China, a strategic partner?
Germany deepens a ‘comprehensive strategic partnership’ with China as a hedge against further economic attacks from the Trump administration.
BERLIN/BEIJING (own report) – Germany hopes to deepen its “comprehensive strategic partnership” with China and expand economic ties with the People’s Republic. This statement of intent has emerged from the talks held yesterday in Beijing between German Chancellor Friedrich Merz and Chinese President Xi Jinping and Premier Li Qiang. What is more, relations between China and the EU as a whole may soon be improved again. The trigger for initiating rapprochement between Berlin and Beijing is the Trump administration’s continued economic attacks on Germany and the EU. They are forcing the German government to cooperate more closely with third countries, both economically and politically, if Germany is to avoid being permanently squeezed by the United States. Despite all the rivalries, Germany cannot avoid closer cooperation with the economic powerhouse China. Merz said in Beijing that he hoped economic differences would be resolved in future “through open dialogue with each other”. A major problem for Germany is its large and growing trade deficit with China. Another problem is that German businesses have to contend with strong Chinese competition in third markets.
Blunt verbal attacks
German Chancellor Friedrich Merz made some rather harsh comments about China just a few days before his departure for Beijing. Addressing the Munich Security Conference, he said that Beijing was “systematically exploiting the dependencies of others.”[1] He warned that the People’s Republic “had the ambition to shape global affairs, laying the foundations for this over many years with strategic patience.” And, “In the foreseeable future,” Beijing “could draw level with the US in terms of military might.” On Wednesday last week, Merz spoke at a CDU party gathering claiming that “suddenly” it was now apparent that China – “unlike in the last 3,000 years of Chinese history” – was “aggressively expanding bases in the South China Sea”, “encircling Taiwan and openly declaring that it would be prepared, if necessary, to use military force to bring about the so-called reunification of China.”[2] Merz did not explain what distinguishes China’s bases in the South China Sea from those of Vietnam, Malaysia and the Philippines. Nor did he address the question of why Chinese reunification should be “so-called”. After all, Germany formally concurs with almost all countries around the world in accepting that under international law Taiwan belongs to China under the One China principle. Even a German chancellor is bound by official points of law.
Trade problems
At the talks in Beijing on Wednesday Merz struck a very different tone. The background to this visit is above all the continued and escalating attacks mounted by Washington and the German government’s need to defend itself against further economic damage. It is to this end that Berlin has recently been concluding free trade agreements with third countries [3] and, with regard to China, seeks to reduce tensions in order to consolidate economic relations. In steering this course, Germany is treading a path already taken by France, Canada and the United Kingdom in recent months. There is, from Berlin’s point of view, an urgent need for a reset in economic relations. Although the People’s Republic once again became the Federal Republic’s most important trading partner last year, German exports to China slumped by 9.7 per cent, while imports from China soared by 8.8 per cent. This has led to a record trade deficit of 89.3 billion euros.[4] The slump in exports is hitting German exporters, while the rise in imports is putting German industry under increasing pressure in its own domestic market. Both trends are weighing heavily on the German economy.
Competition in third markets
German exporters are also losing market share to Chinese competitors in third markets. This is demonstrated by recent studies on the situation in Eastern and South-Eastern Europe, Germany’s traditional sphere of influence. “China has pushed back Germany’s presence in the region,” states Erste Group, a leading bank in Eastern Europe headquartered in Vienna.[5] According to figures from the German East Business Association (OA), which assists German companies in 29 countries from Eastern Europe to Central Asia, Germany is now the largest or second-largest trading partner in only 15 of them, while China has already become the largest or second-largest trading partner in 18. A study conducted by the OA, in collaboration with consultancy firm KPMG, finds that one in six German businesses operating in Eastern markets is now complaining about growing Chinese competition. The Erste Group reports that between 2019 and 2023 alone, China gained “between 10 and 30 per cent of market share” in a number of countries in Eastern and South-Eastern Europe, whereas Germany “lost up to 20 per cent of market share”. China is also advancing in the field of durable consumer goods, according to ING Bank. Poland, for example, increased its imports of Chinese cars from two to eleven billion US dollars between 2022 and 2025.[6]
‘Through cooperation and dialogue’
Economic issues were clearly on the agenda during Merz’s talks yesterday with Chinese President Xi Jinping and Prime Minister Li Qiang. The German government said afterwards that Merz had addressed the topics of Chinese export controls on rare earths and Germany’s high trade deficit. The Chinese side, in turn, complained about European restrictions on Chinese tech companies such as Huawei and EU export constraints. Under pressure from the United States, the Dutch company ASML is not, for example, allowed to export its most advanced chip manufacturing machines to the People’s Republic. A joint statement concluded that “both sides” now wanted to resolve their differences “through sincere and open dialogue”.[7] Chancellor Merz, who was accompanied by the highest-ranking economic delegation in two decades, expressed confidence that the existing “challenges” could be resolved in the future “through cooperation and dialogue”. As a first step, Beijing has agreed to order up to 120 Airbus passenger aircraft, Merz announced.[8] After this first step towards reducing the German trade deficit, further deals were now in the pipeline, it was reported.
‘Good relations’
Merz also called for Sino-German relations in general to be intensified. Other ministerial figures from the German government would, the German Chancellor announced, “be travelling to China” in 2026 with the aim of engaging in an “intensive dialogue”.[9] In addition, Sino-German intergovernmental consultations were to be resumed. Such high-level talks last took place in 2023 and were broken off due to growing tensions. Merz told his hosts that he was striving for “good relations not only between Germany and China ... but also good relations between China and the European Union.” The Chinese side had previously been urging constructive dialogue with the EU. Finally, Merz reported that there had been a strong desire to “deepen the comprehensive strategic partnership between our two countries” – “in mutual respect and open dialogue with each other.”[10] Interpreting the facts rather freely, Merz even asserted that, “We have had good bilateral relations between China and Germany for decades.” He told Xi that he wanted to “build on this” and “develop a good personal relationship between your Prime Minister and me, and between you and me.”
[1] „Unsere Freiheit behaupten wir mit unseren Nachbarn“. bundesregierung.de 13.02.2026.
[2] Merz kritisiert vor Peking-Reise Chinas aggressive Außenpolitik. handelsblatt.com 18.02.2026.
[3] See: In search of alternatives and In search of alternatives (II).
[4] China im Jahr 2025 wieder wichtigster Handelspartner Deutschlands. destatis.de 20.02.2026.
[5], [6] Andreas Mihm: Chinas Drache in Deutschlands Hinterhof. Frankfurter Allgemeine Zeitung 25.02.2026.
[7] Gemeinsames Pressestatement zwischen der Bundesrepublik Deutschland und der Volksrepublik China. bundesregierung.de 25.02.2026.
[8] China will laut Merz bis zu 120 Flugzeuge bei Airbus bestellen. spiegel.de 25.02.2026.
[9] Bundeskanzler Merz in China: „Wir tragen gemeinsam Verantwortung in der Welt“. bundesregierung.de 25.02.2026.
[10] Pressestatements von Kanzler Merz und Staatspräsident Xi Jinping zum gemeinsamen Gespräch.
