German firms lift China investment as US outlays fall, IW study shows
- 'The EU should put a stop to this unfair game and impose countervailing tariffs on Chinese imports'
BERLIN: 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.
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.
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“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.
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.
“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.”
Investment in the US fell by nearly two-thirds to around €4.3 billion, the study said, amid trade tensions and US tariffs imposed by President Donald Trump.