While politicians philosophize about "de-risking," German companies are creating facts on the ground: investments in China jumped to a record high of over €7 billion in 2025 (+50%). At the same time, direct investments in the USA plummeted by 45%.
Details
Engagement in the Far East has reached its highest level since 2021. What's particularly striking: the money comes predominantly from profits made by Chinese subsidiaries (€12 billion reinvested) that never even flow back to Germany.
- In contrast, the fear of unpredictable tariffs is paralyzing German business in the US. In Trump's first year back in office, German direct investments in the US tanked by 45% (down to just €10.2 billion).
"In China, for China" Strategy
Major corporations are yielding to pressure from Beijing: value creation, product development, and even cutting-edge research are being relocated to China.
The goal: build local supply chains to protect against global tariffs and export restrictions.
For example, electric motor manufacturer EBM-Papst invested €30 million in Xi'an: "We develop and produce where our customers are."
⚠️ The Risk: While the strategy secures local market share, it increasingly decouples these corporations from their home base in Germany.
The China Survival Guide for Western Businesses
Entity setup, WeChat strategy, hiring your first local team. 12+ years on the ground in Shanghai.
