China's premier said Thursday that Beijing might contribute to European bailout funds, while visiting German Chancellor Angela Merkel pressed for help in persuading Iran to renounce possible nuclear weapons ambitions.

Merkel was on a visit to reassure Beijing about Europe's financial health following agreement this week on a European treaty on government spending that its leaders hope will end their debt crisis and revive economic growth.

Premier Wen Jiabao, China's top economic official, repeated pledges of support for Europe, his country's biggest trading partner, but made no financial commitments.

"It is very urgent and important to resolve Europe's debt crisis," he said during a joint appearance with Merkel. "China is considering greater involvement in resolving Europe's debt crisis by participating in the European Financial Stability Fund and the European Stability Mechanism."

European leaders want China, with $3.2 trillion in foreign reserves, and other global investors to contribute to expanding the EFSF and the 500 billion euro ($650 billion) ESM, due to begin operation in July.

Merkel is the first of several European leaders to visit China this month for talks expected largely to focus on the economic crisis.

Europe is China's biggest export market and Beijing's stake in its financial health is growing as Chinese companies expand there. China's biggest producer of construction equipment announced this week that it was buying Germany's Putzmeister, a maker of concrete pumps.

"Whether we can maintain the stability of the financial system and stable economic growth and facilitate integration not only concerns the future of Europe but also has a great impact on China," Wen said. "China supports Europe in safeguarding the stability of the euro."

Also Thursday, Merkel called on China, the biggest buyer of Iranian oil, to use its influence to persuade Tehran to renounce nuclear weapons ambitions.

Appearing with Wen, she said there was no alternative to sanctions on Iran.

In a speech earlier at a government think tank, Merkel acknowledged that Beijing opposes an oil embargo. She said, "The question is more how China can use its influence to make Iran understand that the world should not have another nuclear power."

The European Union imposed an oil embargo on Iran last week and froze the assets of its central bank. In December, the United States said it would bar financial institutions from the U.S. market if they do business with Iran's central bank.

China gets more than 10 percent of its oil imports from Iran. Chinese analysts have warned of potential economic damage if an embargo is imposed because Beijing could not easily get replacement supplies elsewhere.

Merkel was due to meet with Chinese President Hu Jintao on Friday. She said "more sensitive topics," including human rights and the rule of law, also would be on her agenda but gave no details.

Merkel called for closer commercial cooperation with China, one of her nation's biggest trading partners. But she also pointed to China as a competitor, warning that Europeans will see manufacturing jobs shift there if they fail to boost competitiveness.
"China's top concern is the stability of the European banking system, which will have a direct impact on China's trade," said Zhang Bin, a finance specialist at the Chinese Academy of Social Sciences, a government think tank.

A commentary in the state newspaper China Daily suggested a trade: Chinese economic assistance in return for Europe's lifting of a ban on weapons sales to China that was imposed after Beijing crushed pro-democracy protests in 1989.

"As a Chinese saying goes, one does not visit the temple for nothing," said the commentary by Ouyang Shi, described as a Beijing-based scholar of international relations.

It later said: "If European demands for China are mostly in economic terms, Chinese hopes of Europe are mainly political, namely mutual respect and treating each other as equals."

Merkel said she also planned to raise complaints by German business people about Chinese market barriers. Business groups complain Chinese regulators improperly favor local companies and try to keep foreign competitors out of promising industries in violation of Beijing's free-trade pledges.