Chinese Premier Wen Jiabao has begun a five day European tour with Hungary, Great Britain, and Germany on the agenda. The trip is taking place at a time when the relationship between Europe and China is plagued by discord, despite economic cooperation, including human rights issues and European concerns over its growing economic dependence on China.

On the first leg of his European tour in Budapest, Wen signed a number of cooperation deals with Hungarian Prime Minister Viktor Orban. Wen announced that China was ready to purchase Hungarian government bonds and extend a 1 billion euro ($1.4 billion) credit to the country. It is the first visit to Hungary by a Chinese leader in 24 years.

Orban told journalists that Hungary had closed a "new and very important deal" with China, which will include a dozen common projects.

There is a reason the eastern European country is on the agenda: Until the end of this month, Hungary is holding the EU presidency, and European topics are meant to dominate Wen's visit. After all, the EU remains China's most important trading partner.

Wen was met by Deputy Prime Minister Zsolt Semjen and National Development Minister Tamas Fellegi on Friday.

Concerned about Greek debt crisis

According to Yan Jin of the Centre for European Studies at Renmin University of China in Beijing, it is the debt crisis in Greece that has the Chinese especially worried.

"China is convinced that the European debt crisis and the Greek debt aren't only an EU problem," Yan said. "It is important for the world economy. If this crisis isn't solved, it can affect the entire European economy, the world economy, and with that, China."

Above all, China is interested in a stable euro and reliable European partners. The Peoples' Republic has invested billions of its enormous currency reserves in euros, buying, among other things, government securities in Greece and Spain. And it has signaled its readiness to invest in more bonds. But at the same time, Chinese experts warn Europe not to have too-high expectations that China will come to Europe's rescue.

Trade and business in the forefront

The visit is also meant to help build trade ties. European companies are hoping for big orders from China, but many of them complain of disadvantages in the Chinese market. Meanwhile, Europeans are increasingly skeptical about China's increasing engagement on their home turf. Recently, the problems of a state-owned Chinese company building a portion of highway between Berlin and Warsaw made headlines. And Chinese computer maker Lenovo's bid for Aldi supplier Medion had many people up in arms.

But Chinese Deputy Foreign Minister Fu Ying said concerns about Chinese plans to take over European business are unfounded.

"Some European politicians attribute political motives to economic decisions," Fu said. "It isn't true, and it doesn't represent the facts. It leads to the fact that Chinese firms lose interest and get the impression that Europe isn't a welcoming field for investment."

Differences of opinion

But Wen isn't only coming to Europe to help dispel mistrust - he has some concrete wishes as well. For years, China and Europe have been struggling over trade and tariffs, with Europe claiming Chinese industry is overly subsidized and China seeking recognition of its market economy as such. Beijing is hoping its good relationship with Germany will help influence trade decisions made in Brussels.

There is also some discord over international questions: China is against putting sanctions on Syria, and it is also opposed to NATO's action in Libya.

Last but not least, there are differences of opinion when it comes to human rights. That subject isn't likely to go untouched during Wen's visit - for example, regarding China's treatment of the artist Ai Weiwei. On Wednesday, Ai was allowed to go home after his surprise abduction, and the world rejoiced at the news. But Germany's Chancellor Angela Merkel has already said that the artist's release is only a first step.

Author: Ruth Kirchner (jen)
Editor: Michael Knigge