Friedrich Merz, leader of the Christian Democratic Union (CDU) and Chancellor of Germany, arrived in Beijing Wednesday, initiating a visit focused on addressing a rapidly widening trade imbalance between Germany, and China. The trip comes as German businesses express increasing concern over the economic relationship, with imports from China exceeding exports by a significant margin.
According to federal statistics, goods worth €170.6 billion flowed from China into Germany in 2025, an 8.8% increase year-over-year. Conversely, German exports to China decreased by 9.7% to €81.3 billion, resulting in a trade deficit of approximately €90 billion. This shift represents a dramatic reversal of fortunes, as China was once a key market driving German economic growth.
Prior to his departure, Merz stated that it would be a “mistake to decouple” Germany from China, signaling a desire to maintain economic ties despite growing pressures. He is accompanied by a business delegation and intends to advocate for a “balanced, reliable, regulated and fair” partnership with Beijing. The German Chancellor is likewise expected to urge China to leverage its influence with Moscow in an effort to de-escalate the conflict in Ukraine.
The trade imbalance is causing alarm within German industry. Jürgen Matthes, head of International Economic Policy at the German Economic Institute (IW), warned that the situation “is eroding the core of German industry, especially in the car, machinery and chemicals sectors.” Matthes attributes the disparity to “massive” Chinese subsidies and currency undervaluation, suggesting that Chinese price advantages are not solely attributable to innovation and efficiency.
The shift in the trade relationship has prompted some to draw parallels to Germany’s previous energy dependence on Russia. A recent analysis suggests the current situation represents a “historic policy miscalculation.” German industry leaders are now calling for a more assertive approach in negotiations with China, with some reporting roughly 10,000 job losses per month in the manufacturing sector.
Merz met with Chinese Premier Li Qiang on Wednesday, marking the formal start of the visit. He is expected to encourage increased Chinese investment in Germany although simultaneously pressing for reforms to address market distortions. Beijing has previously defended its subsidy policies as transparent and compliant with international trade rules, and maintains its commitment to a managed floating exchange rate regime.
The visit follows years of Berlin advocating for closer EU relations with China, including a landmark investment deal in 2020, under the principle of “Wandel durch Handel” (change through trade). But, the current economic realities are forcing a reassessment of that strategy.
