What is the reason for China to invest in Germany? Doesn't high energy and labour costs make Chinese firms think twice before moving into German market?
Germany does pretty well in "non-software" hi-tech. That is manufacturing and older school engineering. In that sense strategic investment on these areas which lot of Chinese industrial output relies on makes perfect sense.
China can be the biggest source of foreign investments in Germany (article before paywall seems to be investment count not € value, but either would work) without Germany being the largest target recipient of Chinese foreign investments. Remember that China is (at nominal GDP which is the kind of thing that matters for trade and investments if not quality of life) the size of the entire EU, of which Germany is just a part.
The other question they may be asking themselves is "where else would we put this money?", which has historically been why the market response to turmoil anywhere has been to invest in US treasury bonds.
Or they may be trying for political or economic influence, owning enough shares to get businesses to buy more stuff from China. Kinda like Musk buying Twitter.
Yes, investing into Germany to buy political or economic influence in EU is possibility, but I don't think China sees EU as an important political player. I think that investing into Germany to gain access to German research, technology, manufacturing experience and know-how is much more important.
Like when the KUKA, German manufacturer of industrial robots and factory automation systems, was acquired by the Chinese appliance manufacturer Midea Group.
What is the reason for China to invest in Germany? Doesn't high energy and labour costs make Chinese firms think twice before moving into German market?
Germany does pretty well in "non-software" hi-tech. That is manufacturing and older school engineering. In that sense strategic investment on these areas which lot of Chinese industrial output relies on makes perfect sense.
Diversification.
China can be the biggest source of foreign investments in Germany (article before paywall seems to be investment count not € value, but either would work) without Germany being the largest target recipient of Chinese foreign investments. Remember that China is (at nominal GDP which is the kind of thing that matters for trade and investments if not quality of life) the size of the entire EU, of which Germany is just a part.
The other question they may be asking themselves is "where else would we put this money?", which has historically been why the market response to turmoil anywhere has been to invest in US treasury bonds.
Or they may be trying for political or economic influence, owning enough shares to get businesses to buy more stuff from China. Kinda like Musk buying Twitter.
Yes, investing into Germany to buy political or economic influence in EU is possibility, but I don't think China sees EU as an important political player. I think that investing into Germany to gain access to German research, technology, manufacturing experience and know-how is much more important.
Like when the KUKA, German manufacturer of industrial robots and factory automation systems, was acquired by the Chinese appliance manufacturer Midea Group.
https://en.wikipedia.org/wiki/KUKA
https://chinaobservers.eu/after-kuka-germanys-lessons-learne...