Merz told Li that Germany attached great importance on maintaining and deepening its intensive economic exchanges with China, its largest trading partner last year, while emphasizing the need to ensure fair cooperation and open communication.
“We have very specific concerns regarding our cooperation, which we want to improve and make fair,” said Merz, who faces a tough balancing act of redefining an economic relationship that is increasingly unfavourable to German interests.
Li called on both sides to work together to safeguard multilateralism and free trade, in a reference to US President Donald Trump’s trade war, that has upended the global trading system.
“China and Germany, as two of the world’s largest economies and major countries with important influence, should strengthen our confidence in cooperation, jointly safeguard multilateralism and free trade, and strive to build a more just and fair global governance system,” Li said.
China is seeking to pitch itself as a reliable economic partner, in contrast to the United States, as Europe struggles to address vulnerabilities in its supply chains and worries about growing dependence on China.
Europe is witnessing an acceleration of concerning trends in China, Europe’s Trade Commissioner Maroš Šefčovič told the European Parliament on Tuesday, citing China’s growing dominance in key manufacturing sectors, a rising imbalance in bilateral trade, and falling market share of EU companies in China.
Merz, on his first visit to China, becomes the latest European leader seeking to reset ties with China after Britain’s Starmer and Canada’s Carney earlier this year, while Beijing touts the benefits of engaging with its massive consumer market and advanced manufacturing base.
Engagement between Europe’s largest economy and China could set the stage for EU-China relations this year.
Merz comes accompanied by a delegation of 30 firms including top carmakers such as Volkswagen and BMW which are acutely feeling the strain of Chinese competition – contributing to a growing trade imbalance that has sparked concern in Berlin and led to calls for protectionist policies.
Germany’s heavily manufacturing-based economy has been particularly hard hit by competition from China’s manufacturers, Rhodium Group’s China analyst Noah Barkin said in a recent research note.
The face of China’s market, once coveted by foreign businesses for its wide consumer base and rising spending power, has changed in the last several years with a slowing economy capping consumer demand and manufacturing overcapacity increasingly pushing domestic firms to look for opportunities abroad.
In editorials ahead of the visit, Chinese state media emphasised the potential for EU-China cooperation to become a stabilising force while US tariff policies upend global trade.
Xinhua, in an editorial published early on Wednesday, cited a German chamber of commerce survey finding that innovation gains in China are feeding back into German headquarters.
State-backed newspaper the Global Times said concerns about competition with China would be outweighed by the lure of China’s massive market.
“Rhetoric such as ‘systemic rival’ and ‘de-risking’ has at times complicated Germany’s China policy,” it said in an early Wednesday editorial.
“Yet the enthusiasm and actions of the German business community speak louder than political slogans.”