Germany's foreign minister to visit China next week, as EU prepares to toughen up on trade

By Joe Cash

BEIJING, Dec 2 (Reuters) - German Foreign Minister Johann Wadephul will visit China from December 8 to 9, two sources familiar with his plans said, after he abruptly cancelled a planned October trip, as Beijing seeks to counter European calls to "de-risk" from the Chinese economy.

The European Union is expected to toughen its trade stance on China next month, with signs that Germany - the EU's largest member and economy - is aligning with the shift and that the 27-member bloc may be sufficiently united to push through policy changes that deepen ties with like-minded trading partners.

SWIFT DIPLOMATIC TURNAROUND

Beijing has staged an uncharacteristically swift turnaround in relations with Berlin since discord over Chinese export curbs on chips and rare earths resulted in Wadephul calling off his visit.

Since then, China's second-ranking official Li Qiang met German Chancellor Friedrich Merz on the sidelines of the G20 in South Africa, and German Finance Minister Lars Klingbeil sat down with China's top economic official Vice Premier He Lifeng.

The sources would only confirm the date and requested anonymity as they were not authorised to speak to the media.

The German foreign ministry did not respond to a request for comment. The Chinese foreign ministry said it did not have any information to share at this time.

CHINA NO LONGER MARKET IT WAS FOR GERMAN EXPORTS

China's weaker economy and its move up the value chain of industrial production means it is no longer the reliable market it once was for German exports.

But Germany still remains a key investment partner for China, which is struggling to attract fresh funds as its post-COVID recovery struggles for momentum, having accounted for 45% of all foreign direct investment into China from the EU and Britain last year, according to data from the Mercator Institute for China Studies.

The EU's goods trade deficit with China has ballooned by nearly 60% since 2019, while Germany's trade balance with China shifted from surplus to deficit in 2023 and continues widening.

"We (Germany) highly appreciate the overarching value of industry and China cherishes industrial production as well. We, however, fundamentally differ... in approaches how to build sustained industrial assets and how to drive exports," Stephan Grabherr, deputy head of mission at the German Embassy in Beijing, said on Tuesday.

"Chinese export restrictions are corrosive to mutual trust and raised our sense of urgency to become more self-reliant," he said at the launch of the German Chamber of Commerce in China's 2025 Business Confidence Survey.

German firms reported a slight uptick in economic and industry sentiment, but continue to struggle with price pressure and Chinese consumers choosing to buy Chinese goods over foreign competitors, the report said.

(Reporting by Joe Cash; Editing by Bernadette Baum and Alex Richardson)