00:00Between a squeeze on German manufacturers from cheap Chinese competition and Washington's
00:05persistent hacking away at the foundations of global trade, Germany's Chancellor has
00:10something of a balancing act to perform while on his first trip to China.
00:16Competition stimulates business. Competition is healthy as long as it's fair. China and
00:20Germany have had positive experiences with each other over many decades. For us Germans,
00:25this has been a formative and positive experience. However, the prerequisite is and remains
00:30that our competition is fair and transparent."
00:34Merz knows Germany is overexposed to dependence on China, its largest trade partner. The country
00:40was running a €90 billion trade deficit at the end of last year, and Beijing's cheap
00:45subsidized factories and undervalued currency are being blamed for the loss of 10,000 German
00:51manufacturing jobs a month. Berlin wants to pursue de-risking, reducing its dependence
00:56on cheap Chinese imports in the long term, but knows against a backdrop of global trade
01:01uncertainty it can't turn its back on Beijing altogether.
01:06There's considerable friction in German-Chinese economic relations. Strategically, the Chancellor
01:11has also set out other courses. His recent visit to India is a clear sign. But it's certainly
01:16in the interest of both sides to try to restore this new normality now. This also means making
01:21progress in economic relations.
01:25Beijing, in the meantime, knows it's holding a strong hand. It's presented itself as a guarantor
01:30of stability in the face of US unpredictability, all while unafraid to use access to its monopoly
01:36on rare earths and other resources to push its partners into line. That's something the delegation
01:41of senior business figures accompanying Mertz wants him to address, even as the European
01:46Union itself takes steps to protect itself from what it's called underpriced Chinese imports.
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