Economics

Feb 18, 2026 Dalia Marin

Requiring Chinese companies that want to sell high-tech products in Europe to form joint ventures with local firms would go a long way toward strengthening the competitiveness of European industry. With its market having become a lifeline for China, the EU needs to recognize the strength of its bargaining position.

MUNICH – As German Chancellor Friedrich Merz prepares to visit China, evidence of the growing imbalance between the two countries is piling up. Germany, Europe’s largest economy, reports that its GDP grew just 0.2% in 2025, whereas China recorded a record-high trade surplus of $1.19 trillion. These data are not unrelated: Goldman Sachs estimates that, were it not for Chinese competition, German growth would have reached 0.5%.