Germany expands "comprehensive strategic partnership" with China
Germany will deepen its "comprehensive strategic partnership" with China and especially expand its economic relations.
Chancellor Merz met with Chinese President Xi Jinping and Prime Minister Li Qiang in Beijing yesterday (February 25).
Just a few days before going to China, Merz made very harsh statements about the People's Republic of China.
In his speech at the Munich Security Conference, he argued that Beijing "systematically exploits the dependencies of others" and said that today it is "a "claim to a global power" that has laid the foundation for years with strategic patience".
Last week, at a CDU party event, he added that China has “aggressively expanded its bases” in the South China Sea “unlike the last 3,000 years in Chinese history” and also openly declared that it has “encircles Taiwan and is ready to use military force to ensure China's reunification if necessary.”
Merz softened his tough attitude a week ago
But Merz's talks in Beijing are clearly different from his harsh statements a week ago.
The German government announced that Merz discussed China's export controls over rare earth elements and Germany's high trade deficit during the meeting.
The Chinese side, on the other hand, complained about the restrictions imposed on Chinese technology companies such as Huawei and the export restrictions of the EU. For example, under pressure from the US, the Dutch company ASML cannot export the most advanced chip production machines to the People's Republic of China.
According to the joint statement, “both sides” want to resolve their disputes “through a sincere and open dialogue”.
Accompanied by a high-level economic delegation, Chancellor Merz expressed that he was sure that the current "difficulties" could be solved in the future "through cooperation and dialogue".
China to order 120 Airbus passenger aircraft
Merz announced that Beijing has agreed to order up to 120 Airbus passenger aircraft as a first step. This will be the first step towards reducing Germany's trade deficit.
In addition, German-Chinese relations will be generally intensified. Merz announced that before the end of this year, other German federal ministers will travel to China in order to establish an "intense dialogue".
In addition, German-Chinese government consultations will be restarted; these consultations were last held in 2023, but were not rescheduled due to increasing tensions.
Merz said that he is making efforts for good relations not only between Germany and China, but also between China and the EU. The Chinese side had previously insisted on this issue.
The Chancellor also said that the desire to deepen the comprehensive strategic partnership between the two countries "in mutual respect and open dialogue" has been reaffirmed.
“We have had good bilateral relations between China and Germany for decades,” the German chancellor said, adding to Xi that he wanted to “develop it further” and “establish a good personal relationship between your chancellor and me, as between you and me.”
European emphasis from Xi
Xi Jinping stated that China and Germany are the second and third largest economies in the world, and that bilateral relations not only affect the interests of the two countries, but also have a significant impact on Europe and the world.
Xi said:
“The international environment is experiencing the most radical transformations since the end of World War II. The more great changes and turmoil the world faces, the more important it becomes for our two countries to develop strategic communication, strengthen strategic mutual trust and make new progress in the China-Germany comprehensive strategic partnership.”
The Chinese leader, who made three proposals for the development of Germany-China relations, listed them as follows:
- First, both countries must be reliable partners who support each other;
- Secondly, both countries should be innovative partners who advocate openness and win-win results;
- Thirdly, both countries must be partners who understand each other and form close ties through cultural and humanitarian relations.
Xi emphasized that “unseened changes are happening faster,” stating that countries should address challenges together and pursue a common future.
In this context, he asked China and Germany to maintain the central position of the UN, re-confirm the role of leader and lead in maintaining multilateralism, implementing the rule of international law, defending free trade and defending solidarity and coordination.
Noting that China supports “efforts to increase Europe's autonomy and power” and hopes that the European side will work in the same direction as China, maintain a strategic partnership position and defend openness, inclusiveness and win-win cooperation, Xi said, “This will achieve greater growth in China-Europe relations and greater contributions to world peace and development.”
The balance in Germany's trade with China is broken
China became Germany's most important trading partner once again last year. However, Germany's exports to China decreased by 9.7 percent, while imports from China increased by 8.8 percent. This situation led to a record trade deficit of 89.3 billion euros.
While the decline in exports is at the detriment of German exporters, the increase in imports puts the German industry under increasing pressure in the domestic market. Both are currently placing a heavy burden on the German economy.
In addition, German companies are now losing market share to their Chinese competitors in third markets. This situation is exemplified in recent research on the situation in Eastern and Southeast Europe, which is Germany's traditional sphere of influence.
