Germany's Trade Minister Katherina Reiche is embarking on a trip to China as Berlin aims to respond to its growing trade deficit with Beijing. This visit comes in the wake of a coalition of several major EU economies, including France, Spain, Italy, and the Netherlands, which have called for a more aggressive stance against China’s trade policies, emphasizing issues like overcapacity and unfair competition.

Despite these pressures, Berlin has historically favored maintaining cooperative ties with China, making it a crucial player in shaping the EU’s trade strategies. Chancellor Friedrich Merz has recently advocated for trade agreements with Beijing, a position met with caution from the European Commission, which is wary of ongoing challenges posed by China.

Currently, Germany reports a staggering €87 billion trade deficit with China, despite it being Germany's largest trading partner, with bilateral trade reaching €250 billion in 2025. Approximately 5,200 German companies operate in China, tapping into critical sectors such as automotive and machinery.

Reiche's upcoming discussions aim not only to bolster economic cooperation but also to explore opportunities in energy technologies. She will be joined by representatives from around 40 German companies to engage in political talks and attend business forums during her visit.

However, German businesses are feeling increasing pressure from state-subsidized Chinese competitors, which has fueled calls for action. A report from the Centre for European Reform highlighted that while German exports to China have dropped by 9.7%, imports from China have surged by 8.8%, indicating a worrying trend that could impact Germany's innovation and industry leverage.

The recommendation for tougher trade measures could signal a shift in Germany’s long-standing strategy of engagement with China, reflecting the mounting concerns over economic dependencies and market access amidst escalating global trade tensions. As policymakers deliberate on the way forward, the outcomes of Reiche’s visit may set the course for future EU-China relations.