{"id":855,"date":"2026-01-27T20:59:52","date_gmt":"2026-01-27T13:59:52","guid":{"rendered":"https:\/\/al-ahwaz.com\/?p=855"},"modified":"2026-01-27T20:59:52","modified_gmt":"2026-01-27T13:59:52","slug":"german-investment-in-china-hits-four-year-high-amid-us-trade-tensions","status":"publish","type":"post","link":"https:\/\/al-ahwaz.com\/?p=855","title":{"rendered":"German Investment in China Hits Four-Year High Amid US Trade Tensions","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

Investment by German companies in China<\/span><\/span><\/strong><\/a> climbed to its highest level in four years in 2025, highlighting how US trade policies are prompting businesses and governments to deepen economic ties elsewhere, according to data compiled for Reuters.<\/p>\n

Previously unpublished figures from the IW German Economic Institute<\/span><\/span><\/strong><\/a> show that German firms invested more than 7 billion euros ($8 billion) in China between January and November last year. That represents a jump of about 55% compared with roughly 4.5 billion euros recorded in both 2023 and 2024.<\/p>\n

US Trade Policy Drives Shift in Focus<\/strong><\/h4>\n

The increase underscores how aggressive trade measures under President Donald Trump<\/span><\/span><\/strong><\/a>, including sweeping tariffs on European Union imports, have encouraged companies in Europe\u2019s largest economy to look beyond the United States for growth.<\/p>\n

Other governments are making similar moves. Britain is sending a business delegation to China this week to pursue deals across sectors from automotive to pharmaceuticals. The EU is edging closer to a trade pact with South America, while Canada<\/span><\/span><\/strong> is seeking to expand trade links with China and India.<\/p>\n

Berlin, meanwhile, has tried to strike a balance between taking a firmer stance on Beijing over trade and security issues while preserving ties with its most important trading partner.<\/p>\n

Supply Chains and Risk Reduction<\/strong><\/h4>\n

\u201cGerman companies are continuing to expand their activities in China \u2014 and at an accelerated pace,\u201d said Juergen Matthes, head of international economic policy at the IW institute. He pointed to a growing emphasis on strengthening local supply chains.<\/p>\n

\"German<\/p>\n

The trend comes as German firms scale back exposure elsewhere. Reuters reported last week that German investment in the United States nearly halved during the first year of Trump\u2019s second term.<\/p>\n

China also reclaimed its position as Germany<\/span><\/span><\/strong>\u2019s top trading partner in 2025, after briefly being overtaken by the US a year earlier, driven largely by rising imports from the world\u2019s second-largest economy.<\/p>\n

Concerns Over Geopolitical Risks<\/strong><\/h4>\n

Matthes said fears of escalating geopolitical tensions were also influencing corporate decisions, with companies seeking to ensure their China operations could function independently in the event of major trade disruptions.<\/p>\n

\u201cMany companies say that producing in China for the Chinese market reduces their exposure to tariffs and export restrictions,\u201d he said.<\/p>\n

Major German corporations \u2014 including BASF<\/span><\/span><\/strong>, Volkswagen<\/span><\/span><\/strong>, Infineon<\/span><\/span><\/strong> and Mercedes-Benz<\/span><\/span><\/strong> \u2014 remain heavily reliant on China, the world\u2019s largest market for cars and chemicals.<\/p>\n

Volkswagen said investments in China and the US were being pursued independently, reflecting local market strategies. The automaker added that technologies developed in China are increasingly being deployed across regions such as Southeast Asia, the Middle East, South America and Africa.<\/p>\n

\u201cChina is helping to strengthen the group\u2019s global competitiveness,\u201d a company spokesperson said.<\/p>\n

Broader Investment Trends<\/strong><\/h4>\n

German Economy Minister Katherina Reiche<\/span><\/span><\/strong> this week highlighted the need to build new alliances as long-standing economic relationships become more fragile.<\/p>\n

Industrial firm ebm-papst<\/span><\/span><\/strong> said it invested 30 million euros in expanding its China operations last year \u2014 more than a fifth of its total capital spending \u2014 to manufacture closer to its customers.<\/p>\n

\u201cThis approach has proven to be a key source of stability, especially during periods of tariffs and geopolitical uncertainty,\u201d the company said, adding that it also plans to expand its US operations this year.<\/p>\n

According to the IW report, which draws on data from Germany\u2019s Bundesbank<\/span><\/span><\/strong>, total German investment in China in 2025 also exceeded the long-term annual average of about 6 billion euros recorded between 2010 and 2024.<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"

Investment by German companies in China climbed to its highest level in four years in 2025, highlighting how US trade policies are prompting businesses and governments to deepen economic ties elsewhere, according to data compiled for Reuters. Previously unpublished figures from the IW German Economic Institute show that German firms invested more than 7 billion […]<\/p>\n","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":1,"featured_media":857,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-855","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"aioseo_notices":[],"gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/posts\/855","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=855"}],"version-history":[{"count":1,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/posts\/855\/revisions"}],"predecessor-version":[{"id":858,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/posts\/855\/revisions\/858"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=\/wp\/v2\/media\/857"}],"wp:attachment":[{"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/al-ahwaz.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}