China-Germany FDI defies tariff impacts, proving cooperation trumps protectionism

(Illustration: Xia Qing/GT)

China remained one of the leading sources of foreign direct investment (FDI) in Germany last year, according to a report released on Monday by Germany Trade &Invest (GTAI), the federal agency responsible for promoting foreign investment. Chinese companies initiated 199 FDI projects in Germany last year. Among all source countries, China ranked No.3, the Xinhua News Agency reported on Monday.

Thomas Bozoyan, a GTAI expert and the report's author, noted that China continues to play a pivotal role in Germany's foreign investment profile. He emphasized that Germany has emerged as a key beneficiary of China's expanding commercial footprint across Europe, according to Xinhua.

Despite increasing economic uncertainty and trade disruption caused by some countries' rising protectionism and unilateral tariffs, the stability and continuity of Chinese investment in Germany underscore the strong resilience of China-Germany economic and trade cooperation, which proves that mutually beneficial cooperation prevails over misguided protectionism.

The German Chamber of Commerce in China on May 7 released a survey that revealed the business confidence of German companies in China had been affected by the US tariffs, but their investment strategies remained strong.

The report showed that 50 percent of surveyed German companies planned to increase their investment in China in the next two years, showing a stable trend compared with 51 percent in September last year. More than one-third have accelerated their localization efforts in China as a strategic response to the ongoing trade tensions.

The positive business sentiment toward the Chinese market was in line with the visits of executives of German companies to China. Notably, during the China Development Forum held in March, executives from German companies such as Mercedes-Benz, BMW, Bosch and Deutsche Bank expressed their willingness to increase their presence in the Chinese market.

China and Germany are key economic and trade cooperation partners and have substantial complementarity. In 2024, German exports to China totaled $94.8 billion, while Chinese exports to Germany stood at $107 billion.

Germany has advantages in machinery manufacturing, chemicals and pharmaceuticals and the automotive sector, while China excels in the electrical and information technology industries, textiles and apparel. Both sides are collaborating well on the industrial digital transformation and are actively expanding cooperation in the green economy.

The stability of bilateral investment, particularly in the high-tech, new energy and digitalization sectors, further demonstrates the vast potential for cooperation between China and Germany. In emerging fields, both sides can expand collaboration in areas like the green transformation, digitalization, artificial intelligence and the digital economy, promoting comprehensive development of bilateral relations.

As a stabilizing force in China-European relations, the China-Germany economic and trade partnership should continue to enhance pragmatic and mutually beneficial cooperation, particularly in light of rising trade protectionism and tariff policies. In the current complex and challenging international landscape, unilateral actions and protectionist measures adopted by certain countries significantly threaten the international economic and trade order, as well as the stability of global industrial and supply chains. Strengthening economic and trade collaboration between China and Germany not only benefits both nations' economies but also contributes to greater stability in China-Europe economic and trade cooperation.

China's Commerce Minister Wang Wentao met with Hildegard Muller, president of the German Automotive Industry Association on April 27, urging the association to play a positive role in steering Germany and the EU to firmly safeguard multilateral trade and calling for proper resolution of the EU's anti-subsidy case against Chinese electric vehicles (EVs).

Germany is one of the EU member states that opposes the introduction of tariffs on Chinese EVs. Economic and trade cooperation between China and Germany demonstrates significant resilience and potential in the current complex international landscape. This partnership underscores the importance of promoting trade facilitation rather than resorting to protectionist measures, enabling enterprises in both countries to maintain competitiveness in the global market.

It is anticipated that European policymakers will acknowledge the growing trend of mutually beneficial and complementary trade and investment cooperation between China and Germany, guiding Europe's economic and trade relations with China toward a constructive path. By steering clear of ideological conflicts and values-based interference, Europe can enhance its strategic autonomy and embrace a pragmatic approach to collaboration with China that prioritizes its own interests. Such a shift has the potential to unlock even greater opportunities within their economic ties.

The author is a reporter with the Global Times.