The situation
On October 28, China’s Foreign Ministry called on Germany and the European Union to resolve differences through dialogue and consultation and to preserve stable, unimpeded industrial and supply chains. The response followed Chancellor Friedrich Merz’s October 27 speech in Singapore, in which he said Germany and Europe would pursue and diversification rather than economic decoupling.
Merz identified supply chains, technologies and critical raw materials as areas where Europe should reduce one-sided dependencies. Neither side announced a tariff, export control, investment-screening decision, enforcement measure or binding agreement.
Why it matters
The exchange highlights a continuing gap between Europe’s effort to reduce strategic exposure and Beijing’s preference for maintaining integrated supply chains. For companies dependent on China-linked inputs, the immediate position remains unchanged: there is policy signalling but no new operating restriction.
The practical test will be whether Germany or the EU converts rhetoric into specific sourcing, technology or critical-minerals measures, or whether consultations contain the dispute.
Current state
Present conditions are unsettled at the policy level: Germany is advocating reduced one-sided dependencies in supply chains, technologies and critical raw materials, while China is urging dialogue and stable, unimpeded supply chains. No new binding trade or regulatory measure has been announced.
Impacts
Trade & Supply Chains
Germany’s stated push to diversify away from one-sided dependencies raises policy uncertainty for China-linked supply chains in technology, critical raw materials and industrial inputs, though no operating rule has changed.
Diplomacy
Beijing’s call for consultation keeps a diplomatic channel open while underscoring disagreement over Europe’s strategic economic posture.
Economic Pressure
There is no verified new tariff, export control, investment-screening decision or enforcement action; current pressure is limited to policy signalling.
What to watch
Key questions
- Do Germany or the European Union announce a specific de-risking measure affecting sourcing, technology, critical raw materials, investment screening or trade with China?
- Do Chinese and German or EU authorities begin formal consultations that produce an agreed supply-chain or trade outcome?