On Wednesday, Merz urged Chinese companies to increase investment in Germany while also calling on Beijing to reduce market distortions. He began his visit to China with the aim of rebalancing relations between the world’s second- and third-largest economies.
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| Source:kathmandupost |
“There are challenges that we should discuss today, but the framework in which we operate is exceptionally good, and we have worked together very well over the past decades,” he said.
Xi Jinping, who has sought to position China as a reliable partner in an increasingly unstable world, welcomed Merz’s remarks. He said, “The more turbulent and interconnected the world becomes, the more China and Germany need to strengthen strategic communication and enhance mutual trust.”
In a meeting with Premier Li Qiang, Merz said there were “very specific concerns regarding our cooperation, which we want to improve and make fair.”
Germany has long expressed concerns about what it sees as an undervalued yuan, market-distorting subsidies, and overcapacity among Chinese exporters. These factors have contributed to a growing trade imbalance with Europe’s largest economy. At the same time, China’s vast consumer market and technologically advanced industries remain highly important.
Speaking at a business event attended by senior leaders from the German and Chinese technology and automotive sectors, Merz said, “We want Chinese investment in Germany.”
Li Qiang called on both countries to work together to safeguard multilateralism and free trade comments widely seen as a reference to U.S. President Donald Trump and his trade policies.
“China and Germany, as two of the world’s largest economies and influential countries, should strengthen confidence in cooperation, jointly safeguard multilateralism and free trade, and strive to build a more just and fair global governance system,” Li said.
No major deals signed
Despite calls for deeper engagement, the agreements signed between Merz and Li were limited in scope. The five documents covered cooperation on climate change and green transition, animal disease prevention, poultry product protocols, and sports collaboration in football and table tennis.
This was fewer than the agreements signed during recent visits by Canadian Prime Minister Mark Carney and British Prime Minister Keir Starmer.
However, additional deals could emerge during the business-focused second half of Merz’s visit.
Merz is accompanied by representatives from 30 companies, including major automakers such as Volkswagen and BMW. These firms are facing increasing pressure from Chinese competition, which has contributed to the widening trade imbalance.
Focus on China–EU ties
As Europe addresses supply chain vulnerabilities and concerns about growing dependence on China, Beijing is seeking to present itself as a reliable economic partner.
China’s market, once highly attractive to foreign businesses because of its vast consumer base and rising purchasing power, has changed in recent years. A slowing economy has limited consumer demand, while manufacturing overcapacity has pushed many domestic firms to look abroad for opportunities.
The state-backed newspaper Global Times wrote that concerns about competition with China would be outweighed by the appeal of China’s massive market.
An editorial stated that terms such as “systemic rival” and “de-risking” have at times complicated Germany’s China policy, but the enthusiasm and actions of the German business community speak louder than political slogans
