German Chancellor Friedrich Merz's first visit to China came against the backdrop of a persistently sluggish domestic economy. Germany's economy has just experienced a consecutive recession in 2023 and 2024, and grew by just 0.2 percent in real GDP in 2025. The trip also coincided with escalating trade frictions between the United States and the European Union, which have exposed the EU's over-reliance on the US market and its deep-seated dependency on the US-led geopolitical bloc.

Ahead of his departure for Beijing, Merz called attempts to decouple from China a "mistake", and said that severing ties with China would be like "shooting oneself in the foot". This stance reflects the changed mentality in Europe today: seeking balance amid competition.

Building a stable, pragmatic and progressive Sino-German relationship is not only a strategic necessity for Germany but also a key fulcrum for bringing Sino-EU relations back on a healthy track.

During Merz's visit, China and Germany issued a joint news statement, agreeing that mutual respect, mutual benefit and win-win cooperation, continued open dialogue, and cooperation in addressing common challenges are the fundamental principles for developing Sino-German relations.

The comprehensive strategic partnership between China and Germany emphasizes the core role of economic cooperation. China remains Germany's largest trading partner, with trade between Germany and China reaching 253 billion euros ($299 billion) in 2025, an increase of approximately 2.7 percent year-on-year, according to German Federal Statistics Office. German investment in China has also reached a four-year high. More importantly, the economies of China and Germany are highly complementary. Germany's leading position in machinery, chemicals and precision manufacturing aligns closely with China's vision for the 15th Five-Year Plan (2026-30), which is set to strongly promote intelligent and green development.

In this context, Merz's visit to Hangzhou was more than symbolic. He visited Unitree Robotics, a Chinese company developing humanoid robots, and experienced a German brand's intelligent vehicle equipped with Chinese algorithms. This was a comparison of "future competitiveness" between China and Germany, demonstrating a new trend of mutual complementarity and learning in Sino-German cooperation in the field of artificial intelligence and showcasing a deep integration from "limbs" to "brain". Germany possesses globally leading industrial automation expertise, forming the "body" of Industry 4.0, while China has made rapid progress in the application of generative AI, machine vision, and embodied intelligence — the "brain" and "nerves" of AI. If China and Germany can overcome the technical barriers of data compliance and algorithm transparency in the future and jointly define international standards for "intelligent manufacturing", it will greatly enhance the productivity ceiling of Eurasia.

New energy vehicles are currently the most intense area of competition between China and Germany, and even between China and Europe, but also the area with the greatest potential for cooperation. In the past, German machinery led the way; now, "Chinese batteries+software" are redefining the automobile. German automakers such as Volkswagen and BMW have established large-scale R&D centers in Hefei, Anhui province, Shenyang, Liaoning province, and other locations in China, not only valuing the Chinese market but also leveraging China's supply chain advantages to accelerate the global market rollout of their research and development. Faced with EU anti-subsidy investigations and tariffs, China and Germany are transforming pure trade competition into deep industrial integration through investment instead of trade, a model where German companies increase production in China while Chinese companies build factories in Germany. Thus, in the field of new energy vehicle, the relationship between China and Germany has evolved from simple competition and confrontation to a situation of intertwined interests.

In the area of energy transition, 2026 is a crucial year for Germany's energy development, with several major reforms underway regarding decarbonization, power security, energy affordability, and the power grid system. This opens up possibilities for Sino-German cooperation in energy storage and broader energy sectors. Germany has imported over 18 billion euros worth of green technologies from China, contributing to Europe's emissions reduction targets, indicating significant potential for cooperation between the two sides.

Sino-German relations have always been a bellwether and leader in Sino-European relations. Merz's visit to China will have a significant ripple effect on Sino-European relations. First, it will help Europe regain its understanding of China. When Germany demonstrates a rational and pragmatic cooperative attitude toward China, it will provide other European countries, especially those in Central and Eastern Europe and Southern Europe, with a "balanced model" to refer to: upholding economic and trade cooperation even while having political concerns.

Second, the predicament of "over-securitization" between China and the EU can be relieved. For some time, China-EU relations have been hampered by "over-securitization", as if chips and batteries carry political attributes. Merz's visit, with the resumption of intergovernmental consultations between China and Germany, and the definition of the boundaries between "risk" and cooperation, will help promote a return to professional discussion in China-EU relations. Dialogue instead of confrontation should provide the blueprint for China and the EU to resolve their trade disputes, strengthening the resilience of China-EU relations.

Finally, multilateralism remains at the core of Sino-German cooperation. China and Germany, and China and the EU, share broad common interests in addressing global climate change, biodiversity loss and geopolitical hotspot crises. In a world that may face more threats of "isolationism", China and the EU can make great contributions to global stability through rational communication and pragmatic cooperation.

As the world's second — and third-largest economies respectively, China and Germany not only share responsibilities concerning the well-being of the people of both countries but also play a stabilizing role in Sino-European relations and even the global arena in the current turbulent and uncertain international environment.

The author is a researcher at the German Studies Center and Center for Sino-German People-to-People Exchange at Tongji University. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.