German Chancellor Angela Merkel said at the start of a visit to Beijing on Friday that the China-U.S. trade war was affecting the whole world and she hoped it would be resolved soon.

Germany's firms have been caught in the crossfire of a U.S.-China trade conflict, its economy - Europe's largest - contracted on weaker exports in the second quarter, and leading economists say it is facing a recession, especially after weak industrial data published this week.

But while U.S. President Donald Trump has pressed American companies to look at ways to close their Chinese operations and make more of their products at home, Merkel wants to start a new phase in the European Union's relations with China.

"We hope that there will be a solution in the trade dispute with the United States since it affects everybody" in the world, Merkel told Chinese Premier Li Keqiang at Beijing's Great Hall of the People during a two-day trip to China.

China and the United States are due to resume trade talks this month, with more senior consultations next month in Washington.

(Reuters)