Germany Is Just Making Too Much Money in China to Back Away Now
Germany Is Just Making Too Much Money in China to Back Away Now
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From autos to chemicals, the country’s biggest exporters are ignoring government pleas and pouring billions into new projects that tie their fortunes even closer to the world’s second-largest economy. German corporate investment in China jumped €1.3 billion ($1.5 billion) between 2023 and 2024, hitting €5.7 billion, according to the Mercator Institute for China Studies.
On average, car manufacturers accounted for about two-thirds of German investment in China from 2020 to 2024, MERICS found. That spending has accelerated in recent years, growing 69% between 2023 and 2024 to reach €4.2 billion.
BMW has committed about €3.8 billion to a battery project in Shenyang, making China the hub of its largest research and development network outside Germany. It also exports electric SUVs from China back to Europe. Meanwhile, Mercedes shifted its annual strategy summit to Beijing and is developing China-only electric vehicles.
Volkswagen, which calls China its “second home market,” has similarly signed a string of deals with Chinese firms to accelerate its technology development.
BASF, the German chemicals giant, just opened an €8.7 billion complex in China — its largest-ever investment. Last month, BASF CEO Markus Kamieth called China essential to the company’s growth month, saying the market helped counter sluggish output in Germany.
Bosch, Germany’s global engineering firm, is deepening reliance on China for product development, while cutting positions in Germany