German Chancellor Friedrich Merz concluded his first official trip to China on February 26, 2026, meeting President Xi Jinping and Premier Li Qiang and leading a delegation of business leaders to Beijing and the technology hub of Hangzhou. The visit blended high-level diplomacy with commercial engagement and centered on four priorities: rebalancing economic ties, reaffirming Germany’s stance on Taiwan, urging Chinese influence on the war in Ukraine, and expanding sectoral cooperation.
Economic imbalance and competition
Merz repeatedly warned about the widening economic imbalance between Germany and China, calling the trend unhealthy. Germany’s trade deficit with China reached a record €89 billion last year, raising alarm among policymakers and many Mittelstand firms. In talks with Premier Li, Merz pressed on issues including trade barriers, currency questions, subsidies, and secure supplies of rare earths, saying that China must deliver on rules-based behaviour to be seen as a reliable partner.
European measures such as new EU tariffs on Chinese electric vehicles remain contentious. Merz acknowledged competition with Chinese producers as a major unresolved problem even as he highlighted opportunities for German investment and market access. He said Economy Minister Katherina Reiche would pursue deeper follow-up talks, signalling that detailed negotiations would be required after his visit.
Commercial results and tech ties
The trip produced concrete commercial outcomes: China is set to buy up to 120 additional Airbus aircraft, a deal Merz pointed to as evidence of the value of high-level engagement. He visited a Siemens Energy site in Hangzhou and met executives from Volkswagen, BMW and Mercedes, which described the visit as welcome for one of their most important markets.
Hangzhou, home to major tech firms including Alibaba as well as younger AI and robotics companies, was central to the business delegation. The stop illustrated both commercial opportunity and competitive pressure: German SMEs report rising quality and price competition from Chinese rivals, with a KfW study finding almost one in five Mittelstand companies seeing growing pressure from China.
Cultural, media and sport cooperation
Cultural and media ties were reinforced when Bundesliga operator DFL and China Media Group signed a memorandum of understanding to extend their TV partnership in the presence of Merz and Premier Li. CMG holds Bundesliga broadcasting rights in China through 2027–28 and agreed to deepen cooperation on promoting youth football.
Ukraine and geopolitics
Merz raised the war in Ukraine directly with Xi, urging Beijing to use its influence over Moscow to help end the conflict. Chinese state media reported Xi saying diplomacy is key and stressing inclusive talks that address legitimate concerns of all parties. Merz said signals from China are taken seriously in Moscow and that Beijing’s voice matters globally, while urging more tangible exertion of influence.
Taiwan and principles
On Taiwan, Merz reiterated Germany’s long-standing one-China policy but warned that any resolution must be peaceful and not achieved by force. He stressed that differences in political systems do not preclude cooperation where mutual interest and dialogue exist.
Diplomatic tone and next steps
Merz’s approach on this trip was more conciliatory than some of his past rhetoric, seeking a reset toward strategic partnership where feasible while publicly confronting difficult issues. He limited on-the-record exchanges with journalists at times, dined with Xi, lunched with Li, and announced plans for regular visits and bilateral government consultations. He also indicated further engagement by economic ministers and follow-up visits to work through trade and market-access issues.
Overall assessment
The visit delivered high-profile business deals and renewed political dialogue, but it left important tensions unresolved over trade, competition and geopolitics. Merz secured commercial wins and pledged sustained engagement, while acknowledging that China’s growing capabilities and their impact on European markets will require detailed, sustained negotiation going forward.