China Surpasses U.S. as Top Foreign Investor in Germany in 2025

Chinese companies bucked a global downturn in foreign direct investment last year to surpass the United States as the leading source of greenfield and expansion projects in Germany for the first time in eight years, according to a new report.

Germany Trade & Invest (GTAI), the country's federal foreign trade and investment promotion agency, said in its 2025 Foreign Investment Report released on Wednesday that China logged 228 investment projects in Germany last year, a 14.6% increase from 2024. The United States came in second with 206 projects, a 10% decline, followed by Switzerland with 174 projects, down 13.9%.

The figures mark the first time since 2017 that China has ranked first among foreign investors in Germany by project count.

The gains came against a broader contraction in cross-border investment activity. Total greenfield and expansion projects in Germany fell 9.3% to 1,564 in 2025, compared with 1,724 in 2024. Globally, foreign investment project volumes dropped 9.5%, while the 27-nation European Union saw an 18.1% decline.

Electronics And Logistics Lead Chinese Investment

Chinese companies concentrated their German investments in electronics and automation, which accounted for 30% of projects, followed by transportation and logistics at 22% and energy and raw materials at 15%. In terms of business activity, 44% of Chinese investment took the form of sales and marketing operations, while 21% involved production or research and development, and 11% involved establishing regional headquarters.

Among notable projects, battery manufacturer CATL continued to expand its factory in the German state of Thuringia, while electric vehicle maker Li Auto established a research and development center in Munich in early 2025.

Thomas Bozoyan, the report's author, said Chinese corporate investment in Germany showed high diversification across industrial applications, cutting-edge technologies and knowledge-intensive services. He noted that 21% of Chinese investors reported integrating production or R&D activities into their German operations — two percentage points above the overall average for all foreign investors — pointing to sustained and deepening commitment to the German market.

Germany Remains Top European Destination For Chinese Firms

Germany's appeal to Chinese investors comes as the two countries deepen their broader economic ties. Data from Germany's Federal Statistical Office released in February showed China replaced the United States as Germany's most important trading partner in 2025, with bilateral trade reaching 251.8 billion euros, compared with 240.5 billion euros for the U.S.

A survey of Chinese companies operating in Germany, published by the Chinese Chamber of Commerce in Germany in late 2024, found that more than half of respondents used Germany as their European headquarters, and identified digitalization, battery technology, and the automotive sector as the three most promising areas for cooperation.

Wu Huiping, deputy director of the Center for German Studies at Tongji University, said trade and commerce has long served as the anchor of Sino-German relations. She noted a structural shift in Chinese investment strategy — away from mergers and acquisitions toward local greenfield operations and localized management. PwC Germany tax partner Shou Shuning observed the same trend, noting that the peak of Chinese acquisition activity in Germany occurred between 2015 and 2018, after which greenfield investment became the dominant mode.

Both analysts pointed to digitalization, new energy vehicles and smart manufacturing as sectors with strong growth potential, and areas where Germany is actively seeking Chinese expertise to support its industrial transformation.

GTAI's head of investment promotion, Achim Hartig, said the latest data demonstrated Germany's resilience as an investment destination amid a challenging global environment, noting that its decline was moderate relative to other European countries. One in five foreign companies used Germany as a production or research base, the report said, and seven investment projects in Germany exceeded 500 million euros in value last year.