Germany’s Paradox on China

Germany faces two major challenges with China: an impending economic crisis and Beijing's support for Russia's war in Ukraine. Berlin's overwhelming focus on the economy has revealed a stark paradox — strong rhetoric on Ukraine but no real effort to push Beijing to pressure Russia into a ceasefire.

German Chancellor Friedrich Merz made his first official trip to China this February, where he openly addressed the two countries’ “difficult issues,” particularly their growing economic competition. German exporters are struggling with declining competitiveness relative to Chinese firms, which European companies say are unfairly supported by state subsidies and an undervalued currency.

Current Debates on China

Germany’s trade balance with China has shifted dramatically from a surplus of €20 bn in 2019 to a deficit of €90 bn in 2025. Yet China remains its largest trading partner, with trade worth €251.8 bn. Berlin faces concerns about dependence on Chinese goods, especially in critical sectors such as electric vehicle batteries, rare earths, photovoltaics, and wind energy equipment, as well as about the loss of competitiveness, jobs, and innovation. The EU and Germany are therefore implementing safeguards to reduce this dependence and protect domestic industry. “We will protect our interests and our economy against trade practices by other states that distort competition,” Merz told the Bundestag.

Berlin faces concerns about dependence on Chinese goods as well as about the loss of competitiveness, jobs, and innovation.

Ukraine has also occupied much of Berlin’s attention, as Germany has provided nearly €100 bn to the country since the start of the war, including €55 bn in military aid. Yet discussion of China’s involvement in the war has been limited, and little has been done to translate calls for Beijing to use its influence to pressure Russia into a ceasefire into action.

During his visit, Merz urged Beijing to make a greater effort to push Russia towards a ceasefire in Ukraine. “We know that signals from Beijing are taken very seriously in Moscow,” he said. The two countries released a joint statement declaring their support for a ceasefire in Ukraine: “[The German and Chinese sides] support efforts to achieve ceasefire and lasting peace for Ukraine based on the UN Charter and its principles.” This, however, was mentioned only briefly at the end of the statement, which focused primarily on economic concerns. Increasing evidence of China’s growing support for Russia’s war in Ukraine raises questions about whether security and geopolitical considerations should become a priority in Berlin’s China strategy.

Germany’s Evolving China Strategy

Merz’s CDU–SPD coalition has pledged to rework the Federal Government Strategy on China adopted by Scholz’s government. The document defines China as “a partner, a competitor and a systemic rival” due to “different concepts of the principles governing the international order in important areas.” This followed the EU’s 2019 Strategic Outlook on China, which labelled Beijing as a partner, competitor, and systemic rival. In line with the EU approach, Merz plans to redraft the strategy with “the principle of de-risking” in mind. Since the end of 2025, its revision has become a major priority.

Scholz began the de-risking approach with the 2023 China Strategy, marking Germany’s first serious move away from its historic trade partnership with Beijing. He told Xi that the war in Ukraine was a high priority and unsuccessfully attempted to persuade him to attend an international conference on Ukraine, push Russia towards a peace agreement, and stop selling goods to Russia that could be used on the battlefield. In the 2023 strategy, Ukraine is mentioned a handful of times. “China is not credibly defending the sovereignty and territorial integrity of Ukraine, while at the same time it does support Russian narratives that are directed against NATO. We remain engaged in a dialogue with China and urge China to clearly declare its opposition to Russia’s war of aggression,” it states. It also warned that if China pursued closer arms cooperation with Russia, its relations with the EU and Germany would immediately be affected.

Under Merz, Germany has moved further towards de-risking and removed the term ‘partnership’ from the government’s rhetoric on China, emphasising competition and rivalry. While Merz’s coalition is still developing a China strategy, a March 2026 article published by the Federal Foreign Office described Germany’s relations with China as “multi-faceted and intense.” The article makes no mention of Ukraine but states that Germany hopes to help Beijing in “shaping its commitment in international institutions and in support of a rules-based international order.” In August 2025, Foreign Minister Johann Wadephul said Berlin had been pushing China for some time to take a more active role in the peace process in Ukraine. “Hardly any other country, any other government, has such a strong influence on Russia as China. Unfortunately, China hasn’t used its opportunities so far, but it is never too late,” he said. Now that the government is reworking its strategy and more details of Chinese–Russian collaboration have emerged, this is the moment to press China harder on Ukraine.

