German Investments in China Surge Amid Trade Wars

German companies increased their investments in China by over 55% in 2025, reaching over 7 billion euros. This surge, amid U.S. tariffs and geopolitical tensions, highlights a strategic shift towards deepening economic ties with China as an alternative to traditional markets, driven by concerns over potential trade disruptions.

German companies invested over 7 billion euros in China in 2025, marking a four-year high as reported by data compiled for Reuters. This significant increase of 55.5% from previous years underscores how U.S. President Donald Trump's trade policies have driven Europe's largest economy to strengthen ties with China.

As geopolitical tensions rise, companies are re-evaluating their strategies. Britain and Canada are seeking to expand trade in Asia, while Germany attempts to balance its toughening stance on China with maintaining strong economic relations. Juergen Matthes from the IW German Economic Institute points to an emphasis on developing local supply chains in China.

The trend reflects a broader movement, with firms like BASF, Volkswagen, and Mercedes-Benz investing heavily in China. Notably, ebm-papst allocated 30 million euros to expand its operations there. Despite concerns over tariffs and export restrictions, China remains a critical market for Germany, recently reclaiming its position as Germany's top trading partner.