Friedrich Merz became German chancellor at a time when the global economic landscape was seeing deepening economic fragmentation, heightened geopolitical tensions and a fraying multilateral trading system. Amid these uncertainties, Germany's foreign and economic policy has retained its foundational commitment to openness, export orientation and global network building, while concepts such as risk diversification, economic resilience, strategic sovereignty and value-driven cooperation have grown increasingly prominent. These developments have inevitably been intertwined with the future of China-Germany economic relations, which bring both opportunities and challenges.

China has been Germany's leading trading partner for many years, with their economic and trade ties rooted in solid practical foundations and profound structural cohesion. Even as the international environment is fraught with risks and lingering political differences, their complementarity enables China and Germany to continue tapping broad cooperation potential across industrial structures, market scale and technological trajectories. The important question is: How can both sides identify priority areas for collaboration in tune with Germany's new policy and uphold multilateralism and free trade through pragmatic engagement?

First, high-end manufacturing offers significant opportunities for China and Germany to cooperate. Germany excels in mechanical engineering, industrial automation, specialized equipment and system integration for complex production processes. In comparison, China boasts large industrial scale, efficient supply chains and a vast domestic market, all of which enable rapid application of innovations. As the global industry pivots toward digitalization, efficiency gains and flexible production capability, China and Germany can make joint efforts not only to boost mutual competitiveness but also to stabilize global value chains through co-development, industrial coordination and standard alignment.

Second, new energy and green industries present particularly promising prospects for cooperation. Germany is a global leader in energy transition, renewable energy deployment, environmental technology and sustainable finance. China has, meanwhile, built substantial production capacity and clear cost advantages in photovoltaic modules, wind turbines, batteries and electric vehicle manufacturing.

Faced with the global challenge of climate change and both countries' ambitious carbon neutrality goals, China-Germany collaboration in renewable energy, energy efficiency, hydrogen technology and green industries will not only advance their respective development agendas but also provide vital public goods for the global green transition.

Furthermore, integrating the two countries' automotive industries is a pragmatic necessity. For Germany, automobiles are a cornerstone of employment and exports, and for China, the sector is a strategic pillar for future growth. Electrification, digitalization and autonomous driving are reshaping the industry's landscape. German manufacturers bring extensive expertise in vehicle technology, safety systems and brand management, while Chinese enterprises are emerging as leaders in battery technology, software integration and market responsiveness.

It is noteworthy that constructive R&D and production cooperation will help the two countries share transition costs, accelerate technological innovation, sustain international competitiveness and underpin the stability of the global automotive supply chain.

Additionally, the digital economy and service trade hold untapped potential. Germany is home to a large number of robust, highly specialized small and medium-sized enterprises, yet these businesses often face significant hurdles in digital transformation. China, with its rich experience in digital technology application, platform economy and scenario innovation, can partner with Germany to explore new cooperation models in industrial internet, digital supply chain management, smart logistics and fintech. Through rule-based dialogue and pilot projects, both sides can promote a more open and inclusive governance framework for the digital economy.

More importantly, China-Germany economic and trade cooperation serves as a powerful example of multilateralism at work. At a time when unilateralism and protectionism are resurgent, China and Germany — as major global economies and stakeholders in the multilateral trading system — can jointly safeguard market openness and the WTO-centered trading order. By deepening bilateral ties through innovative cooperation, opposing the politicization of economic and trade issues, and strengthening industry chains and supply chains, China and Germany can not only consolidate their partnership but also send a positive signal to the international community in support of free trade and multilateralism.

On the other hand, China-Germany trade cooperation faces challenges in the form of differences in industrial policies, market access and rules and standards. Yet history is replete with examples of how dialogue, consultation and pragmatic cooperation can help manage differences and expand consensus. Therefore, instead of setting up barriers, both sides should leverage their complementarity to deepen cooperation.

By building on their shared strengths, adhering to mutual respect and win-win principles, and focusing on key areas such as high-end manufacturing, green transition, automotive development and digital economy, China and Germany can not only secure their own economic interests but also make meaningful contributions to upholding multilateralism and stabilizing the global economy.

The author is a senior research fellow of Institute of Finance and Banking, Chinese Academy of Social Sciences.

The views don't necessarily represent those of China Daily.