German Firms Boost Investment in China While Reducing Outlays in the U.S., Study Shows

German companies increased their investment in China by a third in the first half of 2026, while significantly cutting investment in the United States. This trend was revealed in a study by the German Economic Institute (IW), which analyzed Bundesbank data. The IW noted that state subsidies and an undervalued yuan make production in China artificially cheap, encouraging German companies to expand there to compete globally. The study suggests this shift could lead to production and jobs moving from Germany to China, prompting a call for the EU to consider countervailing tariffs on Chinese imports.