Merkel touched down early today in the southwestern city of Chengdu, where she met local officials, visited a market and toured a factory operated by German car manufacturer Volkswagen.
She then travelled to Beijing, where she wrapped up the first day of the three-day visit with a meeting with Premier Li Keqiang and a banquet at the Diaoyutai State Guesthouse.
Merkel's visit comes just over three months after Chinese President Xi Jinping's trip to Germany, when both parties signed a raft of economic pacts.
For the EU's biggest economy, China is a crucial mass market. Chinese companies want its technology and millions of newly prosperous citizens crave German goods ranging from Audi sedans to luxury home appliances.
Germany last year sold goods worth 67 billion euros (USD 91 billion) to China, its number-two export market outside Europe after the United States. Imports from the Asian powerhouse, meanwhile, topped 73 billion euros (USD 99 billion).
Merkel angered Beijing in 2007 by meeting Tibet's exiled spiritual leader the Dalai Lama, whom ruling Communist Party leaders consider a dangerous separatist.
In a commentary, Xinhua today hailed Merkel's trip.
"It is fair to say that China-Germany relations are at their best in history, which have been strongly underpinned by the pragmatic cooperation between the two economic heavyweights," it said.
Among the companies represented in Merkel's delegation - and eyeing deals that could further cement bilateral ties - are Siemens, VW, Airbus, Lufthansa and Deutsche Bank, according to German media reports.
Merkel is expected to hold a joint press conference tomorrow with Li and will also attend the China-Germany Economic and Trade Commission before meeting Xi.
On Tuesday she will address students at Beijing's renowned Tsinghua University before departing for Berlin.
