German Chancellor Olaf Scholz on Monday pressed his case for an open and fair European market for Chinese cars but warned against dumping, overproduction and intellectual property infringements as he spoke to a group of students in Shanghai.

Scholz, together with three ministers and several leading German executives, is on a visit to China that is being watched for signs as to how Europe will calibrate its response to what it believes are Chinese goods being dumped on its market.

"At some point there will also be Chinese cars in Germany and Europe. The only thing that must always be clear is that competition must be fair," Scholz told students at Tongji University in Shanghai.

"In other words, that there is no dumping, that there is no overproduction, that copyrights are not infringed," Scholz said, adding it was important to allow companies to set up production facilities locally without bureaucratic hurdles.

"And that's why whenever I'm in China and I say level playing field, of course we want our companies to have no restrictions," he said.

Scholz also said small countries should not have to live in fear of big countries and that borders should not be changed by force but did not mention China by name.

Scholz is due to meet President Xi Jinping on Tuesday and question him about China's support for Russia's wartime economy, two years after Moscow unleashed its invasion of Ukraine.

The German government and German businesses are also wary of any potential future conflict over Taiwan.

"One of these principles is that we should not be afraid of our neighbors," he told students, comparing global values and relations between countries to neighbourly relations.

"We want that in our own lives. If our neighbour is a big, strong, muscular person, then we always want to say hello and be sure that he will never hurt us."

(Reuters)

German Chancellor Olaf Scholz visits a research project on the monitoring of water quality in Chongqing, China April 14, 2024. (Reuters)

Germany's Scholz in China: we want fair auto market but no dumping