Arabic version: زيارة المستشار الألماني للصين وسط مخاوف تجارية

Germany’s Chancellor has arrived in Beijing for his first trip to China, facing significant trade challenges. According to BBC News, German businesses are increasingly alarmed by a substantial trade imbalance, with imports from China more than double exports to the country last year.

Friedrich Merz, the Chancellor, emphasized the need for a balanced and fair partnership with China before his departure. He is also expected to urge China to leverage its influence over Russia to help resolve the ongoing conflict in Ukraine. However, the stark trade deficit remains a pressing issue as Merz brings a large business delegation with him.

In 2025, Germany imported goods worth €170.6 billion from China, marking an 8.8% annual increase, while exports to China dropped 9.7% to €81.3 billion. Experts warn that this trade relationship is undermining key sectors of the German economy, particularly in automotive, machinery, and chemicals. Jürgen Matthes from the German Economic Institute attributes these distortions to significant Chinese subsidies and currency undervaluation.

The current trade deficit, described as the latest “China shock,” has been exacerbated by factors such as the pandemic and Russia’s invasion of Ukraine. These events have led to rising production costs in Europe, leaving leaders to consider how best to mitigate the effects of inexpensive Chinese goods.

Merz’s visit comes at a time when Germany’s economic engine is struggling, particularly as its automotive industry transitions to electric vehicles, a sector where China holds a competitive advantage. Business groups are urging Merz to address issues such as competitive distortions and export controls on rare earth materials during this critical trip. The EU has been exploring measures to restore fair competition, a response to ongoing trade challenges with China.