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Christian Rusche IW-Trends No. 2 6. June 2017 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.

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The Activities of Chinese Investors in Germany
Christian Rusche IW-Trends No. 2 6. June 2017

The Activities of Chinese Investors in Germany

IW-Trends

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German Economic Institute (IW) German Economic Institute (IW)

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.

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The Activities of Chinese Investors in Germany
Christian Rusche IW-Trends No. 2 6. June 2017

Christian Rusche: Aktivitäten chinesischer Investoren in Deutschland

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German Economic Institute (IW) German Economic Institute (IW)

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In recent years family businesses have become an object of research in their own right. Indeed, it has been shown that, far from developing less dynamically than other firms, as once assumed, family businesses actually outperform their peers.

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