Merz seeks trade balance with China amid Ukraine war tensions

09:20

By: Dakir Madiha

Merz seeks trade balance with China amid Ukraine war tensions

German Chancellor Friedrich Merz will travel to China next week for his first official visit since taking office, aiming to recalibrate ties with Berlin’s largest trading partner while navigating sharpening geopolitical rifts with Washington and Moscow. The trip, which begins with his departure from Berlin on Tuesday, is designed to strike what German officials describe as a careful balance between economic cooperation and growing strategic rivalry with Beijing.

Merz is scheduled to arrive in Beijing on Wednesday, where he will be received with military honours before holding talks and a working lunch with Premier Li Qiang, followed by a one‑on‑one meeting and dinner with President Xi Jinping. His two‑day programme in the Chinese capital will also include a tour of the Forbidden City and a visit to a Mercedes‑Benz facility, underscoring the centrality of the auto industry to German commercial interests in China. He will then continue to Hangzhou for meetings with executives from Chinese robotics group Unitree and representatives of Siemens Energy, part of a broader push to anchor German technology and energy companies more firmly in the Chinese market.

Government spokesperson Sebastian Hille said competition would be the defining theme of the visit, stressing that Berlin is looking for cooperation “where it is necessary and in our mutual interest” while acknowledging areas of friction. The mission comes as China has reclaimed its position as Germany’s top trading partner, with bilateral trade reaching 163.4 billion euros in the first eight months of 2025, marginally exceeding volumes with the United States and highlighting how exposed German industry remains to developments in the Chinese economy. German carmakers in particular face mounting pressure from Chinese rivals offering cheaper models in segments where German firms once held a dominant position, reinforcing calls in Berlin for a more hard‑headed China strategy.

Merz will be accompanied by what officials describe as the largest German business delegation to travel to China since Angela Merkel’s early years in office, underlining the high stakes for Europe’s biggest economy. Addressing Christian Democratic Union delegates at a party gathering, he described China as an important trading partner but warned against “illusions,” accusing Beijing of seeking to shape a new multilateral order on its own terms. Chinese Foreign Minister Wang Yi, who met Merz on the sidelines of the Munich Security Conference last week, has cast Germany as a “stabilising anchor” in Europe and said Beijing wants to elevate the relationship, even as trade disputes and subsidy concerns cloud the agenda.

The war in Ukraine is set to loom over Merz’s talks in Beijing. Germany has become one of Kyiv’s most committed backers, while China, a close partner of Russia, has declared neutrality but stopped short of condemning the invasion and has been accused in the West of providing Moscow with indirect support. During a visit to Beijing in December, German Foreign Minister Johann Wadephul urged Chinese officials to use their influence in Moscow to help end the conflict, a message Merz is expected to echo as the war nears its fourth anniversary.

In recent speeches, including at the Munich Security Conference, Merz has framed his China trip as part of a broader strategic reset in which Europe adapts to what he calls the end of the familiar rules‑based order. He has warned that a new system dominated by great‑power competition is emerging at speed, and said he would seek “strategic partnerships” with China as U.S. tariff policies and security tensions strain transatlantic ties. While insisting that Germany will not “disregard” the United States, he has signalled that Berlin and its European partners will look for room to manoeuvre on trade and technology, even as they hedge against over‑dependence on the Chinese market.