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Friedrich Merz met China’s President Xi Jinping in Beijing as the German chancellor urged a reset of trade relations between the EU and the world’s second-largest economy amid growing tensions.
Speaking before the meeting on Wednesday, Merz, who is making his first trip to China in office, said Beijing should appreciate its currency, remove subsidies to domestic manufacturers and reduce industrial overcapacity blamed for flooding EU markets with cheap products.
“Due to the sharp rise in Chinese imports, calls for protection are growing louder in Europe,” he warned. “I want as little protectionism as possible. Stronger Chinese domestic demand, made possible by a moderate appreciation of your currency, would make it easier to continue trading without such barriers.”
It was “important to reduce market-distorting subsidies and to consolidate the market where we see overcapacity”, said Merz.
In the meeting, Xi portrayed China as a champion of the multilateral world order and supporter of European efforts to become less dependent on the US.
“China and Germany should . . . take the lead in being defenders of multilateralism, practitioners of international rule of law, defenders of free trade,” Xi said, according to state media.
“China supports Europe’s self-reliance and strength, and hopes that Europe will work with China in the same direction,” he said.
Merz’s two-day trip comes as Europe’s largest economy faces intensifying deindustrialisation pressures and competition from low-cost producers in China in areas such as cars and machine tools — industries at the core of Europe’s export-orientated manufacturing sector.
German industrial companies shed more than 120,000 jobs in 2025, according to EY estimates.
Merz, who is being accompanied on the trip by representatives of 30 companies, will also seek to emphasise the benefits of a rebalanced relationship. Many large German groups, including carmakers, still see the Chinese market as crucial for profits and innovation.
“Few places move as fast in areas such as electromobility, software, artificial intelligence, and battery technology — China is setting the pace and shaping standards,” said Ralf Brandstätter, chief executive of Volkswagen Group China.
“[The] high-level trade delegation . . . fully demonstrates Germany’s strong desire to deepen bilateral trade and economic relations,” state news agency Xinhua said on Wednesday.
Merz’s trip follows a progression of visits to Beijing by European leaders, including the UK’s Sir Keir Starmer last month and France’s Emmanuel Macron in December.
“Over the past two months, leaders from several countries in Europe and the Americas have visited China,” Premier Li Qiang told Merz at the opening of their meeting.
“Although each leader has had different priorities during their visit, the most frequently discussed topic has been how to strengthen dialogue and co-operation,” Li said.
Beijing has sought to capitalise on the visits to project itself as a reliable partner and amplify rifts between the US and its allies over President Donald Trump’s chaotic tariff policies and ambitions to take over Greenland.
But China has struggled to overcome deep scepticism in Europe over its growing trade surpluses and its tacit support for Russia’s war in Ukraine, according to diplomats in Beijing.
Germany’s trade deficit with China, its largest trading partner, rose to a record €87bn last year, up €20bn from 2024.
“The unilateralism and protectionism pursued by the US have prompted European countries to reassess their external relations,” said the Global Times, the Chinese Communist Party mouthpiece.
It added that Beijing was “a firm supporter of free trade” and “aimed at upholding the international system centred on the United Nations”.
