Germany and China set for deeper trade ties, says economics professor

China's rise as Germany's largest trading partner marks a "very significant development," according to economics professor Horst Löchel, who says the relationship has become essential to growth in both economies. 

Speaking to CGTN, the Frankfurt-based economist noted that the scale of bilateral trade reflects how heavily each side now relies on global markets to stabilize domestic performance.

But Berlin's closer ties come with persistent concerns. German Finance Minister Lars Klingbeil recently urged "fair and transparent market conditions" for European firms operating in China – an issue Löchel says remains a real sticking point. 

European companies, he explained, often feel "a little bit disadvantaged" compared with Chinese competitors and continue to push for better market access and equal regulatory treatment.

Germany is also exposed to wider geopolitical pressures, from semiconductor supply chains to rare earths. 

Löchel argues that Berlin's main response must be to "increase the competitiveness of the German economy again," strengthening domestic industry rather than decoupling from China.

Trade tensions driven by US tariffs are reshaping the picture as well. President Donald Trump's protectionist measures have hit both economies, but Löchel says they have also pushed Germany and China "more together," given both countries' long-standing support for free trade. He even suggests a "new coalition" may be emerging between the two export-heavy nations.

Looking ahead, Löchel says Germany is already adjusting its China strategy, placing economic interests more firmly at the center as the country struggles with sluggish growth at home. As Europe's largest economy – and its biggest trader with China – any shift in Berlin's approach is likely to influence the wider EU.

Despite recent headwinds, Löchel is cautiously optimistic about 2026. He expects Germany to recover, helped by fiscal stimulus and an improving global outlook. That, he says, should lift trade volumes, including with China: "We will have more business in future, which is a very good thing."