German Chancellor Olaf Scholz said he would raise trade, the war in Ukraine and climate issues as talks with Chinese leader Xi Jinping started in Beijing, underscoring the growing list of topics the two sides have to address.

Scholz said Tuesday just before the meeting with Xi that Germany and China benefit from rules-based free trade order, and he wanted to discuss how the nations can further develop the World Trade Organization. Scholz is on the final leg of his four-day trip to his nation’s main trading partner. He earlier warned Chinese officials to address overcapacity and treat foreign firms better.

Scholz also said he’d talk to Xi about “how we can contribute more to a just peace in Ukraine.”

Xi said touted the importance of China-Germany ties as the world faces “increasingly more challenges and risks”. He added that the two nations should “join hands to inject more certainties” to the world.

Scholz was also set to meet Chinese Premier Li Qiang later in the day.

The visit comes as tensions between China and the European Union (EU) EU and the US are rising over trade and the war in Ukraine. The bloc has kicked off probes into Chinese subsidies for electric vehicles (EVs) and support for windparks, and will soon launch an inquiry into the procurement of medical devices.

US Treasury Secretary Janet Yellen said on a visit to China earlier this month that the vast output of China’s factories had become a global problem. The US won’t take “anything off the table,” including the possibility of additional tariffs, to stem the flood of Chinese goods, she told CNN over the weekend. 

Beijing has dismissed charges that the rapid growth of its EV industry was due to government subsidies as “groundless,” instead pointing to its innovation prowess.

The criticisms come as Xi leans on his nation’s massive manufacturing industry to reinvigorate economic growth that has faced headwinds from an unfolding property crisis, deflationary pressures and lackluster consumer demand. 

Europe has been unhappy with China since the start of the fighting in Ukraine in early 2022. Beijing has provided Moscow with diplomatic and political support, and trade between the nations hit a record US$240 billion last year, cushioning Western economic sanctions.

“Russia’s war against Ukraine is not only a problem for Europeans,” Scholz said earlier on his trip to China. “It’s something that everyone in the world needs to worry about.”

China says it has not and will not seek to benefit from the war.

Scholz’s visit to the world’s No 2 economy also comes as German firms complain that they face unfair business practices in the Asian nation. The problem threatens to push up costs and erode profit margins, respondents to a recent survey by the German Chamber of Commerce in China said.

Scholz told an audience of university students on Monday in Shanghai that “competition must be fair”.

  - Bloomberg