German Chancellor Friedrich Merz has called for a “balanced, reliable, regulated and fair” partnership with Chinese President Xi Jinping as he embarked on his first visit to Beijing as German chancellor.
Merz said discussions would address Chinese industrial “overcapacity”, export restrictions and market distortions, alongside efforts to “de-risk” supply chains.
The visit comes as Germany faces deindustrialisation pressures and rising dependence on China for critical minerals, including rare earths.
Key developments:
• Germany’s trade deficit with China reached a record €87bn in 2025, up €20bn year-on-year.
• More than 120,000 industrial jobs were lost in Germany in 2025, according to EY estimates.
• China imposed sweeping rare earth export restrictions, affecting automotive and defence sectors.
Merz is expected to press for reduced subsidies for Chinese national champions, while emphasising economic resilience and diversified supply chains.
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