A raft of bilateral business agreements and an exchange of views with Chinese leaders on international issues such as the Iranian nuclear crisis are expected to be high on the agenda of German Chancellor Angela Merkel's visit to China.

Merkel arrived in Beijing last night on her first visit to the country since she took office replacing Gerhard Schroeder six months ago, Merkel, 51, is scheduled to meet President Hu Jintao and Premier Wen Jiabao today.

Merkel's delegation, which comprises senior officials including Economy Minister Michael Glos, Transport Minister Wolfgang Tiefensee and a delegation of 40 executives from companies such as Siemens and Lufthansa, indicates the economic importance of her trip.

A series of contracts and documents will be signed during her two-day trip, which will also take her to Shanghai.

Siemens, which led a group that helped build the 30-kilometre magnetic levitation (Maglev) train link between downtown and Pudong International Airport in Shanghai, may be among the winners of new contracts.

A Siemens-led group is bidding to build a 35-billion-yuan (US$4.4 billion) Maglev link between Shanghai and the nearby city of Hangzhou, capital of Zhejiang Province.

"Germany and China have had a very good start on the Maglev project," Foreign Ministry spokesman Liu Jianchao said at a news briefing last week. "China is willing to continue to co-operate."

Merkel pledged to "develop a long-term partnership-style strategy" with Beijing when she took office on November 22; and her trip to China is only the second country outside Europe she is visiting as chancellor, following two trips to the United States.

Analysts say she faces some delicate issues with China, which she has visited in an official capacity only once before as German environment minister in 1997.

Merkel was critical of her predecessor Schroeder's efforts to scrap an EU arms embargo on Beijing that has been in place since 1989.

Also, Beijing and Berlin are at odds on imposing sanctions against Iran, with Merkel open to tougher measures and the Chinese Government against a showdown with the Islamic republic in the UN Security Council.

"From an overall perspective, Merkel will maintain policy continuity towards China, because she is aware how important the vast market means to Germany," Lian Yuru, a professor of German studies at Peking University, said in an interview.

She said Merkel is "rational, pragmatic and cautious" in handling international relations. "Her first visit as chancellor can also be to establish a personal equation with Chinese leaders."

Germany is an important economic partner for China. Trade volume between the two sides registered US$63.2 billion last year, accounting for one-third of the total between China and the European Union, according to Foreign Ministry statistics. There are more than 1,800 German companies operating in China, according to the German Embassy in Beijing.

German exports to China swelled to more than 18 billion euros (US$23 billion) last year from 270 million euros in 1972.