BERLIN/BEIJING, April 12 (Reuters) - Last year Germany

launched a strategy to "de-risk" from China, but on Saturday

Chancellor Olaf Scholz starts a high-stakes visit there hoping

to shore up ties at a delicate point with the U.S. and EU

threatening to hammer Chinese goods in subsidy rows.

With the German economy in the doldrums, its companies are

pressing for fairer access to a Chinese market which they feel

still discriminates heavily in favour of local firms despite

promises to the contrary.

At the same time, China will likely press Berlin not to fall

in behind threatened European Union measures against its cars,

solar and wind park equipment that Brussels feels are being

dumped on its market too cheaply.

China's own economy is also struggling, hit by another

ratings outlook downgrade this week and its factories blamed for

producing more goods than they can sell locally.

Looming over the visit is the prospect of the return of

Donald Trump to the White House, who has threatened to hike

trade tariffs on all countries including Germany.

With the prospect of U.S. aid to Kyiv looking shakier,

Scholz will also likely push China on its support for Russia's

wartime economy as Russian forces continue to pound Ukrainian

cities two years into the invasion.

Scholz, on a previous visit in 2022, trumpeted persuading

President Xi Jinping to warn Russia off using nuclear weapons.

"The Europeans urgently need to clarify how they can

position themselves as a pole between the USA and China and not

be crushed between their conflicts," said Maximilian Butek, the

head of the German Chamber of Commerce in eastern China.

"There is still no solution as to how to protect your own

market without risking giving up your China business at the same

time."

Scholz's government has become wary of tethering Germany to

the Chinese economy after the invasion of Ukraine exposed

Europe's reliance on Russian gas exports and fuelled a

cost-of-living crisis.

Three studies published by German institutions this week

highlight other German concerns.

One study showed nearly two-thirds of companies feel

discriminated against in the Chinese market, with the rise of

local firms also eating into profits and market share.

A second by the Kiel Institute estimated China's subsidies

for its firms range between three to nine times that of other

OECD countries such as the U.S. or Germany.

But at the same time, efforts by the German economy to

diversify from China have been patchy, a third study showed, and

other measures, such as moves by Berlin to curb use of Huawei

equipment from German networks, have yet to

materialise.

Scholz's government had last July produced a 64-page

strategy document outlining China's increasing assertiveness,

"unfair practices" and the risks to supply chains in a potential

conflict over Taiwan.

BUILDING TRUST

Scholz takes with him CEOs from some of Germany's most

prominent companies such as Siemens and Mercedes

, as well as three cabinet ministers, underscoring

Beijing's importance.

"The EU has been preparing restrictions against China's

green energy exports, seemingly with France at the vanguard,"

said Shi Yinhong, Professor at the School of International

Studies, Renmin University of China.

"At this juncture, making Germany - which has been inclined

to follow its allies in China-related trade restrictions but is

still quite hesitant and slow - oppose it in this period is

really important for China's rearguard actions."

The chancellor will travel to Shanghai and Chongqing as well

as the capital and meet President Xi and Premier Li Qiang.

Mikko Huotari, head of the Merics Institute in Berlin, calls

it a "re-engaging" and stabilising of relations. He urged Scholz

to emphasise that Germany has a special role within the EU and

does not want Brussels to take tough action in trade disputes.

Scholz's trip will likely be followed by visits to China by

Economy Minister Robert Habeck and Foreign Minister Annalena

Baerbock, who only last year angered Beijing by calling

President Xi a "dictator".

"Some countries in the West and the United States say

de-risking when they mean removing China. Risks need to be

managed and not removed," said Victor Gao, chair professor at

Soochow University.

"I believe China will emphasise to Germany that it should

not listen to other countries and embrace peace (regarding

Ukraine). It will probably also emphasise that there is no other

market in the world that can replace China, and that China is

now the world leader in many advanced technologies."

China had in March pledged to treat foreign and domestic

companies equally but German businesses reacted with scepticism

and asked for concrete steps.

However, they are also wary that an escalating trade war

between China and the West could rebound on their own

investments in the world's second biggest economy.

The EU also faces a dilemma, as it could benefit from cheap

solar and wind products for example to further its climate

goals, but risks damaging its own industries as a result.

"I think all sides are lacking trust, so the visit is seen

as a good sign from the Chinese," German Chamber of Commerce's

Butek said.

"We insist on open markets because this is essential to our

survival. The price of losing the market here is way too high

than what we gain from import tariffs on Chinese goods."

(Writing by Matthias Williams; Editing by Muralikumar

Anantharaman)