Steinmeier urges German businesses to leverage strengths in China

German technology is highly regarded in China, German President Frank-Walter Steinmeier said during a state visit on Tuesday, urging Germany's business community to focus on its own strengths when dealing with its top trading partner.

"When travelling here, Germans may be surprised at just how highly Germany and German technology are still regarded in China," Steinmeier said in the city of Hefei, the first stop on his multi-day visit.

He said German business leaders should therefore "act with self-confidence on the markets" and when cooperating with China.

Steinmeier also called for Europe to reposition itself and reorganize its economic instruments against the backdrop of its growing trade deficit with China. 

"The trade surplus that China is accumulating naturally causes us concern because the successful model of economic cooperation is becoming unbalanced," he said.

"We must strive to ensure that economic cooperation does not come to an end, but that it continues - to the mutual benefit of both sides."

Germany's trade deficit with China amounted to just under €90 billion ($100 billion) last year. According to the Federal Statistical Office, China exported goods worth €170.6 billion to Germany, whilst German exports to China were valued at €81.3 billion.

Across the EU, the deficit amounted to almost €197 billion in the first half of 2026, according to EU Trade Commissioner Maroš Šefčovič.

Steinmeier tours VW plant

Steinmeier also visited Volkswagen's plant in Hefei, where the German carmaker has set up a research and development centre for the Chinese market against the backdrop of its sluggish sales there.

The company says it aims to shorten development times for new models and significantly cut costs to help it become competitive again in the world's largest car market.

"This site is the heart of our 'In China for China' strategy," explained Ralf Brandstätter, managing director of the Volkswagen Group China.

He said the company's development of new cars in Hefei is 30% faster and up to 40% more cost-effective than before.

The site is the VW Group's largest development centre outside Germany, employing more than 3,000 vehicle and software engineers focused on smart electric vehicles.