Shortly before German Chancellor Friedrich Merz (CDU) embarked on his trip to Beijing, Volker Treier, head of foreign economic affairs for the German Chamber of Commerce and Industry (DIHK), praised the People’s Republic as a reliable economic partner. “China, given the abruptness of US President Donald Trump, is currently a more predictable partner and competitor than America” Treier told newspapers of the Funke media group in their Monday edition.
Treier said that uncertainty in the U.S. relationship could open opportunities for closer cooperation in areas such as environmental technology, recycling, medical technology, and the circular economy. “The more seriously we engage in dialogue with Beijing and define common interests, the more likely the People’s Republic is to make binding commitments” he added. He acknowledged that European companies remain heavily dependent on critical raw materials from China-a current problem. He urged the chancellor to demand transparency and long‑term assurances from China for the supply of essential resources such as rare earths and permanent magnets, which are now subject to export controls.
In the fall, China had intermittently blocked shipments from the chip manufacturer Nexperia, nearly crippling European automotive firms. Treier reiterated that “the more seriously we engage in dialogue with Beijing and define common interests, the more likely the People’s Republic is to make binding commitments”. He added that private, off‑the‑record talks are more promising than megaphone diplomacy.
Meanwhile, Jürgen Matthes of the German Economic Institute (IW) in Cologne accused China of “massive competitive distortions”. He noted that China pours far more subsidies into its economy than other nations. According to the Federal Statistical Office, Germany’s trade‑balance deficit with China is projected to reach a record €89.3 billion in 2025. Matthes pointed out that the heavily undervalued yuan-appreciated by over 40 % against the euro in real terms since early 2020-is another instrument of China’s industrial policy, giving domestic firms a substantial advantage by making exports cheaper and imports more expensive.
He added that increasing pressure from the Chinese government on German and European companies to produce on site and source parts from China threatens market access if they do not comply. This pressure encourages firms to shift exports into Chinese manufacturing, effectively replacing domestic production.