German Chancellor Seeks to Rebalance Economic Ties with China
German Chancellor Friedrich Merz began a two-day visit to China on Wednesday, February 25, as the economic relationship between the two countries undergoes a significant shift. Once a key driver of German exports, China has emerged as a direct competitor, prompting Berlin to reassess its approach.
Prior to his trip, Chancellor Merz consulted with experts on China, including Jörg Wuttke, former representative of BASF in China and current associate at the DGA consulting firm. According to Wuttke, “The Chancellor wanted to know how to create a personal connection with Chinese officials. He is preparing for this trip with a lot of care.” Wuttke also noted that Merz has limited prior experience in China, having visited only once two decades ago.
Merz is traveling with a delegation of approximately thirty business leaders, and the itinerary includes stops in both Beijing and Hangzhou, a major hub for humanoid robotics. This visit comes as the long-standing complementary relationship between Germany and China—where Chinese demand fueled German industrial growth—has begun to unravel.
The shift is particularly evident in the automotive sector, where China is increasingly challenging German manufacturers. China’s growing economic strength is prompting debate in Germany about how to respond to this changing dynamic. A recent proposal from the Haut-Commissariat à la stratégie et au plan suggests a 30% European tariff on Chinese goods in response to increasing competition.
Despite the evolving dynamics, China has recently regained its position as Germany’s top trading partner. The Chinese Premier recently expressed a desire to deepen cooperation with Germany, signaling continued interest in maintaining strong economic ties.
The relative inexperience of the Chancellor on Chinese matters may complicate efforts to navigate these complex issues. The visit underscores the growing require for Germany to adapt its economic strategy in the face of China’s rising global influence.
