Germany's Foreign Minister Demands Fair Trade Amidst Rising Tensions with China

Berlin, Germany – German Foreign Minister Johann Wadephul has intensified his calls for fair and rules-based trade with China, signaling a significant shift in Germany's economic diplomacy towards its largest trading partner. This renewed push comes amidst growing concerns over Chinese trade practices, critical supply chain dependencies, and Beijing's geopolitical stances, underscoring a complex and evolving relationship that now demands a more equitable footing. The minister's recent diplomatic engagements and candid statements highlight Berlin's determination to address long-standing imbalances and protect German and European economic interests in an increasingly volatile global landscape.

Germany's Deepening Economic Interdependence and Shifting Dynamics

For decades, the economic relationship between Germany and China has been a cornerstone of global trade, characterized by mutual benefit and industrial complementarity. China remains Germany's most important trading partner, with extensive ties across key sectors. However, this interdependence has increasingly revealed vulnerabilities for the German economy. Germany is heavily reliant on China for crucial intermediate inputs, particularly rare earth minerals and semiconductors, which are vital for its automotive, electronics, and defense industries. This reliance has exposed German manufacturers to significant risks from potential supply chain disruptions and Chinese export controls.

Experts at the Deutsche Bundesbank have warned that while an economic crisis in China might be manageable, an abrupt decoupling, potentially triggered by geopolitical events, could deliver a "far heavier blow to German industry." Sectors such as mechanical engineering and electrical engineering, in addition to automotive, exhibit significant reliance on Chinese demand and supply. The traditional model of complementary trade links, where Germany provided high-tech goods and China offered manufacturing capacity, is now largely considered obsolete. Instead, the new normal involves displacement in key industries, fierce competition in external markets, and a "China shock 2.0" manifesting through market distortions and surplus capacities from Chinese output, particularly impacting the European single market. German exports are reportedly falling, while European businesses continue to face challenges in securing fair market access in China.

The Core of Wadephul's Demands: Addressing Unfair Practices

Foreign Minister Wadephul has consistently articulated Germany's demand for reciprocal and fair market conditions. A central point of contention involves China's export restrictions on critical raw materials and technologies, notably rare earths and semiconductors. These controls have caused considerable concern for German companies and have spurred the European Union to propose multi-billion-euro plans to mitigate its dependence on China for these essential materials. Wadephul emphasized that while Germany does not support protectionism and favors free world trade, it is crucial to monitor "indirect state influence" that could lead to competitive imbalances.

Beyond raw materials, the minister has voiced concerns over overcapacity in crucial sectors like electromobility and steel. These issues, he stated, are "central to the German economy" and must be addressed directly with Beijing. The push for fair trade also implicitly includes stronger protections for intellectual property and equitable treatment for foreign companies operating in China, areas where European businesses frequently report disadvantages. The German government aims to identify "where we can strengthen our economic relations, but also determine where obstacles exist."

Geopolitical Strains and the Imperative of "De-risking"

Germany's economic concerns are increasingly intertwined with broader geopolitical tensions, which Wadephul has not shied away from addressing. He has publicly criticized China's "increasingly aggressive behavior" in the Taiwan Strait and the East and South China Seas, warning that any escalation in these vital international trade hubs would have severe consequences for global security and the world economy. Wadephul underlined that China, as a permanent member of the UN Security Council, must respect international law and the international order.

Moreover, China's role in the ongoing conflict in Ukraine has emerged as a significant point of divergence. Wadephul has urged Beijing to use its influence to promote peace and has criticized China for providing "crucial support" to Russia, particularly through the supply of dual-use goods, stating that "80 percent of the dual-use goods that Russia uses come from China." These candid remarks have strained diplomatic relations, notably leading to the postponement of Wadephul's planned visit to China in October 2025 after Beijing only confirmed a limited number of meetings. Reports suggested Beijing sought a retraction of his criticisms regarding Taiwan and Ukraine as a precondition for broader high-level meetings, a condition the minister apparently did not accept.

Despite these tensions, Germany maintains its "One China" policy but insists that any change to the status quo in the Taiwan Strait must not be violent. The confluence of economic dependencies and geopolitical frictions has solidified Germany's commitment to a "de-risking" strategy, aimed at reducing one-sided dependencies and diversifying its supply chains, while balancing partnership, competition, and systemic rivalry.

Navigating a Complex Future: Dialogue Amidst Disagreement

The challenges facing Germany's relationship with China necessitate a recalibration of strategy, pushing for a more robust and unified European approach. Wadephul's rescheduled visit to China in December 2025, following the earlier postponement, underscores the German government's commitment to sustained dialogue despite significant disagreements. During this trip, he plans to engage Chinese counterparts on economic ties, supply chain reliability, and broader international issues including human rights and regional disputes.

German Chancellor Friedrich Merz has also affirmed the government's stance, emphasizing the need to assertively advocate for compliance with industrial and trade policy rules and to reduce one-sided dependencies. This involves fostering new trade agreements and strengthening partnerships in regions like the Indo-Pacific to diversify economic engagements. The dialogue with China, as articulated by German officials, is seen as indispensable, even if perspectives diverge significantly. The goal is to reshape Germany's China policy to navigate the profound global upheaval and ensure that German interests are safeguarded through strategic cooperation within the EU and with international partners.

Conclusion: A New Era of Conditional Engagement

Germany's push for fair trade with China reflects a broader re-evaluation of its foreign and economic policy, moving towards a more assertive and values-driven engagement. Foreign Minister Wadephul's direct address of critical trade imbalances, coupled with his strong stance on international law and geopolitical issues, marks a definitive shift from a solely economically driven relationship. The recurring emphasis on "fairness" is not merely rhetorical but represents a strategic imperative for Germany to secure its economic resilience and uphold international norms. As Germany seeks to "de-risk" and diversify its global economic ties, the coming years will likely see a more conditional and demanding approach in its interactions with Beijing, balancing the undeniable benefits of trade with the necessity of safeguarding national and European interests in an increasingly competitive and multipolar world.