With raft of deals, China and Germany swear to keep trade free

By Thomas Escritt and Michelle Martin

BERLIN (Reuters) - Germany and China signed a raft of commercial accords worth some 20 billion euros ($23.5 billion) on Monday, with their leaders reiterating commitments to a multilateral global trade order despite a looming trade war with the United States.

The deals, involving German industrial giants including Siemens , Volkswagen and BASF , come with the two leading exporting powerhouses being forced into an unlikely alliance in defence of the open global trade on which both their economies depend.

Speaking at a news conference alongside Chinese Premier Li Keqiang, Chancellor Angela Merkel said: "We both want to sustain the system of World Trade Organization rules."

Li stressed the need to fight protectionism, saying China needed a stable and peaceful framework so it could develop further, and that was only possible with free trade: "We are against unilateralism - we are in favour of free trade."

German Finance Minister Olaf Scholz agreed with Chinese central bank chief Yi Gang that German banks would promptly get market access in the financial sector in China, newspaper Handelsblatt cited sources involved in their meeting as saying. No one at the German Finance Ministry was immediately available to comment when contacted by Reuters.

Handelsblatt also cited the sources as saying China's government had said that German companies and institutions would soon be able to issue bonds in renminbi in China.

Merkel said she hoped a Sino-European summit on July 16-17 would bring about progress on protecting investments and added: "I also hope that Germany and China can make a contribution towards ensuring that the world does not end up blundering into a spiral of trade conflicts."

European officials have said China is putting pressure on the EU to issue a strong joint statement against President Donald Trump's trade policies at that meeting.

QUALITY DEALS

Merkel said the deals reached with China were of a "new quality" and while China was a developing country, it was also a "really tough and very ambitious competitor" for Germany.

Li said China is prepared to open up its insurance and bond markets to foreign investors and has in place intellectual property guarantees to ensure that German companies need not fear losing proprietary technologies if they operate there.

German companies and politicians have complained that Germany has been more open to Chinese firms than the other way around. Merkel welcomed the opening of China's financial markets but called for Beijing to open its markets further.

The deals agreed on Monday included BMW planning to source 4 billion euros' ($4.7 billion) worth of battery cells from Chinese battery maker Contemporary Amperex Technology Ltd 300750.SZ (CATL) over the next few years.

That comes at a time when there have been warnings that Europe's lack of its own production capabilities for the cells that power electric cars could leave its car industry exposed and too reliant on others.

Berlin tightened controls on foreign investment last year after a series of high-profile takeovers by Chinese firms, but Merkel said Germany continued to welcome Chinese investment in principle.

She said Berlin was currently discussing "core strategic interests" that affected Germany's security and China had the right to a "clear and transparent answer" on what is possible and what is not.

The two leaders also expressed continuing support for the 2015 nuclear non-proliferation deal with Iran that was rejected by U.S. President Donald Trump, with Li warning of "unforeseeable consequences" if the agreement falls apart.

($1 = 0.8506 euros)

(Additional reporting by Paul Carrel, Riham Alkousaa and Andreas Rinke; Writing by Thomas Escritt and Michelle Martin; Editing by Mark Heinrich and Peter Graff)