China Germany Economic Cooperation Delivers Tangible Results

The recent visit of German Chancellor Friedrich Merz to China marks a significant milestone in strengthening bilateral economic cooperation and partnerships. The discussions led to key agreements that underline both countries' commitment to enhancing their economic ties amidst challenging global dynamics.

Merz's trip comes during a precarious time for Germany, as the nation has faced economic contraction in both 2023 and 2024, only managing a slight growth of 0.2 percent in 2025. Traditional economic strengths, particularly in the automotive and machinery sectors, are increasingly facing global competition, and exports have proven less effective in supporting overall economic growth.

In this context, the expansive and dynamic Chinese market has emerged as a crucial factor for German businesses. For many firms, exporting to China is no longer a choice, but a necessity for strategic growth. Merz arrived in Beijing with a delegation of nearly 30 executives from diverse sectors, such as automotive, chemicals, and biopharmaceuticals, keen to explore what he termed 'enormous opportunities' for deepening economic relations.

However, Germany must also address structural trade imbalances. According to recent statistics, the trade deficit with China surged to €89.3 billion, reflecting that imports from China surpassed exports by more than double in 2025. This widening gap has ignited discussions among German policymakers, emphasizing the need for strategies to enhance exports.

During the February 25–26 visit, significant cooperation agreements were reached, covering areas such as green transition, customs facilitation, and media collaboration. Over 60 influential companies participated in the meeting of the Sino-German Economic Advisory Committee, highlighting the serious commitment from both nations to foster closer ties.

Additionally, China's Ministry of Commerce reported that the negotiations yielded 'positive and pragmatic results', resulting in over a dozen commercial agreements across multiple key sectors, including automobiles, logistics, energy, and finance.

German business leaders exhibited optimism regarding China’s long-term economic potential, pledging to increase investments and engage more actively in China’s modernization endeavors. Following his meetings in Beijing, Merz traveled to Hangzhou to promote economic collaboration further, characterizing the visit as 'substantive and meaningful'.

Historically, pragmatism has underpinned the China-Germany relationship, as noted by researcher Lyu Yunmou. China was Germany’s largest trading partner for eight consecutive years until 2023, briefly losing the position in 2024 before reclaiming it in 2025, with bilateral trade soaring to €251.8 billion. Despite the geographical distance, the interdependence between these two trading giants continues to strengthen.