Merz calls for reduction of 'market-distorting subsidies' during economic talks in China - Germany's Merz presses China to fix trade gaps and ease market access
German Chancellor Friedrich Merz has urged China to address trade imbalances and reduce market barriers during recent talks. The discussions come as Germany's trade deficit with China widens, sparking concerns among European businesses about unfair competition and limited access to Chinese markets.
Merz called for greater openness and fairer trade rules while encouraging Chinese investment calculator in Germany to boost local jobs.
Germany remains China's largest trading partner in Europe, yet the relationship has grown increasingly uneven. Last year, Chinese exports to Germany exceeded imports by more than two to one. The trade surplus in China's favour rose from €52 billion in 2020 to around €85 billion in 2024, driven by surging shipments of electronics, machinery, and vehicles.
German industries, particularly automotive, mechanical engineering, electrical equipment, and chemicals, have faced pressure as Chinese imports replace local production. European companies have also reported restricted market access in key sectors, adding to frustrations over China's industrial policies.
During the talks, Merz emphasised the need for fair competition and the removal of 'market-distorting subsidies.' He acknowledged China's aggressive industrial strategy but insisted on a level playing field. At the same time, he welcomed Chinese fidelity investments in Germany, stating that it could create jobs and strengthen economic ties.
The growing trade gap has fuelled calls for protectionist measures across Europe, with businesses and policymakers pushing for stricter trade rules to balance the relationship.
The discussions reflect rising tensions over trade fairness between Germany and China. With imports far outpacing exports, German industries are feeling the strain, while European leaders seek ways to rebalance the relationship with China. Merz's call for investment and fairer competition signals a push for economic cooperation—but on more equal terms.
