On the second day of his visit to Germany -- the second leg of a European tour -- Hu was to hold talks with incoming chancellor Angela Merkel and outgoing leader Gerhard Schroeder.

Hu said in speech to businessmen on Thursday that he hoped the change of government in Germany would not affect China's relationship with the biggest economy in the European Union.

But the president will be informed that the new power-sharing administration will not take up the fight to scrap the 16-year-old ban on EU arms sales to China which was imposed following the brutal crushing of the 1989 Tiananmen Square democracy protests.

"Lifting the arms embargo is not on the agenda of the new government," the foreign policy spokesman of Merkel's Christian Democrats, Friedbert Pflueger, told Thursday's Berliner Zeitung newspaper.

He said that any change to this position would "only come in close consultations with our European and Atlantic partners".

Schroeder was a firm opponent of the embargo and sought to persuade his European partners to lift it, angering some EU nations and the United States.

Vague EU pledges to lift the ban were shelved after China passed an anti-secession law on Taiwan in April, heightening concerns that the law could eventually lead to war in the Taiwan Straits.

After a three-day visit to Britain complete with the pomp and splendour of a stay at Buckingham Palace as the guest of Queen Elizabeth II, the Chinese president began his four-day stay in Germany by overseeing a raft of business and cultural agreements.

As he made his way to the Charlottenburg Palace in Berlin for talks with German President Horst Koehler, his motorcade passed protests from several hundred human rights demonstrators outside the palace gates.

One banner read: "Human rights right away".

Despite the protests, Europe is rolling out the red carpet for Hu, keenly aware of the massive economic strides China is making.

The Chinese leader oversaw the signing of a deal for German electronics giant Siemens to supply 60 high-speed ICE trains to China from which Siemens will earn 700 million euros (818 million dollars) from a total package of 1.3 billion euros.

Deals with British-based companies worth a total of 783 million poundsbillion euros, 1.3 billion dollars) were struck on the first leg of the tour.

After talks with Hu, Koehler said China had "achieved an enormous amount in the past few decades and is taking huge strides".

But Koehler said there were "clear differences" between the two countries positions' on certain issues, without mentioning human rights by name.

"We know that everything comes in its own time and we understand that China is making its own way, but we also know that the will of the people to live in freedom and dignity is universal," Koehler told a press conference.

Hu did not directly reply to Koehler's speech in his brief response.

Instead, he said that the signing of business deals showed how close China and Germany worked together in the fields of economy, culture and science.

"I am convinced that closer cooperation will serve the people of both countries," Hu said.

Germany is China's biggest European trade partner, with German exports rising 12.7 percent in the first half of 2005 to 9.48 billion euros.

Hu is to visit the industrial region of North Rhine-Westphalia on Saturday before heading to Spain on Sunday morning.

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