German companies that want to invest in Southeast China outside China are increasing

Reducing competitiveness in the , but also the weak economy, geopolitical risks and increasing number of trade barriers determine the foreign investment of German industrial industries. These are the findings of a recent analysis of the German Industrial and Chamber of Commerce (DIHK). The specific analysis of DIHK’s economic research in early 2024 also shows that slightly more companies in Germany wish to invest abroad (and in particular Southeast Asia other than China) than in the previous year. The incentive to save costs rather than expansion is increasingly at the centre. “The opening of new markets generally provides additional impetus for investment and employment in Germany,” said Ilia Notnagel (Ilja Notthnagel), a member of the DIHK executive board, at the presentation of the investigation, for which DIHK detailed the investment plans of around 1,900 German industrial enterprises abroad. “For many years, foreign investment by German companies has always benefited Germany as a business space. But the situation has begun to change: More and more companies are now investing abroad, because Germany is very expensive and complicated for them as a place of business.’ Nothnagel described the fact that these companies are moving abroad – at the expense of the place of establishment – as a “disturbing message”. It shows that Germany must again become more attractive as a place of production. The continued diversification and reorganisation of supply chains is evident in the target areas of foreign investment. The Asia region Pacific (except China) continues to become more important. A little less than a third (32% after 29%) of foreign investment companies intend to invest there. In North America and China, the level of commitment remains almost unchanged over the previous year. Although the eurozone remains the most important target area for German companies, it loses little of its importance: only two thirds of companies (65%) want to invest there, compared with 71% last year.