Germany's Merz Arrives in Beijing to Reset Ties as China Touts Market

Germany–China Economic Reset

BEIJING, Feb 25 (Reuters) - German Chancellor Friedrich Merz touched down in Beijing on Wednesday hoping to reset bilateral ties, with China pitching itself as a reliable economic partner as Europe struggles to balance its U.S. alliance and address supply chain vulnerabilities.

Context and Recent European Visits

Merz, on his first visit to China, becomes the latest European leader seeking to reset ties with China after Britain's Starmer and Canada's Carney earlier this year, while Beijing touts the benefits of engaging with its massive consumer market and advanced manufacturing base.

Engagement between Europe's largest economy and China could set the stage for EU-China relations this year.

Balancing Competition and Dependence

But Merz faces a tough balancing act of redefining an economic relationship that is increasingly detrimental to German interests, as Germany's heavily manufacturing-based economy is hit by competition from China's manufacturers, Rhodium Group's China analyst Noah Barkin said in a recent research note.

Automakers and Trade Imbalance

Merz comes accompanied by a delegation of 30 firms including top carmakers such as Volkswagen and BMW which are acutely feeling the strain of Chinese competition - contributing to a growing trade imbalance that has sparked concern in Berlin and led to calls for protectionist policies.

State Media Narrative

In editorials ahead of the visit, Chinese state media emphasised the potential for EU-China cooperation to become a stabilising force while U.S. tariff policies upend global trade.

Xinhua on Innovation Links

Xinhua, in an editorial published early on Wednesday, cited a German chamber of commerce survey finding that innovation gains in China are feeding back into German headquarters.

Global Times on Market Lure

State mouthpiece the Global Times said concerns about competition with China would be outweighed by the lure of China's massive market.

Debate Over 'De-risking'

"Rhetoric such as 'systemic rival' and 'de-risking' has at times complicated Germany's China policy," it said in an early Wednesday editorial.

Business Actions vs. Slogans

"Yet the enthusiasm and actions of the German business community speak louder than political slogans."

(Reporting by Colleen Howe and Liz Lee in Beijing; Editing by Michael Perry)