How China’s Support for Russia Has Changed German Thinking

China’s stated position on Ukraine proclaims respect for the sovereignty of all countries and international law, seemingly distancing Beijing from Russia. It said it would play a “constructive role” in helping the two countries resume peace talks and was willing to provide assistance with post-conflict reconstruction. China has since repeatedly claimed neutrality in the conflict, yet Beijing’s actions have proven otherwise.

Before the invasion, on 4 February 2022, China and Russia committed to intensifying their cooperation, rejected further enlargement of NATO, and claimed regional spheres of influence. They also pledged to conduct military exercises to rehearse coordination between their armed forces. Since western sanctions were imposed on Russia following the invasion, China has become Russia’s top trading partner, and western leaders have also accused it of providing dual-use exports. In a joint declaration in 2024, NATO leaders labelled China a “decisive enabler” of the war against Ukraine and declared that it was providing “large-scale support for Russia’s defense industrial base,” urging Beijing to cease its support. In September 2025, Reuters reported that experts from Chinese companies had helped a Russian attack-drone manufacturer with technical development work. The two firms were sanctioned by the EU in April 2026. In June 2026, the European Council adopted a package of restrictive measures, including some targeting Chinese companies supplying critical components to the Russian defence sector.

Reuters reported in May 2026 that China’s armed forces had secretly trained Russian servicemen at People’s Liberation Army (PLA) installations in November 2025. In June, EU High Representative Kaja Kallas announced that the bloc had verified reports that the PLA had trained Russian soldiers who were later deployed to Ukraine. They were taught by elite Chinese instructors in advanced drone operations and electronic warfare.

Beijing’s support for Russia has also deepened Germany’s view of China as a geopolitical rival.

The reports have undermined Beijing’s claims of geopolitical neutrality and escalated the EU’s confrontation with China. Germany requested urgent talks with the Chinese ambassador in early July. “Anything that enables Russia to continue its war of aggression against Ukraine also threatens our security. Consequently, China’s decisive and growing support for Russia’s brutal war of aggression directly impacts our security,” a German foreign ministry spokesperson said. On 13 July, the bloc’s foreign ministers adopted a strategic position paper formally labelling China a “key enabler” and “crucial enabler” of Russia’s war effort. Chinese foreign ministry spokespersons responded that this was “pure slander and smearing.”

Private discussions within the EU on whether further measures are needed in response to the training are now taking place — a shift away from the historical prioritisation of trade in relations with China, according to Reuters. One EU official said that the bloc had to stop viewing China through an economic lens and instead see it as what Kallas described as a “decisive enabler of Russia’s war.” Beijing’s support for Russia has also deepened Germany’s view of China as a geopolitical rival. This perception now encompasses the threat China poses to the international order and European security by enabling Russian aggression, rather than focusing only on its authoritarian system. It has also made economic de-risking even more important, as Germany has recognised the dangers of overreliance on autocratic countries in light of its experience with Russian gas.

Is Russia Shaping German Perceptions of China?

While China’s support for Russia has altered government perceptions of the country, it is less clear how it has affected public opinion. Two-thirds of Germans have an unfavourable view of the country, but this is shaped mostly by economic concerns: 59% of Germans regard China as a major economic threat, while only 9% do not see it as such. Yet only 34% were concerned or very concerned about Chinese influence in Germany.

Overall perceptions of China declined after 2020, first amid the Covid-19 pandemic and then following Russia’s full-scale invasion of Ukraine, as Germans who see Russia as a threat and support Ukraine are also more likely to view China’s global influence negatively. However, since 2024, China’s image in Germany has been improving. At the end of 2025, 50% of Germans viewed the country’s increasing influence negatively, down from 61% the previous year.

