Also at the German-Sino business congress in Hefei on Friday, Merkel said that Germany favored giving China "market economy status" in principle - shift that would make it harder for the EU to protect local industry from Chinese competition - but said Beijing still had work to do.
The European Union and other members of the World Trade Organization (WTO) have to decide at the end of 2016 whether to grant China "market economy status" (MES).
The WTO recognised when Communist China joined the body in 2001 that local prices were not set by market forces, but expected that 15 years later Beijing would play less of a role in directing the economy.
During her two-day visit to China, Merkel said on Friday that the world's second biggest economy still had some work to do before it could be granted MES and the status would also be subject to checks by the European Commission.
"Germany supports, in general, China's claim to get the market economy status. At the same time China has to do some homework, for example in the area of public procurement," Merkel said. "But we want to advance the process," she added.