Chinese Investment in Germany Soars

Germany is an attractive destination for Chinese companies hoping to invest abroad. According to Berlin-based Mercator Institute for China Studies, FDI in Germany hit a record high of US$12.6 billion worth of completed deals in 2016. This means that Germany is the largest recipient of Chinese FDI in Europe. Chinese appliance manufacturer Midea’s US$4.4 billion purchase of Germany’s Kuka in 2016 was by far the largest transaction of the year. The German government’s plan to veto the sale of critical technology is likely a direct response to the Kuka takeover. Many are questioning why Chinese companies seem to be particularly interested in acquiring German companies. The answer remains unclear, but the trend of high Chinese FDI in Germany is likely to continue for the coming years.