Merkel woos China as Trump poses new trade challenge

German Chancellor Angela Merkel and China's President Xi Jinping. [Reuters]

China Thursday said it would "open its door wider" to German businesses, giving a warm reception to visiting Chancellor Angela Merkel, who has wooed Beijing to counter trade threats from US President Donald Trump.

Germany and China, two exporting nations that run large trade surpluses with the United States, have found themselves in Trump's firing line and are scrambling to preserve the multi-lateral order on which their prosperity rests.

Merkel faces a delicate balancing act on the trip to show Chinese-German solidarity over trade and the Iran nuclear deal without harming ties with long-term ally Washington.

In the latest US trade move that has alarmed Beijing and Berlin alike, the Trump administration announced on Wednesday a national security investigation into car and truck imports that could potentially lead to tariffs.

The announcement hurt share prices of both European and Asian car-makers. China vowed to protect its interests.

European countries are also concerned that their exporters could be hurt if China instructs importers to buy more US goods to ease trade disputes with Trump. China has already signalled to state companies to buy more US oil and soybeans, trade sources said.