backed company Midea, China's biggest home appliances maker, is trying to buy Kuka, a German supplier of industrial robots, for €4.6 billion, reviving fears about the longer term strategies of Chinese state companies in buying overseas tech assets.
On human rights, Ms Merkel hails from former East Germany and is known for being forthright behind closed doors in calling on her hosts for the release of dissidents during her regular visits to China.
The family of journalist Gao Yu (71) urged Ms Merkel to persuade Beijing to allow her to travel to Germany for medical treatment. The government has not allowed her to leave Beijing since she was found guilty last year of passing documents to people outside the country.
Ms Merkel addressed the controversial new rules for foreign non-governmental organisations, which will give police broad powers to regulate activities and funding, and which critics believe could cause problems for overseas not-for-profit organisations. Ms Merkel said Germany and China would set up an “early warning system” and that she and Mr Li had agreed to stay in close touch about potential issues when the new law comes in on January 1st.
