Germany’s major business groups are pressing opposition leader Friedrich Merz to set out a clear stance on China, calling for firm rules on competition and export controls. The call comes as companies weigh risks from trade tensions and shifting EU policy. Industry leaders want predictability as they plan investment and supply chains that tie Europe’s largest economy to its top trading partner.
German business groups urged Merz to send a clear signal to China on competition and export controls.
The appeal targets a key figure who could shape policy after the next federal election. It reflects growing concern over market access in China, alleged subsidies that distort pricing, and tighter European oversight of sensitive technologies.
Why Business Wants Clarity
German firms rely on sales and sourcing in China. China has been Germany’s largest single trading partner since 2016. Automakers, machinery makers, and chemicals groups are deeply exposed through joint ventures, factories, and local suppliers. Many midsize companies also depend on Chinese demand for specialized equipment.
At the same time, more companies report disputes over public procurement, unequal treatment, and pressure to transfer technology. EU investigations into state support for electric vehicles and other sectors have added to uncertainty. Exporters now face more screening on dual-use items, advanced chips, and key production tools.
Executives say they can plan under strict rules, but not under shifting or unclear ones. They want a line of policy that balances national security and open trade, and that matches EU frameworks to avoid one-off national moves.
The Policy Crossroads
Berlin and Brussels have moved from “engagement first” to a strategy of de-risking. The approach seeks to cut critical dependencies without cutting trade. Germany’s own China strategy, published in 2023, raised screening of outbound investment and supply chains. It also linked trade ties to fair market access and security goals.
The EU has begun using tools that test subsidies and may impose tariffs on certain Chinese products. Export controls on cutting-edge semiconductors and select manufacturing gear have tightened in coordination with partners. German companies watch these steps for their impact on revenue and compliance costs.
- Clear fair-competition demands, including on subsidies and public tenders
- Export controls aligned with EU and G7 rules
- Targeted, risk-based measures on sensitive tech
- Regular consultation with industry before new steps
Merz’s Calculus and the Business Message
As leader of the conservative CDU/CSU bloc in opposition, Merz has criticized Beijing on security and human rights while backing closer EU coordination. He has also called for stronger domestic competitiveness. Business groups now seek specifics on how a government he leads would balance firmness with openness.
The message is pragmatic: be tough on unfair practices, but avoid blanket decoupling. Leaders argue that German strength at home—energy costs, tax policy, and labor skills—must pair with a stable external policy. They also want reassurance that small and midsize exporters will not be caught by complex rules meant for a narrow high-tech set.
Industry Split Shows the Stakes
Views differ by sector. Carmakers and suppliers worry about retaliation if tariffs rise on Chinese EVs, and about losing market share in China. Machinery firms fear copycats and subsidized rivals, but still see China as vital for growth. Chemicals groups face weak demand at home and look to China for volume, yet warn about overcapacity and price pressure.
Labor groups and some manufacturers back tighter controls to protect know-how and jobs. Consumer groups warn that sudden limits could raise prices. This mix suggests any policy will create winners and losers, making clarity even more important.
What to Watch
Several developments will shape the path ahead. The EU’s anti-subsidy probes and any resulting duties will test supply chains. Berlin’s stance on outbound investment screening could influence corporate expansion plans. Coordination with the United States and other partners on semiconductor and AI controls will set global norms.
Merz’s response matters because companies are planning budgets and capacity for 2025 and beyond. A defined signal would help them judge risk in contracts, insurance, and inventory. It would also show how a future government might align with EU trade tools while defending strategic industries.
The business appeal frames a simple trade-off: protect core technologies and fair markets without choking legitimate commerce. Clarity from political leaders could reduce uncertainty premiums and steady investment. Germany’s next steps on China policy will guide how its export engine adapts to tougher competition and tighter controls, and whether it can keep growth while managing risk.
