Germany’s Merz lands in Beijing hoping to reset ties, as China boasts its massive market

BEIJING: German Chancellor Friedrich Merz touched down in Beijing on Wednesday hoping to reset bilateral ties, with China pitching itself as a reliable economic partner as Europe struggles to balance its U.S. alliance and address supply chain vulnerabilities.

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.

But Merz faces a tough balancing act of redefining an economic relationship that is increasingly detrimental to German interests, as Germany’s heavily manufacturing-based economy is hit by competition from China’s manufacturers, Rhodium Group’s China analyst Noah Barkin said in a recent research note.

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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.

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.

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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 mouthpiece 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.”