The German government is working on a new trade policy with China to reduce dependence on Chinese raw materials, batteries and semiconductors, Economy Minister Robert Habeck told Reuters, promising not to be naive about trade relations with Beijing.

Sources previously told Reuters that the Economy Ministry is considering a number of new measures to make doing business with China less attractive.

Habeck said China is a desirable trading partner, but Germany cannot allow Beijing's protectionism to distort competition and will not hold back criticism of human rights abuses because of the threat of losing business. He did not talk about the new measures in full, but said they would include closer scrutiny of Chinese investment in Europe.

China has been Germany's largest trading partner for the past six years, with volumes reaching more than 245 billion euros in 2021.

Reuters reported that the Economics Ministry is considering measures, including reducing or even eliminating investment and export guarantees for China and ending trade fairs.

Habeck said Germany should open up to new trading partners and regions because many industries are heavily dependent on China.