“China has rejected Germany's presence in the region,” says Erste Group, the leading bank in Vienna-based Central and Eastern Europe.
According to the German Eastern European Economic Relations Committee, which monitors relations of German companies with 29 countries in Eastern Europe and Central Asia, Germany is currently the largest or second largest trading partner in only 15 of these countries, while China is the largest or second largest trading partner in 18 countries.
According to a study published by the German Eastern European Economic Relations Committee together with the consultant KPMG, one-sixth of the German companies operating in Eastern Europe complain about China's increased competition.
On the other hand, Erste Group states that between 2019 and 2023 alone, China gained "10 to 30 percent of the market share" in many countries in Eastern and Southeastern Europe, while Germany "lost 20 percent of its market share".
ING Bank reports that China has also made progress in the field of durable consumer goods. For example, Poland increased the value of the cars it imported from China between 2022 and 2025 from 2 billion dollars to 11 billion dollars.
Merz is in search of balance
For this reason, Chancellor Merz demanded the reorganization of trade relations with China, citing the rapid increase in Germany's trade deficit with China.
After his meeting with the Chinese leader, Merz said, "I have stated that there has been a significant imbalance in the trade balance for about two years. We want to reduce these imbalances caused by over capacity in China," he said.
Germany's trade deficit with China reached 90 billion euros in 2025, and German business leaders are increasingly blaming China's unfair competition as the reason for the loss of jobs of their countries in the manufacturing sector. Currently, about 10,000 people lose their jobs in this sector per month.
Before Merz's trip, some German business leaders asked the chancellor to take a tougher stance on China's industrial policies, which provided a price advantage to Chinese companies.
Merz seems to have responded to this pressure and is calling on China to provide equal terms:
“Competition between companies must be fair. We need transparency, reliability and compliance with jointly determined rules.”
The Chancellor also said that he aims to reduce the trade deficit, which has quadrupled since 2020, and said, “This dynamic is not healthy. That's why we're addressing this problem and we want to find ways to reduce this trade deficit," he said.
Although China's importance as an export market for Germany has decreased relatively in recent years, it has continued to be the sixth largest market for German exports in 2025.
Beijing demands to change Russia policy
Merz said Chinese leaders were asking them to “use their influence” to end the Ukraine war, including stopping the export of dual-use goods that Russia could use in the war.
Merz said, "We also know that the signals from China are taken very seriously in Moscow. This applies to actions as well as words," he said.
According to CCTV, Xi and Merz exchanged views on the war in Ukraine.
“The key element of China's stance is to seek solutions through dialogue and to secure the fair participation and reasonable concerns of all parties in achieving a sustainable peace,” the Chinese leader said.
Agreement between BMW and CATL
As part of Berlin's efforts to deepen economic ties, Merz leads a senior business team, including senior executives of nearly 30 leading German firms operating in industries such as automobiles, chemicals, pharmaceuticals, recycling and machinery.
BMW Group president Oliver Zipse was also part of the delegation. According to the electric vehicle industry news site ChinaEVHome, BMW and Chinese battery giant Contemporary Amperex Technology (CATL) have signed a memorandum of understanding in Beijing to decarbonize the battery supply chain and strengthen data exchange.
BMW operates three software companies with four major research, development and innovation centers in China.
After touring the Forbidden City and visiting the Mercedes-Benz facilities in Beijing, Merz moved to the technology center Hangzhou in the east, where he visited the robotics company Unitree Robotics and the German technology giant Siemens Energy.
Deputy government spokesman Sebastian Hille said Merz would also attend a meeting of the German-Chinese Business Advisory Committee, a platform that brings together high-ranking officials and company leaders from both sides.
Emphasis on "multilateralism" and "free trade" from Li Qiang
Prime Minister Li called on both sides to protect multilateralism and free trade.
“China and Germany ... must strengthen our confidence in cooperation, protect multilateralism and free trade together,” Li said.
According to AFP, the two sides have signed a series of agreements, including agreements on climate change and food security.
Prime Minister Li called for deeper technological cooperation with Germany and emphasized the opportunities that have arisen under China's last five-year plan.
“We support the dual flow of innovation resources between businesses and research institutions in both countries,” Li said at a symposium attended by Friedrich Merz and more than 60 boss representatives from both sides.
According to Xinhua, “While we can make deeper joint technology development, joint research platforms, and broader result sharing, we can encourage companies to explore third-country markets together,” he added.