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article imageDaimler signs 1.0-bn-euro production deal with Chinese partner

By AFP     Mar 28, 2014 in Business

German auto giant Daimler said Friday it had signed a deal worth one billion euros ($1.4 billion) with its Chinese partner to expand production at their joint Beijing-based venture.

The deal, signed with Beijing Automotive Industry Corporation (BAIC Group), during a visit to Germany by Chinese President Xi Jinping, will expand production capacity at Beijing Benz (BBAC) by 2015, it said in a statement.

The plant produces cars for the local market, including the Mercedes E- and C-Class models, and engines.

"Of the four billion euros currently being invested in BBAC, the one billion euros specified in the agreement signed today is to be used solely for the expansion of local car and engine production capacity until 2015," the statement said.

Daimler said in November it had received the green light from China to acquire a 12-percent stake in BAIC Motor, a unit of Beijing Automotive Group.

The new investment deal was signed in Berlin in the presence of Chancellor Angela Merkel and Xi, who arrived in Germany earlier Friday on the third stop of a European tour.

Germany is China's biggest trading partner in Europe, while China is Berlin's biggest in Asia.

Among a raft of other pacts signed was a memorandum of understanding by German chemical and pharmaceuticals giant Bayer to enlarge a plant in Beijing and a cooperation accord between Volkswagen and its Chinese partner SAIC on fuel cell technology.

Engineering giant Siemens agreed a memorandum of understanding with Huaneng Power International and Shanghai Electric Group on cooperation in the field of energy.

Operator of the Frankfurt stock exchange, Deutsche Boerse, and Bank of China signed a preliminary agreement, while the Bundesbank and China's central bank agreed a declaration of intent to set up a yuan clearing and settlement centre in Germany's financial capital, Frankfurt.

The People's Bank of China is due to sign a similar agreement in London next week.

The pacts signed were mostly declarations of intent or preliminary accords.

During his previous stop in France, Xi and French President Francois Hollande oversaw the signing of 50 deals worth 18 billion euros ($25 billion), including a Chinese order for 70 Airbus planes worth more than $10 billion.

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