Europe wants to reduce its economic dependence on China. German companies are moving in the opposite direction. Investment in China rose by roughly a third in the first half of 2026, while German investment in the United States fell by nearly two-thirds.
German companies invested €5.6 billion more in China during the first half of the year than in the comparable period of 2025, according to German Economic Institute analysis of Bundesbank data.
At the same time, German investment in the United States fell to around €4.3 billion.
The divergence comes as Europe increasingly talks about economic security and reducing excessive dependence on China.
German companies face a different calculation.
German Economic Institute economist Juergen Matthes told Reuters that businesses believe they cannot afford to retreat from China.
It remains an enormous market.
It is also where German manufacturers increasingly have to compete directly with Chinese industry.
THE INCENTIVES POINT EAST
The United States wants European allies to reduce their exposure to China.
American tariffs and trade tensions are simultaneously making investment in the U.S. less attractive.
China presents its own problems.
Matthes argues that Chinese subsidies and currency advantages are drawing production and employment towards China, and has called for EU countervailing tariffs.
That leaves Europe caught between economic security and commercial reality.
German investment in China: up roughly one-third.
German investment in America: down almost two-thirds.
Governments can tell companies to de-risk.
What happens when the money sees the risk differently?
Sources
Reuters: German firms lift China investment as U.S. outlays fall
Join the Dissenting Citizen Newsletter
Independent news and commentary delivered directly to your inbox.
