German Chancellor Friedrich Merz should prioritise Germany’s €87 billion trade deficit with China and attract Chinese investment during his state visit this week, business leaders and China experts have told Euronews.
Merz arrived in China on 24 February for his first trip to the country as chancellor, accompanied by a large cross-sector business delegation including numerous small and medium-sized enterprises.
“Political relations have a direct impact on the business success of German companies in China,” said Oliver Oehms, managing director of the German Chamber of Commerce in North China.
“It is therefore all the more important that the chancellor signals and demands a willingness for dialogue,” Oehms emphasised.
Euronews brings five bits of advice from experts to Merz to make his Beijing trip a success.
1. Be empathetic and open to dialogue with Xi
China expert Jörg Wuttke, who advised Merz at the Chancellery last week right before his trip to Beijing, said establishing a human relationship with President Xi Jinping should be the priority.
“There are a lot of difficult issues on the table and in order to discuss them, we need to have a certain amount of empathy,” Wuttke said.
Merz’s background as a lawyer who worked on supervisory boards and committees in the private sector during the early 2000s could prove advantageous.
“He is a businessman. The Chinese appreciate that,” Wuttke said.
2. Address the trade imbalance
Germany’s trade deficit with China has surged from €20 billion in 2024 to €87 billion, according to Wuttke.
In 2025, imports from China totalled €170.6 billion while exports to China reached only €91.3 billion.
The imbalance stems partly from the euro exchange rate, which has made European products less competitive, Wuttke said.
US President Donald Trump’s policies have made the euro 15% to 16% more expensive against the dollar, and China’s yuan is pegged to the dollar.
“Trump has managed to make Chinese exports 15% to 20% more competitive,” Wuttke said.
Oehms said German companies expect Merz to address export controls, which face considerable uncertainties, lack of transparency and long processing times for licence approvals.
“Any progress on export controls would be good news for German companies,” Oehms said.
3. Court Chinese investment
Experts believe Chinese companies will globalise more than ever as their domestic market becomes less profitable, creating opportunities for Germany to attract investment.
“Chinese companies are becoming more globalised than ever before,” Wuttke said. “This means that we have Chinese suppliers, we have Chinese customers and we have Chinese competition outside of China. And that’s why we in Europe should say: ‘Then come to us’.”
Wuttke drew parallels with Japanese companies like Nissan, Honda and Sony that expanded globally during the 1980s and 1990s.
China’s domestic demand has been weakening for years, making Europe an attractive market for Chinese firms seeking higher margins.
German companies still possess advanced and innovative technologies that China needs, Oehms said. “We shouldn’t make ourselves smaller than we are.”
4. Attract Chinese talent
Germany should also work to bring top Chinese engineers and digital experts into its economy, Wuttke said, pointing to successful integration of Indian professionals.
“It’s a success story how many Indians we have integrated into our economy. You can do the same with the Chinese,” said Wuttke.
However, Germany’s poor investment climate poses a challenge. Wuttke said successful Chinese professionals prefer destinations like Tokyo and Dubai over Germany.
Implementing recommendations from the 2024 Draghi Report on strengthening European competitiveness would be necessary to attract Chinese investors and specialists, Wuttke said.
5. Avoid past mistakes
Merz should avoid the patronising tone that characterised former Chancellor Olaf Scholz’s government approach to China, according to Wuttke, who lived in the Asian country for 30 years.
“We can’t teach the Chinese anything. They don’t change, you can go there with two raised index fingers and nothing happens,” Wuttke said.
The advantage of Merz’s trip is his focus on economic rather than ideological issues, Wuttke said.
“The saying goes: ‘Man has two ears and one mouth. It’s better to listen than to talk’,” Wuttke said.
Merz referenced Chinese culture in a statement before his departure, noting that in the Year of the Fire Horse, “they say that a horse cannot show its strength alone, but only by pulling the cart together with others.”