China and Germany saw a decline in direct investment in 2023, attributed to global economic uncertainty and policy changes. However, key industries like automotive remain attractive for investors. FDI outflows from Germany to China decreased by 30%, but actual use of foreign capital from Germany to China increased by 21% according to MOFCOM. The Deutsche Bundesbank and MOFCOM data provide different perspectives on investment trends between the two countries.
Decline in Direct Investment between China and Germany
In 2023, both China and Germany experienced a decrease in direct investment due to global economic uncertainty and policy changes. Despite this, China remains an appealing destination for German foreign direct investment, particularly in industries like automotive and advanced manufacturing. While FDI outflows from Germany to China decreased by 30% in the first three quarters of 2023, the actual use of foreign capital from Germany to China saw a 21% increase during the same period, as reported by MOFCOM. The different perspectives provided by Deutsche Bundesbank’s FDI data and MOFCOM’s actual use of foreign capital highlight the evolving investment trends between the two countries.
Latest Trends in Direct Investment
The complex investment environment in both China and Germany has led to a significant decline in two-way FDI figures in the first three quarters of 2023. Despite this, industries with high growth potential, such as automotive and advanced manufacturing, continue to attract German companies to China. Simultaneously, high levels of reinvested earnings indicate that established firms are strengthening their commitments in the Chinese market. Interestingly, the potential for electric vehicle sales in Germany is encouraging Chinese companies to invest more in the country.
Comparison of FDI Data
According to data from Deutsche Bundesbank, total FDI outflows from Germany to China decreased by 30% in the first three quarters of 2023, reaching EUR 7.98 billion. This marked a notable shift from the positive trends seen in 2022 when FDI flows from Germany to China hit a record EUR 11.4 billion. In contrast, MOFCOM reported a 21% year-on-year increase in the actual use of foreign capital from Germany to China in the first eight months of 2023. These contrasting figures suggest a dynamic landscape for future investment between Germany and China.