Schröder's Packed Asian Agenda

When Chancellor Schröder heads to Asia, it's normally all about helping German business tap the region's key markets. In the past Berlin has made a considerable effort to aid industry and the government is planning to do the same on this trip.

"Certainly economic topics will be an important focus of the trip in both China and Japan. The chancellor will be travelling with a large business delegation," according to a government spokesman.

But there are signs that politics may not take such a backseat to business this time around. China's leadership has several pressing issues to discuss with Schröder, including the possible lifting of the EU's weapon's embargo against Beijing. Berlin, on the other hand, wants Chinese backing for Germany's bid to become a permanent member of the UN Security Council. That's something Japan also is aiming for, and Tokyo and Berlin are sure to talk strategy over the upcoming reform of the United Nations.

While Germany's political relationship with Japan is well established, ties to China are rapidly evolving. Following a visit by Chinese Premier Wen Jiabao to Germany in May, he and Schröder agreed to set up a hotline linking Berlin with Beijing. The secure telephone line is modelled on the dedicated hotlines the German leader has to the White House in Washington and the Kremlin in Moscow and shows just how seriously both sides now take political contact at the highest levels.

"It appears the leaders are even developing personal contacts," Dr Eberhard Sandschneider from the German Council on Foreign Relations said, adding that the new dimension in the countries' relationship was being driven by the realization that both sides potential had much to gain from closer ties.

Schröder supports lifting embargo

Besides solidifying German support for the lifting of the EU weapons embargo imposed on China after pro-democracy protests on Tiananmen Square were bloodily crushed in 1989, Beijing wants Brussels to accord it "market economy" status. Sandschneider said Schröder's support for the weapon embargo would have little benefit for the German economy, however, it could be key in making China more willing to back Germany in other endeavors such as Berlin's quest for a permanent UN Security Council seat.

"There is not much of an argument for the embargo anymore. But the symbolism is very important. You don't want to send the message that Europe is selling weapons to Beijing that could end up in the Taiwan Straight," said Sandschneider, explaining that Schröder needed to tread lightly on the issue.

Some analysts said China was also keen to groom contacts to European powers like Germany and France in order to shore up its official stance on a "multi-polar" world that wasn't dominated by the only remaining superpower, the United States. However, both Beijing and Berlin ultimately have a sober view of the limits of their political cooperation.

"In theory the Chinese would like to counterbalance the United States, but they are aware of the EU's internal divisions and difficulties," Dr Kay Möller from the German Institute for International Politics and Security Affairs in Berlin said. "And the Europeans are coming to realize they had the same problems with Beijing regarding opening the Chinese economy and on human rights that the Americans have."

That cold political reality means few doubt Berlin is about to start neglecting German business interests in its dealings with Beijing.

"Germany's policies toward China are still dominated by economics -- everything else takes a back seat," Möller said.

Plenty of PR

During his visit, Schröder will attend several PR events for big-name German firms including carmakers DaimlerChrysler and Volkswagen. Besides spending time in Beijing, he will also travel to the industrial town of Changchun in the northeastern Jilin province to address regional business leaders.

Schröder will fly straight from Changchun to Japan, where he will hold talks with Japanese Prime Minister Junichiro Koizumi. Besides planning strategy over their joint desire to join the top league of the UN Security Council, Schröder and Koizumi may be inclined to discuss the weakness of the US dollar versus the euro and yen.

With Washington loath to do anything to support the sinking greenback, Japan and Germany -- both big exporters -- are suffering. The endangered prospects for growth in the world's second and third largest economies could cause both Berlin and Tokyo to increase pressure on Beijing to revalue the Chinese yuan's dollar-peg.

"If the yuan is decoupled from the dollar it would certainly help German exporters," Andre Schwarz from the BGA German Foreign Trade Association said.