FRANKFURT, July 8 (Reuters) - German Chancellor

Friedrich Merz is set to make his first visit to China towards

the end of this year with a delegation of top business

executives, a person with direct knowledge of the matter said.

The visit from the head of Europe's biggest economy and one

of China's largest trading partners would be symbolically

important in underpinning relations between the two, amid

friction with the United States over trade tariffs.

Chinese companies hope to invest more in Germany and Merz's

visit could be used to repair relations after earlier tensions

with Berlin, the person, who has knowledge of the preparations,

told Reuters.

The trip, which could come as soon as October, has yet to be

finalised and details could change.

A spokesperson for the German chancellery declined to

comment. The Chinese foreign ministry did not immediately

respond to a Reuters request for comment.

It follows a visit to Berlin earlier this month by China's

foreign minister, Wang Yi, on a European tour seeking to lay the

groundwork for a summit between European Union and Chinese

leaders later this month.

German Foreign Minister Johann Wadephul said the two foreign

ministers had discussed Russia's invasion of Ukraine, Taiwan and

the crisis in the Middle East.

China and Germany are closely interwoven, not least by

German carmakers' dependence on China, the world's biggest auto

market, in making and buying their cars.

Relations faltered under the previous German government,

where then Foreign Minister Annalena Baerbock repeatedly

criticised Beijing, describing President Xi Jinping as a

"dictator", and China as a rival.

Points of friction remain. Germany summoned the Chinese

ambassador to the foreign ministry on Tuesday after saying

China's military had laser targeted a German aircraft in the Red

Sea.

So far, Merz has also taken a tough public line on China,

while avoiding a full-blown standoff.

Earlier this year, he underscored worries about China's

closeness to Russia while pledging to reduce Germany's reliance

on the world's second largest economy.

Xi, meantime, called on Merz to deepen cooperation and

jointly promote economic globalisation.

(Writing By John O'Donnell; Additional reporting by Ryan Woo in

Beijing; Editing by Emelia Sithole-Matarise)