EconoScope

(ECNS) -- When German Chancellor Friedrich Merz walked into the showroom of Unitree Robotics in Hangzhou City of East China's Zhejiang Province on 掌上桑植新闻网Thursday, he was greeted by a series of sublime robot performances.

This illustrates that the German government and German businesses are not only closely following China's cutting-edge digital economy innovations, but are also seeking better opportunities to cooperate with each other, said Sun Yanhong, director of the European Economic Research Office at the Institute of European Studies under the Chinese Academy of Social Sciences.

German Chancellor Friedrich Merz visits Unitree Robotics in Hangzhou City, Zhejiang Province on Feb. 26, 2026. (Photo: China News Service/Wang Gang)

Germany has long been renowned for its world-class manufacturing, including mechanical engineering, automotive production, industrial software and automation. While their "Industry 4.0" strategy has guided industrial modernization for more than a decade now, rapid advances in algorithms, large AI models and intelligent hardware have accelerated so much that a new phase is required to move forward in these areas.

In recent years, China has leapt forward with its progress in robotics, intelligent manufacturing and AI deployment in various sectors. Its industrial ecosystem, from core components and system integration to large-scale production and commercialization, has helped them become global leaders. This in turn has intensified competitive pressure on Germany's traditional industrial pillars, including machinery and automotive manufacturing.

Data from Federal Statistical Office of Germany reflects these challenges they have. It shows that although Germany's GDP returned to growth last year after two consecutive years of contraction, manufacturing value-added still declined by 1.3% year on year, with particularly sharp drops in the automotive and machinery sectors.

Against this backdrop, China's importance to Germany continues to grow. Bilateral trade reached 251.8 billion euros ($272 billion) last year, up 2.1%, making China Germany's largest trading partner once again, surpassing the United States, according to the data.

Not only this, but data on trade structure highlights China's critical role in Germany's industrial ecosystem too. Official data show that Germany imported 13.9 billion euros worth of machinery from China, up 11.6% year on year. Imports of electrical equipment rose 14.8% to 32.8 billion euros, while the largest share of imports was for data processing equipment, electronics and optical products, reaching 50.9 billion euros.

These figures underscore China's dual role as both a key market and a crucial supply chain partner for helping Germany upgrade their industrial methods. Meanwhile, Chinese firms are rapidly moving up the value chain in sectors such as new energy vehicles, intelligent manufacturing and biomedicine, areas that were also traditionally dominated by many German companies.

Sun noted that while manufacturing competition between the two nations has intensified, there remains vast potential for cooperation in emerging sectors, including electric vehicles, intelligent manufacturing, and biotechnology.

Hu Chunchun, executive director of the Institute of European Studies at Shanghai International Studies University, said Germany should avoid overemphasizing de-risking narratives, warning that overstating security concerns could ultimately harm its economy.

Merz's stop in Hangzhou reflects these shifting dynamics, as he was accompanied by senior executives from around 30 German companies in various sectors such as automotive, chemicals, pharmaceuticals, machinery and circular economy sectors, reinforcing traditional strengths while positioning for future industries.

As Merz observed embodied intelligence technologies firsthand, the visit offered a glimpse not only of advanced robotics, but of the evolving future of manufacturing in today's world. For German industries, which are trying to navigate their own structural transformation, China's industrial advancement is no longer a distant development, but an increasingly important factor shaping its future.

(By Gong Weiwei)