German Chancellor Friedrich Merz began a visit to China Wednesday aimed at resetting relations between the world’s second- and third-largest economies by urging Chinese firms to invest in Germany while pressing Beijing to reduce market distortions.

On his first visit to China as Chancellor, Merz, who was accompanied by a large business delegation, told President Xi Jinping that he wanted to deepen economic ties with China, Germany's largest trading partner last year.

"There ​are challenges, which we should talk about today, but the framework in which we operate ​is ⁠exceptionally good and we have worked together very well over the past decades," he said.

Xi, who has sought to position China as a reliable partner in an increasingly unpredictable world, welcomed the comments from Merz, who faces a tough balancing act of redefining an economic relationship that is increasingly unfavourable to German interests.

"The more turbulent and intertwined the world becomes, the more China and Germany need to strengthen strategic communication and enhance strategic mutual trust," he said.