Xi Jinping proposes economic union to Germany amid trade conflict with EU

Chinese leader Xi Jinping proposed to Berlin the formation of a new model of interaction based on equality, mutual benefit, and strategic stability. He put forward this initiative during a meeting with German President Frank-Walter Steinmeier on 30 October 2026 in Beijing. Steinmeier is in the PRC for a five-day state visit.

Focus on technology instead of protectionism

The Chinese leader called on the two largest economies in Asia and Europe to abandon confrontation and protectionism, instead expanding trade, investment, and technological exchange. Priority sectors for cooperation were identified as artificial intelligence, automotive manufacturing, the digital economy, "green" energy, and the services sector, reports China Daily.

Trade balance: $211 billion in exchange

Despite ongoing disputes with the European Union, trade turnover between Beijing and Berlin in 2025 grew by 4.6% and reached $211.11 billion. As a result, China again became Germany's main trading partner in the world, while Germany retained its status as a key partner for China among EU countries.

Meanwhile, total trade in goods and services between the EU and China in 2025 exceeded €880 billion. However, the structure of the exchange remains imbalanced: imports of Chinese goods to Europe amounted to €571.3 billion, while exports of European products to the PRC were only €199.5 billion. This led to a deficit exceeding €370 billion and intensified tensions over issues of subsidies, market access, and export restrictions on strategic raw materials.

Conditions for investors and political guidelines

Xi Jinping called on German businesses to intensify investments in China, promising to improve the business climate and open new sectors for cooperation. At the same time, he demands fair and non-discriminatory conditions for Chinese companies operating in Germany.

Frank-Walter Steinmeier confirmed Berlin's adherence to the "one China" policy, the principles of the UN Charter, and the rules of the World Trade Organization. However, ahead of the meeting, the German president warned that Beijing's pursuit of economic self-reliance should not create dependence for other states. Berlin expresses concern over state subsidies to Chinese producers, restrictions on European firms' access to the PRC market, and China's control over critically important raw materials.

Automotive industry: Volkswagen developments in Hefei

A key element of the visit was the tour of the Volkswagen Group China Technology centre in the city of Hefei (Anhui province). This is the largest research and development complex of the conglomerate outside Germany, where approximately 3,000 engineers and technical specialists are developing intelligent electric vehicles.

Volkswagen's Chinese division received permission for road testing of third-level (L3) autonomous driving systems and expects to prepare the technology for implementation in 2027. Steinmeier proposed more actively implementing Chinese developments in the German and European automotive industry.

Cooperation prospects and international context

Xi Jinping also proposed to deepen exchange in the fields of education, culture, and science, simplify the visa regime by the 55th anniversary of the establishment of diplomatic relations in 2027, and strengthen coordination of positions in international organisations.

Steinmeier, who visited China for the eighth time in 25 years, emphasised the need to uphold international law and avoid the formation of new economic blocs.

This trip takes place following German Chancellor Friedrich Merz's visit to China in February. Meanwhile, Germany and France are discussing new EU instruments to counter unfair trade practices. Beijing proposes to deepen economic partnership, while Berlin seeks to achieve more equal trading conditions and protect its own industry.