While China’s support for Russia has altered government perceptions of the country, it is less clear how it has affected public opinion.

Russia has begun to shape German perceptions of China, but economic concerns remain their dominant driver. Even as Russia’s full-scale invasion of Ukraine has continued, unease among Germans about Beijing’s growing influence has declined. This creates a paradox: although Germans prioritise European security and China has become increasingly involved in the war, Russia’s invasion does not appear to be the main factor shaping their views of the country.

Trade and Security

The Federation of German Industries (BDI) emphasised in 2023 that Germany must reduce its dependence on raw materials and intermediate goods as quickly as possible in response to growing geopolitical tensions and pursue a long-term diversification strategy. By August 2026, however, its position had become more forceful. BDI chief Tanja Gönner warned that the country was experiencing a “China Shock 2.0,” which was affecting German industry through its reliance on critical raw materials, and said that Europe needed to be more assertive towards China. Yet many German firms are struggling to move away from China. Trade reached €185.9 bn between January and September 2025. According to Matthias Rüth, managing director of Tradium, doing so is difficult when China dominates critical markets, such as rare earths, and business relationships are already longstanding. Rüth said Tradium had not faced government pressure to de-risk from China, only market pressure.

German car companies are particularly tied to China despite a significant deterioration in their competitive position. BMW recently invested in a battery project in Shenyang and had no major plans to pivot away from China. A BMW spokesperson said that there were currently no fundamental changes underway in the company’s ties to the country. Volkswagen, BMW, and Mercedes-Benz committed around €11 bn in China in 2022 and have since each invested billions in various projects there. Yet this continued investment comes as German carmakers face growing competition in the Chinese market. German brands’ share fell by 33% on average between 2020 and 2025.

The firms’ position conflicts with that of the new government, which is pushing for de-risking from China after historically encouraging business with the country. “I always tell them when I meet them: ‘That’s your risk if things go wrong, please don’t come to us,’” Merz said.

China may increasingly be viewed as a strategic economic competitor, making Berlin more willing to prioritise security considerations in its China policy.

The German Association of the Automotive Industry (VDA) said that while “the necessary de-risking is being pursued and implemented vigorously by companies in the automotive industry,” it must also be “enabled politically, not merely demanded.” This entails promoting Germany as a business location, as well as improving competitiveness and growth, thereby fostering innovation within the country.

For decades, German industry’s dependence on the Chinese market provided a strong incentive for Berlin to preserve close economic relations with Beijing. This is becoming less sustainable as Chinese industry competes ever more directly with German firms and the long-term trajectory of the German automotive sector is unfavourable. China may increasingly be viewed as a strategic economic competitor, making Berlin more willing to prioritise security considerations in its China policy. If the commercial benefits of maintaining that relationship diminish while the security costs of China’s support for Russia increase, Berlin may be less motivated to avoid confrontation with China over Ukraine. Germany and France’s joint roadmap on China, which is currently being developed, could become an important vehicle for this new position and could pave the way for Europe to follow.

Time for Berlin to Follow Through

The war in Ukraine is a top priority for Germany and for the future of European security, but Berlin has thus far failed to follow through with extensive pressure on China over Ukraine, instead prioritising its economic relations with the country. China could undoubtedly play a vital role in helping to nudge Russia towards ending the war because of its close relations with Moscow. It is therefore in the interests of Germany and the EU to take the lead in pushing Beijing to pressure Russia and cease its support. Moreover, as Berlin begins implementing its de-risking strategy towards China, security will carry greater weight and further questions about Beijing’s involvement in Ukraine will be brought to the forefront of discussions. Now, amid rising trade tensions and questions about Chinese access to the EU market, the EU and Germany may have an opportunity to gain leverage over China.

Views expressed in ICDS publications are those of the author(s).