German Chancellor Friedrich Merz just finished his two-day state visit to China this week with both sides vowing to deepen economic ties while airing sharp differences over trade imbalances, security concerns and fair competition.

In recent weeks, Germany has made a decision to consider blocking a Chinese takeover of a retailer, and its scrutiny of a wind farm project has led to the dropping of a Chinese supplier.

Yesterday, China and Germany signed a Memorandum of Understanding (MOU) on Cross-Border Data Flow Cooperation, another step to mitigate regulatory obstacles on data transfer, which plays an critical role in the auto industry.

Chinese President Xi Jinping met with German chancellor Olaf Scholz today during Scholz's three-day China trip. Xi defended China's exports and called for bilateral collaboration, especially in machinery, automobiles, and the green transition, while Scholz highlighted market access and the regulatory environment in China.

At the 6th China International Import Expo (CIIE), German companies have had a strong presence and reportedly signed deals with Chinese partners on energy, construction, and manufacturing. Germany's continued engagement in the market is crucial to China, as it plays a pivotal role in China-EU relations.

Over the weekend, China's Vice Premier He Lifeng and Germany's federal minister of finance Christian Lindner co-chaired the third financial dialogue in Frankfurt. The two sides made commitments on trade, investment, and regulatory cooperation.

As the EU seeks to work out a way forward in its economic relations with China, dealing with related security and rights issues as well, its key member states are also having internal discussions on these issues. Germany is the largest economy in the EU and its position on these