Will Germany find a new economic equilibrium with China?

GERMAN Chancellor Friedrich Merz entered office in 2025 with a blunt warning: bilateral ties with China are on an unsustainable path. His trip last week to Beijing and Hangzhou, China’s tech hub, sought a cautious correction.

While much attention focuses on US-China relations ahead of US President Donald Trump’s planned Beijing trip this April, Berlin-Beijing ties are systemically important, too. Germany reclaimed its status as China’s largest trading partner in 2025.

During the 2025 election campaign, Merz built a reputation as a China hawk. Before becoming chancellor, he cautioned German firms against making bigger investments in the world’s second-largest economy. He warned if they “endanger the entire company group”, they should expect no economic help from the state.