German Firms Boost China Investment, Cut US Outlays – IW Study
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German Companies Increase China Investments While US Outlays Drop in 2026
German Investment Trends in China and the United States
BERLIN, Sept 13 (Reuters) – German companies increased investment in China by a third in the first half of 2026 while sharply reducing investment in the United States, according to a study by the German Economic Institute (IW) seen by Reuters on Sunday.
Growth of German Investments in China
• German firms invested €5.6 billion ($6.50 billion) more in China than in the same period of the previous year, based on IW’s analysis of Bundesbank data. The figure was in line with the average half-year investment level between 2020 and 2025.
Strategic Importance of the Chinese Market
• “German companies have little choice but to continue investing in China,” IW’s Juergen Matthes said, describing the country as both an important sales market and a “gym” where companies can build up their competitive muscle.
Factors Driving Expansion in China
• Matthes said state subsidies and an undervalued yuan made production in China artificially cheap, encouraging German companies to expand locally to compete with Chinese rivals globally.
Implications for Germany and EU Policy
• “For Germany, this means production and jobs are shifting to China,” Matthes said. “The EU should put a stop to this unfair game and impose countervailing tariffs on Chinese imports.”
Decline in German Investment in the United States
• Investment in the U.S. fell by nearly two-thirds to around €4.3 billion, the study said, amid trade tensions and U.S. tariffs imposed by President Donald Trump.
Currency Exchange Rate Information
($1 = 0.8615 euros)
(Reporting by Maria Martinez and Rene WagnerEditing by Miranda Murray)
