Sarkozy begins China visit at imperial tombs

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XIAN, China, Nov 25 (Reuters) French President Nicolas Sarkozy went to China's former imperial capital at the start of a visit overshadowed by trade disputes but expected to net 20 billion dollar in business deals from Asia's reawakened giant.

Sarkozy began his first state visit to Asia in Xian and a guided tour of the Terracotta Army -- the 6,000 preserved figures of warriors and horses defending the necropolis of China's first emperor, one of the world's most remarkable tourist spots.

He was escorted into the earth trenches for an up-close tour, walking up and down the battle lines of lifesize baked-clay soldiers.

Sarkozy was due to visit another recently restored burial site before heading to Beijing for talks with President Hu Jintao on topics from China's yuan currency, which Europe and the United States believe undervalued, to its burgeoning trade surplus and the growing international tensions over Iran.

Despite vocal criticism from Sarkozy on Beijing's reluctance to free its currency to ease economic imbalances, or to back Western calls for sanctions against Iran over its nuclear work, the trip is seen likely to include major deals for French firms.

China is due to order two modern EPR nuclear power reactors from France's Areva after handing an earlier strategic deal for reactors to U.S. rival Westinghouse.

And talks were under way to try to match an order for 150 Airbus jets sold during a farewell state visit to China by Sarkozy's predecessor, Jacques Chirac, in October last year.

The European planemaker is based in France but controlled by French and German interests through aerospace parent EADS, which is cutting jobs partly due to a strong euro.

Industry officials say EADS hopes to firm up provisional Chinese orders for 20 of its A350 wide-body mid-sized jets as part of total aircraft orders that could exceed 15 billion dollar.

China needs thousands of aircraft in coming decades to keep pace with air travel in the world's fastest growing economy, but on average it shares orders between Airbus and Boeing.

Sarkozy's three-day visit to China will also include a private meeting with Prime Minister Wen Jiabao, a glance at Beijing's 2008 Olympics preparations and a whirlwind visit to Shanghai on his way home to Paris on Tuesday.

Sarkozy's trip comes days before high-level talks between China and European Union monetary officials and a China-EU summit on Wednesday in Beijing.

The European Union is worried over China's growing trade surplus, which it blames on an artificially weak yuan.

On the eve of his visit Sarkozy said fair exchange rates among leading currencies were a condition for balanced ties.

He delivered a message that with China's economic power and growing international clout came responsibilities.

By starting his journey in Xian, however, Sarkozy appeared to send a reassuring diplomatic signal to his hosts -- that despite a restless image and a zeal for reform, he is conscious of China's sense of history and its centuries-old culture.

The trip was also stage-managed to demonstrate that the page has turned in French politics, beginning at the exact spot where his domestic rival, Chirac, left off at the end of his 2006 visit, which was long on friendship but short on business deals.

REUTERS SZ VC1032

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