Chancellor Merz in China - On an increasingly complicated relationship
Chancellor Friedrich Merz's visit to China in February 2026 is one of the most important foreign policy trips of his time in office so far. It takes place at a time when relations between Germany, Europe, and China are being recalibrated: economically closely intertwined, politically increasingly strained. The stay in Beijing and Hangzhou is therefore less a classic state visit aimed at rapprochement than a diplomatic tightrope walk between cooperation and strategic distance.
The economic relationship between the two countries is at the heart of the talks. China remains Germany's most important trading partner, but at the same time an increasingly fierce competitor. Merz therefore emphasizes the principle of "cooperation where possible – competition where necessary." The German government is particularly critical of the massive industrial overcapacities in China, for example in the steel, automotive, and technology sectors, which are putting pressure on European markets. This issue was explicitly addressed in the talks with President Xi Jinping and Premier Li Qiang and is to be explored in greater depth in further negotiations.
Another key topic is Germany's growing trade deficit with China, which has now reached a record high. Berlin is calling for fairer competitive conditions, fewer subsidies for Chinese companies, and better market access for German firms. At the same time, Merz explicitly wants to continue and expand economic cooperation, for example, in the areas of investment and technology partnerships. This dual strategy – economic closeness coupled with political caution – characterizes the entire trip.
The Chancellor is accompanied by an exceptionally large business delegation comprising top managers from leading German corporations in the industrial, automotive, and logistics sectors. This underscores the strong economic focus of the trip. Several corporate agreements have been prepared, including major industrial and aviation deals. For German businesses, the primary objective is to secure existing market positions in China and reduce competitive disadvantages.
The visit followed the classic structure of German-Chinese government consultations. In Beijing, Merz first met with Premier Li Qiang for economic and trade talks, followed by the politically crucial meeting with President Xi Jinping. In addition to bilateral issues, geopolitical questions were also on the agenda – in particular, Russia's war of aggression against Ukraine and China's potential role in a peace process. Germany hopes to exert at least indirect influence on Moscow through Beijing, even though China has not yet changed its position.
Another item on the agenda was a visit to Hangzhou, a center of China's digital and technology industries. The focus there was on innovation, investment, and future technologies – areas where cooperation seems possible, but where strategic dependencies should be avoided. This stop symbolizes the attempt to combine economic partnership with technological "de-risking," that is, to limit risks without decoupling from China.
Politically, the trip represents a new German policy on China under Merz. Unlike previous governments, he avoids clearly classifying China as a "rival," but emphasizes systemic differences and the need for European unity. His guiding principles are: minimizing risk instead of decoupling, fair competition, cooperation despite differences, and stronger European coordination of China policy. With this, Germany positions itself between economic pragmatism and strategic caution.
The political consequences and prospects of the visit are ambivalent. In the short term, it is likely to contribute primarily to stabilizing economic relations and safeguarding specific corporate interests. At the same time, structural conflicts persist: market imbalances, government subsidies, dependencies on technology and raw materials, and geopolitical differences, for example, with Russia and Taiwan. Following the trip, Merz himself spoke of "continuing challenges" and announced more in-depth follow-up negotiations.
In the long term, the visit demonstrates that Germany is recalibrating its China policy: China remains an indispensable economic partner, but is simultaneously understood as a strategic challenge. The trip therefore marks less a new beginning than a readjustment – towards a relationship that is both closer and more cautious, more cooperative and more conflict-ridden. This dual reality is likely to continue to shape German foreign and economic policy in the coming years.