Markets 
German Trade Minister Katherina Reiche is travelling to China from Tuesday to Friday as Berlin’s trade deficit with Beijing continues to deepen.
The trip comes two days after several of the EU’s largest economies – France, Spain, Italy, the Netherlands, as well as Lithuania – issued a non-paper urging the EU to crack down on Chinese overcapacity and unfair trade practices.
Berlin, however, did not endorse their call.
Germany remains the main chokepoint in the EU’s strategy towards China. While Euronews previously reported that the publication late last year of Germany’s trade deficit with Beijing marked a turning point for the EU executive, which is trying to sharpen its trade defence tools, Germany continues to favour cooperation with the Chinese.
In March, German Chancellor Friedrich Merz called for a trade agreement with Beijing. Brussels pushed back against the idea.
“There are a number of concerns and real challenges that the European Union has consistently expressed to China that we need to see them meaningfully address before we can even talk about any future agreements or anything like that,” the Commission’s deputy chief spokesperson, Olof Gill, said at the time.
Even with a record €87 billion trade deficit with China, Berlin hopes Beijing will keep its market open to German industry, despite the obstacles faced by EU businesses in China and the Asian giant’s strategy of reducing its dependence on foreign products.
Access to China’s market
The main objective of Reiche’s visit this week is to discuss potential economic cooperation. According to the German government, the strategy is to explore future opportunities for collaboration while maintaining dialogue with the Chinese leadership.
Despite a steadily growing trade deficit, China remained Germany’s most important trading partner in 2025. According to the Federal Statistical Office, bilateral trade volume reached €250 billion. Around 5,200 German companies operate in China, making the country one of the most important foreign markets for Germany’s automotive, mechanical engineering and electrical industries.
During the trip, Reiche is expected to hold political talks, attend a business forum and visit local companies. She will be accompanied by a business delegation representing around 40 companies. Discussions are also set to focus on the development of energy technologies.
“We hope the visit will help to transfer the insights gained on the ground into the political discussion in Berlin and to further develop bilateral exchange,” said Oliver Oehms, Executive Director of the German Chamber of Commerce in China.
In a survey published in May by the chamber, 51% of German companies operating in China supported policies favouring partnerships with Chinese companies, while 42% backed the “strategic” use of knowledge gained through such partnerships.
But these sectors are also increasingly under pressure, as Chinese competitors benefit from extensive state subsidies.
According to a report published in May by the EU think tank Centre for European Reform, the growing concentration of global car, machinery and chemicals production in China could weaken innovation in traditional manufacturing hubs and increase Beijing’s leverage over Berlin through the threat of supply disruptions, similar to its blockade of rare earth exports in 2025.
The report added that demand generated by Germany’s fiscal stimulus after easing its debt brake could end up boosting Chinese imports rather than supporting Berlin’s domestic industry.
German exports to China fell by 9.7% year-on-year, while imports of Chinese goods such as electronics, electric vehicles and components rose significantly by 8.8%.
“China has already eaten much of German industry’s lunch and is preparing to start on dinner,” the report said.
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