German firms lift China investment as US outlays fall, IW study shows

BERLIN, Sept 13 (Reuters) - German companies increased investment in China by a third in the first half of 2026 while sharply reducing investment in the United States, according to a study by the German Economic Institute (IW) seen by Reuters on Sunday.

• German firms invested €5.6 billion ($6.50 billion) more in China than in the same period of the previous year, based on IW's analysis of Bundesbank data. The figure was in line with the average half-year investment level between 2020 and 2025.

• "German companies have little choice but to continue investing in China," IW's Juergen Matthes said, describing the country as both an important sales market and a "gym" where companies can build up their competitive muscle.

• Matthes said state subsidies and an undervalued yuan made production in China artificially cheap, encouraging German companies to expand locally to compete with Chinese rivals globally.

• "For Germany, this means production and jobs are shifting to China," Matthes said. "The EU should put a stop to this unfair game and impose countervailing tariffs on Chinese imports."

• Investment in the U.S. fell by nearly two-thirds to around €4.3 billion, the study said, amid trade tensions and U.S. tariffs imposed by President Donald Trump.

($1 = 0.8615 euros)

(Reporting by Maria Martinez and Rene WagnerEditing by Miranda Murray)