German industry associations are publicly calling for a more assertive German and European Union policy toward China, citing what they describe as unfair competitive practices from Chinese companies. The discussions come as political leaders, including opposition leader Friedrich Merz, formulate their positions on economic relations with Beijing.
The Federation of German Industries (BDI) has repeatedly highlighted challenges for German companies. In statements regarding Germany’s national security and China strategies, the BDI has pointed to market distortions caused by Chinese state subsidies, difficulties in market access for foreign firms in China, and forced technology transfers. These concerns are particularly prominent in the automotive sector, where German carmakers face increasing competition from Chinese electric vehicle (EV) manufacturers.
These industry concerns have been echoed at the European level. In October 2023, the European Commission officially launched an anti-subsidy investigation into battery electric vehicles imported from China. The Commission stated the probe would determine whether EV value chains in China benefit from illegal subsidization and whether these subsidies cause or threaten to cause economic injury to EU producers.
The debate has intensified within Germany’s political landscape. Friedrich Merz, the leader of the Christian Democratic Union (CDU), Germany’s main opposition party, has advocated for a more robust stance on China. In public addresses, Merz has criticized the current government’s approach and emphasized the need to reduce economic dependencies while protecting German industrial interests from what his party terms systemic rivalry.
Chancellor Olaf Scholz’s governing coalition released its formal “Strategy on China” in July 2023. The 64-page document outlines a policy of “de-risking, not decoupling.” The strategy paper acknowledges China as a partner, competitor, and systemic rival. It calls for reducing critical dependencies in sectors like raw materials and semiconductors but reaffirms Germany’s commitment to economic engagement with its largest trading partner.
According to the Federal Statistical Office of Germany, Destatis, goods worth €254.1 billion were traded between Germany and China in 2023, making China Germany’s most important trading partner for the eighth consecutive year. This economic interdependence complicates policy decisions, as many large German corporations, including automakers Volkswagen and BMW, rely heavily on the Chinese market for a significant portion of their sales and profits.
As the debate continues, industry groups, government officials, and political parties continue to weigh the balance between maintaining critical economic relationships with China and addressing concerns over long-term industrial competitiveness and security.
