German Chancellor Friedrich Merz called for greater cooperation with China on Wednesday while pressing for fairer trade rules and urging Beijing to use its influence to help end the war in Ukraine.Merz’s first visit to China since taking office in May last year saw him meet Prime Minister Li Qiang and later President Xi Jinping in Beijing during a two-day trip aimed at strengthening ties with Germany’s largest trading partner, even as Berlin views Beijing as a systemic rival.“Today during my visit, we need to discuss some issues,” Mertz told Lee, according to the Associated Press. “But I think there is also great potential for further growth in our two economies.” He added that cooperation should continue “as long as possible”.According to Agence France-Presse, Xi Jinping told Merz that he was willing to elevate bilateral relations to a “new level” and stressed that he “always attaches great importance to Sino-German relations.” Merz called the trip an “excellent opportunity” to boost economic ties and said he hoped joint intergovernmental consultations that had been suspended due to political changes and the pandemic could resume “soon.”
Putting pressure on China and Ukraine
Before arriving in Beijing, Mertz said he would seek help from China to end Russia’s four-year war in Ukraine.He stressed that despite differences, “today, major global political issues can no longer be solved without Beijing’s participation,” noting that “Beijing’s voice has been heard, including in Moscow.”Many European governments have expressed disappointment that China has not done more to pressure Russia. Beijing maintains close diplomatic and trade ties with Moscow and says its stance on the conflict is fair.“We hope that all parties will seize the opportunity and reach a comprehensive, lasting and binding peace agreement,” Chinese Foreign Ministry spokesman Mao Ning said earlier this week.
Trade tensions and tariffs background
Mertz’s visit comes as U.S. President Donald Trump’s tariffs stoke global economic uncertainty and demand allies take more responsibility for their own security.China has been seeking support from other countries to counter what it sees as rising unilateralism and protectionism. In an apparent reference to the United States, Li Keqiang said “unilateralism and protectionism are on the rise and even prevalent in some countries and regions,” adding that China and Germany should “jointly safeguard multilateralism and free trade.”Mertz emphasized that Germany’s China policy must be framed by a broader European approach. “From a European perspective, our message is the same: we want a balanced, reliable, normative and fair partnership with China,” he said, according to the Associated Press. “This is our proposal, and it is also our hope and expectation for China.”
Trade imbalance and overcapacity concerns
Economic imbalances remain a key sticking point. According to the Associated Press, German imports from China increased by 8.8% last year to 170.6 billion euros ($201 billion), while exports to China fell by 9.7% to 81.3 billion euros ($96 billion).Germany’s trade deficit with China hit a record 89 billion euros ($105 billion) last year.European leaders, including Merz, are seeking to improve market access for their companies and reduce systemic overcapacity in industries such as electric vehicles and solar panels. “We also want to discuss how to find remedies, for example, in cases where systemic overcapacity, export restrictions and access restrictions… distort and impede competition,” Merz said.According to Agence France-Presse, German industry representatives urged Merz to address “overcapacity, distortions of competition and export controls on key raw materials” and warned that if structural reforms are not carried out, a new trade conflict with the EU may occur.
Strategic Competition in Economic Interdependence
Although China overtook the United States last year to become Germany’s largest trading partner, Berlin also views Beijing as a strategic and systemic rival.Mertz acknowledged before departure that China “claims the right to define a new multilateral order according to its own rules,” and while he stressed the need for global economic ties, he warned against illusions.The chancellor was accompanied by a large business delegation that included executives from Germany’s major carmakers and industrial companies, underscoring the economic significance of the visit.