German Chancellor Friedrich Merz on Wednesday called for closer cooperation with China while pressing for fairer trade rules and urging Beijing to use its influence to help end the war in Ukraine.Merz, on his first trip to China since taking office in May last year, met Premier Li Qiang and later President Xi Jinping in Beijing during a two-day visit aimed at strengthening ties with Germany’s largest trading partner even as Berlin views Beijing as a systemic rival.“We have a few issues that we need to talk about today in the course of my visit,” Merz told Li, according to news agency AP. “But I think there is also great potential for further growth of both our economies.” He added that collaboration should continue “wherever possible.”Xi told Merz he was willing to take bilateral relations to “new levels” and stressed that he “always attached great importance to Sino-German relations,” reported news agency AFP. Merz described the trip as a “great opportunity” to boost economic ties and said he hoped joint intergovernmental consultations, paused due to political changes and the pandemic, would resume “very soon.”
Pressing China on Ukraine
Merz indicated before landing in Beijing that he would seek China’s assistance in bringing about an end to Russia’s four-year-old war in Ukraine.He stressed that despite differences, “the big global political problems can no longer be tackled today without involving Beijing,” noting that “Beijing’s voice is heard, including in Moscow.”Many European governments have expressed frustration that China has not done more to pressure Russia. Beijing has maintained close diplomatic and trade ties with Moscow and says its stance on the conflict is impartial.Chinese foreign ministry spokesperson Mao Ning said earlier this week, “We hope all parties will seize the opportunity to reach a comprehensive, lasting and binding peace agreement”.
Trade tensions and tariffs backdrop
Merz’s visit comes amid global economic uncertainty triggered by US President Donald Trump’s tariffs and demands that allies shoulder more responsibility for their own security.China has sought to rally support from other nations to push back against what it sees as rising unilateralism and protectionism. In an apparent reference to the United States, Li said that “unilateralism and protectionism have gained ground and even become prevalent in some countries and regions,” adding that China and Germany should “jointly safeguard multilateralism and free trade”.Merz emphasised that Germany’s China policy must be framed within a broader European approach. “Our message from a European point of view is the same: We want a balanced, reliable, regulated and fair partnership with China,” he said, according to AP. “This is our offer. At the same time, it is what we also hope for and expect from the Chinese side.”
Trade imbalance and overcapacity concerns
Economic imbalances remain a key sticking point. According to AP, Germany’s imports from China rose 8.8 per cent to €170.6 billion ($201 billion) last year, while exports to China fell 9.7 per cent to €81.3 billion ($96 billion).Germany’s trade deficit with China hit a record €89 billion ($105 billion) last year.European leaders, including Merz, are seeking improved market access for their companies and reductions in what they describe as systemic overcapacity in sectors such as electric vehicles and solar panels. “We also want to discuss how we can find a remedy, for example, where systemic overcapacities have arisen, where there are export restrictions and where there are access restrictions … that distort and prevent competition,” Merz said.German industry representatives have urged Merz to address “overcapacity, distortions of competition, and export controls on critical raw materials,” AFP reported, warning of potential new trade conflicts with the European Union if structural reforms are not undertaken.
Strategic rivalry amid economic interdependence
While China overtook the United States to become Germany’s biggest trade partner last year, Berlin also views Beijing as a strategic and systemic rival.Merz acknowledged before departure that China “claims the right to define a new multilateral order according to its own rules,” cautioning against illusions even as he stressed the need for global economic ties.The chancellor is accompanied by a large business delegation, including executives from major German automakers and industrial firms, underscoring the economic stakes of the visit.
