Merkel said that China needed "to respect the rules of the game," after talks in Beijing touched upon controversial issues such as piracy and unsafe Chinese exports.

"In our talks, I made clear that every country has the right to development," Merkel told journalists in a joint press conference after the one-hour meeting with the Chinese premier Wen Jiabao. "But at present there are a great many large countries such as China that are developing fast and there is a need to respect the rules of the game."

The label "Made in China" has suffered enormous image damage in recent months, especially in the aftermath of a recent recall of 18 million Chinese-made products by US toy giant Mattel because of safety concerns.

An opportunity, not a threat

Critics of China have also voiced concerns in recent years that the country's economic rise could potentially be seen as a threat to the rest of the world, especially in view of China's deplorable human rights record.

"China's development is an opportunity, not a threat," Wen said. "We have decades of work ahead before we can be even a moderately well-developed country."

The Chinese premier stressed that his country was still struggling with issues such as poverty and population growth, but added that Chinese intentions were not sinister.

"China will always take the peaceful road," he said. "China is very happy to cooperate with all nations but will never threaten... so it's clear, everyone please be at ease, there is no such thing as the 'China Threat Theory.'"

Hi-tech espionage?

Merkel's talks with the Chinese premier came only two days after the German news magazine Der Spiegel reported that Chinese hackers had broken into the government computer network in Berlin.

According to the magazine, spy programs -- which investigations showed could be tracked to the Chinese People's Liberation Army -- were uncovered at Merkel's office, the foreign ministry and other government institutions.

"We in the government took (the reports) as a matter of grave concern," Wen said. "Hackers breaking into and sabotaging computers is a problem faced by the entire world."

The Chinese premier emphasized that fighting hacking must be a joint effort and that China will cooperate with Germany on this issue.

"We are willing to maintain cooperation with the German government and take firm and effective action to prevent all hacking acts that threaten computer systems," he said.

Climate goals

Wen promised China would undertake greater efforts to prevent global warming in its next environmental five-year plan starting in 2011, but stressed that China's responsibilities regarding carbon-dioxide emissions were not the same as those of long-time industrialized nations.

"It will be extremely difficult to reach these targets, but we have already shown our determination," Wen said. "We have a much tougher task than Germany does."

China has long maintained that wealthy nations -- those that have already benefited from emissions-producing industrial booms -- are the ones who should take the lead in cutting greenhouse-gas emissions.

"China has taken part of the responsibility for climate change for only 30 years while industrial countries have grown fast for the last 200 years," he said.

Merkel, who made climate change a key focus of Germany's presidency over the G8 group of leading industrialized nations, emphasized that all countries needed to work on energy efficiency.

"Developed countries should help by providing the latest technology," she said.

China has set goals to reduce its energy consumption by 20 percent by the year 2011, but its consumption fell by only 1.23 percent last year. It also failed to meet its targeted 2-percent reduction in emissions of major water and air pollutants last year, recording instead toxic levels rising by almost 2 percent.

Merkel also met with Chinese President Hu Jintao later on Monday. She will head for Japan on Wednesday, where she will also address climate change and economic issues.