Finance
German business lobby warns of unfair trade practices by China
Published by Global Banking & Finance Review®
Posted on February 20, 2026
2 min readLast updated: February 20, 2026
Quick Summary
Germany’s business lobby warns China’s subsidies, overcapacity and export curbs distort markets and risk price wars. The stance contrasts with Chancellor Friedrich Merz’s cooperative messaging ahead of his Beijing visit.
German Industry Lobby Alleges Unfair Chinese Trade Practices, Urges EU Unity
German Lobby Flags China Trade Risks
BERLIN, Feb 20 (Reuters) - German business bosses warned on Friday of what they called destabilising and unfair global business practices by China, ahead of a visit to Beijing by Chancellor Friedrich Merz in which he is expected to focus on cooperation opportunities.
Allegations: Overcapacity and Subsidies
In a position paper seen by Reuters, the powerful lobby group Asia-Pacific Committee of German Business accused Beijing of driving overcapacity, massive subsidies, distortive foreign-exchange policies and politically motivated export controls.
"Chinese competition, systemic risks, dependencies and distortions of competition have intensified significantly and have become a key challenge for prosperity and security in Europe," the paper said.
Potential for Escalating Trade Conflict
More trade conflicts with Europe were looming if China continues its increasingly assertive conduct in global trade, it said.
Call for a Unified EU Response
While stressing China's role as a partner in business and innovation, the association called on Europe to unify and prepare a "robust" response.
Beijing Denies Unfair Practices
The Chinese government has repeatedly rejected allegations of unfair trade policies.
'FUTURE COOPERATION'
Merz’s Agenda in Beijing
The business group's warning contrasts with Merz's more conciliatory messaging recently. He said ahead of his visit his goal was to talk "about future cooperation between Europe and Germany on this side and China on that side".
Balancing U.S. Trade Barriers
He has been seeking to redefine relations with China to balance out trade barriers erected by the United States.
Risk of Global Price Wars
The lobby group in particular warned that weak domestic demand and an industrial output capacity inflated by Chinese government measures were leading to ruinous global price wars.
Reporting and Editing Credits
(Reporting by Andreas Rinke, Writing by Ludwig Burger, Editing by Linda Pasquini and Jan Harvey)
Key Takeaways
- •Germany’s Asia-Pacific Committee of German Business warns China’s overcapacity, subsidies, FX policies and export controls distort competition in Europe.
- •Weak domestic demand and inflated industrial capacity in China risk fueling global price wars, the group says.
- •The warning contrasts with Chancellor Friedrich Merz’s more cooperative tone ahead of his visit to Beijing.
- •The lobby urges a unified, robust European response and greater de-risking of supply chains.
- •Beijing rejects accusations of unfair practices, but further EU–China trade friction may loom.
Frequently Asked Questions about German business lobby warns of unfair trade practices by China
1What is the main topic?
A leading German business lobby warns that China’s overcapacity, subsidies, FX policies and export controls distort global competition. The warning comes ahead of Chancellor Friedrich Merz’s visit to Beijing.
2Why does this matter to markets and businesses?
Distorted pricing and potential price wars can pressure European manufacturers and margins. Heightened EU-China trade tensions could trigger investigations, tariffs or stricter export controls affecting supply chains.
3What actions are suggested for Europe?
The lobby urges a unified, robust EU response and de-risking—diversifying suppliers, tightening trade defenses, and coordinating policy to reduce strategic dependencies on China.
