Scholz in China: Balancing Economic Ties and Diplomacy

German Chancellor Olaf Scholz arrived in China, kicking off a trip in which he faces a tough balancing act as he aims to shore up economic ties with Berlin's biggest trading partner.

Scholz touched down in the southwestern megacity of Chongqing , accompanied by a large delegation of ministers and business executives.

As Western allies are cranking up pressure on Beijing, Scholz is expected to underline that Germany remains committed to doing business with the world's second-largest economy and rejects US-led calls for "decoupling".

His friendly overtures towards China risk sparking ire among Washington and EU partners, which have been pushing back against Beijing's heavy subsidies for industries.

"China remains a really important economic partner," Scholz told journalists, adding that he would try to level the playing field for German companies in China.

On the geopolitical front, Scholz will also use his visit to persuade Chinese President Xi Jinping to exert his influence to rein in his Russian counterpart Vladimir Putin and help bring an end to the war in Ukraine.

"Given the close relations between China and Russia, Beijing has the possibility to exert its influence on Russia," said a German government source in Berlin.

The three-day tour through Chongqing, Shanghai and Beijing is Scholz's second trip to China since he took office.

His first in November 2022 took place under intense scrutiny, as it came swiftly after Xi strengthened his grip on power, and marked the first post-pandemic visit by a G7 leader to China.

The German economy shrank by 0.3 percent last year, battered by inflation, high interest rates and cooling exports, and for this year, the economy ministry expects just an anemic growth of 0.2 percent.

Beijing has set an annual GDP growth target of around five percent for this year, but exports plunged more than expected last month.