German companies continue to invest in China, increasingly financing this expansion using profits generated locally. According to an analysis by the Institute of the German Economy (IW), based on data from the German Federal Bank, companies invested approximately 5.6 billion euros in China during the first half of 2026. This amount was roughly one-third higher than the previous year’s period, though it remains within expected ranges when viewed over the longer term.
Behind this stable total is a mixed trend. Some firms have reduced their activities in China due to the challenging environment and intense competition. Since 2017, the value of sold or dissolved holdings has exceeded that of newly acquired ones. Specifically, between 2017 and 2024, German companies invested two billion euros annually in new stakes while divesting existing ones worth 3.6 billion euros, resulting in a net outflow of 1.6 billion euros each year.
Nevertheless, a large majority of these companies remain committed to the Chinese market. Data from the Chamber of Commerce (AHK) Greater China indicates that over 85 percent of German subsidiaries plan to maintain their presence there, and more than half are planning further investments. The capital needed for this growth is increasingly coming from the China business itself. In 2025, reinvested profits amounted to 7.8 billion euros, compared to 5.4 billion euros between 2017 and 2024.
