Chinese Prime Minister Wen Jiabao met German Chancellor Angela Merkel Friday in Beijing with both sides promising closer cooperation, according to dpa. Merkel said Germany and China have put their ties on a "completely new basis" and relations are set to be deepened with annual consultations between both governments. The two countries issued a 28-point joint communique envisaging closer cooperation in politics - especially preventing climate change - business, culture and social matters. China was upset by Merkel's decision to meet the Tibetan spiritual leader the Dalai Lama in 2007, whom Beijing regards a dangerous separatist. But tensions appear to have eased with Germany confirming its support for the one China policy and the territorial integrity of China. Economic issues featured heavily in the talks. The Chinese prime minister said his country had faith in the euro. Wen said Europe "has been and will stay as one of our key investment markets" but said China would stick to the principle of holding a diversified portfolio of currency reserves. Merkel said Wen's comments were "an important signal" that China has confidence in the euro and again mentioned the efforts of the European Union to stabilise its single currency. Wen said China supported the work of the EU and the International Monetary Fund to achieve stability in the eurozone. Merkel and Wen both dismissed international criticism of their export surpluses. "China and Germany should be praised not blamed," Wen said. Merkel said Germany was proud of its competitiveness and rejected artificially stimulating imports and getting further into debt. Germany and China agreed not to let budget deficits grow further. After the meeting, Merkel said that China had not yet reached the point where the European Union could classify it as a market economy. The chancellor highlighted intellectual property and access to markets as issues that still needed clarification. But the joint communique said Germany would support the recognition of China as a market economy by the EU. Such recognition would bring trading advantages for China.
