China-Germany economic cooperation matters more than ever

German Chancellor Friedrich Merz's China visit on February 25-26, his first official trip to the country, comes at a moment of structural uncertainty and profound geopolitical strain in the world economy.

With China once again becoming Germany's largest trading partner in 2025, the high-level meetings in Beijing underscore the strategic weight of stabilizing and strengthening bilateral ties amid mounting global uncertainty.

The strength and momentum of this complementarity underscores a fundamental reality: deeper economic convergence between the world's second- and third-largest economies is not merely a strategic choice, but a strategic imperative.

The International Monetary Fund projects China's medium-term growth at around 5 percent, while Germany is looking at 0.2 percent growth amid energy transition costs and industrial restructuring. The arithmetic is straightforward: Germany needs demand, while China needs high-end technology and industrial upgrading.

With a population of roughly 83 million, the average German consumed about $2,400 worth of Chinese goods in 2025, highlighting the deep integration of China into everyday German life. On the export side, Germany sends vehicles and automotive parts, industrial machinery and electrical equipment to China, showcasing its prowess in high-end manufacturing.

The geopolitical headwinds place pressure on both Berlin and Beijing. Supply chain "de-risking" narratives risk morphing into economic fragmentation. Yet data tells a subtler story. According to the German Economic Institute, Germany's foreign direct investment in China remained above 7 billion euros ($8.32 billion) from January to November 2025, up 55.5 percent from the 4.5 billion euros in 2024.

Meanwhile, Chinese greenfield investment in Germany, particularly in renewables and logistics, has stabilized rather than collapsed, signaling continued bilateral economic engagement. The private sector, in other words, continues to vote with capital.

As China enters the 15th Five-Year Plan period (2026-30), with a strategic focus on developing new quality productive forces and advancing emerging sectors, a new chapter in cooperation is set to unfold.

Expanding collaboration in frontier fields such as clean energy, embodied intelligence, biotechnology and industrial digitalization should become new priorities. In short: this is not about dependency; it is about deep industrial complementarity.

German automakers such as Volkswagen, BMW and Mercedes-Benz derive 30-40 percent of global sales from China. Meanwhile, China's electric vehicle market, now the world's largest with over 16 million new energy vehicles sold in 2025, has become fiercely competitive. Partnerships with Chinese battery leaders like CATL and digital ecosystems from firms such as Huawei allow German brands to localize innovation rather than merely export legacy engineering.

For China, deeper R&D integration with Germany's automotive clusters in Baden-Württemberg and Bavaria can accelerate breakthroughs in hydrogen mobility, lightweight materials and next-generation power electronics.

The visit by Merz, who is accompanied by around 30 senior executives from leading German companies spanning automotive, chemicals, biopharmaceuticals, advanced machinery and the circular economy, sends a clear signal of intent. It underscores a commitment on both sides to deepen practical cooperation and build a forward-looking strategic partnership anchored in emerging sectors and innovation-driven growth.

The visit to domestic robotics leader Unitree Robotics in Hangzhou on Thursday can mark the start of a new era in China-Germany forward-looking strategic cooperation in emerging sectors.

At a time when global economic ties face mounting uncertainties, three pragmatic policy moves could help transform vulnerability into long-term resilience.

First, reciprocal market transparency is essential. Clearer and more predictable regulatory frameworks, particularly in areas such as continuous political dialogue and high-level changes, mutual respect and mutual market openness, would help reduce political mistrust and provide businesses with greater certainty.

Second, supply chain co-location offers a constructive alternative to decoupling. Rather than shifting production away from one another, companies can jointly localize manufacturing aimed at third markets, diversifying risk while preserving the benefits of deep integration.

Third, stronger EU-level coordination is critical. A pragmatic China-Germany economic agenda can contribute to broader China-EU trade stability. As Germany accounts for roughly one quarter of the European Union's GDP, Berlin's policy orientation will inevitably influence the tone and direction of decision-making in Brussels.

The choice before Chancellor Merz is not ideological, it is structural. Decoupling would compress Germany's industrial competitiveness.

"It would be a mistake for us to seek to decouple ourselves from China," Merz said before leaving Berlin, a remark that underscores how his administration is seeking to calibrate a pragmatic, consistent and business-friendly approach toward China, emphasizing stability and mutually beneficial, win-win cooperation. Strategic engagement, when managed transparently and pursued with a clear sectoral focus, offers the best outcome: shared resilience.

In an era increasingly defined by tariffs, distrust and turbulence, the China-Germany relationship is not a relic of globalization's past. It is a test case for whether advanced and emerging industrial powers can still build prosperity through complementarity rather than confrontation.

By deepening collaboration in high-tech industries, clean energy, advanced manufacturing and digitalization, both countries can unlock shared opportunities, mitigate geopolitical risks and set a model for pragmatic, mutually beneficial international engagement.

Ibrahim Khalil Ahasan is a Dhaka, Bangladesh-based independent columnist and freelance journalist.

The views don't necessarily represent those of China Daily.

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