When Germany's Economic Affairs and Energy Minister Katherina Reiche arrived in Beijing this week with a 40-member business delegation, she carried a message Brussels would do well to heed before its Friday debate on new trade restrictions targeting China's alleged "overcapacity".

Germany, Europe's largest economy and its industrial engine, understands something increasingly lost in Brussels' geopolitical rhetoric: Europe's prosperity is deeply intertwined with China's market, supply chains and innovation ecosystem.

The European Union cannot safeguard against what it deems "unfair practices" by damaging its own export industries or blocking channels of cooperation with the world's second-largest economy. It is arithmetic. China and Germany conducted roughly 250 billion euros ($290.20 billion) in goods trade in 2025 — accounting for about 33.2 percent of China-EU trade that year, with China remaining Germany's largest trading partner for several consecutive years. Around 5,000 German companies operate in China. German investment in China exceeded 7 billion euros in 2025, reportedly up nearly 50 percent from the previous year and the highest level in four years. At the same time, Chinese investment projects in Germany surpassed those from the United States. These are the numbers of two major economies adapting to a more competitive but still mutually beneficial relationship.

Chinese Vice-Premier He Lifeng and Commerce Minister Wang Wentao used their respective talks with Reiche on Wednesday as opportunities to deepen industrial integration. Both emphasized the compatibility between China's 15th Five-Year Plan (2026-30) priorities — digitalization, green development and industrial upgrading — and Germany's Industry 4.0 ambitions and low-carbon transition.

That convergence is real. Europe's green transition, from electric vehicles to renewable energy grids, depends heavily on access to competitively priced Chinese technologies and critical materials. Reiche acknowledged what many European politicians hesitate to say publicly: China has become one of the world's major industrial and innovation centers in robotics, artificial intelligence, batteries and renewable energy. Europe can either engage with that reality or try to fence it off. Some people in Brussels seem tempted to do the latter.

The European Commission's toolbox — from expanded safeguards to broader trade-defense mechanisms and restrictions on Chinese technology suppliers — risks confusing competitiveness with protectionism. Such measures may offer short-term political advantages, but they will inflict long-term economic costs on Europe itself, especially on export-oriented economies such as Germany.

European restrictions on high-tech exports to China artificially suppress European exports while inflating the "imbalance" Brussels now condemns.

Nor should China's manufacturing strength be reduced to "overcapacity" or "subsidies". Much of the cost-performance advantage of Chinese products comes from scale, relentless competition, infrastructure efficiency and rapid innovation cycles that benefit European consumers and industries enormously at a time of high energy costs and sluggish growth.

Europe did not become a technological powerhouse by shielding itself from competition. It succeeded by embracing openness, fostering industrial ecosystems and competing vigorously. If the EU hopes to remain relevant in the ongoing tech revolution, it must rediscover that confidence rather than retreat behind regulatory walls.

That requires reciprocity from both sides. China is committed to providing a fair and nondiscriminatory business environment for European companies operating in China, something the German business leaders accompanying Reiche acknowledged. Similarly, Chinese companies deserve nondiscriminatory treatment in Europe.

Reiche's visit, following German Chancellor Friedrich Merz's earlier trip to China, suggests that Berlin still sees dialogue as preferable to confrontation. The broader EU should resist allowing strategic anxieties to override economic self-interest.

Europe does not need to agree with China on everything to trade successfully with it. But it does need to remember that prosperity, especially in difficult economic times, is usually built through win-win cooperation and managed competition, not through fear of either.