German chancellor Angela Merkel, accompanied by a business delegation, is visiting China. Mutual investment flows will be one topic on her agenda. German investors in China still encounter many hurdles, whereas Chinese companies in Germany may count on a generally open investment environment. That's one of the reasons why Chinese investment in Germany has risen substantially in recent years and will most probably continue to grow. This bears challenges and opportunities for both Germany as the host country of investment and the Chinese investors.
Against this background, Cora Jungbluth, project manager and China specialist at the Bertelsmann Stiftung, analyzes the development of Chinese direct investment in Germany in the new issue of the Asia Policy Brief. She argues that the German government should call upon the Chinese government to level the playing field for foreign and Chinese investors in China. As for Chinese investment in Germany, recent data by the German Federal Bank and the Chinese Ministry of Commerce show that their impact on the German economy still is marginal. For individual, companies, however, the acquisition by a Chinese investor may be of great importance if the new proprietor averts insolvency, resolves the issue of succession many family-owned businesses in Germany face, or facilitates access to the Chinese market. Chinese companies investing in Germany in turn hope for access to the German market, but also for access to technology, brand names and distribution channels. Challenges lie in the substantial political, legal, economic and cultural differences between China and Germany. Chinese companies thus have to find an approach to their new identity as part of German business and society. It will be interesting to see in how far this leads to mutual impact – Chinese companies influencing Germany’s business environment and vice versa.
In the Asia Policy Briefs renowned experts and authors from the Bertelsmann Stiftung analyze important developments in Asia and their consequences for Germany and Europe. The short briefing papers focus on current events as well as underlying trends in important Asian countries All Asia Policy Brief editions can be downloaded here.
