Merkel had been due to speak with China's most prominent civil rights lawyer, Mo Shaoping, at the German embassy in Beijing, but Chinese security kept him from taking part in the reception.
"I think that a country with as much vigour and dynamic growth as China should also have the confidence to know that the people – with their vigour and power of persuasion – are needed to strengthen civil society," she said.
The German chancellor was also scheduled to speak with the publisher of a liberal paper, Nanfang Zhoumo, whom Merkel had granted an interview ahead of her visit.
Hong Kong media cited editors of the newspaper, who reportedly said they had come under "a great deal of pressure" from Beijing over the planned meeting.
Green Party MP Viola von Cramon-Taubadel, who accompanied Merkel on her trip, said the fact that the German delegation was unable to meet with the newspaper was a further sign of "over-nervousness."
Moreover, the incident with Mo tarnished the trip: "The Chinese leadership did not have to do that," Cramon-Taubadel said.
Merkel said the two sides also reviewed the human rights situation in China. "The issue of Tibet was also discussed, as one of many issues that deeply trouble us," she said.
Yet on the economic front, the German chancellor hailed talks between the two sides, saying she was confident that China would work to help Europe emerge from its debt crisis.