German companies are increasingly turning to China for investment and growth as Washington’s policy unpredictability pushes corporate planners to re-evaluate risk. Oliver Oehms, executive director for North and Northeast China at the German Chamber of Commerce, says tariffs, immigration rules and an array of erratic U.S. moves have dented confidence in the American market and prompted many firms to refocus on China’s relatively stable and predictable commercial environment.
The shift reflects more than a short-term reaction to politics. German business leaders point to China’s steady demand, improving market access in some areas, and the practical advantages of producing and innovating close to lead customers. Oehms contrasts the “ups and downs” of U.S. trade relations with the comparative predictability of dealings in China, a judgment echoed in recent investment numbers and corporate surveys.
Berlin’s political outreach underscores the economic urgency. Chancellor Friedrich Merz is expected to lead a high-level economic delegation to Beijing at the end of February, in what would be his first China trip since taking office last May. Delegation talks are likely to press China on structural issues — market openness, fair competition and intellectual property protection — while signalling that German political leadership wants stable bilateral ties to support industry.
The China-Germany Chamber’s 2025/26 business confidence survey, with 630 respondents from some 2,000 member firms, shows a strong tilt toward China: 93% of respondents plan to continue operating in the Chinese market and 53% expect to increase investment there. Sixty-five percent expect China’s economy to grow over the next five years, and a record 60% predict Chinese firms will become innovation leaders in their sectors.
Official statistics reinforce the survey: the German Institute for Economic Research reports that direct investment from Germany into China reached roughly €7.0 billion in January–November 2025, up 55.5% year‑on‑year and the highest level since 2021. Investment is concentrated in automotive and mechanical engineering, with reinvestment of on‑the‑ground profits cited as a major source. By contrast, German direct investment into the United States plunged about 45% over a similar period to roughly €10.2 billion.
Companies describe a pragmatic “in China, for China — even for the world” strategy that hedges geopolitical risk and captures China’s growing scale in tech and manufacturing. Many German firms report deepening cooperation with Chinese partners on overseas projects, and two‑thirds of surveyed firms are already participating in such outbound partnerships. Still, smaller and family-owned firms remain cautious, deterred by market complexity and fierce local competition.
The trend has strategic consequences. A sustained reorientation of German investment toward China would accelerate technology transfer, deepen supply‑chain integration in East Asia, and reduce Germany’s reliance on domestic suppliers. That reorientation improves resilience to sudden trade barriers but also raises concerns about dependency, erosion of export markets, and the relocation of higher-value R&D to China.
How Berlin manages this commercial pivot will matter for transatlantic relations. The Merz delegation is likely to press Beijing for clearer rules and better protections while trying to preserve market access for German industry. For businesses, the calculus is increasingly pragmatic: stable demand, constructive engagement on market rules and the potential for scale in China now outweigh the costs of political friction with Washington.