Before Merz’s trip to China, many German business leaders urged the Chancellor to take a stronger stance against China’s industrial policies. They highlighted issues like subsidies and currency manipulation that give Chinese companies an unfair edge.
Responding to this call, Merz emphasized the need for fair competition, saying, “Competition between companies must be fair. We need transparency and compliance with rules.” He also acknowledged the growing trade deficit with China, which has increased fourfold since 2020. “This dynamic is unhealthy,” he noted, stressing the need for solutions to address it.
Despite these concerns, Merz remained optimistic about the potential for continued ties with China. He mentioned that Chinese leaders have committed to purchasing up to 120 aircraft from Airbus during his visit with a delegation of about 30 executives. More business deals are expected to follow.
Interestingly, while China’s share of German exports has decreased over the years, it still ranks as the sixth-largest destination for these exports in 2025.
Merz also urged Chinese leaders to leverage their influence to curb Russia’s aggression in Ukraine, particularly by halting the export of dual-use goods that could aid the Kremlin in its military efforts. “Signals from China are taken very seriously in Moscow,” he remarked, emphasizing the importance of Chinese actions and words in this context.
In recent discussions, experts have noted that Germany’s reliance on China has been shifting, with Southeast Asian markets emerging as alternatives. According to a recent survey by the Ifo Institute, around 40% of German companies plan to diversify their supply chains away from China in the next few years. This trend reflects wider economic changes and the need for resilience in global trade.
In a world increasingly shaped by geopolitical tensions, these dynamics of trade and diplomacy will be crucial to watch. The balance between cooperation and competition is delicate, especially with rising concerns about economic and military stability. Keeping an eye on how these relationships evolve will offer insights into the future of international trade.
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China,Companies,Competition,Currency,Dumping/Duties,Exports,Friedrich Merz,German politics,Germany,Manufacturing,Overcapacity,Russia,Trade,Ukraine,War,Xi Jinping
