German Chancellor Friedrich Merz’s first official visit to China occurs at a pivotal geopolitical moment: transatlantic relations face strains and China promotes itself as a champion of “true multilateralism”, as Wang Yi put it at the Munich Security conference.

In this changing world order, where power trumps rules ever more, Berlin should strive for a stance on China that strengthens Europe’s economic security and strategic resilience. What happens in Beijing will reverberate across the EU’s China policy and Germany’s role in shaping it. The Chancellor’s visit to China therefore is a difficult task and expectations on both sides weigh heavily. It requires precise strategic consideration: dialogue with Beijing without political naivety; economic openness without security vulnerabilities; European unity without domestic political irritations. Merz should try to resist a potential Chinese charm offensive and align his visit with four guardrails:

  1. China’s stance on Russia’s war against Ukraine: This issue goes directly against Europe’s core security interests. As a result, it is and will remain a structural burden for bilateral relations.
  2. Economic security and de-risking are a priority: Export controls, e.g. on rare earths, weaponise dependencies and increase the vulnerability of European industry. De-risking is not protectionism, but a legitimate political goal – one China itself has pursued for years.
  3. The trade imbalance and China’s underlying industrial policy are a long-term economic and security risk for Europe. The next Five-Year Plan (2026-2030) signals continuity with even more speed and ambition.
  4. Diverging corporate and overall economic interests: Some large multinational corporations are expanding their investments in China – in some cases while simultaneously reducing capacity in Germany.

Standing firm on European and German core interests

China again was Germany’s largest trade partner in 2025, albeit with increasing imbalances in China’s favour. But in times of rising tensions and differences, it remains vital to keep diplomatic channels of communication and exchange open – even if the message might be “agreeing to disagree.”

But the timing and sequencing of the Chancellor’s visit to China still is telling. Merz has been in office for nearly one year and his first Asian visit was to India. This shows that Germany is recalibrating its Indo-Pacific priorities according to the shifting geopolitical and geoeconomic landscape. De-risking and diversifying economic relations require global partnerships beyond the two great powers, China and the US.

Beijing will still try to exploit the deterioration of transatlantic relations during the Chancellor’s visit to China. This means it is important for Friedrich Merz to resist a potential charm offensive. The core issues in the relations with China do not vanish into thin air just because of increasing US pressure on Europe.

These four guardrails should therefore guide the Chancellor’s talks with Chinese interlocutors:

1. Address China’s role in Russia’s war against Ukraine:

This issue remains the most significant structural burden for bilateral relations. Although Beijing presents itself as neutral – and occasionally signals interest in diplomatic solutions – it has refrained from condemning Russia’s aggression and maintained close political and economic ties with Moscow.

China at least indirectly supports Russia’s war machine by buying Russian fossil fuels and supplying dual-use goods, such as advanced electronic and communication components. Without this, Russia would likely not have been able to continue this war for four years. Moreover, it is safe to assume that China will remain on Russia’s side as long as it is in China’s strategic interests. This goes blatantly against Europe’s core security interests.

Chancellor Merz will not alter Beijing’s strategic calculus vis-à-vis Moscow. But he should make it clear that bilateral relations with China will not be lifted to a ”new level”, as recently proposed by Beijing, as long as the war is going on.

2. Emphasize economic security and de-risking:

China’s export restrictions on critical inputs, such as rare earths, are an economic security risk for Germany and the EU. The restrictions weaponise dependencies and increase the vulnerability of European industry. Chancellor Merz should therefore consistently signal to Chinese interlocutors that economic security and de-risking remain a priority for Germany and the EU.

Rather than merely appealing to China’s goodwill, he could adopt a more strategic rhetorical approach. Chinese officials have repeatedly called for the EU to enhance its “strategic autonomy.” From a Chinese perspective, this implicitly means de-risking from the US, not from China.

The Chancellor could deliberately turn this argument around: Genuine strategic autonomy requires resilience, diversification and reduced exposure to external coercion. In that sense, the EU’s de-risking agenda follows a logic long embedded in China’s own economic policy, which has consistently sought to reduce critical dependencies and strengthen domestic capabilities.

By framing de-risking as a legitimate political goal – one China itself has pursued for years – the Chancellor can push back against potential accusations of protectionism. He could also make clear to the Chinese side: If China wants to be seen as a reliable partner, it does not impose export restrictions in critical sectors.

3. Voice concerns about trade imbalances:

Germany’s trade deficit with China widened significantly in 2025. Exports fell by 9.7% while imports rose by 8.8%, resulting in a record deficit of €90 billion – around one-third higher than the previous year. Industrial overcapacity, state subsidies, an undervalued Chinese currency, and the re-direction of Chinese exports as a result of the US-China trade conflict are increasing pressure on core European industries, such as automotive and machine tools, often referred to as China Shock 2.0. China’s next Five-Year Plan signals continuity with even more speed and ambition, as Beijing prioritises technological self-reliance in strategic sectors – from semiconductors to AI – with the clear objective of reducing external dependencies and securing global leadership in future industries. China also aims to reinforce and upgrade its position in global value chains in traditional industries, including chemicals and mechanical engineering.

For Germany, whose economic model is deeply rooted in high-value manufacturing, this poses a structural risk. Chancellor Merz should voice these concerns emphatically, even if Beijing will not fundamentally change its industrial policy – regardless of the potential negative impact on other countries. Nevertheless, it is important that Chinese interlocutors hear this message in order to highlight the stark contrast to their ubiquitous win-win rhetoric. This is also an important message to the German public in order to raise awareness of the risks involved in economic relations with China.

4. Distinguish between corporate and overall economic interests:

According to media reports, the largest business delegation since Angela Merkel’s first term will accompany the Chancellor to China. Among the 30 participants are DAX CEOs along with representatives of medium-sized and Mittelstand companies, which typically have less leverage in shaping China-related policy. The delegation also comprises several companies from the machine tool sector – one of the industries most exposed to the China Shock.

For the Chancellor, this creates a balancing act. As German investment in China is highly concentrated among a small number of large corporations, dependencies are distributed asymmetrically. More diversified medium-sized and Mittelstand companies may depend less on China as a sales market. They may be more concerned with the effects of the China Shock on Germany, the EU and third markets. However, some large companies with substantial investment in China, depend heavily on the Chinese market. For some of them, de-risking even means doubling down on their investment in China – in some cases accompanied by job cuts or reduced investment in Germany.

Corporate interests and the long-term interests of Germany or the EU as a business location therefore do not always align. While company representatives join the delegation to promote their commercial interests, the Chancellor’s role is different. He represents the overall economic and strategic interests of Germany and the EU: resilience, fair competition and a strong domestic industrial base. These aspects – not individual companies’ interests – should be the focus of his talks in China.

Chancellor Merz’s visit to China will serve as an indicator of how Germany intends to navigate this complex and contested relationship. The message Berlin sends about priorities, limits and expectations will shape not only bilateral relations with Beijing, but Germany’s role in the EU’s China policy.

An abridged version of this text was first published by China.Table on February 22, 2026.

About the author

Cora Jungbluth is Senior Expert in the Europe’s Future Programme at the Bertelsmann Stiftung. Her research focus is on China, foreign direct investment and international trade, especially the role of emerging economies.

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