German direct investment in China shrank in the first half of the year, although it remained close to its record level reached last year. As a share of Germany's total overseas investment, however, German funds invested in China are growing, official data analyzed by the German Economic Institute (IW) showed.

German investment in China fell to 10.31 billion euros ($11.02 billion) in the first half of 2023, up from 12 billion euros in the first six months of last year.

German investment this year accounted for almost twice as much as the 5.5 billion euros of German money invested in the Chinese economy in the first six months of 2019, before the coronavirus pandemic. An average of 4 billion euros was German direct investment in China for the first half of the previous decade.

Overall, German direct investment around the world has fallen to 63 billion euros this year, down from 104 billion euros in the first half of last year.

Bundesbank expects the German economy to deteriorate

As a result, investment in China as a share of Germany's total investment actually increased: from 11.6 percent in the first half of last year to 16.4 percent in the first half of this year.

"The trend towards China remains almost unchanged this year," said Jürgen Mattes, an analyst at the German Institute of Economics. "Although the German economy as a whole invests much less abroad, new direct investment in China remains almost as much as before," he added.

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