Published by Global Banking & Finance Review®
Posted on February 20, 2026
2 min readLast updated: April 3, 2026
Add as preferred source on GoogleGermany’s business lobby warns China’s subsidies, overcapacity and export curbs distort markets and risk price wars. The stance contrasts with Chancellor Friedrich Merz’s cooperative messaging ahead of his Beijing visit.
BERLIN, Feb 20 (Reuters) - German business bosses warned on Friday of what they called destabilising and unfair global business practices by China, ahead of a visit to Beijing by Chancellor Friedrich Merz in which he is expected to focus on cooperation opportunities.
In a position paper seen by Reuters, the powerful lobby group Asia-Pacific Committee of German Business accused Beijing of driving overcapacity, massive subsidies, distortive foreign-exchange policies and politically motivated export controls.
"Chinese competition, systemic risks, dependencies and distortions of competition have intensified significantly and have become a key challenge for prosperity and security in Europe," the paper said.
More trade conflicts with Europe were looming if China continues its increasingly assertive conduct in global trade, it said.
While stressing China's role as a partner in business and innovation, the association called on Europe to unify and prepare a "robust" response.
The Chinese government has repeatedly rejected allegations of unfair trade policies.
'FUTURE COOPERATION'
The business group's warning contrasts with Merz's more conciliatory messaging recently. He said ahead of his visit his goal was to talk "about future cooperation between Europe and Germany on this side and China on that side".
He has been seeking to redefine relations with China to balance out trade barriers erected by the United States.
The lobby group in particular warned that weak domestic demand and an industrial output capacity inflated by Chinese government measures were leading to ruinous global price wars.
(Reporting by Andreas Rinke, Writing by Ludwig Burger, Editing by Linda Pasquini and Jan Harvey)
A leading German business lobby warns that China’s overcapacity, subsidies, FX policies and export controls distort global competition. The warning comes ahead of Chancellor Friedrich Merz’s visit to Beijing.
Distorted pricing and potential price wars can pressure European manufacturers and margins. Heightened EU-China trade tensions could trigger investigations, tariffs or stricter export controls affecting supply chains.
The lobby urges a unified, robust EU response and de-risking—diversifying suppliers, tightening trade defenses, and coordinating policy to reduce strategic dependencies on China.
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