Merz Arrives in Beijing as Germany Raises Alarm Over Trade Imbalance With China

By Blessing Nweke

German Chancellor Friedrich Merz has arrived in Beijing for high-level talks with Chinese leaders, as business groups warn that a widening trade imbalance is threatening the country’s industrial base.

Official statistics show imports into Germany from China were more than double the value of exports last year. In 2025, Germany imported goods worth €170.6 billion from China — an 8.8% increase — while exports fell 9.7% to €81.3 billion.

Before departure, Merz said Berlin sought a relationship with China that is “balanced, reliable, regulated and fair.” He is also expected to urge Beijing to use its influence over Russia to help end the war in Ukraine.

China remained Germany’s largest trading partner in 2025, overtaking the United States, but economists warn the growing deficit is eroding key sectors including automotive, machinery and chemicals.

Researchers at the German Economic Institute say Chinese subsidies, currency policy and overcapacity in manufacturing are major drivers of the imbalance. Beijing has repeatedly defended its policies, insisting subsidies comply with global trade rules and its exchange rate is market-based.

Analysts describe the widening deficit as part of a broader “China shock” affecting the European Union, intensified by pandemic disruptions and higher production costs following Russia’s full-scale invasion of Ukraine.

Germany’s business groups are pressing Merz to address competition distortions, export controls on rare earths and the impact of cheap imports, particularly as the country’s car industry faces job losses during the transition to electric vehicles.

Despite growing pressure, Merz signalled Berlin will continue its de-risking strategy while rejecting full economic decoupling from China.