German Chancellor Friedrich Merz became the first foreign leader to visit China in the Year of the Horse. President Xi Jinping and Premier Li Qiang met and held talks with Merz in Beijing. Together with more than 60 Chinese and German business leaders, Li and Merz also attended the symposium of the China-Germany Economic Advisory Committee. The two countries inked a number of cooperative agreements in green transition, customs, sports and media. They also issued a joint press statement, in which the two sides agreed to properly resolve each other’s concerns through dialogue. Speaking to reporters at the end of his trip, Merz said he witnessed and supported the launch of new business partnerships during the visit. “For me, it was important to gain a firsthand impression of the country, including through discussions with government leaders and business representatives,” he said, noting that he was impressed by China’s high level of technological development, for example “Mercedes-Benz’s advances in autonomous driving in China, Unitree’s progress in robotics, and companies producing in China for the global market”.
Merz said unequivocally that Germany was open to Chinese investment, talked up hi-tech cooperation and made clear that trade barriers would be his last resort. “Because of the sharp increase in Chinese imports, calls for protection are growing louder in Europe. I want to be frank with you, and I already told you this in our conversation earlier: I want as little protection and safeguarding as possible,” Merz said in comments directed at Premier Li at a business event. “We want to continue to benefit from open markets. Stronger Chinese domestic demand, perhaps facilitated by a moderate appreciation of your currency, would make it easier to continue trade without such barriers,” Merz said, adding that it is “important to reduce market-distorting subsidies and achieve market consolidation where we see overcapacity. Today, German companies in China are encountering a top-class innovation ecosystem, and we are learning from it. We are also learning from each other. This mutual learning, this mutual improvement, creates growth, creates jobs and creates prosperity on both sides, in both our countries,” Merz said.
Chancellor Merz took a special test ride in the new Mercedes-Benz S-Class, experiencing the L2 Urban and Highway Navigation System jointly developed by the German auto company and Chinese technology company Momenta. This intelligent assisted driving system is seamlessly integrated into Mercedes-Benz's proprietary central brain – the Mercedes-Benz Operating System (MB.OS) architecture, connecting driving assistance, the intelligent cockpit, and vehicle control. “China is one of the most important markets for Mercedes-Benz not just in scale but also in its power of innovation," said Oliver Thöne, Member of the Board of Management of the Mercedes-Benz Group responsible for Greater China, noting that over the years, it has established solid footprints in China with its largest production base as well as the most comprehensive research and development (R&D) set-up outside Germany, serving more than seven million customers. “Mercedes-Benz is a traditional manufacturer, while Chinese tech companies have unique strengths in the fields of new energy, artificial intelligence (AI), and driving technologies. The complementary advantages of both sides can effectively revitalize traditional manufacturing,” Zhou Mi, Senior Research Fellow at the Chinese Academy of International Trade and Economic Cooperation commented.
In Hangzhou, Chancellor Merz visited the Chinese robotics company Unitree for a tour and a robotic performance before wrapping up his two-day China visit. Siemens CEO Roland Busch, who was among senior executives from about 30 leading German companies accompanying Merz, said Hangzhou is a highly innovative city – “perhaps the Tech Valley of China”. Busch noted that China is seeking to boost productivity through automation and digitalization, areas in which Siemens holds strong global advantages. The integration of industrial software and automation, he said, is fundamental to advanced manufacturing, and Siemens stands ready to support China’s high-tech manufacturing agenda. Michael Schumann, Chairman of the German Federal Association for Economic Development and Foreign Trade, said China’s rapid progress in robotics and industrial artificial intelligence – visible during Merz’s visit to Unitree – creates significant opportunities to combine German strengths in precision engineering, automation and industrial software with China’s scale and speed of technological deployment.
According to China's Ministry of Commerce, in recent years, annual trade between China and Germany has consistently exceeded USD200 billion, while two-way investment stock has surpassed USD65 billion. German exports to China have fallen 23% since their 2022 peak, Rhodium Group research found, spearheaded by a 66% drop of German car shipments to the country from 2022 to 2025. At the same time, German companies’ investments in China hit a four-year high last year, according to the German Economic Institute, as some big businesses doubled down on Beijing amid global turbulence. China took over from the United States to become Germany’s largest trading partner in 2025, according to Germany’s Federal Statistical Office Destatis. China-Germany trade totaled €251.8 billion in 2025, rising 2.1% year-on-year, while trade with the U.S. fell 5% on a yearly basis.
Feng Zhongping, Director of the Institute of European Studies at the Chinese Academy of Social Sciences, said Merz’s visit showed a return to a pragmatic and rational approach in Germany’s China policy. “Merz’s visit sent a signal that as the world’s third-largest economy, Germany sees broad space for cooperation with China, the second-largest economy, and is seeking to expand cooperation grounded in mutual benefit,” Feng said.
This overview is based on reports by the China Daily, Global Times, and South China Morning Post.
