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Daimler Signs $1.4 Billion Production Deal with Beijing Joint-Venture Partner

March 29, 2014
Daimler's deal was signed with Beijing Automotive Industry Corp. (BAIC Group). Agreement signed during visit by China's president to Germany. Volkswagen and Siemens were among other German manufacturing firms signing agreements during China's visit.

BERLIN - German auto giant Daimler said Friday it had signed a deal worth $1 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 Corp. (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 [Beijing Benz Automotive Co.], 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 (IW 1000/18) said in November it had received the green light from China to acquire a 12% stake in BAIC Motor, a unit of Beijing Automotive Group.

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 (IW 1000/82) to enlarge a plant in Beijing and a cooperation accord between Volkswagen (IW 1000/7) and its Chinese partner SAIC on fuel cell technology.

Engineering giant Siemens (IW 1000/35) 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 center 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.

Copyright Agence France-Presse, 2014

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