The Year of the Fire Horse in China is only a few days old. The Chinese government has said that Germany’s Chancellor Friedrich Merz will meet with both Chinese President Xi Jinping and Premier Li Qiang. Merz has announced that this visit will elevate cooperation with China to a new strategic partnership, and the size of his delegation indicates the seriousness of this claim. Maybe the unique 60-year event of the Year of the Fire Horse (as opposed to the simple regular Year of the Horse) provides a good metaphor for that.
China once again became Germany’s most important trading partner in 2025, overtaking the U.S. In 2025, the German trade deficit with China rose to €90 billion—€30 billion above the level of the year before—and dropping sales of cars and machines to the Chinese, who have technologically advanced themselves, convinced German industries to make €7 billion in new direct investments in China over the past year to compensate for part of the lost revenue from declining exports, particularly of cars, with increased production onsite in China. China’s trade with Germany increased by 2% last year. There is more readiness to engage in new joint ventures, which the Chinese are offering to also produce for exports to third countries with an increasing demand for high-quality products.
