Merz Calls for ‘Open Dialogue’ With Beijing as Trade Deficit Widens

1. German Chancellor Friedrich Merz initiated his first official visit to China amid efforts to maintain strong economic ties while addressing concerns about trade imbalances between the two countries. On his arrival in Beijing on February 25, Merz emphasized the need for transparent communication channels, stating on X (formerly Twitter) that "open channels of dialogue" are essential for deepening diplomatic and economic relations with Beijing[para. 1][para. 2].

2. Merz's trip made him the first foreign head of state to visit China in the lunar New Year of the Horse. This visit followed a series of official visits by other Western leaders—including the prime ministers of Ireland, Canada, and Finland, the UK premier, as well as the King of Spain and the President of France—in late 2025, indicating ongoing high-level international engagement with China[para. 3].

3. The timing of Merz’s visit, immediately after the Lunar New Year holidays, was proposed by Beijing, which the German government viewed as a "good omen." Before departure, Merz wrote that his objective was to promote a "fair, reliable partnership on equal footing" with China[para. 4][para. 5].

4. On his first day, Merz held meetings with Premier Li Qiang at the Great Hall of the People and later with President Xi Jinping. He also attended a Sino-German Economic Advisory Committee symposium, where he reiterated a commitment to strengthening bilateral trade and the importance of trade relations being "balanced and reliable" for mutual benefit[para. 6][para. 7].

5. Merz’s published itinerary indicated visits to the Forbidden City and the Mercedes-Benz facilities in Beijing, along with planned trips to Hangzhou to meet with robotics company Unitree Robotics and Siemens Energy. These stops highlighted a focus on both cultural and high-technology commercial ties[para. 8].

6. The visit saw the signing of several cooperation agreements between China and Germany, witnessed by Merz and Li, covering areas such as green transition, customs, sports, and media. Additional agreements included protocols on animal disease prevention, poultry products, and cooperation in football and table tennis. Germany is also set to extend the contract for Chinese state television to continue broadcasting the Bundesliga[para. 9][para. 10].

7. Merz expressed the intent for ongoing "candid dialogue," announcing the planned dispatch of several government ministers to China before the end of 2026 to strengthen relations. The business delegation he led included executives from about 30 leading German companies in sectors like automotive, chemicals, biopharmaceuticals, machinery manufacturing, and circular economy, reflecting Germany’s sectoral strengths[para. 11][para. 12].

8. In meetings, Merz addressed Germany’s specific concerns about bilateral cooperation, aiming for improvements to make it fairer. Premier Li highlighted opportunities from China’s 15th Five-Year Plan and a willingness to expand trade, promote investment, and enhance educational and research exchanges. Li also encouraged the purchase of more German products and the creation of a predictable business environment in Germany[para. 13][para. 14][para. 15].

9. Merz responded by emphasizing strong economic ties and Germany’s commitment to regular dialogue, balanced trade, and green transition. He stated Germany’s readiness to support EU-China relations[para. 16].

10. High-level discussions addressed critical issues such as the yuan exchange rate, China’s industrial overcapacity, and stricter export controls on rare earths. Merz advocated for yuan appreciation and reduction of industrial overcapacity, arguing these would boost Chinese domestic demand and foster smoother trade[para. 17][para. 18][para. 19].

11. Germany and the EU have consistently raised concerns about large trade deficits with China. In 2025, bilateral trade between Germany and China totaled 253 billion euros ($298 billion), with German imports from China at 171.2 billion euros and exports to China at 81.8 billion euros—a significant deficit. EU-wide, the trade deficit with China is projected to reach 359.3 billion euros in 2025, up from 304.5 billion euros in 2024, approaching historical highs[para. 20][para. 21][para. 22].