China has become Germany's most important trading partner and German exports there have helped mitigate the impact of the Covid-19 pandemic on Europe's biggest economy. However, concerns about China's growing assertiveness and its human rights record have caused concern, reports Reuters.
In his speech at a recent industry event, Mr Russwurm said Europe and Western countries needed to adopt a confident approach towards 'difficult' customers and competitors such as China, Russia, Saudi Arabia and Brazil.
'We need an honest discussion about how we deal with autocratic trading partners,' he said. 'We advocate responsible coexistence and cooperation - with clear boundaries.'
He added that part of that approach was accepting that different social systems exist side by side.
'We must not shy away from confrontation when red lines are crossed. Universal human rights, for example, are not an 'internal affair',' he said.
Mr Russwurm welcomed a move by the Group of Seven richest democracies to stand up to China's Belt and Road initiative, saying it was 'right - and overdue'.
The G7 sought earlier this month to counter China's growing influence by offering developing nations an infrastructure plan that could rival President Xi Jinping's multi-trillion-dollar Belt and Road initiative.
China denounced the joint G7 statement as a gross interference in the country's internal affairs, and urged the grouping to stop slandering China.
Addressing the same conference, Armin Laschet, who hopes to succeed Merkel as conservative chancellor after a September election, welcomed the G7 move, but struck a more cautious note, saying starting a cold war with China was not the answer.
'We must talk about our concerns (on human rights) but there is no need to turn our China policy on its head,' said Mr Laschet.