German Chancellor Friedrich Merz begins his first official visit to China this week, in an attempt to restart relations with Beijing amid rising global trade tensions and a faltering transatlantic relationship with the United States, reports "Reuters".
Merz is leading a delegation of leading German business figures, including the heads of car giants Volkswagen, BMW and Mercedes-Benz. The companies face a double whammy - increased competition from Chinese electric car makers and US tariffs that are making their exports more expensive by billions of euros.
China was Germany's biggest trading partner last year, but the trade patterns have changed significantly. Chinese exporters, aided by an undervalued yuan, German officials say, have turned Germany's traditional surplus into a serious deficit. In 2025, Germany's trade deficit with China will reach nearly 90 billion euros.
"The trade imbalance has reached alarming proportions," said Mikko Huotari, director of the Berlin-based Merics institute, stressing that the business environment for German companies in China has deteriorated for a significant number of them.
During the visit, Merz will meet with Chinese President Xi Jinping and Premier Li Keqiang. A number of economic agreements are expected to be signed. The program also includes visits to a Mercedes-Benz electric car plant and a Siemens Energy plant.
Beijing is seeking to position itself as a reliable global partner in the face of growing geopolitical confrontation, especially after the unpredictable trade policies of US President Donald Trump. At the same time, German industry groups are urging the chancellor to address issues such as overcapacity, distorted competition and export controls on strategic raw materials.
China produces more than 90% of the world's processed rare earths and last year tightened export restrictions, raising serious concerns among Western manufacturers. At the same time, the European Union has raised tariffs on Chinese electric cars and taken measures to protect the steel sector.
Merz's visits to Beijing will be followed by a visit to Washington, underscoring Berlin's efforts to balance its relations between the two economic giants in a new era of global rivalry.