Germany’s Merz Reaches Out to Xi Before Inaugural Trip to China

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(Bloomberg) — German Chancellor Friedrich Merz sent a conciliatory message to President Xi Jinping as he departed Berlin on his inaugural trip to China, while urging the government in Beijing to help ensure “fair and transparent” rules-based commerce.

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Merz acknowledged that Germany and Europe need to do their own homework to boost competitiveness and resilience, but said there should also be an honest discussion during his trip of what to do when “systemic overcapacity and export and access restrictions distort competition.”

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German policy must take account of the fact that China has joined the ranks of major powers and issues like climate change and Russia’s war on Ukraine cannot be solved without involving Beijing, added the conservative leader.

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“We are convinced that we will cope better in dealing with these shared challenges if we approach one another with firmness, with self-confidence and with mutual respect,” Merz told reporters.

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“That also means not lecturing or reprimanding one another. We want to engage in a dialog between equals which finds common ground and takes a constructive approach to systemic differences in a spirit of trust.”

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China’s entrenched status as both a strategic rival and an essential trading partner for Europe’s biggest economy makes Merz’s first visit there as chancellor a tricky balancing act.

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He’s been hawkish toward the Asian nation in the past, warning executives against expanding investment there, but Tuesday’s statement suggested he’s opting for a more pragmatic line.

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US President Donald Trump’s assault on the global order has forced Merz to question his long-standing commitment to robust transatlantic ties and to try to expand existing partnerships or build new ones.

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Merz will be in China for two days and is due to hold separate talks on Wednesday with Xi and Premier Li Qiang.

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He’s also taking what he called a “prestigious” business delegation and is scheduled to visit a Mercedes-Benz Group AG plant Thursday in Beijing.

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He’ll then travel on to tech hub Hangzhou for a tour of facilities operated by Chinese robotics firm Unitree and Germany’s Siemens Energy AG.

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In his statement Tuesday before boarding a government aircraft, Merz said Germany will continue its policy of de-risking from China rather than de-coupling, which he said would be a mistake that would “hamper our own economic opportunities.”

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“Both sides must reduce risks that arise from ever closer connectivity and one-sided dependencies,” Merz said. “That applies particularly with regard to supply chains, technologies and raw materials.”

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Dirk Jandura, president of Germany’s BGA export lobby, said the government is right to derisk from China and highlighted the need for “a balanced approach between openness and resilience” rather than a broader decoupling.

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“Critical dependencies, for example in raw materials, intermediate goods or key technologies, should be addressed through dialog and reduced through diversification,” Jandura said Monday by email. “Simultaneously, supply chains must remain stable and resilient.”