German Chancellor Friedrich Merz met Chinese President Xi Jinping in Beijing on Wednesday and sought to strengthen relations with Germany’s largest trading partner even as Berlin views Beijing as a strategic competitor.
The visit comes as Europe’s biggest economy grapples with sluggish growth and as US trade policy under President Donald Trump has unsettled global markets. Berlin and Beijing signalled their intention to deepen cooperation, with Merz describing the trip as a “great opportunity” to expand economic engagement.
Xi said he was prepared to elevate bilateral ties to “new levels”, emphasising that he has always placed high importance on Sino-German relations.
China overtook the United States last year as Germany’s top trade partner. However, Germany also characterises China as a systemic rival within the Western alliance framework.
Merz expressed hope that joint governmental consultations — paused due to Germany’s change of leadership and the pandemic — would resume soon. At the same time, he is expected to press German and broader European interests during discussions, including urging Beijing to use its influence with Russia to help end the war in Ukraine.
But he is also expected to stress German and European interests during his talks with Xi, and urge him to put pressure on China’s ally Russia to end the war in Ukraine.
Merz is the latest in a string of Western leaders courting Beijing in recent months, including Britain’s Keir Starmer, France’s Emmanuel Macron and Canada’s Mark Carney, as they recoil from the mercurial policies of Trump, who is also expected from March 31.
Large business delegation
Export-dependent Germany needs “economic relations all over the world”, Merz said before leaving for Beijing with a large business delegation in tow.
“But we should be under no illusions,” he added, pointing out that China, as a rival to the United States, now “claims the right to define a new multilateral order according to its own rules”.
Merz earlier met with Premier Li Qiang in Beijing’s opulent Great Hall of the People, where he called for “fair” cooperation, and representatives from both sides signed agreements and memorandums – including on climate change and food security.
In an apparent allusion to the United States, Li noted that “unilateralism and protectionism have gained ground and even become prevalent in some countries and regions”.
“Against such a backdrop, China and Germany, as two major economies in the world with significant influence, should… jointly safeguard multilateralism and free trade,” Li said.
China under Xi has grown far more assertive on the world stage, built up its military, stressed its claim to self-ruled Taiwan, and pushed back strongly against criticism of its human rights record.
Flexing its muscle at times of tension, Beijing has restricted exports of critical minerals used in products from microchips and wind turbines to electric-car batteries and weapons systems.
Last year, Beijing temporarily halted the export of Nexperia chips to Europe following a dispute with the Dutch government.
More broadly, European businesses complain that China, with its low domestic demand, is flooding Europe with goods made cheap through state subsidies and an undervalued currency.
Germany’s trade deficit with China hit a record 89 billion euros ($105 billion) last year.
‘Systemic competition’
As Trump has unsettled allies and rivals alike, China has nonetheless also sought to present itself as a reliable partner and defender of the multilateral order.
China’s top diplomat, Wang Yi, told Merz at the Munich Security Conference this month that Beijing hoped to bring ties “to a new level” and wanted Germany to be a “stabilising anchor for strategic relations” in the European Union.
Merz, like his predecessors Angela Merkel and Olaf Scholz, is joined by business leaders including executives of auto giants Volkswagen, BMW and Mercedes.
On Thursday, Merz is to visit Beijing’s Forbidden City, then a Mercedes plant where autonomous driving vehicles will be presented.
The chancellor then travels to AI hub Hangzhou to visit the robotics group Unitree and German turbine maker Siemens Energy.
German businesses have given Merz a to-do list on his trip.
“We expect the chancellor to clearly address problems such as overcapacity, distortions of competition, and export controls on critical raw materials,” said Wolfgang Niedermark of the Federation of German Industries.
German and European companies in China are not only “competing with highly innovative Chinese firms” but are also players in a “state-driven systemic competition”.
Merz should advocate for “structural reforms to strengthen domestic demand and fairer competitive conditions” in China, he said, warning that without change there will be “new trade conflicts with the EU”.
Without inputs from agencies
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