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Premier brings back $30b worth of deals from Germany

Updated: Jul 12,2018 9:19 PM

During Premier Li Keqiang’s visit to Germany, both sides have signed more than 40 cooperative agreements, covering various industries including agriculture, education, healthcare, communication and automotive.

“The value of the agreements amounts to $30 billion,” he said at a news conference on July 9. “We have made breakthroughs in many fields.”

The first agreement was signed by the Guangdong provincial government and BASF Group.

According to the agreement, BASF Group will invest about $10 billion to build a world-class petrochemical industry park in Zhanjiang, Guangdong province. It will be the biggest investment project ever for BASF and be operated solely by the company.

“It is the first time that BASF has invested in China with a 100 percent stake, which means a progress for Germany-China relations,” Merkel said.

Premier Li also noted that a fine chemicals integrated base which will be built by BASF is the first case in China of an investment by a foreign-owned enterprise in the heavy chemical industry.

In another agreement, China’s CATL will invest 240 million euros to build a battery manufacturing center and an R&D center for smart manufacturing technology in Thuringia, Germany. It will be the biggest lithium battery manufacturing base in Germany.

“It is the first time that the technology is introduced to Europe. I am glad to see that China has helped us fill this gap,” Merkel said.

Wolfgang Tiefensee, Thuringia’s minister of economy, said CATL’s investment is one of the most important investment projects in Thuringia in 10 years. “Thuringia should be proud of having attracted such an excellent Chinese company.”

The automotive cooperation documents, including a joint cooperative declaration on autopilot and other seven agreements, could be the most eye-catching.

Analysts said that China and Germany are future-focused. According to statistics, new energy vehicles and autopilot were the major part of the agreements.

Insiders said the automotive cooperation between the two sides was the highlight of the China-Germany partnership.

At the signing ceremony, Siemens CEO Joe Kaeser signed a cooperative agreement with China’s State Power Investment Corporation (SPIC) and a strategic cooperation memorandum with Alibaba Cloud.

The cooperation with SPIC is a milestone and will bring benefits to both countries. Using Siemens’ technologies and SPIC’s rich experience in the Chinese market, the two companies can provide sustainable energy to China and the world in an efficient way, Kaeser said.

He added the other document is also a milestone, supporting China’s manufacturing drive through Industry 4.0, a solution highlighting the use of automation and digitalization in industry. It was first proposed by Germany, and is now a major cooperative project between the two countries.

Reuters, the Wall Street Journal and The Associated Press reported on the tens of billions of dollars of commercial agreements signed between China and Germany just within 24 hours after the signing ceremony.

Reuters quoted Merkel as saying that the cooperation with China has “new high quality”.

Currently, the global trading system and the sustained recovery of the world economy have been challenged by unilateralism and trade protectionism, while the mutual cooperation between China and Germany — the largest economies on both sides of the Eurasian continent — will be a predictable and positive signal to the world economy, according to international commentators.

“Germany and China are the world’s biggest exporters. The common signal released by the government consultation is not a threat to the United States, but a common attitude to support free trade,” said the chairman of the Asien-Pazifik-Ausschuss der Deutschen Wirtschaft.

Meanwhile, a notice issued by China Interbank Market Dealers Association said that with the approval of the People’s Bank of China, Deutsche Bank (China) can carry out underwriting business of nonfinancial corporate debt financing instruments according to the market evaluation results.

This means that Deutsche Bank (China) -- the biggest commercial bank of Germany — has become the sixth foreign bank that can underwrite Chinese bonds.

The approval was an indication of the accelerated pace of the Chinese bond market’s opening-up, according to analysis.

During the consultation, Yi Gang, governor of the People’s Bank of China, said that China will implement pre-entry national treatment plus negative list management as soon as possible, and the specific timetable and road map for the expansion and opening-up of the financial industry have been completed according to the principle.