Germany’s business leaders are not heeding the flashing red warning signs that relying on China is risking economic calamity.
From autos to chemicals, the country’s biggest exporters are ignoring government pleas and pouring billions into new projects that tie their fortunes even closer to the world’s second-largest economy. German corporate investment in China jumped €1.3B ($1.5B) between 2023 and 2024, hitting €5.7B.
Government officials, too, have done little to change the pattern. Privately, they’re meeting and developing action plans. But they’re still reluctant to intervene in foreign investment decisions. One senior German official quipped that it’s historically not in the country’s DNA.

In recent meetings, business leaders and government officials have traded blame over the situation but offered few solutions. Left untouched was the deeper question of who bears the costs of shunning China — businesses through lost profits, workers through layoffs, consumers through higher prices, or an already stretched government.
For now, China simply offers too many near-term profits to ignore, even if Beijing may ultimately throttle access to vital supplies and its massive market. Executives see little reason to change course unless Berlin forces their hand or helps foot the bill.
The consequence of inaction may ultimately be far-reaching. The more Germany tethers its industry to China now, the more influence Beijing will wield over Europe’s largest economy in the long run — power China could use to tilt global competition in its favor or even constrain the continent’s attempts to influence global affairs.
“De-risking is not just a commercial consideration. The counter factual is a world where China can dictate Europe’s foreign and economic policy.”
The automotive sector is at the heart of Germany’s exposure to China, and it’s doubling down.
On average, car manufacturers accounted for about two-thirds of German investment in China from 2020 to 2024. That spending has accelerated in recent years, growing 69% between 2023 and 2024 to reach €4.2B.
Today, China is the most important market for BMW, Mercedes-Benz and Volkswagen.
BMW has committed about €3.8B to a battery project in Shenyang, making China the hub of its largest research and development network outside Germany. It also exports electric SUVs from China back to Europe. Meanwhile, Mercedes shifted its annual strategy summit to Beijing and is developing China-only electric vehicles.
Volkswagen, which calls China its “second home market,” has similarly signed a string of deals with Chinese firms to accelerate its technology development.
The pattern extends beyond the auto industry.
Chemicals giant 
BASF just opened an €8.7B complex in China — its largest-ever investment.
Similarly, global engineering firm Bosch is deepening reliance on China for product development, while cutting positions in Germany.
Overall, average annual German investments in China reached €5.2B over the past 5 years, well above the €3.3B average recorded between 2015 and 2019.
But not every German company sees it the same way. Starting years ago, numerous smaller firms decided they could no longer bank on China for their economic livelihood.
Laser technology firm 4Jet was wary of Beijing’s longstanding playbook: using massive subsidies to rapidly grow domestic industries, then flooding the global market and undercutting competition.
So 4Jet, whose customers include aviation companies and glass and tire makers, began prioritizing markets like India to offset any lost revenue in China. Now, the firm could survive even if China closed off its market completely.
CEO Jörg Jetter: “I find politics astonishingly naive. It’s very transparent what they’re doing there.” He’s eferring to Beijing’s “Made in China 2025” plan. China has become a market leader in solar energy, batteries, EVs, and a serious competitor in machine tools and robotics.
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bloomberg.com/news/articles/
BASF just opened an €8.7B complex in China — its largest-ever investment.
Similarly, global engineering firm Bosch is deepening reliance on China for product development, while cutting positions in Germany.
Overall, average annual German investments in China reached €5.2B over the past 5 years, well above the €3.3B average recorded between 2015 and 2019.
But not every German company sees it the same way. Starting years ago, numerous smaller firms decided they could no longer bank on China for their economic livelihood.
Laser technology firm 4Jet was wary of Beijing’s longstanding playbook: using massive subsidies to rapidly grow domestic industries, then flooding the global market and undercutting competition.
So 4Jet, whose customers include aviation companies and glass and tire makers, began prioritizing markets like India to offset any lost revenue in China. Now, the firm could survive even if China closed off its market completely.
CEO Jörg Jetter: “I find politics astonishingly naive. It’s very transparent what they’re doing there.” He’s eferring to Beijing’s “Made in China 2025” plan. China has become a market leader in solar energy, batteries, EVs, and a serious competitor in machine tools and robotics.
1/2
bloomberg.com/news/articles/