German Chancellor Angela Merkel has called on China to “make better use of its influence” on Iran to resolve a looming stand-off with the West over the country's nuclear programme.
While Ms. Merkel has pressed China for more support for strong United Nations Security Council measures to deal with both Iran and Syria, she has also sought greater Chinese assistance for the debt-hit eurozone, facing a tough diplomatic balancing act on a three-day visit that began here on Thursday.
“We believe in recent years discussion has not led to any significant advancement [on the Iranian nuclear issue],” she told an audience of scholars and journalists at the influential Chinese Academy of Social Sciences, where she began her visit on Thursday morning.
“If we talk about European sanctions against Iran, the question is how China can make better use of its influence to make Iran understand that the world must not have another power with nuclear weapons,” she said, adding that she did not see “transparency” in Iran's nuclear programme.
China has recently voiced opposition to further sanctions as well as to a ban on the import of Iranian oil backed by the U.S. and European Union. Iran is China's third biggest source of foreign oil.
Ahead of her afternoon meeting with Premier Wen Jiabao, Ms. Merkel acknowledged there were persisting differences between China and the West. “China thinks further sanctions are wrong,” she said. “We may have a difference of opinion but it is important that dialogue continues.”
Following talks, Mr. Wen reiterated in remarks to reporters China's opposition to sanctions, saying “dialogue and cooperation is the only correct and effective solution.. and sanctions will not fundamentally address the problem”.
In Beijing, the German Chancellor has sought to reassure Chinese investors that the EU was taking measures to address its financial problems, from pushing reforms and encouraging innovation to reducing bureaucracy.
Mr. Wen said China was considering “involving itself more deeply into” efforts to address the European debt issue through channels such as the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), without specifying details.
Chinese officials have expressed wariness over investing in government bonds in Europe, though Mr. Wen said China was “firmly confident” in the future of the European economy. Around a quarter of the $3.2-trillion foreign exchange reserves are in Euro-denominated assets, Reuters reported on Thursday.
China's rising importance to Europe has been made clear in recent weeks, with firms showing an interest in acquiring assets in the debt-hit continent. Earlier this week, Sany Heavy Industry, one of China's biggest construction equipment firms, told the Shanghai Stock Exchange it would pay €360 million to acquire 90 per cent of Putzmeister, a German engineering firm.
The China Investment Corporation, last month, also invested an estimated £1 billion to acquire an 8.68-per-cent stake in Thames Water, the largest water company in Britain.
Ms. Merkel rejected suggestions that sensitive issues, such as human rights or even pressuring China to take a greater role in global affairs, would be downplayed as Germany and the rest of Europe looked for greater support amid economic strains.
She said “no sensitive topics are off the agenda”, including human rights and the rule of law. “Dialogue on these topics creates trust,” she added.
Ms. Merkel also made a strong call for greater access and more intellectual property rights protection for German firms in China.
“The German market is fairly open,” she said. “So we hope German enterprises will face the same treatment that Chinese enterprises enjoy in China”.
Last year, China became Germany's largest export market outside the EU, with bilateral trade reaching €140 billion last year, Ms. Merkel said.