German Chancellor Angela Merkel and Chinese Prime Minister Wen Jiabao officially opened Sunday evening the Hannover Messe, the world's biggest industry and trade fair.

China is this year's guest of honour at the gigantic annual week-long trade fair, which brings together 5,000 manufacturing and technology companies from 69 countries in this northern German city from April 23-27.

As many as 500 companies are from China alone. And the motto of this year's Hannover Messe is "Green Intelligence" with the focus on environmentally sustainable innovations and technologies.

"As two of the most important manufacturing countries in the world, China and Germany are committed to working closely to promote dialogue and cooperation of the global industries," Wen said during a lavish and colourful opening ceremony held under tight security in Hanover's concert and congress centre.

Merkel, for her part, noted that it was her third meeting with Wen in less than a year and that "little by little, we're understanding better how things function in the two countries."

Bilateral trade between Germany and China stood at 144 billion euros last year and "we're working on making this even more," she said.

According to the head of the German VDMA industry federation, Thomas Lindner, China was staging "the largest single showcase of industrial technology ever outside the People's Republic" at this year's fair.

"This impressive and extensive presentation shows us China both as a trading partner, but also a business competitor," Lindner said.

"Many German companies have been contributing for many years to China's astonishingly rapid industrial development. Many of these German companies are today part of the success story of Chinese industry," Lindner said.

For Wen, Germany is the second stage on a mini-European tour that kicked off in Iceland on Friday and will also take the Chinese leader to Sweden and to Poland.

On Monday morning, Merkel and Wen will take a short tour of one of the gigantic exhibition halls, after which they will travel to the headquarters of auto giant Volkswagen in near-by Wolfsburg where a deal is expected to be inked on a new VW plant in China.

Outside the congress centre in Hanover on Sunday evening, around 200 protestors staged a small demonstration, waving Tibetan flags and shouting slogans about China's human rights record.