Berlin — German corporations are intensifying their investments in China, ignoring repeated government warnings about over‑reliance on the world’s second‑largest economy. From automakers to chemical giants, billions are being poured into projects that tether Germany’s industrial future more closely to Beijing.
According to the Mercator Institute for China Studies, German corporate investment in China surged to €5.7 billion in 2024, up €1.3 billion from the previous year. Automakers alone accounted for two‑thirds of this spending, with BMW, Mercedes‑Benz, and Volkswagen treating China as their most critical market. BMW’s €3.8 billion battery project in Shenyang exemplifies this deepening dependence.
Chemical giant BASF has opened its largest‑ever investment in China, an €8.7 billion complex, while Bosch continues to shift product development eastward. Executives argue that China offers unmatched near‑term profits, even as Berlin warns of potential supply disruptions and geopolitical leverage.
Government officials, including Chancellor Friedrich Merz, have cautioned that Beijing could quickly restrict access to vital supplies or markets. Yet Berlin remains reluctant to intervene directly in corporate decisions, leaving companies to weigh the risks of layoffs, higher costs, or lost profits should China tighten its grip.
Smaller firms, such as laser technology company 4Jet, have already diversified to markets like India, wary of China’s subsidy‑driven strategy to dominate industries from solar energy to robotics. Their example highlights the growing divide between cautious mid‑sized firms and multinational giants unwilling to reduce exposure.
Ultimately, Germany’s deepening ties with China raise profound questions about sovereignty and resilience. As one analyst warned, “De‑risking is not just commercial—it is geopolitical.” The longer Germany binds its industrial base to Beijing, the greater the risk that Europe’s largest economy could see its foreign and economic policy dictated from abroad.
