KEY POINTS:
LONDON - China's emergence as global manufacturing superpower was a key topic in Prime Minister Helen Clark's talks with German government leaders in Berlin today.
"They're very interested in the fact that we're negotiating a Free Trade Agreement with China," Helen Clark said in a telephone interview with NZPA.
She said this was because Germany had been a significant manufacturing power, but "the world's manufacturing capital" was now China.
"There tends to be quite a reaction still in Germany to globalisation and the loss of jobs," she said.
In a trinity of meetings today, the Prime Minister met with Chancellor Angela Merkel, Vice Chancellor Franz Muntefering, and Federal President Horst Koehler.
All three were seeking out New Zealand's perspectives on the rise of China as an economic force.
Helen Clark said Dr Koehler believed there were two views within Germany on how it should interact with China.
"One was containment and the other was engagement," she said.
"I said we strongly favoured engagement and we're negotiating a Free Trade Agreement and engaging in many ways," she said, adding that "engagement" was also Dr Koehler's view.
However, Helen Clark said New Zealand's view of China stemmed from it having "quite radically restructured" its economy over a number of years.
"We don't have a large scale manufacturing sector that's at risk," she said.
"We've developed a niche manufacturing capacity, which will succeed by staying at the high value end of that industry. So, we have a somewhat different perspective."
Clark's talks with Chancellor Merkel centred on trade issues, and Germany taking for six months from January 1, 2007, the European Union's (EU) presidency
"It's quite an important time to be putting some of our issues on her agenda," she said of her first meeting with Dr Merkel.
"For example, New Zealand has been updating with the EU the action plan we have on taking the relationship forward," she said.
In particular, Helen Clark said New Zealand was looking to progress aviation services and wine agreements with Europe, as well as making the existing science and technology arrangement more formal.
She and Dr Merkel also spoke about climate change, New Zealand's perspectives on the Asia-Pacific region, the "very successful" working holiday scheme, which had seen some 5000 young Germans visit New Zealand each year, and trade.
"I also said that given that Germany had for the most part been committed to more open trade, including in agriculture, that we hoped that Germany could put a lot of energy in to endeavouring to move the Doha world trade talks forward from their position in the chair," the Prime Minister said.
Meanwhile, she discussed Mr Muntefering's role in keeping together the ruling grand coalition between conservatives and social democrats
"From both him and Dr Merkel I got the very clear impression that they're very committed to seeing the grand coalition go for the full four-year term and that they feel that gives stability to German politics," she said.
"It means (to New Zealand) that we're establishing a relationship with an administration that's got another three years to run and has a certain stability about it."
On a more general note, Helen Clark also said the German leaders were interested in New Zealand's domestic policy, "good economic growth", and low unemployment.
"And they're well aware that New Zealand, while at the bottom of the economic cycle, has about a third of the unemployment in Germany...and is growing at a level, which is still close to Germany's best performance in years," she said.
"They look very carefully at what's happening and they're quite impressed by, you know, how New Zealand did emerge from very difficult restructuring with a resilient economy."
- NZPA
