German Companies' Surge in China Investment Amid Trade Tensions

German companies' investments in China hit a four-year peak in 2025 as firms seek to mitigate risks from U.S. trade policies. With a 55.5% rise from previous years, this trend highlights a strategic shift to strengthen local supply chains and reduce dependency on volatile markets.

In 2025, German companies increased their investments in China to a four-year high, according to data gathered for Reuters. This surge is attributed to U.S. President Donald Trump's trade policies, prompting industries to seek new partnerships.

Between January and November 2025, investments climbed to over 7 billion euros, marking a significant 55.5% rise from previous years. The aggressive U.S. trade stance, including tariffs on European Union imports, prompted Germany to pivot its focus toward China.

The shift underscores concerns over geopolitical conflicts and aims to fortify local operations against potential trade disruptions. German firms like BASF, Volkswagen, and Mercedes-Benz are adapting by expanding their presence in China, contributing to the global competitiveness of Europe's largest automaker, Volkswagen.

(With inputs from agencies.)