German media: German companies' investment in China "is expected to double this year"
2024-08-28
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[Global Times special correspondent in Germany Yu Shan] "Despite Germany's efforts to reduce its dependence on Asian giants, its investment in China is still growing." Deutsche Welle reported on the 26th that the German government released its first "China Strategy" document last year, in which German Chancellor Scholz talked about the need to reduce dependence on China. However, according to data from the German Central Bank, from January to June this year, Germany's direct investment in China reached 7.28 billion euros. The report said that if German companies continue to inject capital into China as they did in the first six months, Germany's foreign direct investment (FDI) in China is expected to double this year.
German Chancellor Scholz file photo Source: Visual China
When analyzing why German companies' investment in China is still growing, Deutsche Welle first mentioned that the fate of the German automotive industry is closely related to China. According to the report, one-third of Germany's new cars are sold to China every year. According to data from the German Association of the Automotive Industry, in 2023, a total of 15.1 billion euros worth of German cars will be sold to China, and the value of auto parts exported by German auto suppliers to China is about 11.2 billion euros. In addition, German automakers have exported hundreds of thousands of cars made in China to Europe. According to the German Daily News, German automakers' investment in China is in a leading position in various industries, and their investment level is still rising.
In this regard, Doris Fischer, professor of Chinese business and economics at the University of Würzburg in Germany, said: "If German companies are forced to make certain investment decisions at this time, they may 'lose competitiveness'."
The report also mentioned that it is not just automobiles. A survey conducted by the German Chamber of Commerce last month showed that more than half of the 566 companies surveyed said they planned to increase investment in China to ensure competitiveness. Deutsche Welle quoted Maximilian Butke, executive director of the East China region of the German Chamber of Commerce in China, as saying that the cost of "reducing dependence" has deterred many companies, and seeking diversification has brought even more arduous challenges. "Entering new markets requires a large amount of capital outflow, and German companies also face problems such as finding skilled labor, bureaucracy and lagging behind in digitalization in new markets."
Germany's Sueddeutsche Zeitung reported in February this year that in the two years from 2021 to 2023 alone, German companies' investment in China was the same as the total from 2015 to 2020. China's share of all outbound direct investment in Germany also increased in 2023, reaching 10.3%.
