China’s Premier Li Qiang has called for deeper collaboration with German Chancellor Friedrich Merz across a range of strategic industries, including new energy, smart manufacturing, biomedicine, hydrogen energy, and intelligent driving. The two leaders met on the sidelines of the G20 Summit in Johannesburg, according to a report from state news agency Xinhua.
Li emphasized that China and Germany should “focus on shared interests” and strengthen the foundation of bilateral cooperation despite ongoing geopolitical tensions.
Relations Improve After Period of Tension
Diplomatic ties between the world’s second- and third-largest economies have improved notably in recent weeks. The relationship had deteriorated after Beijing imposed export restrictions on chips and rare earths, disrupting production for major German manufacturers.
The situation escalated further when German Foreign Minister Johann Wadephul canceled a planned visit last month after China declined to schedule all but one of his official meetings. The move signaled heightened diplomatic friction between Berlin and Beijing.
High-Level Visits Help Stabilize Ties
Efforts to stabilize the relationship gained momentum when German Finance Minister Lars Klingbeil made the first official visit of Merz’s administration to China last week. Klingbeil held discussions with China’s Vice Premier He Lifeng, focusing on safeguarding supply chains amid the strain caused by U.S. President Donald Trump’s new tariffs on major exporters.
Chancellor Merz is also expected to travel to China in the near future, signaling Berlin’s intention to strengthen communication with Beijing.
Li Qiang Urges Berlin to Maintain “Pragmatic” Approach
During their meeting, Premier Li Qiang encouraged Germany to adopt a “rational and pragmatic” China policy, free from external pressure and political interference. He stressed that the two nations should concentrate on long-term shared goals, particularly in fast-growing sectors such as:
- New energy technologies
- Smart manufacturing
- Biomedicine and pharmaceutical innovation
- Hydrogen energy development
- Intelligent mobility and autonomous driving
Li underscored that these fields present major opportunities for cooperation as both countries seek to accelerate technological advancement.
Strong Trade and Investment Links Remain Central
Despite disagreements over China’s stance on Russia, tensions in the Indo-Pacific, and Germany’s criticism of China’s human rights record and industrial subsidies, the two nations remain deeply interconnected economically.
According to Chinese data:
- China purchased $95 billion worth of German goods last year, including high-value automobiles.
- Germany imported $107 billion in Chinese products, mainly electronic components and semiconductors.
China also views Germany as a crucial source of foreign investment. In 2024, German companies injected $6.6 billion in new capital into China—representing 45% of all EU and UK direct investment into the country, according to the Mercator Institute for China Studies.
German Companies Remain Heavily Dependent on Chinese Market
China continues to play an essential role in Germany’s economic landscape:
- Nearly one-third of German automakers’ global sales are generated in China.
- German chemical and pharmaceutical firms maintain large operations in the country, despite facing stronger competition from domestic Chinese companies.
Both governments recognize that maintaining stable economic engagement is vital for their industries and long-term growth.
Conclusion
The meeting between Li Qiang and Friedrich Merz marks an important step toward rebuilding momentum in China–Germany cooperation. While political and strategic challenges remain, both sides appear committed to strengthening ties in emerging high-tech sectors that will shape the future of global industry.
