A future German coalition government could take a "more rational" approach to China policy, a former Chinese envoy to Germany says, pointing to likely chancellor Friedrich Merz's focus on the economy and trade.

Centre-right election winner Merz, leader of the Christian Democratic Union, is trying to put together a coalition government with the centre-left Social Democrats. The chance of the China-critical Green Party securing a position in the new leadership, however, appears slim.

According to Wu Ken, who was China's ambassador to Germany from 2019 to 2024, a Merz-led government could be expected to focus on the two countries' economic ties.

"This stems primarily from Merz's long-standing emphasis on the economy, particularly in trade," Wu said. "More measures to secure economic and trade relations between the two nations could be implemented ... I remain confident about the prospects."

During his diplomatic posting, Wu had extensive exchanges with Merz and Social Democratic Party co-leader Lars Klingbeil, who is in talks to form a coalition government.

"These two figures certainly do not see China in exactly the same way, especially in terms of how to perceive China and its development," Wu said. "However, one thing they agree on is that China is an indispensable partner to Germany."

Wu Ken, who was China's ambassador to Germany from 2019 to 2024, is expecting "positive energy" in relations under the new German leadership.

Wu anticipated a fresh outlook for China-Germany relations under the new government after outgoing Foreign Minister Annalena Baerbock, of the Green Party, leaves office.

"Whichever of the two parties sends someone to be foreign minister, I think it will bring a new look - that is, positive energy - in terms of cooperation and advancing the relationship with China," Wu said.

On China relations, he expected a new Merz administration to try to strike a balance between the approach of the outgoing Olaf Scholz government and that of Angela Merkel, when trade and economic ties served as an anchor for ties between the two nations.

"Her approach ensured that the Sino-German relationship remained steady and continued to develop smoothly over the long term," Wu said.

Relations between China and the European Union have been strained in recent years, including over Beijing's ties with Moscow since Russia invaded Ukraine, and alleged Chinese industrial overcapacity, unfair subsidies and the large trade deficit.

Wu said ideological factors were increasingly part of the bilateral relationship and that Germany's stance on China since 2023 - as a partner, competitor and systemic rival - was "perplexing".

"In my view, this strategy has not only failed to advance Sino-German relations but has, in some areas, hindered the progress of bilateral ties, especially on trade and the economy," he said.

"These classifications seem to lack a clear basis and rationale, fragmenting China into three segments without clear distinctions. Even I, as the ambassador to Germany, found myself uncertain of when I was considered a partner, a competitor, or an adversary."

Relations have been strained between China and the European Union. 

The Greens, one of three parties in Scholz's last coalition government and holder of the foreign ministry portfolio, were the driving force behind Berlin's first-ever and rigorously worded China strategy in July 2023.

The strategy emphasised the need to de-risk, diversify and reduce Germany's reliance on China. It also called for tariffs to be applied - including EU levies on Chinese electric vehicles - to counteract the influx of inexpensive Chinese imports into the region.

The Greens also regard Russia's ongoing war in Ukraine and the broader global conflict with authoritarian regimes like China as catalysts for a strategic realignment of the country's economic security, trade and supply chains.

From 2016 to 2023, China was Germany's largest trading partner. But last year the United States overtook China in this position as German exports to China fell by 7.6 per cent. Despite this shift, China has remained an important trading partner as Germany's economy contracted in the past two years, adding to urgency for the new government to address economic challenges.

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