German industry presses Merz for tougher China policy

German industry is urging Chancellor Friedrich Merz to adopt a tougher stance against China, citing unfair competition from Chinese manufacturers. This shift in sentiment comes amid concern over subsidies and state support that have helped Chinese firms gain market share in Europe. According to an OECD report, Chinese manufacturers received three to eight times more state support than their counterparts relative to revenue, contributing to nearly 60% of their global market-share gains.

Germany's trade deficit with China widened by €22 billion last year, driven by rising imports and falling exports. Merz's government has called for proposals to address trade imbalances, while German industry groups advocate for faster implementation of existing trade policies and adjustments to anti-dumping and anti-subsidy proceedings.

Despite concerns, China maintains that its practices are not unfair. The industry fears retaliatory measures from Beijing and emphasizes the need to level the playing field, calling for better protection and regulations.