Germany, China sign giant deal ahead of G-20 summit

Germany, China sign giant deal ahead of G-20 summit

Germany, China sign giant deal ahead of G-20 summit Germany and China signed a raft of key economic deals as the leaders of the both countries pledged to carry bilateral ties to a new phase in a meeting in Berlin ahead of the G-20 summit. 

Among deals which were signed in the presence of Chinese President Xi Jinping and German Chancellor Angela Merkel on July 5 were a giant Chinese order for Airbus A320 aircraft and an extended cooperation between German carmaker Daimler AG and China’s BAIC Motor Corp.

The Chinese leader and Merkel pledged to work together more closely on a range of issues, including trade and aerospace, two days ahead of the G-20 summit in Hamburg that U.S. President Donald Trump is also due to attend. 

“Chinese-German relations are now about to have a new start where we need new breakthroughs,” Xi told a joint news conference with Merkel in Berlin after the two oversaw the signing of agreements between China and companies including Siemens AG, Airbus SE and Daimler AG, as quoted by Reuters. 

He said he hoped to make a “new blueprint, set our sights on new goals and plan new routes” for cooperation during his visit to Germany.

“We will have difficult discussions, since bringing 20 states together with all their developments and ideas is not easy,” Merkel said.

She added that she and Xi had also talked about wanting to quickly sign an investment treaty that would ultimately turn into a full-blown free-trade agreement. 

Germany and China are bonding over shared goals of free trade and curbing climate change. 

Merkel said she will seek to move along talks between China and the European Union on the former’s trade status and called for progress toward an investment accord that could in time lead to a free-trade agreement.

$23 bln deal

In Berlin, Airbus signed an agreement to sell 140 aircraft to China, in a deal worth almost $23 billion at list prices.

The agreement is for 100 A320 family aircraft and 40 A350 planes, Airbus stated.

“It’s one of the biggest deals that we’ve signed in a long time,” Airbus Group Chief Executive Tom Enders told journalists after signing the deal in Berlin, as quoted by Reuters. 

The planes will be purchased by state-owned China Aviation Supplies Holding Company, which will then allocate them to Chinese airlines.

The A320 planes will be a mixture of the older CEO and the new NEO version with revamped engines, while the majority of the A350 orders are for the -900 model. The deal is flexible pending negotiations with the airlines.

Enders said he expected up to 50 percent of the A320 family planes would come from the Airbus final assembly line in China.

Daimler and its Chinese joint venture partner BAIC Motor Corporation have also agreed to jointly invest 5 billion yuan ($735 million) in battery electric vehicle production in China by 2020 and to provide the infrastructure needed.

Of that investment, a three-digit million euro sum is to be invested in a new battery factory to be built in China by joint venture Beijing Benz Automotive Co., Ltd. (BBAC), Daimler said in a statement on July 5.

“By 2025, the Chinese market will have a substantial share in global sales of Mercedes-Benz electric vehicles,” management board member Hubertus Troska said.

Daimler and BAIC signed a framework agreement last month to upgrade production facilities at BBAC to make New Energy Vehicles, a label for so-called low-emission vehicles which include hybrid and pure battery electric cars.