German companies increase China investments as US outlays decline

German foreign investment China market US trade tariffs economic decoupling manufacturing shifts

According to a study by the Institute of the German Economy (IW) based on Bundesbank data, German companies significantly increased their investments in China during the first half of 2026. These investments rose by approximately 5.6 billion euros, a one-third increase compared to the same period last year. This level of investment aligns with the average recorded between 2020 and 2025.

In contrast, German investment in the United States saw a sharp decline of nearly two-thirds, falling to roughly 4.3 billion euros. The study attributes this retreat to heightened trade tensions and tariffs implemented by US President Donald Trump.

IW expert Juergen Matthes noted that German firms have little choice but to maintain a presence in China, describing the country as both a vital sales market and a 'fitness center' to sharpen competitive advantages. He warned that state subsidies and an undervalued yuan make Chinese production artificially cheap, which may lead to the migration of production and jobs from Germany to China. Matthes urged the European Union to implement countervailing tariffs to address these competitive imbalances.

Entities

Bundesbank · China · Deutsche Bundesbank · Donald Trump · German Institute of Economic Research · Germany · Institute of the German Economy · Juergen Matthes · Jürgen Matthes · United States

Claims

What the coverage asserts, and how many sources carry each claim.

[● 8 SOURCES] Increased trade tensions and tariffs imposed by US President Donald Trump are cited as reasons for the decline in German investment in the US. denar.mk · www.vol.at · www.insider.gr · www.arise.tv · biznesalert.pl · +3 more
[● 8 SOURCES] German investments in the United States fell by nearly two-thirds to approximately 4.3 billion euros during the same period. denar.mk · www.vol.at · www.insider.gr · www.arise.tv · biznesalert.pl · +3 more
[● 8 SOURCES] State subsidies and an undervalued yuan contribute to artificially low production costs in China. denar.mk · www.vol.at · www.insider.gr · www.arise.tv · biznesalert.pl · +3 more
[● 8 SOURCES] German companies increased investments in China by approximately 5.6 billion euros in the first half of 2026 compared to the previous year. denar.mk · www.vol.at · www.insider.gr · www.arise.tv · biznesalert.pl · +3 more
[● 8 SOURCES] Juergen Matthes stated that German companies must continue investing in China as it serves as both a major market and a competitive training ground. denar.mk · www.vol.at · www.insider.gr · www.arise.tv · biznesalert.pl · +3 more