According to data released by the Bundesbank, in 2023, the amount of German direct investment in China increased by 4 compared to last year3% to 11.9 billion euros, a record high, and investment in China accounted for 10% of Germany's foreign investment3%, higher than the 8% level of other countries in Asia.
According to the Cologne Institute for Economic Research in Germany, the scale of German enterprises' investment in China has remained relatively stable, and the funds for investment in China basically come from the profits generated by investment in China. The German economy as a whole was weak last year, with total foreign direct investment falling sharply to €116 billion from €170 billion in 2022.
Although Germany's direct investment in China has hit a new high in 23 years, Germany has repeatedly asked German companies to reduce their investment in China and has drastically reduced the investment guarantees provided to German enterprises.
Handelsblatt, a German business newspaper, published a report alleging that Volkswagen was involved in "forced labor" and exerted pressure for Volkswagen to reconsider its operations in Xinjiang, China. In response, a Volkswagen spokesperson said that Volkswagen is currently negotiating with SAIC Volkswagen, a non-controlling joint venture, on the direction of future business activities in Xinjiang and is studying different scenarios in depth.
The representative of Volkswagen's second largest shareholder (Lower Saxony**, Germany**), Lower Saxony Governor Stephan Weil, said the report was "worrying". The German company "Co-Investment" also said that the latest news means that Volkswagen is no longer eligible for its sustainable** investment.
Less than a week ago, German chemical giant BASF also revealed that it would take a stake in two joint ventures in Xinjiang for similar reasons.