Official data has showed that China dropped out of the top three foreign investors in Germany for the first time in more than a decade as the Chinese government focuses on boosting the domestic economy.
Germany Trade & Invest (GTAI), a government institution, said that China is now the fourth largest contributor of foreign direct investment to Germany, behind the United States, Britain and Switzerland.
GTAI managing director Robert Hermann said the drop to an economic strategy promoted by the Chinese government that focuses on stimulating the domestic economy was related to investments in infrastructure as well as in research and development.
“The Chinese government regulates capital exports,” Hermann said. “It’s increasingly focused on boosting investments domestically.” The data revealed that the United States remains the largest investor in Germany with 302 projects last year, followed by Britain with 185 and Switzerland with 184.
China was the third-largest investor in Germany in 2018, Now it has dropped to fourth place for the first time since 2009, when GTAI started compiling the data. Britain climbed to fourth place to become the second-largest foreign investor in Germany as companies alarmed that Brexit will hamper access to the European Union’s single market set up affiliates in Europe’s largest economy.
As many as 1,851 foreign companies moved to Germany last year, 10% less than a year earlier. But the number of jobs they planned to create almost doubled to 42,000. Foreign car and battery makers are driving the job boom created by foreign direct investment, Hermann said.
U.S. electric car maker Tesla (TSLA.O) plans to build its European factory outside Berlin, Chinese carmaker Geely wants to set up an innovation centre south of Frankfurt, and Chinese battery maker Contemporary Amperex Technology Ltd (CATL) (300750.SZ) is planning a factory in eastern Germany.
GTAI expect foreign investments to fall this year as the coronavirus pandemic sinks the world economy into a recession.