IW-Trends No. 2 6. June 2017 Christian Rusche The Activities of Chinese Investors in Germany
Since 2014, China has been investing more abroad than foreign companies have been investing in China. The Chinese government is encouraging foreign direct investment not only to modernize the economy, but also to acquire influence and secure essential resources. In Germany, the activities of Chinese investors have come under increasing criticism, though only a small proportion of Chinese direct investment is directed towards Germany.
Since 2014, China has been investing more abroad than foreign companies have been investing in China. The Chinese government is encouraging foreign direct investment not only to modernize the economy, but also to acquire influence and secure essential resources. In Germany, the activities of Chinese investors have come under increasing criticism, though only a small proportion of Chinese direct investment is directed towards Germany.
Indeed, compared to German companies’ capital stock in China and Hong Kong (around 64 billion euros), at 2.4 billion euros the capital stock of Chinese investors in Germany is relatively low. Chinese firms in Germany are concentrating particularly on mechanical engineering and the automotive industry (including component suppliers). Investment is mostly in the form of takeovers, as this is the best way to secure know-how and simplify entry into a new market. Overall, the benefits of Chinese direct investment in Germany, which consist mainly in the safeguarding of jobs and the opening up of new markets, currently outweigh the drawbacks. However, the danger that the Chinese government will in future be able to exert influence through its state-owned holdings is a real one.
IW-Trends No. 2 11. July 2026 Hubertus Bardt et al.
Why Do Companies Invest in Germany?
The growth of Germany’s capital stock is slowing, as current investment increasingly fails to keep pacewith steadily rising disposals. In particular, private investment – which accounts for well over fourfifths of total gross fixed capital formation – has been alarmingly low in recent years.
Hubertus Bardt / Michael Grömling / Thomas Schleiermacher / Susanne Seyda IW
Subscribe to our newsletters to receive updates on the latest IW publications. Sign up here to stay informed.
This website uses necessary cookies to ensure the operation of the website. You can allow or decline tracking. If you allow tracking, Matomo is used with cookies. You can find detailed information about the use of cookies in our privacy policy.
Warning: You are using an outdated browser!
Please switch to a modern browser (e.g. Google Chrome, Firefox or Microsoft Edge) in order to enjoy the best user experience.
German Economic Institute (IW) 
