German Chancellor Friedrich Merz has framed relations with China as one of the defining strategic dilemmas of his government, saying at the Munich Security Conference that freedom in the new great-power era is no longer guaranteed and explicitly identifying China as a challenge. He warned that Beijing is trying to shape international affairs through patient influence building and could eventually match US military capabilities. At the same time he signaled that Germany can no longer take the United States for granted as a dependable partner.
China presented a contrasting message in Munich, where Foreign Minister Wang Yi stressed multilateralism, a rules-based order and free trade — positions that the German government sees as lacking in Washington. Merz will visit China on February 24 at the invitation of Premier Li Qiang, his first trip since taking office in May 2025, accompanied by a large business delegation. He described the discussions as centered on strategic partnerships, but observers caution that Chinese offers will need careful negotiation to align with German interests.
The commercial relationship has shifted markedly. China became Germany’s top trading partner, with bilateral trade surpassing €250 billion in 2025, yet the balance has tilted: Germany’s trade deficit with China climbed to an estimated record of around €90 billion in 2025, up roughly €30 billion from 2024. Merz has warned of a growing competitiveness gap.
The German auto industry illustrates those pressures. The sector, long triumphant in China, is struggling with the electric vehicle transition. Many German EV models are too expensive for the Chinese market while lower-cost Chinese EVs are increasingly exported to Europe. German pride in premium engineering now competes with Chinese manufacturers that have become adept at integrating software and consumer electronics into cars. Industry analysts say China has emerged as a technological leader in key fields, making recovery a difficult and long-term task.
Supply vulnerabilities and security concerns add to the economic calculus. China controls near-monopolies in several rare earths and other critical materials needed for batteries and electronics, and restrictive export measures in 2025 reportedly forced temporary production halts at some German carmakers. Policymakers also cite risks from Chinese access to data through communications networks and related technologies, and US officials have urged European allies to align with Washington on those security threats. Experts warn that an emerging bipolarity between the US and China could pressure Germany into taking sides.
Merz intends to press President Xi Jinping to stop Chinese support for Russia’s war in Ukraine, but analysts doubt Beijing will abandon its ties with Moscow given its own geostrategic calculations. The chancellor’s trip is seen as overdue both because it comes long after he assumed office and later than comparable Western visits; French, British and Canadian leaders have visited China in recent months seeking greater economic space.
Diplomatic friction has complicated the run-up to the visit. Foreign Minister Johann Wadephul accused China of aggressive behavior in the Pacific and canceled his planned Beijing trip after it became clear he would meet only his counterpart, a decision that was poorly received in China. Merz himself has been outspoken, criticizing China’s South China Sea base expansions and its posture toward Taiwan — comments that could influence the tone of talks in Beijing.
The visit will test whether Germany can secure economic opportunities while managing strategic dependencies and security risks. Officials and business leaders face the task of negotiating cooperation where it serves German interests, while addressing vulnerabilities that have become visible in trade balances, technology competition and supply chains. This article was originally published in German.