BERLIN – China last year dropped out of the top three foreign investors in Germany for the first time in more than a decade, official German data seen by Reuters showed on Wednesday, as the Chinese government focused on improving the domestic economy.
The figures compiled by Germany Trade & Invest (GTAI), a government agency, reveal that China is now the largest contributor to foreign direct investment into Germany, behind the United States, Britain and Switzerland.
GTAI managing director Robert Hermann attributed this decline to the economic strategy promoted by the Chinese government which focused on stimulating the domestic economy with investments in infrastructure as well as in research and development.
“The Chinese government regulates export of capital,” Hermann said. “This is increasingly focused on increasing investment in the country.”
Data shows that the United States remains the largest investor in Germany with 302 projects last year, followed by Britain with 185 and Switzerland with 184.
China, which is the third largest investor in Germany in 2018, dropped to fourth place for the first time since 2009, when GTAI began to collect data.
Britain rose from fourth place to become the second largest foreign investor in Germany because the company worried Brexit would hamper access to the single European Union market which formed affiliations in Europe’s largest economy.
Data shows that 1,851 foreign companies moved to Germany last year, 10% less than the previous year. But the number of jobs they planned to create almost doubled to 42,000.
Foreign car and battery makers are pushing for a boom in jobs created by foreign direct investment, Hermann said.
US electric car maker Tesla plans to build a European plant outside Berlin, Chinese car maker Geely wants to set up an innovation center in southern Frankfurt, and battery maker China Contemporary Amperex Technology Ltd. (CATL) is planning a factory in eastern Germany.
GTAI estimates that foreign investment will decline this year because the coronavirus pandemic has plunged the world economy into recession.
(Writing by Joseph Nasr; Editing by Maria Sheahan)
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