German firms' investment in China jumps by a third in first half, US investment falls nearly 70%, IW survey finds
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German companies increased investment in China in the first half of 2026 while sharply cutting investment in the United States, a survey by the German Economic Institute (IW) found. IW analyzed Bundesbank data and found that corporate investment in China rose by 5.6 billion euros, or 6.5 billion dollars, from a year earlier, roughly in line with the half-year average for 2020-2025. Juergen Matthes of IW said German companies have little choice but to keep investing in China, noting that China is both an important sales market and a "gym" where companies can build their competitive muscles. He also said state subsidies and an undervalued yuan make production in China artificially cheap, and that German companies are expanding their local operations to compete with Chinese rivals in global markets. "For Germany, this means production and jobs are shifting to China. The European Union should put a stop to this unfair game and impose countervailing duties on imports from China," he said. Meanwhile, investment in the United States fell by nearly two-thirds to about 4.3 billion euros, amid trade friction and tariffs imposed by President Trump.
