While meeting with Merkel in Beijing, Premier Wen stressed that the EU should keep pushing ahead with financial reforms to put forward a consistent and clear-cut solution to the debt crisis. To the surprise of Western media and EU officials, Wen didn't ask Merkel to persuade the EU to grant China market economy status or lift the arms embargo on China. But he required the EU to improve its investment environment.

China's support to Europe is completely from a strategic and long-term perspective. China should help stabilize the European market, which is actually helping China itself, because Europe has been both China's largest export market and biggest source of technology imports, Wen said.

Expanding investment

Yao Ling, a researcher on European studies at the Chinese Academy of International Trade and Economic Cooperation, said, "The European debt issue is a problem of rich countries. China is only a developing country by per-capita income. It is paradoxical that a poor country should rescue a rich one. We might provide help as our capacity allows. The crisis should be solved fundamentally based on the efforts of euro-zone countries."

"There are multiple ways for China to help Europe address its debt crisis, including purchasing the sovereign debt of European countries and increasing imports from the EU and investment to the EU," said Yao.

Based on statistics of the Chinese Ministry of Commerce, China's imports from the EU in 2011 increased 25 percent year on year, while its investment in the EU nearly doubled that of the previous year. So in that sense, China has already begun its practical action in helping Europe.

Last December, China's Three Gorges Corp. won a bidding contest to buy a stake in Energias de Portugal, the country's dominant power company. The deal was considered a forerunner of other potential asset sales to China by debt-stricken euro-zone economies. Also, the State Grid Corp. of China has recently acquired a 25-percent stake in Redes Energéticas Nacionais, Portugal's national power grid.

Since last year, with the debt crisis becoming increasingly fierce, many EU countries including Greece, Portugal, Spain and Italy began big privatization programs to raise funds. Germany, Britain and France showed interest in foreign investments. For China and Chinese enterprises seeking to go global, the debt crisis presents many opportunities.

In a speech delivered at the Chinese Academy of Social Sciences during her latest visit, Merkel said Germany welcomes Chinese companies to increase investment in Germany and will open its market wider to China.

However, China's investment in Europe has often encountered non-economic barricades. An article in The Economist in June last year pointed out that China's investment makes Europeans nervous because they feel that China intends to buy Europe's jewels with its giant savings at knock-down prices.

In July 2011, the European Council on Foreign Relations criticized enlarged investment to Europe from emerging market economies, including China, in a report titled The Scramble for Europe.

"There are still doubts about Chinese investment in Europe. Therefore, discriminatory measures still exist," said Feng of the CICIR.

Li of the CIIS suggested Chinese companies should do more research before investing in Europe. "Because of cultural differences, Chinese enterprises should be very cautious in investing in Europe. Try to learn more about the investment environment, especially the local legal system," Li said.

During a meeting with representatives of Chinese and German entrepreneurs, Premier Wen encouraged Chinese enterprises to invest in Europe. He also called on the European side to create a positive investment environment for Chinese enterprises.

This was Merkel's sixth official visit to China as German chancellor. In the last five trips, each time the two sides signed large cooperation and trade agreements. However, this visit was an exception.

"It only demonstrates that Sino-German economic and trade relations are mature and stable. But it is new that Merkel called for more cultural exchanges. This shows Germany's intention to enhance deep mutual understanding and promote strategic cooperation with China," said Li of the CIIS.

This year marks the 40th anniversary of Sino-German diplomatic relations. A Chinese Culture Year featuring a series of activities such as concerts, exhibitions and film festivals is being held in Germany.

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