The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors.
"Currently, the international financial crisis is not over and the global economic recovery is difficult and tortuous," Wen said at the Hanover trade fair that was also attended by German Chancellor Angela Merkel.
More investment in the real economy and technical innovation will be the most powerful drivers of global recovery, he said.
China's annual economic growth slowed to 8.1 percent in the first quarter of 2012 from 8.9 percent in the previous three months - the fifth consecutive quarter of slowdown.
"The reason why the global economy cannot walk out of the shadow of the (financial) crisis is also related to the lack of new growth points in the real economy," said Wen, adding that China and Germany had fared better than most during the crisis due to their strong manufacturing bases.
Merkel, whose country has faced criticism over its insistence on reducing debts even during a time of poor growth in much of the developed world, said Germany wanted to strike a good balance between fiscal discipline and fostering growth.
"We must succeed with both because responsibility rests with Germany too for a sensible global economic development," she said.
The economies of China and Germany - the world's second biggest exporter - are increasingly intertwined, with bilateral trade jumping to 130 billion euros in 2010 from 94 billion in 2009.
OPENING UP
Germany produces the machines and equipment that Chinese companies need to manufacture their goods, many of which in turn end up back in Germany.
China is also a giant market for high quality products made in Germany such as cars and electrical goods. The main Chinese exports to Germany are electrical goods, toys, and textiles.
"China's national policy of opening up (its economy) to the outside world will not change," Wen told the gathering.
He repeated Beijing's pledge to improve its legal framework and protection of intellectual property and give equal treatment to foreign companies in government procurement.
China will create a "fairer and more stable transparent and predictable environment" for foreign investors, said Wen, whose tour of northern Europe began in Iceland.
Many Chinese academics are beating the drum for deepening economic reforms and steps to tame state conglomerates, which strengthened their domination of key sectors after Beijing's 4 trillion yuan ($632.64 billion) stimulus package launched in 2008.
Free market reforms, launched by former leader Deng Xiaoping in 1978 and underpinned by China's entry into the World Trade Organisation in 2001, are starting to lose steam, they say.
About 500 Chinese exhibitors are taking part in this year's Hanover trade fair, in which China has the status of "partner" country and which is expected to draw around 200,000 visitors in coming days.
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